state of the state budget 2012-13 governor’s january proposal

State of the State Budget2012-13 Governors January Proposal Presented by Angela Su, CTA NODD School FinanceJanuary 2012http://dl.dropbox.com/u/29390328/Issues12-13statebudget.pptxLink available until January 24, 2011

www.dof.ca.gov

Proposition 98The Constitutional Guarantee Compared to Actual FundingCalifornia Teachers Association

Chart1

53.353.3

55.655.3

57.656.4

60.349.1

60.751.1

59.149.7

61.248.3

* Per LAO Estimate

Proposition 98 Guarantee

Actual Funding

Deficits

-19.2-6.1

-22.42012-13

-20.42013-14

-20.22014-15

-19.42015-16

Source: Legislative Analyst's Office

Annual Operating Shortfall

Carry in Deficit from 2010-11

Absent Permanent Solutions,Deficits Will Persist for YearsGeneral Fund (In Billions)

small business

0.87

0.13

Taxes

Prop 98

53.353.3

55.655.3

57.656.4

60.349.1

60.751.1

59.149.7

61.248.3

* Per LAO Estimate

Proposition 98 Guarantee

Actual Funding

Chart5

-0.4224633057

-0.1295971979

-0.1134964164

-0.0920089467

-0.0788593557

0.2592592593

% Change

% chng 0405 1011

0.2185510996

0.0331764706

0.0574468085

0.39546875

1.108

1.2625

% Change 04-05 to 10-11

Pecent Change From 04-05 to 10-11

Corp Inc Tax

0.146

0.102

30% REDUCTION

Corporate Income Taxes as a % of General Fund Revenue

Corporate Income Taxes as a Percentage of General Fund Revenue

Data

2011-122012-132013-142014-152015-16

Annual Operating Shortfall-$19.2-$22.4-$20.4-$20.2-$19.4

Carry in Deficit from 2010-11-$6.1

Taxes

Business > $1 M2%87%

Business < $1 M98%13%

Fiscal Year2005-062006-072007-082008-092009-102010-112011-12*

Proposition 98 Guarantee$53.3$55.6$57.6$60.3$60.7$59.1$61.2

Actual Funding$53.3$55.3$56.4$49.1$51.1$49.7$48.3

PROGRAM% Change 04-05 to 10-11

General Fund Revenues21.9%

Health & Human Services3.3%

K-14 (Prop. 98) Expenditures35.7%

Corrections39.5%

Resources110.8%

Business, Transportation & Housing126.3%

$ Change

Business, Transportation & Housing$0.5

Health & Human Services$0.8

Resources$1.1

Corrections$2.5

K-14 (Prop. 98) Expenditures3$2.7

General Fund Revenues$16.9

% Change

Business, Transportation & Housing-42.2%

K-14 (Prop. 98) Expenditures3-13.0%

Health & Human Services-11.3%

Corrections-9.2%

General Fund Revenues-7.9%

Resources25.9%

1980-812011-12Diff

14.60%10.20%30%

1980-812011-12

Corporate Income Taxes as a % of General Fund Revenue14.60%10.20%

6,200,0008852$54,882,400,000

6,200,000

6,200,00011223$69,582,600,000

Major Exp 0708

(DOLLARS IN BILLIONS)

2007-0812011-122 Proposed% Change

K-14 (Prop. 98) Expenditures3$57.1$49.3-13.7%

Health & Human Services$29.7$21.2-28.7%

Business, Transportation & Housing$1.6$0.7-55.9%

Corrections$9.8$9.2-6.8%

Resources$1.7$2.123.4%

General Fund Revenues$102.3$89.7-12.3%

1 Department of Finance, Final Budget Summary 2007-08, Aug 2007

2 Department of Finance, Governor's January Budget Summary 2011-12, January 2011

3 Includes local property taxes and general fund spending


2007-0812010-112% Change



Business, Transportation & Housing$1.6$0.9-42.2%

Corrections$9.8$8.9-9.2%

Resources$1.7$2.125.9%



2 Department of Finance, Final Budget Summary 2010-11, October 2010



2007-0812010-112% Change


All other state programs$42.8$38.3-10.5%



2 Department of Finance, Final Budget Summary 2010-11, October 2010




K-14 (Prop. 98) Expenditures3$57.1$49.3-13.7%-$7.8

All other state programs$42.8$33.1-22.7%-$9.7







K-14 (Prop. 98) Expenditures3$49.7$49.3-0.8%-$0.4

All other state programs$38.3$33.1-13.6%-$5.2





Doesn't match SR info

Doesn't match SR info

Major Exp 0405



K-14 (Prop. 98) Expenditures3$47.0$49.34.9%


Business, Transportation & Housing$0.4$0.772.8%

Corrections$6.4$9.243.2%

Resources$1.0$2.1106.6%

General Fund Revenues$77.3$89.716.0%

1 Department of Finance, Final Budget Summary 2004-05, June 2004



(DOLLARS IN BILLIONS)(DOLLARS IN BILLIONS)

2004-0512010-112% Change2004-0512010-112$ Change% Change

K-14 (Prop. 98) Expenditures3$47.0$49.75.7%K-14 (Prop. 98) Expenditures3$47.0$49.7$2.75.7%

Health & Human Services$25.5$26.33.3%Health & Human Services$25.5$26.3$0.83.3%

Business, Transportation & Housing$0.4$0.9126.3%Business, Transportation & Housing$0.4$0.9$0.5126.3%

Corrections$6.4$8.939.5%Corrections$6.4$8.9$2.539.5%

Resources$1.0$2.1110.8%Resources$1.0$2.1$1.1110.8%

General Fund Revenues$77.3$94.221.9%General Fund Revenues$77.3$94.2$16.921.9%

1 Department of Finance, Final Budget Summary 2004-05, June 20041 Department of Finance, Final Budget Summary 2004-05, June 2004

2 Department of Finance, Final Budget Summary 2010-11, October 20102 Department of Finance, Final Budget Summary 2010-11, October 2010

