Education and the CA Budget

CA Budget 2008-2009: $85B budget in CA; $24B deficit

18% decline in state revenues in previous 2 years

• 2010-2011 $ 86B budget; $18B deficit • Revenues improving gradually this year

• Balanced Budget by cutting services, borrowing, statewide furloughs (3 days/month) and layoffs

• LAO: Projected deficit of $20B for each of next 5 years (“structural deficit”=consistently spend more than we have)

Facts About Taxes in CA

CA’s top income tax bracket has fallen from 11% of income in 1983 to 9.3% today. 

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 2008-2009

Impact on Higher Education

UC ▪ Faculty and staff furloughs▪ 32% increase in fees over 2 years (to over $10,000)

• CSU• Faculty and staff furloughs• Fees increased 40% over last two years to $4287• Enrollment reduced by 40,000 over two years (no

Spring admissions)

CCC▪ No furloughs/few layoffs yet; 1% pay cut for some▪ Increased fees from $20 to $26/unit (30%)▪ Enrollment increased by 56,000 students

Impact on K-12 Spending

Impact on CCSF 2009-2011

$18 million deficitClasses cut by 6.3% -- about 300 out of

4,900 classes.Cuts to student services (counseling,

library)Pay freezes; highest-paid administrators

6% pay cut. Hiring freeze for staff and administration;

most faculty hiring postponed. About 30 classified staff being “bumped” by

laid-off city employees

Impact at CCSF Spring 2010 classes cut by 6.3% -- 300

classes. About 100 classes restored for 10-11

Summer school 2010 cut (800 classes) 2011 restored (80%)

 Fees maintained at $26/unit for this year

Projected 2011-12 Deficit from $21m – 36m

Proposed Solutions Prop. 25 – changes 2/3 to simple majority to

balance budget (passed in Nov.) but not for tax increases

Tax increases (req. 2/3 vote of legis to put on ballot) Oil and gas severance tax/$ for higher ed Increase income tax on wealthiest (1% on top1%) Revise Prop. 13 to allow increase in non-residential

pty taxes Cut more services/programs

Additional furlough days/layoffs Social Services, Parks, Cities/Counties

Brown’s proposals

CC Fee increases to $36./unit

1.5 billion cut to higher ed (12B cuts overall) $400m to ccs; $500m to UC, CSU

Extend Tax Increases set to expire in June Vehicle license, sales tax, income tax Requires 2/3 vote of legis to get on ballot K-12 budget depends on this; 13B overall

What choices would you make?

Increase Fees /Increase Taxes

Layoffs vs. across the board pay cuts/Furloughs

Cut Student Services or cut classes ? http://www.latimes.com/news/local/la

-statebudget-fl,0,95571.htmlstory