Budget Hole of $13 Billion, Mid-Year Cuts to Public Schools Required, Legislative Analyst Predicts

State revenues will be $3.7 billion less than expected, triggering $2 billion in cuts – more than half to public schools – according to an economic forecast issued by the Legislative Analyst on November 16.

The gloomy assessment of the 44-page California’s Fiscal Outlook includes the state ending this fiscal year with a $3 billion deficit and being an additional $10 billion short of spending commitments in the next fiscal year, which begins July 1, 2012.

“One year ago, we wrote that the U.S. economic recovery was progressing more slowly than previously expected. Once again, we have to make the same observation,” the analyst says.

The annual forecast takes on greater significance this year because it’s one of the yardsticks used in determining whether to impose a series of as much as $2.5 billion in spending cuts approved as part of the budget signed by Gov. Jerry Brown on June 30.

As part of the budget deal, lawmakers and the Democratic governor said an additional $4 billion in revenue would materialize during the current fiscal year. If it didn’t a series of cuts would be automatically imposed to close most of the gap.

Brown’s Department of Finance is also completing its forecast. The higher of the two will be used to determine whether cuts will be made and, if so, how much.

A decision is required by December 15.

“Some level of trigger cuts will likely occur but the exact amount will be known in December,” said Ana Matosantos, Brown’s finance director, in a statement.

Two tiers of triggered cuts were created by the budget deal.

The first round of $601 million don’t impact public schools, which have been shorted at least $17 billion over the past several fiscal years, according to a June 2010 survey of nearly 390 districts by the state Department of Education.

One-third of the first round of cuts fall on the University of California and the California State University System, each shouldering $100 million reductions. Also cut by $100 million each are services to the developmentally disabled and in-home care.

Under the analyst’s predictions, the estimated revenue shortfall is well over $2 billion, the level at which public schools are affected.

The budget called for elimination of up to seven public school days for a savings of as much as $1.5 billion. State support for home-to-school transportation would also be cut by nearly $250 million.

The analyst says school transportation will be cut by $248 million and general support for schools by $1.1 billion, reducing the loss of instructional days.

 A $1.1 billion cut is approximately $180 per pupil. 

To avoid cuts to public schools the Brown administration’s revenue projections must be $1.7 billion higher than the analyst.

“Fewer children will get the child care critical to a good start in life, more families will have to scramble to get students to and from school and pupils will likely find more crowded classrooms once they get there,” said State Superintendent of Public Instruction Tom Torlakson in a statement. “That’s not the world-class education California’s children deserve.”

More than half of the projected budget shortfall for the next fiscal year stems from the state owing public schools $6 billion more under the formulas dictating the state’s annual contribution.

Elsewhere, the analyst predicts California’s unemployment rate will stay above 10 percent through 2014

 “Today’s news is no surprise.  Our economy’s sluggish growth means a tax windfall is unlikely,” said Controller John Chiang. “The governor and lawmakers were smart to backstop their hopeful budget projections with mid-year cuts but they may not have gone far enough.”

Brown and lawmakers were praised by the analyst for their actions on the budget this year, which halved the projected shortfalls in future years.

“By making very difficult budgetary decisions  — including the trigger cuts – the Legislature and the governor have strengthened the state’s fiscal condition considerably,” the analyst says.

Said Brown: 

“California’s budget gap is the result of a decade of poor fiscal choices and a global recession. This year, we cut the problem in half. Next year, we’ll continue to make the tough choices necessary until the problem is solved.”

 Now, instead of operating shortfalls of $20 million, California faces holes of between $8 billion and $9 billion, the analyst predicts.


Filed under: Budget and Economy


  1. It’s obvious that California’s problems continue to get worse. When will the legislature and governor make the necessary decisions to turn this state around? It is obvious that they are living in a bubble created by their union financial supporters and environmental wackos. Unfortunately, the citizens of California are not engaged in the state’s implosion.

    Comment by Gwengen — 11.17.2011 @ 6:41 am

  2. I’m the mother of a student with autism and a parent advocate for families of students with disabilities in LAUSD. I’ve been involved with our Special Education Community Advisory Committee for 10 years (8 in leadership positions) and have seen the decline of legally mandated services over the years due to budget cuts.

    Our children don’t have the luxury of a “do-over” in their education. One shot is all they get. It’s frightening that our legislators have so little regard for our future, yet manage to find time (and space in bank accounts) for special interests. Our children, especially those with disabilities and Title I students in poverty, cannot afford to fly our “leaders” to Hawaiian get-aways to share our stories. They don’t visit our schools or see, first-hand what their lack of leadership has already done to school sites.

    Cuts have caused our teachers and administrators to perform even more duties without support staff, making it difficult to provide the time in classrooms needed to properly teach or to provide oversight for special education mandates. We’ve been suffering in the Division of Special Education for years and are desperate now…just desperate. I don’t know how else to describe the situation. It hurts, knowing how rich our state is.
    We need to create a more fair and just tax system or face the consequences of a future population unable to help rebuild California. We used to have one of the best education systems in the nation. Now it’s 49th? This resistance to reaching consensus or supporting education has destroyed opportunities for millions of future voters. Way to go, legislators.

    Comment by Sonja L — 11.17.2011 @ 6:58 am

  3. LOOK IN THE MIRROR if you want to find the source of blame. California has religiously elected Democrats to the Governor’s Office, all state constitutional offices (AG, Treasurer, etc.) and they are all fully owned subsidiaries of the SEIU, state and governmental employee unions, and simpatico with pro-Latino and other labor groups. YOU, the electorate, have chosen politicians who put organized labor, public employees, and Latinos –especially illegal aliens– ahead of all other groups in this state. When the highways fall apart, look in the mirror. As our schools fail, look in the mirror. As crime rates soar as they release THOUSANDS of so-called nonviolent prisoners into our communities, look in the mirror. As your jobs evaporate and businesses flee this state or go out of business, look in the mirror. As public employees retire all around you with FULL pensions, with GENEROUS medical benefits for life, etc., and your 401 K evaporates, look in the mirror. As illegal alien kids go to colleges for REDUCED tuition when American students must pay out-of-state tuition or can’t get a slot in the university because it was taken by an illegal, look in the mirror. And to all of you idiots who will claim I am a right wing conservative Republican, think again… I am a registered Independent for over 25 years. I “get” it and I did not vote for those causing us all of the problems all around us. I blame those of you who voted in liberal Democrats and I welcome the collapse as it is the only thing that will wake you the hell up. Many thanks for the collapse. I appreciate it.

    Comment by Getting It — 11.17.2011 @ 8:34 am

  4. Democrats like Arnold Schwarzenegger 2003-11 – 8 years, Pete Wilson 1991-99 – 8 years, George Deukmejian 1983-91 8 years, Ronald Reagan 1967-75 – 8 years?

    Jerry Brown Jr, Democrat, served after Regan from 1975-83 – 8 years
    Gray Davis, Democrat, served after Pete Wilson from 1999-2003 – 4 years

    12 years of Democratic control as opposed to 32 years of GOP control. Republicans have had control for the longest time and should take as much blame or more for this mess we’re in.

    Comment by Sonja L — 11.17.2011 @ 11:47 am

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