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California Budget Crisis for 2011

The 2010 California Budget Crisis was a carryover from the 2009 budget crisis and/or the 2008 budget crisis.  The 2011 budget crisis has its roots in 2003 budget crisis. With election of Governor Brown and the passage of Proposition 25 lowering the requirement to a pass a budget to a majority, the dynamics of budget passage have changed.  In the Governor's Inaugural Address there was no hint of what lieds ahead. Before the Governor released his budget, newly elected State Superintendent of Public Instruction Tom Torlakson declared a fiscal emergency for California school districts.Also Governor Brown eliminated the position of Secretary of Education while making seven appointments to the State Board of Education. Among the appointments included Bill Honig, former State Superintendent and Mike Kirst, a contributor to the Getting Down to Facts study.

On January 10, Governor released his budget, sparing K-12 education for the time being.  

The real fun began in June. With Prop 25 passing, the Legislature needed to pass budget by June 15th. Well, the Legislature actually passed a a majority budget on June 15th. Unfortunately, on June 16th, Governor Brown vetoed the budget. On June 21, Controller John Chiang indicated he would withhhold pay to the Legislature based on his analysis. On June 28, the Governor signed the 2011/12 budget when they found $4 billion in extra revenues. The reaction was typical of the partisan rhetoric we have heard over the past few months. An initial analysis show school districts will have few options if the projected revenues do not show up because of AB114. Even more significant is $2 billion diverted from Prop 98 to help the Governor realigned State services to the cities and counties. In November the LAO issued a report indicating revenue shortfall would trigger mid year cuts. At the end of November, a group of business and former political leaders as part of the Think Long committee, issued a 23 page report detailing a plan to raise $10 billion in new revenues and make changes to California governance. In December, as result of revenue shortfalls, trigger cuts were implemented as part of the budget deal from June. $249 million in transportation funds were eliminated and $79 million ($15 to $18 per student of base revenue limit) was cut.

Background Documents