Public safety and education in jeopardy

Gov. Jerry Brown announced his proposed 2012-13 budget last week. The $92.5 billion budget is balanced and could produce a $1.1 million surplus for future reserves.

Both the projections and plan are delicately balanced on the assumption that state voters will approve his proposed tax increases on upper-bracket taxpayers and a half-cent sales tax hike.

Even if approved, the state’s Legislative Analyst’s Office (LAO) estimates that the revenues will be less than the governor’s projection. The LAO’s revenue projections are $4.7 billion less than the Administration’s estimates.

Re-enforcing the lower revenue forecasts last week was the state controller’s notice that December state income tax revenue was significantly less than expected based on June projections.

More importantly, if the tax proposals were defeated, schools and public safety would incur drastic reductions to maintain a balanced budget for the remainder of the 2012-13 fiscal year.

Overall
The governor’s budget request builds on the state budget approved in June 2011, which means it “keeps the cuts made last year and adds new ones.”

With no changes, the 2012-13 fiscal year is projected to have a $9.2 billion deficit. About $4.2 billion will be carried over from this fiscal year. The remaining $5.0 billion is the expected deficit based on no revenue or program changes.

The governor’s solutions balance additional cuts primarily in health and social programs, such as CalWORKS and Medi-Cal, and in education, with additional revenue. The new revenue would come from the tax increase propositions to be on the November ballot.

With these cuts and revenue increases, the state budget would be balanced and end the fiscal year with $1.1 billion reserve. The critical step is new revenue. Without voter approval, the governor and legislature will have to cut programs an additional $5.4 billion.

These reductions will be focused on education and public safety programs, which would impact the Hill.

Public Safety
If the new taxes are not approved, CAL FIRE’s budget would be cut 10 percent or $15 million. This would be a substantial affect on fire services. Some stations would have to be closed and air attack would be reduced.

“That amount would roll into a cumulative $60 million cut for Fiscal Year 13/14,” wrote CAL FIRE Battalion Chief Julie Hutchison. “It is anticipated that these reductions will impact fire protection (engines, aircraft, dozers, fire crews) resources statewide. We have not had the opportunity to develop a plan for these cuts … The executive managers will be involved in a very difficult, thorough and lengthy process determining criteria based on maintaining critical services to the public with these potential cuts.”

Nearly 20 percent of state park rangers and fish and game wardens as well as seasonal lifeguards are targeted for elimination if the new revenue proposal is defeated in November.

Education
Without new state revenue, K-12 education funding would incur another $4.8 billion reduction. The state higher education programs would lose $400 million.

“I wish I thought the tax initiative would pass, but I don’t think it will,” wrote Hemet Unified School District Superintendent Dr. Steven Lowder in a message to the Town Crier. “I would be very happy to be wrong on this one. My recommendations will be for the District to plan on a down vote and if it passes, things will be all good so to speak.”

The budget, with the new revenues, begins to return educational funding decisions to local districts. The 2012-13 proposed funding level of $52.5 billion is $4.9 billion more than the current year’s level. Almost all of the state funding would be allocated based on one formula rather than a multiplicity of categorical programs. The proposal will target funds to schools with large populations of disadvantaged pupils, according to the governor’s budget documents.

The LAO report endorsed these proposals. “The governor’s plan addresses several of the longstanding, fundamental, widely recognized problems with the state’s K-12 and community college funding systems,” said the LAO report which then recommended that “the Legislature adopt the governor’s basic restructuring approaches (regardless of the state’s revenue situation).”

“I think the idea of more ‘real’ control at the local level is very good,” Lowder said. “I’m not sure if it will actually happen, however the state has been giving us the ability to collapse categorical funds into the general fund, so there may be hope.”

Government restructuring
The governor is trying to change state government and improve its efficiency. He is proposing to reduce the number of departments from 12 to 10 and combine into a new Department of Revenue similar functions such as the Franchise Tax Board and Employment Development Department.

More than 45 state agencies and offices will be eliminated. One of the major changes includes the abolition of the departments of Mental Health and of Alcohol and Drug Programs. Their functions would shift to various other existing departments including Health Care Services, Public Health, Social Services and Education.