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Just when you thought the budget couldn’t get leaner

By Katy Murphy
Thursday, November 15th, 2007 at 10:33 am in finances.

cuts.jpgA report released yesterday by Legislative Analyst Elizabeth Hill can’t be good news for California schools — or any other recipient of state funding for that matter.

Hill projected a $10 billion shortfall in the state budget over the next two years, largely, because of an economic downturn. That means Schwarzenegger and state lawmakers will have to make some serious cuts, raise taxes, or both.

Here’s the Tribune article that ran today. Here’s a Legislative Analyst’s Office briefing on how the state budget situation might affect Prop. 98, the formula that sets the minimum funding levels for public schools and community colleges (Between you and me, it’s not that easy to understand).

How do you think the Oakland school district — which, as we all know, has no small deficit of its own — will survive further cuts in state funding, should it come to that?

image from DeFaBa’s Web site at flickr.com

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  • Jennifer

    I believe that this is why we tied the Governor’s hands by mandating a minimum school funding.

  • turner

    I disagree, Katy. OUSD does NOT have a deficit. It ended the last fiscal year with a healthy balance.

    Now, all we need to do is exercise good judgment in budgeting and spending.

    Turner

  • Katy Murphy

    Jennifer: That’s true, but the K-12 system is not impervious to cuts. Paul Warren from the Legislative Analyst’s Office said that with a two-thirds vote, the state Legislature can suspend Prop. 98. That could mean no cost-of-living adjustment for schools in 2008-09. It happened about three years ago, and at least once before that.

    The California Teachers Association agreed to the suspension the last time, but then there was a big fall-out in 2005 between the CTA (and, seemingly, everyone else in the K-12 system) and Schwarzenegger over “broken promises” and the amount of money the state owed the school system. There was a lawsuit and a big payout.

    That’s probably way more than you wanted to know.

  • Katy Murphy

    The CFO of the school district says there’s a deficit of $4.7 million.

  • Turner

    One CFO says $1.5 million; the other says $4.7 million. They are both right because it’s all budget and budget is all subjective depending on how conservative you are. Still, it’s all smoke and mirrors. It’s all in the budget and budget is just a guideline on how to spend the money. The central office has always been disconnected from the principals and how the schools actually spend money.

    So they predict all these deficits for the fiscal year, and then end up in the black. Don’t take my word for it. Check out the last fiscal report. We ended with $43 million as the bottom line. Granted a lot of that was categorical but it was still unspent.

    Now, legally, we are supposed to have a 2% reserve but we have been unable to do that. But, really, looking at the books, there is NO deficit.