With the Governor calling off negotiations over placing the question of temporary revenue extension on the June ballot, school business officials across the state of California are asking themselves the same question; so now what?
The Governor suspended negotiations figuring that there was little
chance of reaching agreement with Republicans who reportedly walked
into a meeting with a list of 53 demands. The Governor’s declaration sent shock waves through the Capitol, creating a
sense of hopelessness. But with the window closed on the possibility of
a June election, the focus has now turned to finding a legislative solution.
As time has progressed since the unveiling of the governor's budget in January, talks between the Governor and Republicans continued to be unfruitful, public support for extending the temporary revenues in a special election dipped. In fact, public support dipped low enough that many people in and around the Capitol thought taking anything to the ballot would be risky at best. Even when the Governor hinted at an initiative that could be quickly drafted, circulated and placed on a November special election ballot, many people believed that measure would be an even tougher sell than a measure appearing in June. Once the temporary taxes expire at the end of June, voters would be faced with a tax increase rather than a tax extension.
So that leaves a legislative solution as the only option available. And within that option there are several variations that could occur.
Those variations include:
- The Governor can pursue a two-thirds legislative vote to extend the temporary revenues and not place the issue on the ballot. Presumably, the governor would not negotiate with Republican leaders, but with specific Republican legislators who have signaled an interest. Assuming all of the Democrats stay supportive, two Republican votes would be needed in both the Senate and the Assembly. This option could produce the same level of funding on which the 2011-12 budget that is on the governor’s desk is based. For schools, it would mean relatively flat funding, albeit that flat funding comes with a new apportionment deferral.
- The Governor could pursue a majority vote strategy that extends the same revenues using an untested legal opinion that all the Democrats would have to do is include the extension as an amendment to the current year budget. This strategy would undoubtedly be challenged. Theoretically, this method could produce the same level of funding as could be produced using a two-thirds vote. Schools could receive the same level of funding as currently proposed, but it would be difficult to plan for that funding with a court challenge.
- The Governor could pursue a majority vote strategy that was outlined in a legislative counsel opinion sought by Republicans. The opinion outlined a scenario where a majority vote could be used to modify revenues that had been previously approved by voters. How much revenue could be raised this way is not known for sure, but it would be less than what the current budget bill is based on. That being the case, the remainder of the state’s deficit could be addressed with fund transfers and other creative budgeting. This method would also likely be challenged in court. For schools, the funding level would be something less than what is currently proposed.
- The least desirable option is to simply pursue an all cuts budget with a simple majority vote of the legislature. Senator Darrell Steinberg and others have hinted that in an all-cuts budget, schools would be faced with a $5 billion cut. That is approximately $835 per ADA. But again, an all-cuts approach would come together as a last resort, the details of which would not be known until just before a vote is taken.
- Lastly, and perhaps the most palatable remedy for both Democrats and Republicans is a hybrid solution. While the governor remains committed to allowing voters to
ultimately decide the issue, he now appears open to temporarily
extending the taxes by action of the Legislature alone. Following the
Legislature's enactment of a tax extension or new taxes, voters would
be given the opportunity to ratify the decision at a future election. This would allow the Governor to keep his campaign promise while giving Republicans in both houses the political cover they need to support the temporary extension through legislative action.
For school districts trying to plan, the level of uncertainty has not changed. The range of possibilities remains the same; something between a "Wishful Thinking" Budget with a $19 per student cut to a "Scorched Earth" scenario with a cut in the $850 to $1,000 per student range. Most school districts have prepared by adopting a "Be Prepared" budget (commonly referred to as the Boy Scout scenario) in the range of a $349 per student cut. Let's pray its enough.