ED-3LEgisLativE anaLyst’s OfficE2009-10 BuDgEt anaLysis sEriEs
exeCutive summary
The Governor’s 2009‑10 budget includes almost $55 billion in Proposition 98 undingor K‑12 education and the Caliornia Community Colleges (CCC). The budget reects majorreductions to school spending in 2008‑09 and 2009‑10. In this report, we outline ways or theLegislature to achieve budgetary savings while minimizing the adverse eects on core educa‑tional programs. In addition, we recommend that the Legislature use the state’s fscal crisis as anopportunity to rethink the state’s K‑14 educational ramework and undertake substantive reormin some key areas—categorical program unding, state mandates, and cash disbursements.
Governor’s Plan Balances K-14 Budget by Cutting K-12 General Purpose Funding.
Toachieve state savings, the Governor’s budget takes a deep cut to K‑12 revenue limits. (“Revenuelimits” reect general purpose unding that supports schools’ base academic program.) Aterproposing to cut K‑12 revenue limits roughly $2 billion in 2008‑09, the Governor’s budget or2009‑10 makes an additional cut o roughly $1 billion. Combined, these cuts represent roughly$3 billion in budget‑year solutions to help address the state’s huge shortall.
Recommend Making More Targeted Reductions.
Rather than cutting districts’ most exiblesource o unding, we recommend that the Legislature make targeted spending reductions. Be‑cause the level o education savings that the state will need to achieve in 2009‑10 is unknownat this time, we develop a three‑tiered approach to achieving Proposition 98 savings. Undereach tier, we make targeted reductions to specifc K‑14 categorical programs or block grants.Tier 1 reductions would provide this frst step o savings with little, i any, programmatic eect.In contrast, tier 3 reductions would have relatively signifcant programmatic eects on schools.Taken together, the tiers are intended to give the Legislature many options or achieving budget‑year solutions.
Opportunity for Categorical Program Reform
Governor’s Plan Suspends Most Categorical Program Requirements.
To help school dis‑tricts and community colleges respond to a tight budget, the administration proposes to perma‑nently suspend most categorical program requirements. This means districts would no longerneed to adhere to virtually any o the state’s existing program or reporting requirements. Inaddition, districts would be able to transer unds among categorical programs as well as romcategorical programs to general purpose accounts. Although additional exibility would beneftdistricts, we have concerns with the Governor’s approach o merely disregarding—rather thanreorming—the state’s categorical system.
Recommend Undertaking Substantive Categorical Reorm.
We recommend that theLegislature adopt a more strategic approach that provides districts with additional exibilitybut also simplifes, streamlines, and improves the existing system. Specifcally, we recommendconsolidating 42 existing K‑12 categorical programs into three large block grants ocused oninstructional support, at‑risk students, and special education students. The three block grantswould consolidate more than $10 billion, or roughly two‑thirds, o all state categorical und‑ing or K‑12 education. For CCC, we recommend consolidating eight programs into two block
LEgisLativE anaLyst’s OfficE2009-10 BuDgEt anaLysis sEriEs
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