Governor to present budget for next year

Gov. Arnold Schwarzenegger will unveil today his budget proposal
for the upcoming year and for the first time in three years, the
University of California may be out of the crosshairs of spending
reform.

Instead, the governor will more likely play kindergarten cop
this January, delaying $2.2 billion owed to the state’s K-12
public schools and community colleges under Proposition 98.

Schwarzenegger promised during his 2003 gubernatorial campaign
never to suspend the popular proposition, which requires 40 percent
of state revenues to go to schools, but the reform plan outlined in
his State of the State Address has many worried.

Educators agreed to forego the increased revenues of last
year’s rebounding economy only if they were repaid this year,
and the governor’s desire to withhold these funds and burden
the education system with a further $1.1 billion in transferred
pension plans has angered many of them.

“California spends $50 billion on K-14 education this
year; that’s $2.9 billion more than last year,”
Schwarzenegger said in his State of the State Address last
Wednesday, implying the problem was not a lack of money, but rather
how the money was being used.

K-14 education refers to grade schools, middle schools, high
schools and community colleges ““ all of which are protected
under Proposition 98.

Today’s budget proposal will provide a starting point for
legislators, who will negotiate the budget for at least six
months.

Given the $8.1 billion state deficit and the governor’s
reluctance to raise taxes, much of the difference will have to be
made up with cuts to social programs and $3.5 billion in bonds,
approved by voters last March.

While Proposition 98 protects education from kindergarten to
community college, it “says nothing about higher
education,” said Professor Michael Bazdarich, a senior
economist with the UCLA Anderson Forecast.

Without those protections, the “UC has already taken
bigger hits (than K-12 education),” Bazdarich said. With the
UC budget already stretched to the limit, the K-12 budgets may be
the next frontier for spending reform.

“Rightly or wrongly, budget reforms will be targeted at
K-12,” Bazdarich said.

Over the last four years, the UC has had to endure a 16 percent
state funding reduction coupled with a 16 percent enrollment
increase, according to a May 2004 UC press release.

Last May, the governor, UC President Robert C. Dynes and
California State University Chancellor Charles B. Reed agreed on a
compact that would temporarily alleviate the cuts in higher
education, beginning with this year’s budget.

The compact provides for UC enrollment increases of 5,000
students during the 2005-06 year, as well as provisions for annual
salary and cost-of-life increases of 3 percent.

In the three years before the compact, CSU absorbed $500 million
in budget cuts which led to two years without pay raises and 7,000
students who could not be admitted.

The compact also made student fees more predictable, setting an
average undergraduate fee increase of 10 percent over a three-year
period beginning in 2004, with a 14 percent increase last year and
an 8 percent increase this year.

Representatives at the governor’s office declined to
comment on the compact, preferring to let the budget proposal speak
for itself, but H.D. Palmer, a spokesman for Schwarzenegger’s
finance department, told the Contra Costa Times Saturday that
“the deal would be fulfilled.”

“He had a deal with K-12 but he changed that deal,”
said Mac Taylor, a deputy in the California Legislative
Analyst’s Office. But Taylor also added that the governor
“was pretty strong on the compact.”

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