3 Includes local property taxes and general fund spending3 Includes local property taxes and general fund spending

Exp trend

34.2999.35224.9980.3746.9995.706

37.85510.39526.9651.7237.8387.954

39.76111.33129.4183.0199.2938.834

42.23311.89129.7261.50210.2097.844

33.8910.18128.8031.54710.0087.118

35.73210.60224.3942.5128.1644.945

36.111.526.3460.9058.9312.801

K-14 (Prop. 98) Expenditures

Higher Education

Health & Human Services

Business, Transportation & Housing

Corrections

Other General Fund Expenditures

% chang trend

0.1036764920.11152694610.07868629493.60695187170.11987426780.3939712583

0.05035001980.090043290.09096977560.75217643640.18563409030.1106361579

0.06217147460.04942193980.0104697804-0.50248426630.0985688152-0.1120670138

-0.197546942-0.14380624-0.0310502590.0299600533-0.0196885101-0.092554819

0.05435231630.0413515372-0.15307433250.6237879767-0.1842525979-0.3052823827

0.01029889170.08470099980.080019677-0.63972929940.0939490446-0.4335692619


Higher Education



Corrections


% chng 0708 to 1011

0.06217147460.04942193980.0104697804-0.50248426630.0985688152-0.1120670138

-0.197546942-0.14380624-0.0310502590.0299600533-0.0196885101-0.092554819

0.05435231630.0413515372-0.15307433250.6237879767-0.1842525979-0.3052823827

0.01029889170.08470099980.080019677-0.63972929940.0939490446-0.4335692619


Higher Education



Corrections


Chart16

000000

-0.197546942-0.14380624-0.0310502590.0299600533-0.0196885101-0.092554819

-0.1539317595-0.1084013119-0.17937159390.672436751-0.2003134489-0.369581846

-0.1452181943-0.0328820116-0.1137051739-0.3974700399-0.1251836615-0.6429117797


Higher Education



Corrections


Chart17

00000

-0.197546942-0.14380624-0.031050259-0.0196885101-0.072865397

-0.1539317595-0.1084013119-0.1793715939-0.2003134489-0.2021185534

-0.1452181943-0.0328820116-0.1137051739-0.1251836615-0.6034667237


Higher Education


Corrections


Chart18

42.23311.89129.72610.2099.346

33.8910.18128.80310.0088.665

35.73210.60224.3948.1647.457

36.111.526.3468.9313.706


Higher Education


Corrections


Source info


2004-0512005-0612006-0712007-0812008-0912009-1012010-111$ Change% Change

K-14 (Prop. 98) Expenditures$34.0$36.6$40.5$41.3$41.6$35.0$36.1$2.16.2%

Higher Education$9.4$10.2$11.4$12.0$12.1$10.5$11.5$2.122.3%

Health & Human Services$25.5$27.1$29.3$29.7$31.1$25.0$26.3$0.83.3%

Business, Transportation & Housing$0.4$1.7$3.0$1.6$1.6$2.6$0.9$0.5126.3%

Corrections$6.4$7.4$8.8$9.8$10.3$8.2$8.9$2.539.5%

Other General Fund Expenditures$3.4$7.0$8.3$7.8$6.6$3.2$2.8-$0.6-17.9%

Total Expenditures$79.1$90.0$101.3$102.2$103.3$84.6$86.6$7.59.4%

General Fund Revenues Budgeted$77.3$84.5$93.9$101.2$102.0$89.5$94.2$16.921.9%

1 Department of Finance, Final Budget Summary 2004-05, 2005-06, 2006-07, 2007-08, 2008-09, 2009-10, 2010-11

Budget year

Department of Finance, Final Budget Summary 2004-05, June 2004


2004-052005-062006-072007-082008-092009-102010-11$ Change% Change2007-082008-092009-102010-11$ Change% Change

K-14 (Prop. 98) Expenditures$34.3$37.9$39.8$42.2$33.9$35.7$36.1$1.85.3%K-14 (Prop. 98) Expenditures$42.2$33.9$35.7$36.1$1.85.3%

Higher Education$9.4$10.4$11.3$11.9$10.2$10.6$11.5$2.123.0%Higher Education$11.9$10.2$10.6$11.5$2.123.0%

Health & Human Services$25.0$27.0$29.4$29.7$28.8$24.4$26.3$1.35.4%Health & Human Services$29.7$28.8$24.4$26.3$1.35.4%

Business, Transportation & Housing$0.4$1.7$3.0$1.5$1.5$2.5$0.9$0.5142.0%Business, Transportation & Housing$1.5$1.5$2.5$0.9$0.5142.0%

Corrections$7.0$7.8$9.3$10.2$10.0$8.2$8.9$1.927.6%Corrections$10.2$10.0$8.2$8.9$1.927.6%

Other General Fund Expenditures$5.7$8.0$8.8$7.8$7.1$4.9$2.8-$2.9-50.9%Other General Fund Expenditures$7.8$7.1$4.9$2.8-$2.9-50.9%

Total Expenditures$81.7$92.7$101.7$103.4$91.5$86.3$86.6$4.95.9%Total Expenditures$103.4$91.5$86.3$86.6$4.95.9%

General Fund Revenues Budgeted$77.3$84.5$93.9$101.2$102.0$89.5$94.2$16.921.9%General Fund Revenues Budgeted$101.2$102.0$89.5$94.2$16.921.9%

1 Department of Finance, Final Budget Summary 2004-05, 2005-06, 2006-07, 2007-08, 2008-09, 2009-10, 2010-111 Department of Finance, Final Budget Summary 2004-05, 2005-06, 2006-07, 2007-08, 2008-09, 2009-10, 2010-11

2 Using budget year data2 Using budget year data

Using Prior Year actual dataUsing Prior Year actual data

Other GF Ex + BTH$6.1$9.7$11.9$9.3$8.7$7.5$3.7-$2.4$0.9


2005-062006-072007-082008-092009-102010-11

K-14 (Prop. 98) Expenditures10.4%5.0%6.2%-19.8%5.4%1.0%

Department of Finance, Final Budget Summary 2005-06, June 2005Higher Education11.2%9.0%4.9%-14.4%4.1%8.5%

Health & Human Services7.9%9.1%1.0%-3.1%-15.3%8.0%

Business, Transportation & Housing360.7%75.2%-50.2%3.0%62.4%-64.0%

Corrections12.0%18.6%9.9%-2.0%-18.4%9.4%

Other General Fund Expenditures39.4%11.1%-11.2%-9.3%-30.5%-43.4%

Total Expenditures13.5%9.6%1.7%-11.5%-5.7%0.3%

General Fund Revenues Budgeted9.3%11.1%7.8%0.8%-12.3%5.2%


2 Using budget year data

Using Prior Year actual data

Other GF Ex + BTH59.2%22.5%-21.2%-7.3%-13.9%-50.3%


2007-082008-092009-102010-11

K-14 (Prop. 98) Expenditures6.2%-19.8%5.4%1.0%

Higher Education4.9%-14.4%4.1%8.5%

Health & Human Services1.0%-3.1%-15.3%8.0%

Business, Transportation & Housing-50.2%3.0%62.4%-64.0%

Department of Finance, Final Budget Summary 2006-07, June 2006Corrections9.9%-2.0%-18.4%9.4%

