Posted on 05/10/2006 7:29:44 PM PDT by NormsRevenge
Gov. Arnold Schwarzenegger on Wednesday announced a plan to repay billions of dollars to schools that educators say he has owed them since he backed out of a budget deal he made shortly after taking office in 2003.
The deal, reached as the governor finalized the annual May revisions to his proposed 2006-07 budget, calls for the state to repay $2.9 billion over seven years.
Another $2.8 billion from an unexpected tax windfall this spring will also go to education.
The agreement is expected to settle a lawsuit brought by education groups and it may also quiet one of Schwarzenegger's most vociferous political enemies - the California Teachers Association - in a tough election year. The group spent $50 million in last year's special election to defeat the governor's initiatives.
Sandra Jackson, a CTA spokeswoman, called the deal good news but cautioned that it would not change the CTA's position come November. The union has endorsed State Treasurer and Democratic gubernatorial candidate Phil Angelides.
"The governor's refusal to repay the money that was owed to schools was a big problem for us and we had to keep that in the forefront. Now that he has proposed to repay that money in his May revision, we can now move on towards full funding for our schools," Jackson said.
The deal, however, raised red flags for budget watchdogs who said they worry the agreement could exacerbate future deficits.
Under the deal, the administration technically concedes the state underfunded education in 2004-05 by $1.7 billion and then recalculates what's owed to schools this year and next.
The deal marks the first time the governor's administration has agreed with the education lobby on how much the state owes since a meeting Schwarzenegger held with the education lobby in December 2003.
Educators said they agreed to accept $2 billion in cuts to help the newly elected governor balance the 2004-05 state budget. In return, the governor promised that schools would get more money if state revenues increased more than expected.
Assembly Speaker Fabian Nunez, D-Los Angeles, credited the governor for fully funding education but questioned the timing of the decision.
"He's making good on his promise but at the same time you have to look at the political implications," said Nunez, noting Schwarzenegger's re-election bid. "There's a concerted effort by the administration to soften the blow of his opposition."
"This is a way to reinvigorate his campaign for re-election."
State Superintendent of Public Instruction Jack O'Connell commended the governor for doing the right thing. He said he repeatedly criticized Schwarzenegger for failing to live up to his deal, and said so in meetings around the state.
"I was critical of the governor and I also said I would thank him when he lives up to his commitment to the students of California, so today I am publicly thanking the governor."
California is doomed if they don't reelect him... but they are far from saved.
"There is a ready solution for anyone on the public payroll who feels that he is not paid enough: He can resign and work for a living. This applies with equal force to Congressmen, welfare 'clients', school teachers, generals, garbage collectors, and judges." -- Robert A. Heinlein
Another "Republican" headed for the trashbin. Electing Arnold has been like putting a "Kick Me" sign on our backs. What difference does it make whether it comes from the left or the right if all the kicks are the same?
LOL, it must be re-election time, time to pay off the education mafia.
Or else.
Perfect. Well said.
What the ?
He started last year with a $9 Billion Surplus. Add to that $5 Billion in unanticipated revenue this year. But he can't just pay back the darn money and put this behind him? Seven Years? Is he gonna 'finance' his payback for raiding the Transportation fund, too? Just pay off the credit cards and stop the deficit spending, already!
Notice how casually this was presented. Almost an after thought.
For those who understand the Prop 98, progressive, funding formula this apparently small, retroactive change ($1.7B) in the 2004-2005 funding level has significant ramifications in the following years.
Think of it as a compound interest calculation that is reset retroactively. A 2% increase, compounded for 7 years, adds an additional 15% rate of increase to the education budget by the end of the next gubernatorial term.
Adding to the state's dilemma is the distinct possibility that a portion of the BigBangBonds, through litigation, may be included in the Prop 98 formulas and California is off to the poor house supporting the education monster.
Get rid of Prop 98 and the Austrian before it and he bankrupts us all.
Analysis of the 2006-07 Budget Bill
Legislative Analyst's Office
February 2006
http://www.lao.ca.gov/analysis_2006/education/ed_02_anl06.html
Proposition 98 Update
Our updated economic and revenue forecasts lead us to project different Proposition 98 outcomes than the Governor. Specifically, we estimate a somewhat higher Proposition 98 minimum guarantee for both the current and budget years. We also discuss various issues related to Proposition 98, including an update on the outstanding maintenance factor and our recommendation that the Legislature enact trailer bill language to rebench the Test 1 factor. Finally, based on updated economic data, we estimate that the K-12 cost-of-living adjustment (COLA) will be higher than the Governor’s projection-5.8 percent instead of 5.2 percent. Funding COLAs at this level could lead to additional state costs of around $300 million.
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