Copyright© 2007 by School Services of California, Inc.

                                      Volume 20                   For Publication Date: July 6, 2007             No. 15

Countdown to a New Fiscal Year 

As the clock ticks closer to the start of a new fiscal year, the Budget Conference Committee met for the first time in more than a week to finalize its actions on the 2007-08 State Budget. Comments from Republicans on the committee, however, made it clear that the June 29, 2007, action is not the end of the story. “Republicans stand ready to support a balanced budget. Unfortunately this budget falls short of that,” said Senator Dennis Hollingsworth, the Senate Republicans’ appointee to the Conference Committee. The vote of the Conference Committee was along partisan lines, with Democrats voting in favor and Republicans voting in opposition. Attention now turns to the Governor and legislative leaders to resolve the remaining differences and pave the way for the 27 votes in the Senate and the 54 votes in the Assembly needed for passage of the Budget Bill. 

Prior to the meeting of the Conference Committee on June 29, progress had been proceeding at a snail’s pace. Governor Schwarzenegger spent most of the week in Europe, while the Legislature waited until the end of the week to schedule a Budget Conference Committee hearing.  

Political insiders surmised that the waiting game has been due to the lack of articulation over what is needed by the various political parties in order to support the Budget. In prior years, when parties could not agree, the “Big Five”—comprising the four legislative leaders from each party and the Governor—have convened to work out the differences. This year, the Governor’s Office indicated Governor Schwarzenegger finds it more effective to have the legislative leaders meet first and work out a package. “This is the same sort of leadership that led to the infrastructure bonds and the prison reform package,” said Schwarzenegger spokesman Aaron McLear to the Sacramento Bee (“Governor Forgoes Budget Haggling,” 6/27/07). “He thinks it's better to have respect for all four caucuses and allow them to do their jobs.”  

Late State Budgets have become a common occurrence in Sacramento, with an on-time Budget happening only four times in the past two decades. And, because of past court decisions that require the state to make payments to schools and other agencies when the Budget is late, there are few high stakes consequences for not passing an on-time Budget.  

So what is at stake? Some speculate that a drawn-out Budget stalemate could have a detrimental impact on the Governor’s remaining legislative agenda, including health care, redistricting, and the public works bond. Additionally, a protracted Budget stalemate could cost the Legislature its chance at revising term limits. 

Prior to adjourning the hearing, the Conference Committee adopted the Proposition 98 package for community colleges. Highlights of the package include: 

Ongoing funds include budget bill language to recapture $80 million of 2006-07 Apportionment funds on or after March 14, 2008.  This language will guarantee that all workload reported in the current year will be funded and avoid the potential for a revenue deficit. 

The biggest surprise out of the Conference Committee was the $80 million apportionment reduction to community colleges. In addition, the Committee provided language and $13.8 million to provide a rate increase for career development & college preparation (enhanced non-credit).   

Many of the new programs proposed by Governor Schwarzenegger for K-14 education received no funding at all in this Budget compromise. His proposals for school safety, career-technical education, and teacher recruitment were all in jeopardy once the $364 million budget error came to light. With the closure of the Conference Committee’s work, the lights are likely being turned off for good on these proposals. 

Other items of interest that received no funding in the Conference Committee’s Budget include the one-time funding for mandates, career-technical equipment, accreditation for small and at- risk colleges, and textbook assistance. 

The word in the hallways of the State Capitol is that a final Budget is probably two to three weeks away. Stay tuned for further developments. 

                                                                —Jamillah Moore, Ed.D., Dave Heckler, Nancy LaCasse,
                                                                                                                            and Terry Anderson