July 18, 2007

Beware the "slashers"

The LA Times reports this morning that Republicans have proposed to "slash" aid to the schools by $400 million and the Democrats say that will happen, essentially, over their dead bodies. The school lobby is deeply disappointed in the Republicans for considering such a thing.

Nothing against my friends at the LAT, since the Republicans deserve to be slapped when they whisper this stuff in private rather than explaining it to all in the light of day, but a little more context might help here. It sounds as if the Republicans might be talking about adjusting the Prop. 98 estimate for the coming year. That estimate is tied in part to the state's revenues. In May, Schwarzenegger increased the Prop. 98 number for 07-08 to reflect higher projections for tax revenues in the coming year. Then before the ink was dry on those numbers, the actual tax collections started coming up short, to the tune of $800 million already in just May and June.

The Democrats' budget "slashed" about $400 million from the schools to reflect those lower revenues in the current year, but kept with Schwarzenegger's assumption for the minimum in the coming year. If you assume that the lower than expected revenues in May and June will be continue in soft collections in the rest of 2007 and 2008, you would also expect the Prop. 98 minimum to be a bit lower. I'm guessing that is what the Republicans have suggested.

Now let's look again at the "slash."

When the budget was approved last summer, the schools stood to get $55.1 billion from state and local taxes, a ten percent increase over the amount originally budgeted the year before -- despite essentially zero growth in enrollment.

The governor's May revision increased the current year amount by $371 million to reflect the higher revenues, and proposed $57.6 billion for the coming year.

The Democrats' plan approved by the conference committee backed out that extra $371 million for this year.

If, indeed, the Republicans are now proposing $400 million less for next year, that would mean the schools budget would grow from $55.1 billion to $57.2 billion, an increase of $2.1 billion, or just under 4 percent.

K-12 attendance, by the way, is expected to decline by about 28,000 from this year to next.

Posted by dweintraub on July 18, 2007 11:11 AM