June 30, 2009

Last Day for Legislature to Pass $3 Billion School Cut

By David Walrath

Part of the Democrats’ budget proposal and the Governor’s May Revision is to include reductions to current year school funding, which also would reduce next year’s school apportionment obligation.  These changes would relieve the state of the need to issue registered warrants (IOUs) starting this week.  If the school bill is not passed by midnight June 30, then numerous legal questions arise regarding the ability of the state to retroactively apply the cuts for this year, 2008-09. 

Given the lateness in the fiscal year – this is the last day – the school proposal could have technical difficulties in being enacted but if not enacted, the state could “lose” $3 billion of the state budget solution.  The $3 billion is a combined current and budget year effect. However, if there is a Proposition 98 suspension in 2009-10, then the budget year cuts also could occur.

If the state believes this is a must-pass bill, then expect everyone to look at it as a freight train to which they want to attach their box car.  All sorts of new policy proposals will probably be raised today.  The Governor has raised new policy issues concerning this bill; I believe Republicans will raise issues they will want addressed prior to supporting the bill. 

While nothing is assured, odds are very good that it will be a late night in Sacramento.  Schools should not count on legislative inaction protecting the $3 billion for schools.  Instead, expect legislative agreement to take the $3 billion as proposed in the Governor’s May Revision.