Other General Fund Expenditures-11.2%-9.3%-30.5%-43.4%

Total Expenditures1.7%-11.5%-5.7%0.3%

General Fund Revenues Budgeted7.8%0.8%-12.3%5.2%




Cumulative % change


2007-082008-092009-102010-11

K-14 (Prop. 98) Expenditures0.0%-19.8%-15.4%-14.5%

Higher Education0.0%-14.4%-10.8%-3.3%

Health & Human Services0.0%-3.1%-17.9%-11.4%

Business, Transportation & Housing0.0%3.0%67.2%-39.7%

Corrections0.0%-2.0%-20.0%-12.5%

Other General Fund Expenditures0.0%-9.3%-37.0%-64.3%

Total Expenditures0.0%-11.5%-16.5%-16.3%

General Fund Revenues Budgeted0.0%0.8%-11.6%-6.9%


Department of Finance, Final Budget Summary 2007-08, Aug 20072 Using budget year data



2004-052005-062006-072007-082008-092009-102010-11$ Change% Change

K-14 (Prop. 98) Expenditures$34.3$37.9$39.8$42.2$33.9$35.7$36.1$1.85.3%

Higher Education$9.4$10.4$11.3$11.9$10.2$10.6$11.5$2.123.0%

Health & Human Services$25.0$27.0$29.4$29.7$28.8$24.4$26.3$1.35.4%

Corrections$7.0$7.8$9.3$10.2$10.0$8.2$8.9$1.927.6%

Other General Fund Expenditures$6.1$9.7$11.8$9.3$8.6$7.4$3.7-$2.4-39.3%

Total Expenditures$81.8$92.7$101.6$103.4$91.5$86.3$86.6$4.85.9%

General Fund Revenues Budgeted$77.3$84.5$93.9$101.2$102.0$89.5$94.2$16.921.9%




Cumulative % change

Department of Finance, Final Budget Summary 2008-09, Sep 2008(DOLLARS IN BILLIONS)

2007-082008-092009-102010-11

K-14 (Prop. 98) Expenditures0.0%-19.8%-15.4%-14.5%


Health & Human Services0.0%-3.1%-17.9%-11.4%

Corrections0.0%-2.0%-20.0%-12.5%

Other General Fund Expenditures0.0%-7.3%-20.2%-60.3%


General Fund Revenues Budgeted0.0%0.8%-11.6%-6.9%


2007-082008-092009-102010-11

K-14 (Prop. 98) Expenditures$42.2$33.9$35.7$36.1

Higher Education$11.9$10.2$10.6$11.5

Health & Human Services$29.7$28.8$24.4$26.3

Corrections$10.2$10.0$8.2$8.9

Other General Fund Expenditures$9.3$8.7$7.5$3.7

Total Expenditures

General Fund Revenues Budgeted

Department of Finance, Final Budget Summary 2009-10, July 2009

Department of Finance, Final Budget Summary 2010-11, Oct 2010

Gov's Proposal 2011-12 State Budget Summary, Jan 2011

total budget

34.14512.26530.6797.6766.39614.216

36.73513.4732.8448.1767.42718.711

40.66714.90236.18110.7218.77520.157

45.42414.97938.00713.2859.85823.99

46.16813.55839.39612.7610.36522.243

35.65312.20632.82612.5468.23417.78

36.84412.62137.67712.5038.9816.629

K-14 Expenditures

Higher Education



Corrections

Other State Expenditures

Chart8

34.14512.26558.967

36.73513.4767.158

40.66714.90275.834

45.42414.97985.14

46.16813.55884.764

35.65312.20671.386

36.84412.62175.789

K-14 Expenditures

Higher Education


tot bud 0708 to 1011

45.42414.97938.00713.2859.85823.99

46.16813.55839.39612.7610.36522.243

35.65312.20632.82612.5468.23417.78

36.84412.62137.67712.5038.9816.629

K-14 Expenditures

Higher Education



Corrections


California State Budget Projected Expenditures

Chart15

000000

0.0163790067-0.09486614590.0365458994-0.03951825370.0514303104-0.0728220092

-0.2151065516-0.1851258428-0.1363169942-0.0556266466-0.164739298-0.2588578574

-0.188886932-0.1574203885-0.0086826111-0.0588633798-0.089064719-0.3068361817

K-14 Expenditures

Higher Education



Corrections


California State Budget Proposed ExpendituresCumulative % Change

Source Info 2


TOTAL EXPENDITURES (General, Spec & Bond funds)2004-052005-062006-072007-082008-092009-102010-11$ Change% ChangeTOTAL EXPENDITURES (General, Spec & Bond funds)2004-052005-062006-072007-082008-092009-102010-11

K-14 Expenditures$34.1$36.7$40.7$45.4$46.2$35.7$36.8$2.77.9%K-14 Expenditures$34.1$36.7$40.7$45.4$46.2$35.7$36.8

Higher Education$12.3$13.5$14.9$15.0$13.6$12.2$12.6$0.42.9%Higher Education$12.3$13.5$14.9$15.0$13.6$12.2$12.6

Health & Human Services$30.7$32.8$36.2$38.0$39.4$32.8$37.7$7.022.8%Other State Expenditures$59.0$67.2$75.8$85.1$84.8$71.4$75.8

Business, Transportation & Housing$7.7$8.2$10.7$13.3$12.8$12.5$12.5$4.862.9%

Corrections$6.4$7.4$8.8$9.9$10.4$8.2$9.0$2.640.4%TOTAL EXPENDITURES (General, Spec & Bond funds)2005-062006-072007-082008-092009-102010-11

Other State Expenditures$14.2$18.7$20.2$24.0$22.2$17.8$16.6$2.417.0%K-14 Expenditures7.6%10.7%11.7%1.6%-22.8%3.3%

Total Expenditures$105.4$117.4$131.4$145.5$144.5$119.2$125.3$19.918.9%Higher Education9.8%10.6%0.5%-9.5%-10.0%3.4%

Total Revenues Budgeted (GF & SF)$98.6$108.5$121.6$128.1$128.1$113.0$120.2$21.521.8%Other State Expenditures13.9%12.9%12.3%-0.4%-15.8%6.2%


2 Using budget year dataTOTAL EXPENDITURES (General, Spec & Bond funds)2004-052005-062006-072007-082008-092009-102010-11

K-14 + Higher Ed Expenditures$46.4$50.2$55.6$60.4$59.7$47.9$49.5

Other State Expenditures$59.0$67.2$75.8$85.1$84.8$71.4$75.8

TOTAL EXPENDITURES (General, Spec & Bond funds)2005-062006-072007-082008-092009-102010-11

