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Proposition 98The Constitutional Guarantee Compared to Actual Funding California Teachers Association
How We Got Here California Teachers Association
It’s the Economy… Housing Bubble Burst Financial Market Meltdown The Great Recession Sluggish state and national recovery Very slow job growth (public sector losses offset private sector gains) California Teachers Association
It’s the Economy… The Economy is the sum total of human work The organization of money and resources in a country, region, or community Everyone participates in it The purpose of the economy is to meet the needs of people California Teachers Association
…and the Economy is Political Whose “needs” get met in the current economy? The existing structure….. • Enables a few to make lots more money • Enables those few to pay less taxes • Has not created, and in fact has reduced, the number of ‘middle class’ jobs (good wages and benefits) • Has caused wages to stagnate California Teachers Association
Corporate Profits, Personal Income & Median Wages 8 California Teachers Association
Who Pays Taxes in CA Has Changed Over Time LAO, Historical State Revenues
Where is “Here”? Overview of the 2012-13 State Education Budget
Governor’s Tax Initiative • Increase income tax rates on wealthy (2012 - 2016) • 1% rate increase married incomes $500,000 - $600,000 • 1.5% rate increase incomes $601,000 - $1 million • 2% rate increase incomes over $1 million • Increase the state’s sales tax rate by 0.5% points (2013 - 2016)
Mid-Year Cut Trigger If the Governor’s Tax Initiative does not pass in November 2012, the following education cuts will occur on January 1, 2013: $4.8 billion from K-14 $2.3 billion to not repay deferral $2.6 billion real program cut (6% RL reduction or $387/ADA – cost of about 3 weeks instruction) $200 million University of California $200 million California State University
Our Union’s Funding Goals for Education Adequate Amount of per pupil funding needed to provide all students the opportunity for academic success CTA goal of the top quartile of the 50 states* Equitable Promotes fairness by funding schools and colleges to meet the individual needs of all students* CTA believes in compliance with the Serrano decision to achieve equalization of educational opportunities* Stable & Reliable Avoid “bubbles and “crashes” *California Teachers Association 2011-12 Organizational Handbook, Policies
Funding Initiate Criteria Based on tax fairness – a progressive tax system – to ensure everyone is paying their fair share and to and bring stability to our funding issues Include funding for Pre-K through higher education and other essential public services Generate at least $8 billion Broad coalition support Winnable
Beyond Proposition 98 Although Proposition 98 has established K-14 education funding as a priority in the state budget, it is clearly not enough to fund an adequate education for California’s children. Proposition 98 does not include the CSU & UC systems, therefore portions of higher education do not have a constitutional priority position in the state budget. Since Proposition 98, we’ve dropped from 30th to 47th in per pupil spending.
School Funding (2009 Averages) Quality Counts 2012 & www.cde.ca.gov
How to Increase Funding • Bigger piece of the pie - Improve the relative priority in the state budget • Proposition 98 (Been there, done that) • CSU & UC systems not included • Other important state programs, including social services may be just as important for student success • Grow the Pie • Expand the revenue base • Economic development • Expanding who pays taxes or what items/services are taxed • Increase tax rates • Closing Loopholes
Economic Prosperity & Funding Education • Prosperity for large corporations does not necessarily translate to prosperity for the vast majority of the people in America • Economic Expansion is important and necessary and will ultimately increase public funds and by extension, school funding, but only if the economic expansion includes improvements for all (including working people) who pay taxes • Education Funding is a key ingredient in improving education and thus the value of human capital which can help economic expansion
Check back for information about tax fairness and economic development in California and the how to fund schools beyond Proposition 98. www.cbp.org California Budget Project www.edsource.org EdSource www.ppic.org Public Policy Institute of CA www.caltaxreform.org CA Tax Reform Assn