GOVERNOR SCHWARZENEGGER’S CLAIM THAT K-12 EDUCATION FUNDING IS INCREASING BY SEVEN PERCENT IS A MYTH

 

Governor Arnold Schwarzenegger and his Finance Director Tom Campbell continue to claim that the Governor’s Proposed Budget includes a 7.1 percent increase in funding for schools. The Department of Education has been asked to verify this claim. But, after a thorough review of the Governor’s Budget, that claim cannot substantiated.

 

The following is an analysis of the Governor’s Budget for education. It shows that there is a significant credibility gap between what the Governor says is allocated for schools and what actual funding will be used for the education of our students.

 

It also shows that if you look the total funding in the Governor’s Proposed Budget for K-12 schools, and consider that “COLA and growth” merely cover increased costs due to inflation and the anticipated growth in the student population, AND that the Governor proposes shifting new costs to school districts, the real world effect is that students in California will not benefit from any additional resources in the classroom, but may be affected by budget cuts at their local school.

 

Consider the following (all of the numbers in this table come directly from the Governor’s budget):

 

K-12 Funding

2004-05

2005-06

Diff.

% Change

General Fund (Prop 98 + non-98)

 

$31,622,272

 

$33,475,243

 

$1,852,971

 

5.86%*

Total Prop 98 (GF + Prop.Taxes)

 

$42,167,464

 

$44,696,414

 

$2,528,950

 

6.00%*

Total Funding

$50,854,025

$53,043,734

$2,189,709

4.31%*

Total Funding subtracting proposed COLA from 05-06

 

 

$50,854,025

 

 

$51,393,863

 

 

$539,838

 

 

1.06%

Total Funding subtracting proposed COLA and growth from 05-06

 

 

 

$50,854,025

 

 

 

$50,999,117

 

 

 

$145,092

 

 

 

0.29%

Total Funding subtracting proposed growth from 05-06

 

 

$50,854,025

 

 

$52,648,988

 

 

$1,794,963

 

 

3.53%

 

(* If the same funds for the CA Community Colleges (CCC) are included, those percentages change respectively to 6.21%, 6.16%, and 4.57%.)

 

The first three rows of this table represent the type of comparisons that a reasonable person would make in response to the question, “How much more will K-12 education receive in 2005-06 under the Governor’s Proposed Budget than it received in 2004-05?”

 

Those three comparisons are of:

i)                    General Fund appropriations to K-12 in the two years – this makes sense because the state’s budget shortfall is primarily a General Fund issue,

ii)                  Total Prop 98 funding for K-12 in the two years – this makes sense because it represents the bulk of state funding, is probably the most used number when talking about K-12 funding, and Prop 98 has been the focus of education budget discussions in 2004-05 and 2005-06, and

iii)                Total Funding for K-12 – this probably makes the most sense since the real issue is how much better or worse off schools are, and that would depend on the total amount of funding available to them, including general fund, other state funds, local property taxes, and federal funds. The only things that this number would leave out would be local revenue, such as parcel taxes and proceeds from bake sales.

 

 

However, this still really doesn’t answer the question that we want to – “How much better (worse) off will schools be in 2005-06, than they are in 2004-05?” The other way to put this is that “schools will nominally get 4.31-6.0% more dollars, but what will that mean to them in real terms?”

 

The last three rows of the table use Total Funding for K-12 (that’s item iii) above) and start to correct the 2005-06 funding level for those proposed appropriations that don’t move schools forward, but only keep them treading water. Cost of living adjustments (COLAs) are designed to offset cost increases that impact schools from one year to the next; a COLA is expressly intended to maintain the real level of funding by correcting for inflation.

 

 

Ordinarily that would be a sorry state, but at least not going backward. However, the number in the Governor’s proposed education budget leaves something out. In another section of the budget you can find the State Contributions to the State Teacher’s Retirement System. In that section is a $469,047,000 reduction in the state contribution to STRS.

 

 

The only way to calculate a 7.1% increase is to look at the increase in Total Prop 98 General Fund. The figure is reached by combining Prop. 98 funding proposed for K-12, California Community Colleges, California Youth Authority, Department of Mental Health, the Commission on Teacher Credentialing, AND other state agencies.