Department of Finance, Final Budget Summary 2004-05, June 2004(DOLLARS IN BILLIONS)K-14 + Higher Ed Expenditures8.2%10.7%8.7%-1.1%-19.9%3.4%

TOTAL EXPENDITURES (General, Spec & Bond funds)2005-062006-072007-082008-092009-102010-11Other State Expenditures13.9%12.9%12.3%-0.4%-15.8%6.2%

K-14 Expenditures7.6%10.7%11.7%1.6%-22.8%3.3%

Higher Education9.8%10.6%0.5%-9.5%-10.0%3.4%

Health & Human Services7.1%10.2%5.0%3.7%-16.7%14.8%

Business, Transportation & Housing6.5%31.1%23.9%-4.0%-1.7%-0.3%

Corrections16.1%18.1%12.3%5.1%-20.6%9.1%

Other State Expenditures31.6%7.7%19.0%-7.3%-20.1%-6.5%

Total Expenditures11.4%12.0%10.8%-0.7%-17.5%5.0%

Total Revenues Budgeted (GF & SF)10.0%12.1%5.3%0.1%-11.8%6.4%




TOTAL EXPENDITURES (General, Spec & Bond funds)2007-082008-092009-102010-11

K-14 Expenditures$45.4$46.2$35.7$36.8

Higher Education$15.0$13.6$12.2$12.6

Health & Human Services$38.0$39.4$32.8$37.7

Department of Finance, Final Budget Summary 2005-06, June 2005Business, Transportation & Housing$13.3$12.8$12.5$12.5

Corrections$9.9$10.4$8.2$9.0

Other State Expenditures$24.0$22.2$17.8$16.6

Total Expenditures$145.5$144.5$119.2$125.3

Total Revenues Budgeted (GF & SF)$128.1$128.1$113.0$120.2




TOTAL EXPENDITURES (General, Spec & Bond funds)2007-08 Baseline2008-092009-102010-11

K-14 Expenditures0.0%1.6%-21.5%-18.9%


Health & Human Services0.0%3.7%-13.6%-0.9%

Business, Transportation & Housing0.0%-4.0%-5.6%-5.9%

Corrections0.0%5.1%-16.5%-8.9%

Other State Expenditures0.0%-7.3%-25.9%-30.7%


Total Revenues Budgeted (GF & SF)0.0%0.1%-11.8%-6.2%



Department of Finance, Final Budget Summary 2006-07, June 2006

Department of Finance, Final Budget Summary 2007-08, Aug 2007

Department of Finance, Final Budget Summary 2008-09, Sep 2008

Department of Finance, Final Budget Summary 2009-10, July 2009

Department of Finance, Final Budget Summary 2010-11, Oct 2010

P98 v NonP98 Exp 8889


1998-9912011-122 Proposed% Change1998-9912010-112% Change from 98-992011-122 Proposed% Change from 98-99

K-14 (Prop. 98) Expenditures3$35.2$49.340.1%K-14 (Prop. 98) Expenditures3$35.2$49.741.2%$49.340.1%

Non K-14 (General Fund) Expenditures$32.8$48.648.1%Non K-14 (General Fund) Expenditures$32.8$56.070.7%$48.648.1%

General Fund Revenues$57.0$89.757.4%General Fund Revenues$57.0$94.265.3%$89.757.4%

1 LAO, State Spending 1998-99, Oct 19981 LAO, State Spending 1998-99, Oct 1998

2 Department of Finance, Governor's January Budget Summary 2011-12, January 20112 Department of Finance, Governor's January Budget Summary 2011-12, January 2011



1998-9912010-112% Change1998-9912010-112% Change from 98-99 to 2010-1122011-122 Proposed% Change from 98-99 to 2011-122 Prop

K-14 (Prop. 98) Expenditures3$35.2$49.741.2%K-14 (Prop. 98) Expenditures3$35.2$49.741.2%$49.340.1%

Non K-14 (General Fund) Expenditures$32.8$56.070.7%Non K-14 (General Fund) Expenditures$32.8$56.070.7%$48.648.1%

General Fund Revenues$57.0$94.265.3%General Fund Revenues$57.0$94.265.3%$89.757.4%

1 LAO, State Spending 1998-99, Oct 19981 LAO, State Spending 1998-99, Oct 1998

2 Department of Finance, Governor's January Budget Summary 2011-12, January 20112 Department of Finance, Governor's January Budget Summary 2011-12, January 2011


Sheet3

Sheet1

How We Got HereCalifornia Teachers Association

Its the EconomyHousing Bubble BurstFinancial Market MeltdownThe Great Recession Sluggish state and national recoveryVery slow job growth (public sector losses offset private sector gains)California Teachers Association

Its the Economy The Economy is the sum total of human workThe organization of money and resources in a country, region, or communityEveryone participates in itThe purpose of the economy is to meet the needs of peopleCalifornia Teachers Association

and the Economy is PoliticalWhose needs get met in the current economy?The existing structure..Enables a few to make lots more moneyEnables those few to pay less taxesHas not created, and in fact has reduced, the number of middle class jobs (good wages and benefits)Has caused wages to stagnate

California Teachers Association

The Truth About The EconomyCalifornia Teachers Association

Corporate Profits, Personal Income & Median Wages*California Teachers Association

Who Pays Taxes in CA Has Changed Over TimeLAO, Historical State Revenues

CA K-12 Education Funding Sources

Chart1

0.1

0.6

0.23

0.02

0.06

EdSource, The Basics of Californias School Finance System, January 2009

2009-10

Revenue Sources

Sheet1

Revenue Sources

Federal10%

State60%

Local Property Taxes23%

Lottery2%

Misc Local6%

To resize chart data range, drag lower right corner of range.

Chart1

0.06

0.34

0.6

How California Funds K-12 Education, Thomas Timar, UC Davis, Sept. 2006

Before Prop 13

School Revenue Sources before Prop 13

List

IDEAS

Prosperity for all

reduce inequality

wealth distribution

historical record on wealth distribution

economic development and school funding

existing economic system

tax fairness (define)

preserve public education

preserve public sector

small business vs corp greed

investing in public education pays dividends

pension defense

how do other states fund social services, public sector and public education

how do other countries fund social services, public sector and public education

CA education funding ranking

State budget process broken

Use "We are One" to link prosperity for all.

