Education and the CA Budget

Education and the CA Budget

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)

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

Corporate Tax Cuts 2008-2011

Impact on K-12 Spending

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

CCSF Budget Cuts

800 classes cut from 2010-20128% 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

November 2012 Revenue MeasuresProp 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)

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

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

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.

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

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”)