Education and the CA Budget

1. Education and the CA Budget

2. CA Budget • 2008-2009: $85B budget in CA; $24B deficit • 18% decline in state revenues in previous 2 years • 2011- 12 $87B budget • Dec, 2011“triggers” : more cuts and increase CCs to $46/unit • 2012-13 $93B • 2013-2014 Proposed $98B • Projected$ 7B increase in revenues from Prop 30 and 39 • Proposed spending is below 2007-2008, in adjusted dollars • LAO: Projected deficit (“structural deficit”=consistently spend more than we have)

3. Facts About Taxes in CA • CA’s top income tax bracket had fallen from 11% of income in 1983 to 9.3% in 2012.  • In 1980 California corporations contributed nearly 15% of the state budget; today they pay 11%. • CA legislature has cut taxes for individuals, families and businesses by more than $12 billion over the past fifteen years

4. Corporate Tax Cuts 2008-2011

5. Impact on K-12 Spending

7. Impact on Higher Education • UC • Faculty and staff furloughs • 32% increase in fees over 2 years (now $12,900+) • CSU • Faculty and staff furloughs • Fees increased 40% over 2 years ( now $5000+) • Enrollment reduced by 40,000 over two years

9. CCSF Budget Cuts • 800 classes cut from 2010-2012 8% more classes/services cut for 12-13 • Summer school 2010 cut (800 classes) • 2011 restored (80%) •  Faculty pay cut in 12-13 • Faculty/staff layoffs

10. November 2012 Revenue Measures • Prop 30 Tax increase ($6B per year for 7 years) • Raises taxes on wealthy (over $250,ooo, top rate 13.3%) • Raises sales tax from 7.25 to 7.5% for 4 years • Prop 39 ($1B per year for energy efficiency and gen fund) • Eliminates corp tax loophole for out of state businesses • Taxes based on sales (70% of tax paid by large corps)

11. Revenue for CCSF: Proposition A • Voters approve Prop A parcel tax by 72% • $14-16M per year for CCSF • $79 per year on each parcel in SF • Revenue begins in Dec, 2013

12. Gov. Brown’s proposal for school finance reform (for 13-14) “Weighted Student Formula” • More money (“supplement”) for districts with low-income, ELL, or foster youth (+local control) • No district will receive less than it did in 12-13 • Funding increase by $2700/student over 5 years for vast majority of districts • “Teaching in Compton is a much bigger challenge than teaching in Beverly Hills” - Gov. Jerry Brown

13. Proposed Budget for 13-14 • Increases spending by 5 percent, to $98 billion in 2013-14 • Expands Medi-Cal, the state’s health care program for low-income Californians • Maintains last year’s funding levels for most parts of the budget, including child care • Pays down $4.2 billion in budgetary debt.

14. What choices would you make? • Increase Fees /Increase Taxes • Layoffs vs. across the board pay cuts/Furloughs • Cut Services or cut salaries ? • http://www.latimes.com/news/local/la-statebudget-fl,0,95571.htmlstory

15. Other Proposed Solutions • Prop. 25 – changed 2/3 to simple majority to balance budget (passed in Nov. 2011) N/A to tax increases • Revenue increases (req. 2/3 vote of legis to put on ballot) • Oil and gas severance tax • Revise Prop. 13 to allow increase in commercial pty taxes (“split roll”)