Calcs

2009-10CaliforniaNational AverageTop QuartileHighest

$8,826$11,372

6,300,000$55,603,800,000$71,643,600,000

DIFFERENCE$16,039,800,000

California $8,852National Average $11,223

School Funding @ 2009 Averages$55.6$71.6

School Funding @ 2010 Averages

CA vs Nat's avg funding

55.603

71.6436

6.3 million Students X $8,852 per Student = $55.6 billion

$16 B Increase needed annually to get to the National Average


$55.6 B

$71.6 B

CA vs Nat's avg funding (2)

55.603

71.6436

6.3 million Students X $8,852 per Student = $55.6 billion

$16 B Increase needed annually to get to the National Average


$55.6 B

$71.6 B

Wealth dist data

USEqualSweden

Top 20%84%20%36%

2nd 20%11%20%15%

3rd 20%4%20%21%

4th 20%0.2%20%11%

Bottom 20%0.1%20%18%

US wealth dist

0.84

0.11

0.04

0.002

0.001

Equal wealth dist

0.2

0.2

0.2

0.2

0.2

Sweden wealth dist

0.36

0.15

0.21

0.11

0.18

Tax revenue data

1970-712010-111970-712010-112009-10

Personal Income Tax28%50%1,264,38328%47,12750%44,82052%

Sales & Use Tax40%29%1,808,05240%27,04429%26,61831%

Corporate Income Tax12%12%532,09112%10,89712%9,27511%

Other Revenue & Loans20%10%929,00020%9,16210%6,2077%

4,533,52694,23086,920

Tax revenue data

1970-71

SF b4 p13 chart

2010-11

SF b4 P13 data

0.06

0.34

0.6


School Revenue Sources before Proposition 13


Federal6%

State34%


How California Funds K-12 Education

Thomas Timar

University of California, Davis

Sep-06

CA Per Pupil Funding Rank Has FallenProp 13Ed WeekRevenue Limits

Where is Here?Overview of the 2012-13 State Education Budget

NEW MONEY, or NOT?Proposition 98 increase of $4.9 billion$2.4 billion deferral repayment = no program funding increase (deferrals borrow from next years P98 funding)$2.5 billion credit for a deferral whose creation was avoided (if program funding was increased to meet P98 min, a deferral would have to be made I couldnt make this stuff up) Transportation eliminated ($491 million statewide program funding cut)California Teachers Association

Governors Tax InitiativeIncrease income tax rates on wealthy (2012 - 2016)1% rate increase married incomes $500,000 - $600,0001.5% rate increase incomes $601,000 - $1 million2% rate increase incomes over $1 millionIncrease the states sales tax rate by 0.5% points (2013 - 2016)

2011-12 BudgetIn ReviewK-12 Districts 2.237% COLA, but Funded 0% Deficit factor = 19.754%, w/ mid-year cut 19.96%Flat funding from 2010-11, except 0.25% mid-year cut (about $13/ADA)COLA $Elem$137HS$164Unif$143

Chart1

0.0566-0.0263-0.07844

0.1015055-0.10156701-0.18355

0.0972096285-0.10156701-0.17963

0.1217871242-0.1038130925-0.20004

0.1573477761-0.1038130925-0.2166

Statutory COLA

Funded COLA

Deficit

Cumulative Revenue Limit COLAs & Deficit

bar graph

0.04530.04530

0.0566-0.0263-0.07844

0.0425-0.0773-0.18355

-0.00390-0.17963

0.0224-0.0025-0.20004

0.03170-0.2166

Statutory COLA

Funded COLA

Deficit

Revenue Limit COLA & Deficits

LIne chart

0.0566-0.0263-0.07844

0.1015055-0.10156701-0.18355

0.0972096285-0.10156701-0.17963

0.1217871242-0.1038130925-0.20004

0.1573477761-0.1038130925-0.2166

Statutory COLA

Funded COLA

Deficit

Cumulative Revenue Limit COLAs & Deficit

Chart4

0.0566-0.0263-0.07844

0.1015055-0.10156701-0.18355

0.0972096285-0.10156701-0.17963

0.1217871242-0.1038130925-0.20004

0.1573477761-0.1038130925-0.2166

Statutory COLA

Funded COLA

Deficit

Cumulative Revenu Limit COLAs & Deficits

Chart5

0.0566-0.0263-0.07844

0.0425-0.0773-0.18355

-0.00390-0.17963

0.0224-0.0025-0.20004

0.03170-0.2166

Statutory COLA

Funded COLA

Deficit

Revenue Limit COLAs & Deficit

COLA n Def 0708 to 1213

2007-082008-092009-102010-112011-122012-132008-092009-102010-112011-122012-13

Statutory COLA4.53%5.66%4.25%-0.39%2.24%3.17%Statutory COLA5.66%4.25%-0.39%2.24%3.17%

Funded COLA4.53%-2.63%-7.73%0.00%-0.25%0.00%Funded COLA-2.63%-7.73%0.00%-0.25%0.00%

Deficit0.00%-7.844%-18.355%-17.963%-20.004%-21.660%Deficit-7.844%-18.355%-17.963%-20.004%-21.660%

2007-082008-092009-102010-112011-122012-13

Statutory COLA4.53%5.66%4.25%-0.39%2.24%3.17%

Statutory COLA4.53%10.45%15.14%14.69%17.26%20.98%

Funded COLA4.53%-2.63%-7.73%0.00%-0.25%0.00%

Funded COLA4.53%1.78%-6.09%-6.09%-6.32%-6.32%

Deficit0.00%-7.844%-18.355%-17.963%-20.004%-21.660%

2008-092009-102010-112011-122012-13

Statutory COLA5.66%4.25%-0.39%2.24%3.17%

Statutory COLA5.66%10.15%9.72%12.18%15.73%

Funded COLA-2.63%-7.73%0.00%-0.25%0.00%

Funded COLA-2.63%-10.16%-10.16%-10.38%-10.38%

Deficit-7.844%-18.355%-17.963%-20.004%-21.660%

Sheet2

Sheet3

2012-13 PROPOSED COLA & Revenue LimitK-12 Districts 3.17% COLA, but Funded 0%, sort of Deficit factor = 21.666%Deficit factor from DOF doesnt zero out COLAAvg Increase $37/ADA (0.71%) from funded 2011-12 & $51/ADA (0.97%) increase from trigger cut funded BRLBelieve Gov intended flat funding from 2011-12COLA $Elem$198HS$238Unif$207

2012-13 K-12 Revenue LimitsDOF Deficit (21.666%) creates a slight increase in the BRL year-over-year (with or without the mid-year BRL cut in 2011-12). It is unlikely this increase will be realized in the final state budget and most LEAs will likely budget a 0% COLA.

