Volume I, No. 7

December 18, 2008

California school finance is in for a wild ride over the next 18 months; Education’s Bottom Line provides information regarding the State Budget along with other pertinent information on issues affecting school districts.  

Assembly and Senate Act Send Democratic Budget Proposal to Governor

By Ian Padilla -- ipadilla@m-w-h.com

Today the Senate and Assembly met to consider an $18 billion budget plan authored by Democratic lawmakers.  The proposal is a package of bills which proposes a combination of tax increases and programs in an effort to partially address the fiscal crisis that California is facing.  The Democratic proposal is controversial because it circumvents the Constitutionally-required two-thirds vote requirement to increase taxes based on the theory that the proposal is “revenue-neutral” because it proposes to raise some taxes and lower others, and so it can be approved with a simple majority vote.  Republican lawmakers vigorously oppose the Democratic proposal arguing that it is illegal. 

Concerning education funding, the Democratic proposal reduces K-12 funding by $2.5 billion in the current year, and provides certain types of fiscal flexibility for districts. We believe that the flexibility component is the same or essentially the same as the flexibility provisions contained in SB 8XXXX which is the proposal previously developed by Democratic lawmakers, but we are in the process of confirming this.  We will make more detailed information available once we confirm this information. 

The most immediate question at this point is whether or not Governor Schwarzenegger will sign this package of bills into law.  The Governor has indicated that he will not approve a package unless it contains provisions to relax state workplace and environmental laws to expedite public works projects. 

Stay tuned. 

PMIB Votes to Freeze Disbursement of Funds to Infrastructure Projects Already Under Way

By Tom Duffy -- tduffy@m-w-h.com

The Pooled Money Investment Board (PMIB), comprised of the Director of the Department of Finance, State Treasurer, and State Controller, met on December 17, 2008 and froze disbursement of existing loans for specified infrastructure projects, including 900 K-12 projects approved by the State Allocation Board that are either under way or ready to start. We believe the action taken yesterday will have an immediate affect on only 200 to 300 projects. However, if the action is not reversed by February, then more projects will be affected; if not reversed by summer, then over 1,000 projects could be affected. more...

Why Can't Sacramento Solve the State Budget Problem?

By David Walrath -- dwalrath@m-w-h.com

School district administrators, teachers, parents and California citizens are all asking why Sacramento politicians are not solving the current budget problem.  The general refrain is, “We elected them to solve the problem but they are not getting it done.”  There are some very good and practical reasons why the budget problem is not being solved.  It will begin with increasing tax revenue, then move to program cuts, review political deal making, and conclude with what I believe is necessary. more...

CARB Approves Scoping Plan to Reduce Greenhouse Gas Emissions, School Bus Regulations

By Anna Ferrera -- aferrera@m-w-h.com

On Thursday December 11, the Air Resources Board approved California's plan to reduce the state's greenhouse gas emissions to 1990 levels by 2020.  more ...

San Diego County Trial Court Finds Mandate Deferrals Unconstitutional

By Ernest Silva - esilva@m-w-h.com 

California School Boards Association v. State of California decided a claim by CSBA on behalf of school districts against the State challenging the State’s practice of deferring mandate reimbursement by appropriating just $1,000 for each mandate.  While the Court said all of the right things in supporting the school claims, the Court’s remedy may not put money in district coffers. more...

If you have any questions on the articles in this newsletter, please contact the author of the article in question.

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Murdoch, Walrath & Holmes (MWH) has been instrumental in shaping statewide policy and implementing regulations for K-12 schools for more than two decades.  Strategic relationships have been forged with the State Administration through agencies such as the Department of Education, the State Allocation Board, the Department of Finance and the Office of Public School Construction and, on the federal level, with key Congressional Members and the Executive Branch.  MWH prides itself on having some of the best minds in K-12 education in virtually all aspects of school fiscal needs. 

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