August 3, 2010

Democrats Propose Proposition 98 Suspension

This afternoon Assembly Speaker John Perez and Senate President pro Tempore Darrell Steinberg unveiled the new Democratic state budget proposal.  Within that proposal, is their attempt to protect education funding and also suspend Proposition 98.  While most of their budget proposal will probably not be successful, there is no expectation that they will rescind their Proposition 98 suspension proposal if final negotiations result in even lower education funding. The education community should continue to presume the May Revision education funding levels and now presume a suspension of Proposition 98.

When Proposition 98 is suspended, that effectively means even if the state’s economy turns out to be better than anticipated, schools will not receive a share of that economic growth without a specific state appropriation action. 

Suspension rebenches the beginning point for moving back to the Test 2 funding level and clearly indicates the amount of maintenance factor that is owed to schools.  The amount of money owed to schools in any year for maintenance factor payments has both a constitutional and statutory calculation.

While suspension avoids legal issues regarding maintenance factor payments, the fear is: If the Legislature suspends this year and the economy does not improve will it be easier for them to suspend again next year when they are not up for election?

 ~Dave Walrath