Before 2011-12 mid-year cutW/ 2011-12 mid-year cut2011-12 Funded BRL$5,244$5,2312011-12 Statutory BRL$6,535$6,5352012-13 Proj. Unified COLA$207$2072012-13 Statutory BRL$6,742$6,7422012-13 Proj. Deficit FactorX 0.78334X 0.783342012-13 Funded BRL$5,281$5,281Diff. Funded BRL$5,281 - $5,244 = $37$5,281 - $5,231 = $51% Funded BRL$37 $5,244 = 0.71%$54 $5,228 = 0.97%

2012-13 PROPOSED COE COLA & Revenue LimitCounty Offices 3.17% COLA, Funded 0% Deficit factor = 22.497%Flat funding from 2011-12

GrowthStatewide increase of K-12 ADA 0.36%Individual District & COE Growth Funded, but with deficit applied

Basic Aid (Excess Tax)For 2011-12 and beyond, SB 70 continues the Basic Aid Fair Share cut to categoricals but at the rate of 8.92% (of entitlement using the RL formula) Cut is scheduled to continue each year until the 2008-09 & 2009-10 RL cuts are restored intent of legislature, although will be implemented annually with legislationLook for trailer legislation

Categorical Programs: Tier 1

No 2012-13 CutsCOLA = 0%Historically Protected Programs CSR internal flexibility


No 2012-13 Cuts COLA = 0%No Categorical FlexibilityYear Round Schools (final year $ to Charter Facilities, then eliminated) Student Assessment Testing Charter School Facilities Grant Partnership Academies Apprentice Program K-12 Internet Access Ag-Voc EdFoster Youth Programs Adults in Correctional Facilities Tier 2


Admin Training Program COE Fiscal Oversight Pupil Retention BGAdult Education COE: Williams Audits Reader Services: Blind Alternative Tcher CertifCommunity Day Schools ROC/Ps American Indian ECECCommunity-Based Eng TutoringSanctionsAP Programs Deferred Maintenance School and Library Impr BG Arts and Music Block Grant Ed TechSchool Safety Block Grant (8-12) Bilingual Teacher Training Gifted and Talented School Safety Competitive Grants CALHSEE-Inst Supp & ServInstructional Materials BGSpecialized Secondary Prog Grants California Assn Student CouncilsInternational BaccalaureateSupp Instruction (Summer School) CalSAFEMath & Reading Prof DevelSupp Schl CounselingCertificated Staff Mentoring MH CSR 9th GradeTargeted Instructional Improv BGCharter School Categorical BG National Board Cert IncentTeacher Credentialing BGChild Oral Health Assessments PE Teacher IncntTeacher Dismissal Civic Education Peer Assistance and Review Class Size Reduction (9th Grade) Professional Devel BG


No 2012-13 CutsCOLA = 0%Categorical Flexibility for any educational purposeFlexibility for 2008-09 to 2014-15 Public Hearing new requirement (AB 189, effective Jan 1, 2012.Must meet before budget adoption & identify program to be closed

Fiscal FlexibilityCurrent Law

Flexibility OptionsOriginal Flex DurationExtension Passed 2011Restricted routine maintenance set aside, reduced from 3% to 1% or 0%2008-09 to 2012-132014-15Deferred Maintenance Match eliminates 0.5% of budget local match2008-09 to 2012-132014-15Suspends new Instr Materials requirement & suspends SBE instructional material adoptions 2008-09 to 2012-132014-15 & SBE adopt 2015-16Reduce Min Requirement for REU to 1/3 of the regularly recommended level.2008-09 to 2012-132013-14 (back to prior level)

Fiscal FlexibilityCurrent Law

Flexibility OptionsOriginal Flex DurationExtension Passed2011Categorical Program Flexibility use for any educational purposeThru 2009-10 only2014-15Option to negotiate 5 day reduction in student year and instructional minutes2009-10 to 2012-132014-15Sell surplus property not purchased with state funds and use proceeds for general fund purposesUntil 01/01/20121/1/2014Class Size Reduction K-3 Flexibility - Escalating penalties2008-09 to 2011-122013-14

PROPOSED Weighted Student Funding FormulaProvide significant & permanent flexibilitymost state categoricals & revenue limit $ weighted factors considering costs of educating specific student populationsphased in over five yearscoupled with accountability measures basis for evaluating & rewarding schoolsinclude the current quantitative, testbased accountability measures & locally developed assessments & qualitative measures of schools.

Special Education0% COLA on state/local share$12.3 million for growthEst. $465 per unit of growth ADA

$178 million for Mandate Block GrantPlan to eliminate almost half of all current K14 mandates (needs legislation)Plan to create incentives for schools to continue to comply with remaining previously mandated activities

Mandated Cost Reimbursement

Transitional Kindergarten$223.7 million Requirement that schools provide transitional kindergarten in 2012-13

Unemployment InsuranceIncrease of $21.8 million fully fund the additional costs of unemployment insurance for local school districts and county offices of education.

Charter SchoolsStreamline and Expand Financial Support for Charter Schools $50.3 million increase charter school categorical programs for growthEnhance Charter School FundingInvest in Charter School Facilities Improve Charter School Working Capital http://www.ebudget.ca.gov/pdf/BudgetSummary/Kthru12Education.pdf

Federal Stimulus/Ed Jobs2010-11Last 10% of SFSF now allocated to LEAsEducation Jobs $1.2 billion to CAOver 90% of the final allocation already distributed to LEAshttp://www.cde.ca.gov/fg/fo/r14/edjobfunds10result.aspmay be used only for Compensation, benefits and other expenses, such as support services, necessary to retain existing employees, to recall or rehire former employees, and to hire new employees, in order to provide early childhood, elementary, or secondary educational and related services where those employees provide school-level educational and related services.

Community Colleges 2012-130% COLA No growth 0% COLA for categorical funding, but proposes to consolidate funding for nearly all categorical programs and allow use of the funds for any purposeAdministration to review the recommendations of the forthcoming Student Success Task Force report for inclusion in the May RevisionOngoing deferrals same as 2011-12 except $209 million to be repaid in 2012-13New Mandate block grant ($12.5 million new $) consistent with his K-12 mandate proposal, would eliminate nearly half of existing mandates and would make remaining mandates optionalFunding contingent on CCC s continuing to meet the requirements of mandates that are not eliminated

Mid-Year Cut TriggerIf the Governors Tax Initiative does not pass in November 2012, the following education cuts will occur on January 1, 2013:$4.8 billion from K-14$2.3 billion to not repay deferral $2.6 billion real program cut (6% RL reduction or $387/ADA cost of about 3 weeks instruction)$200 million University of California$200 million California State University

How Do We Fix our Education Funding Problem?

