CA: Revised budget plan leaves out payment of 'loan' to schools

San Diego Union - Tribune ^ | 5/10/06 | Ed Mendel

[NormsRevenge]

SACRAMENTO – Gov. Arnold Schwarzenegger will propose a revised state budget Friday that uses most of a $4.5 billion windfall in unexpected tax revenue to pay down debt and build a larger budget reserve, rather than pay off a disputed “loan” to schools, administration officials said yesterday.

Schools will get their regular share of the new revenue as required by the Proposition 98 school-funding guarantee, the officials told reporters in a briefing. The Schwarzenegger aides would discuss the budget only on condition of anonymity.

But they refused to discuss the governor's plans, if any, to deal with a $3.2 billion debt that school groups say is owed under a promise made when Proposition 98 was suspended two years ago to help balance the budget.

The $4.5 billion windfall is cash received in the current fiscal year ending June 30. The revised budget Friday also will contain a revenue estimate for next fiscal year that could provide more money for schools and other programs.

The focus of yesterday's briefing was on a proposal to make debt payments more affordable for a record $37.3 billion package of bonds on the November ballot for transportation, school construction, flood control and housing.

The bipartisan agreement on the bonds, months in the making, is regarded by Schwarzenegger and legislative leaders as a major step toward easing traffic congestion and preparing California for future growth.

Schwarzenegger gave a hint of his budget plans Friday as he toured a school in suburban Sacramento to tout the bond package approved early that morning by the Legislature.

The governor warned against repeating the mistake made six years ago, when windfall tax revenue from a high-tech boom was spent on increased programs and tax cuts, producing a huge budget shortfall when revenue returned to normal.

The state is still struggling to close a chronic budget deficit that has given California the lowest credit rating of any state. Schwarzenegger has avoided a tax increase and now gets a revenue boost from an improving economy and a strong stock market.

“Don't tie it (the revenue windfall) up in ongoing programs,” he told reporters Friday. “Use it to pay down the debt.”

The governor's revised budget plan would lower annual debt payments in the future by making a $1 billion early payment of outstanding deficit bonds and earmarking “spillover” sales-tax revenue to pay off transportation debt.

Aides said that under the proposal, if voters approve the November bond package, the annual debt payment would not go much above 6 percent of the general fund, regarded by some as a reasonable debt limit.

The budget Schwarzenegger proposed in January for the new fiscal year beginning July 1 had $1.6 billion for debt repayment and a slim $600 million reserve.

Aides said the revised plan doubles debt repayment to $3.2 billion and increases the reserve to $2.2 billion in a general fund approaching $100 billion.

The budget the governor proposed in January gave schools $1.7 billion more than required by Proposition 98, a down payment on what school groups say is owed.

[Grampa Dave]

Let the whining from the Teacher Union thugs begin.

[NormsRevenge]

Schwarzenegger aides would discuss the budget only on condition of anonymity.

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Trial balloon, anyone?

[NormsRevenge]

I can hear the ack ack guns cranking into position now.. ;)

The LA Times has a slightly different take..

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With Extra $5 Billion, Governor Plans to Pay Debt, Aid Schools

EXCERPT
http://www.latimes.com/news/local/la-me-budget10may10,1,4088526.story?coll=la-headlines-california

By Evan Halper and Joe Mathews, Times Staff Writers
May 10, 2006


SACRAMENTO — Gov. Arnold Schwarzenegger plans to retire a large chunk of the state's debt and boost education funding with more than $5 billion in unexpected revenue from surging tax receipts, according to documents obtained by The Times.

The governor will offer details on the windfall, and the plan for spending it, in a revised budget proposal on Friday. The billions he will propose returning to schools promise to help him end a bruising political battle that has dogged his administration.

[NormsRevenge]

The educational system already gets half the budget or so it seems , now a Judge wants to end exit exams which means we will have no way of knowing what we are getting for all the money spent.

We have seen minimal improvement testing wise from billions from the state and feds the last few years yet the mantra remains,, More more More

[NormsRevenge]

SAT scores drop; some see red flag

Mary Beth Marklein, USA TODAY
http://news.yahoo.com/s/usatoday/20060510/ts_usatoday/satscoresdropsomeseeredflag
Wed May 10, 7:00 AM ET

EXCERPT

Some colleges are reporting double-digit drops in the average SAT scores of applicants this year, even as other credentials, such as class rank and college-prep coursework, remained similar to or grew stronger than last year's.

Among schools reporting large drops: The nine-campus University of California system, which saw a 15-point drop on average among applicants, Average composite scores for the ACT, a rival college entrance exam, were unchanged from last year.


It's not yet clear what the drops mean, but colleges are particularly curious because the scores are almost completely based on the new SAT, introduced last year by the non-profit College Board, which owns the test.