In a rare December budget action, Gov. Jerry Brown announced deeper cuts Tuesday to colleges, libraries and child care, though he spared K-12 schools from the worst-case scenario they had feared.
It served as prologue to another year of budget jousting as Brown prepares to ask voters for $7 billion in higher taxes to avoid deeper reductions.
All told, California will impose $980 million in midyear cuts to a dozen programs starting in January, a sizable amount but less than half of what the legislative analyst predicted in a gloomier forecast last month.
The governor estimates that 7,500 children will lose subsidized child care, while community colleges plan to add another fee hike starting next summer.
"The state cannot give what it does not have," Brown said after expressing the same sentiment in Latin. "And there's been a lot of obfuscation and gimmickry, and I've reduced that to a minimum, if I do say so. I don't want to rely on pushing the problem further down the road."
The Democratic governor said Tuesday he expects California to fall $2.2 billion shy of its optimistic summer revenue forecast for the current fiscal year, triggering the $980 million in cuts.
Because of how Brown and lawmakers drafted the June budget, K-12 school districts could have lost as much as $1.5 billion in general-purpose funding the equivalent of seven instructional days.
But Brown's latest revenue snapshot was robust enough that schools will instead face a smaller $79.6 million reduction in general funding and a $248 million elimination of bus transportation money. That should avert massive reductions in the school calendar or other drastic measures for most districts.
"The good news is, it wasn't horrific news," said Jonathan Raymond, superintendent of Sacramento City Unified School District. He had anticipated losing $12.5 million in state funding but now says the district will lose only about $2 million.
Still, districts remain nervous because Brown threatened Tuesday to impose deeper cuts next fall if voters reject his $7 billion plan to raise sales taxes, as well as income taxes on the wealthy.
Brown said he will propose "far more than a billion" in new cuts when he releases his budget in January. It is unclear how large his fiscal office believes the deficit will be, but the Legislative Analyst's Office pegged the figure last month at $12.8 billion.
"Schools may have dodged a bullet in December," said education lobbyist Kevin Gordon. "But they may find that in the budget come January, their share of a $13 billion hole will add to the uncertainty they've lived with the last couple of years."
University of California and California State University had prepared to absorb the $100 million cut each was handed Tuesday by relying on reserves. CSU also delayed purchases and campus maintenance.
But their future remains murky, and Department of Finance Director Ana Matosantos said the cuts are expected to remain in place next year.
California Community Colleges Chancellor Jack Scott said his system will impose a new $10 per unit hike, raising fees from $36 to $46 starting next summer. He expects that to be permanent.
The governor may make small talk with Republicans at winter Capitol-area receptions, as he indicated Tuesday, but he does not plan on courting GOP support for his tax proposal. With help from labor unions, Brown will attempt to gather 807,615 valid signatures to place his measure on the November 2012 ballot.
Democrats are enthused by recent polls, including one this week from the Public Policy Institute of California, indicating that voters may be willing to approve Brown's taxes for schools and deficit reduction.
"You either cut, or you tax, there is no third way," Brown said.
Jon Coupal, president of the Howard Jarvis Taxpayers Association, whom the governor has blamed for dousing the last Capitol tax negotiation, said Brown's tax plan would drive business out of state.
"If American history has taught us anything, it's that there is a third way, and it's that you grow the economy," Coupal said. "Unfortunately, this governor is doing everything he can to shrink the economy."
It's far from certain that midyear cuts will save the entire $980 million that Brown is counting on. A federal judge has already blocked a $100 million cut to In-Home Supportive Services until a hearing next month.
California's largest school district, Los Angeles Unified, announced Tuesday it will sue the state to halt the $248 million school bus cut. The district says it is required to bus 35,000 students under a desegregation court order, while it must transport 13,000 students with special needs under state and federal laws.
Locally, Elk Grove Unified School District already subsidizes transportation with $6.5 million in general funding on top of state school bus money. The 320-square-mile district offers bus service only to students who must travel long distances and to special education students for whom it is mandated, said school board member Priscilla Cox.
The new cuts could mean another $1.5 million from the district's general fund.
"The impact on our budget is significant enough to worry about," Cox said. "It is something that has to be taken from somewhere. It isn't something you can ignore."