Our Unions Funding Goals for EducationAdequateAmount of per pupil funding needed to provide all students the opportunity for academic successCTA goal of the top quartile of the 50 states*EquitablePromotes fairness by funding schools and colleges to meet the individual needs of all students*CTA believes in compliance with the Serrano decision to achieve equalization of educational opportunities*Stable & ReliableAvoid bubbles and crashes*California Teachers Association 2011-12 Organizational Handbook, Policies

Funding Initiate CriteriaBased on tax fairness a progressive tax system to ensure everyone is paying their fair share and to and bring stability to our funding issuesInclude funding for Pre-K through higher education and other essential public servicesGenerate at least $8 billionBroad coalition supportWinnable

Beyond Proposition 98Although Proposition 98 has established K-14 education funding as a priority in the state budget, it is clearly not enough to fund an adequate education for Californias children.

Proposition 98 does not include the CSU & UC systems, therefore portions of higher education do not have a constitutional priority position in the state budget.

Since Proposition 98, weve dropped from 30th to 47th in per pupil spending.

School Funding (2009 Averages)Quality Counts 2012 & www.cde.ca.gov

Chart1

54.168

72.906

80.98

112.92

Billions

6.25 million Students X $8,667 per Student = $54.2 billion(Proposition 98)

$18.7B Increase to get to the National Average

2 Times current Education Spending

Estimated Spending 2007

$26.8 B Increase to get to the Top Quartile


0708 to present

16,38691212007-08CaliforniaNational AverageTop QuartileHighest2007-082008-09

16,11310223$8,852$11,223$12,474$17,114$17,114$9,83118068$9,642

14,308117456,200,000$54,882,400,000$69,582,600,000$77,338,800,000$106,106,800,00014,310$10,59315863$11,229

13,94616386DIFFERENCE$14,700,200,000$22,456,400,000$51,224,400,00015,598$12,47417847$12,957

13,89615,012$17,11413959$18,068

13,31413,28314567

12,98312,23915116

12,626California $8,667National Average $11,665Top Quartile $12,957Highest $18,06817,05012703

12,424School Funding @ 2009 Averages$54.2$72.9$81.0$112.912,55913361

12,41911,37011783

11,90314,08714591

11,85915,42416174

11,81412,8401296

11,676California $8,852National Average $11,223Top Quartile $12,474Highest $17,114299811,68011905

11,563School Funding @ 2008 Averages$54.9$69.6$77.3$106.19,85112780

11,4889,89710095

11,44312,32012056

11,0742008-09CaliforniaNational AverageTop QuartileHighest11,94913519

10,923$8,667$11,665$12,957$18,06811,88012823

10,9236,250,000$54,168,750,000$72,906,250,000$80,981,250,000$112,925,000,00010,79511472

10,815DIFFERENCE$18,737,500,000$26,812,500,000$58,756,250,00010,31811382

10,60212,49110624

10,49810,49612253

10,37810,39612007

10,3078,8529827

10,22310,46711001

10,1949,9839329

10,16210,54110757

10,09011,36711229

9,92110,05110419

9,80311,54010517

9,7819,8108667

9,58510,59310320

9,5038,72213773

9,43510,03010935

9,2969,89310231

9,27013,22810237

9,25310,53812225

8,98911,6299115

8,98011,2219576

8,8368,4358654

8,6389,1378655

8,3458,4399369

8,2568,2618695

8,2089,5417217

8,1649,4989708

8,0108,5079024

7,9346,5258363

7,8458,22811232

7,7568,6338840

6,22813,31116034

12,45713090

0607

16,38691212006-07CaliforniaNational AverageTop QuartileHighest

16,11310223$8,167$10,557$11,745$16,386

14,308117456,200,000$50,635,400,000$65,453,400,000$72,819,000,000$101,593,200,000

13,94616386DIFFERENCE$14,818,000,000$22,183,600,000$50,957,800,000

13,896

13,314

12,983

12,626California $8,167National Average $10,557Top Quartile $11,745Highest $16,386

12,424School Funding @ 2007 Averages$50.6$65.4$72.8$101.6

12,419

11,903

11,859

11,814

11,676

11,563

11,488

11,443

11,074

10,923

10,923

10,815

10,602

10,498

10,378

10,307

10,223

10,194

10,162

10,090

9,921

9,803

9,781

9,585

9,503

9,435

9,296

9,270

9,253

8,989

8,980

8,836

8,638

8,345

8,256

8,208

8,164

8,010

7,934

7,845

7,756

6,228

Sheet2

Sheet3

How to Increase FundingBigger piece of the pie - Improve the relative priority in the state budget Proposition 98 (Been there, done that)CSU & UC systems not includedOther important state programs, including social services may be just as important for student successGrow the PieExpand the revenue base Economic developmentExpanding who pays taxes or what items/services are taxedIncrease tax ratesClosing Loopholes

Chart1

0.1

0.6

0.23

0.02

0.06

Revenue Sources

Sheet1

Revenue Sources

Federal10%

State60%


Lottery2%

Misc Local6%


Chart1

0.4

0.6

State Budget

Sheet1

State Budget

Prop 9840%

Non-Prop 9860%


Chart1

0.6

0.4

State Budget

Sheet1

State Budget

Prop 9860%

Non-Prop 9840%


Chart1

0.1

0.6

0.23

0.02

0.06

Revenue Sources

Sheet1

Revenue Sources

Federal10%

State60%


Lottery2%

Misc Local6%


Possible Tax SolutionsReturn top Income Tax brackets to 11% ($4B)Return VLF to 2% ($2B -$4B)Broaden Sales Tax ($2B+)Oil Severance Tax @ 9.9% ($1B+)Close Corp Prop Tax Loopholes ($2B+)Increase Alcohol & Tobacco Taxes ($2.4B)Eliminate Corp Tax Loopholes from 2009-10 Budget Agreement ($1.7B+)Others? (Nov 2012)

Current InitiativesThe Schools & Local Public Safety Protection Act of 2012 (Gov, $4.8 - $6.9 B annually)Our Children, Our Future Local School Funding Act (Advancement Project Molly Munger, $10 B annually)Raise Income tax 0.4% to 2.2% based on income1st 4 yrs 60% to K-12, 10% ECE, 30% reduce state debt after, 85% to K-12, 15% ECEFunds must be used at school sites not districtProhibits use for personnel salary increases beyond what was in place Novemeber1, 2012Considerable reporting requirements

Current InitiativesMillionaires Tax to Restore Funding for Education and Essential Services Act of 2012 (Courage Campaign & CFT, $6 B)Raise income tax 3% on incomes > $1 M to $2 M, 5% over $2 M3/5 to education, 2/5 to local govt for public safety and infrastructure60% for education, 25% children & senior services, 10% public safety, 4.9% roads & bridges, 0.1% admin

Current InitiativesProtect Homeowners and Close Corporate Tax Loopholes Act ($4.5 B, $2 B inc Prop 98)assess commercial property @ market value90% of revenue to General Fundremaining 10% would be distributed among cities, counties, special districts, school districts, and community college districts as under current lawdoubles the homeowner's property tax exemption as well as the renter's tax credit and exempts from taxation the first $1 million of value of business personal property

Possible Economic SolutionsFix it ideas not as easy to come byThe Newer Deal = Massive public investment in infrastructure (federal level)Investment in public education for a better educated workforce (long term)Support small businessOther ???

