CA: Pension plan underscores philosophical differences over budget

SACRAMENTO (AP) - A key player in the state's powerful education lobby on Friday criticized a Democratic compromise proposal on the state budget, throwing a last-minute curve into talks that both sides said were progressing toward a possible deal.

Gov. Arnold Schwarzenegger and the Legislature's Democratic majority have been separated for weeks on spending differences that total less than 1 percent of an estimated $116 billion annual spending plan.

The divide, however small, is as much philosophical as fiscal, illustrating the Republicans' desire to pass a budget that doesn't add a single dollar in deficit spending.

At issue is money Gov. Arnold Schwarzenegger wants school districts to pay toward the cost of their own teacher retirement benefits and a compromise plan from Democrats.

Schwarzenegger and Republican lawmakers want to shift nearly $470 million in state teacher retirement contributions to local school districts. They see it as a way to limit spending as much as possible and eliminate future shortfalls.

Democrats want that money restored. They are concerned about cutting too deep into core services such as schools and health care, even if it means adding to future debts. The state already is paying off billions of dollars in loans used to close past budget shortfalls and projects a deficit for the 2006-2007 fiscal year that could be as high as $5 billion.

The governor and Republicans have held out in recent days and won big concessions from Democrats, who appear to be ready to compromise on the final remaining issues, including the teacher retirement contributions.

The Democrats' compromise would cost schools about $235 million, half of Schwarzenegger's proposal. But that has sparked a revolt from the California School Boards Association, which represents virtually all of the state's more than 1,000 school districts and county offices of education.

The organization issued an alert Friday to its members, hoping to stop lawmakers from accepting the compromise proposal.

"Right now, it's something for the Democrats to think about," said Dan Schnur, a GOP consultant who once worked for former Gov. Pete Wilson. "But if the teachers union gets involved, it will become something they will have to do something about."

School officials already believe they are owed an additional $3.1 billion in funding next year under a voter-approved funding guarantee and a pledge they say Schwarzenegger made shortly after taking office, said Scott Plotkin, executive director of the California School Boards Association.

He said the final straw for his group is the Democrat's latest compromise to shift half the $469 million in annual teacher pension costs to school districts.

"We thought the Democrats were on our side," he said. "When we heard about this latest idea, we all said, what's going on here?"

Democratic leaders said the flare-up will not disrupt progress on the budget and expect to reach an agreement in the coming days.

"We spent five months fighting the administration's slashing of education funding, and we are not giving that up now," said Steve Maviglio, spokesman for Assembly Speaker Fabian Nunez, D-Los Angeles. "But there are areas where we may need to make some compromises in. We need to get a budget passed."

Assemblywoman Jackie Goldberg, D-Los Angeles, a former school teacher and one of the Legislature's strongest advocates for education, said she doesn't like any of the compromises Democrats have been forced to make.

"We got as close as we could to protecting as much as we could," she said. "We have to get a budget."

Looming over the budget talks is the specter of the November special election, which contains several initiatives seeking to reform how state government operates and campaign cash is raised. A drawn-out budget fight is seen as bad news for both parties.

Rarely in recent years have legislators been so close to agreeing on a state budget so early in the summer. Missing the deadline to have a budget in place by July 1, the start of the new fiscal year, is common, with talks typically dragging into late July or early August.

The governor and legislative leaders are scheduled to meet behind closed doors Saturday when some believe they could reach a handshake agreement.

Since taxpayers will foot the bill regardless of who administers the program (teacher's retirement) what's the fight about?

Schwarzenegger wants to shift the cost of public education from the state to the local level as it was prior to the 1960s. The problem this shift back in time creates is that the state also took substantial tax revenues away from locals during that same period.

Prior to the rise of the state in the 1960's, local governments received most of their revenues through sales tax, property taxes and service fees. As the state took larger and larger portions of sales and property taxes local governments began cinching their belts. Expansion of property taxes was denied after passage of Prop 13.

Both the legislature and Schwarzenegger are proponents of big government. What the electorate must accomplish if they allow Schwarzenegger to force local governments to pick up more of the tab is to force the state to also surrender some of the loot (tax revenues).

Both the legislature and Schwarzenegger are proponents of big government.

Ouch!, The truth hurts, don't it.

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What the electorate must accomplish if they allow Schwarzenegger to force local governments to pick up more of the tab is to force the state to also surrender some of the loot (tax revenues).

Good and Luck! Once a pig gets a taste of truffles, they won't go back to ground mash. ;-)

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