Economic Prosperity & Funding EducationProsperity for large corporations does not necessarily translate to prosperity for the vast majority of the people in America

Economic Expansion is important and necessary and will ultimately increase public funds and by extension, school funding, but only if the economic expansion includes improvements for all (including working people) who pay taxes

Education Funding is a key ingredient in improving education and thus the value of human capital which can help economic expansion

Taxes, Economic Development & Education FundingMore Education Funding More tax revenueExpand baseAlter structureEconomic development expands tax baseEducation Funding has a high rate of economic return

How are we going to reach the goal of education funding in the top quartile of the fifty states?Educate CTA Members onThe relationships betweenThe Education Funding SystemTax Fairness IdealsEconomic Development and ExpansionRevitalize the Working Class

The End of the American Dream?

Educate, Agitate, Organizewww.cta.orgCheck back for information about tax fairness and economic development in California and the how to fund schools beyond Proposition 98.www.cbp.org California Budget Projectwww.edsource.org EdSourcewww.ppic.org Public Policy Institute of CAwww.caltaxreform.org CA Tax Reform Assn

1/19/11CTA-NODD*2011-12 Proposed State BudgetState of the State Budget11/19/11CTA-NODD*READ: The recession, state budget deficit and more than $18 billion in education cuts have made things worse. Education funding is now even below the minimum constitutional guarantee. The blue line shows funding schools should get if Prop 98 fully funded. The red line shows where we are. Remember, Prop 98 allows education to take reduced funding in years when the overall state budget declines and promises to restore those funds in the future.

POINTS TO NOTE: Prop 98 has helped with school funding, but it has hardly fixed the problem.School funding is not stable or reliable in the current system.*11/19/11California Teachers AssociationState of the State BudgetState of the State Budget11/19/11CTA-NODD*Diminished Spending Power Is Restraining the RecoveryConsumer spending remains weak, and economists identify this as one of the key factors restraining job growth. Consumer spending dropped sharply in recent years due to the decline in families wealth that resulted from the bursting of the housing bubble as well as the deterioration of families incomes due to unemployment, reduced work hours, and the diminished purchasing power of workers wages. Total US consumer spending fell by an estimated $7,356 per person, on an inflation-adjusted basis, between December 2007, when the national recession began, and May 2011 a reduction of $175 per person per month during that period. In fact, in May 2011 nearly two years since the recession technically ended inflation-adjusted per capita consumer spending remained 1.6 percent below its pre-recession peak. Weak consumer spending means that many businesses lack enough demand for their products and services to justify hiring. Indeed, a national survey shows that weak sales remains many small businesses primary concern. In the face of relatively weak demand, many businesses are postponing investments.Instead of hiring or investing, US corporations are stockpiling cash. They currently have the highest level of cash holdings as a share of their assets in more than four decades. In the first quarter of 2011, corporations holdings of cash and other liquid assets totaled $1.9 trillion, up 37.5 percent from a recent low in the first quarter of 2009. These holdings represented 6.8 percent of corporations total assets in the first quarter of 2011, the highest share since 1964.State of the State Budget11/19/11CTA-NODD*The real problem, however, goes deeper than the obvious current economic problems. We need to talk about the purpose of the economy.

POINTS TO NOTE:Highlight the purpose it is about the needs of people, not corporations. We are stating as a premise, the purpose of the economy so that we dont spend our training time arguing about the purpose of the economy. Should we be making sacrifices for sake of the economy or should the economy serve us? since the whole point of the economy is to meet our needs, not the other way around.

*11/19/11California Teachers AssociationState of the State BudgetConsider using a story/narrative of examples to illustrate points.

POINTS TO NOTE:The economy works best for those who already have money and political power.

BACKGROUND: Adam Smiths Invisible Hand, theory that free market forces and the pursuit of self-interest would best stimulate innovation and growth. Today conservatives use Smiths writings to support the idea that government should play no economic role other than establishing a safe and secure framework for markets everything else should be left to the market. This belief has not served most Americans very well.

Tie concepts together with a narrative about bank & wall street bail outs or Apples proprietary i-tunes and on which machines you can play i-tunes purchases. Corporations make most market decisions.

In America, the economy is political, just watch the federal budget deficit debate

*11/19/11California Teachers AssociationState of the State BudgetREAD: Watch as Former Labor Secretary Robert Reich explains the problems with the economy in less than 2 minutes, 15 seconds. CLICK the play arrow on the bottom left corner to start the video.*11/19/11California Teachers AssociationState of the State BudgetREAD: In the past two decades, wealthiest Californians have seen the greatest increase in income whereas 8 out of 10 Californians have seen a loss in income during the same period.*11/19/11California Teachers AssociationState of the State BudgetREAD: In addition, the economy creates some special benefactors. Corporate income in California has grown over 400% from 2001- 2008, compared to 28% for personal income and 25% for the median wage.

National data show that productivity growth since the recession officially ended in June 2009 continued to boost corporate profits, with few benefits for workers. Between the second quarter of 2009 and the first quarter of 2011, total corporate profits for US businesses rose by 48.6% nearly 11 times the percentage gain in total wages and salaries for the nations workers, which increased by just 4.5%. In fact, as a result of this remarkably strong growth, corporate profits represented 14.0% of total national income in 2010 the highest share ever recorded, and records begin in 1929.In contrast, wages and salaries made up just half (49.9%) of national income the lowest share on record. Historically, workers earnings accounted for well over half of national income.

Declining Fortunes for Most Californians Stand in Stark Contrast to Rising Corporate ProfitsRecent gains in productivity the amount of goods and services produced per hour worked translated into skyrocketing corporate profits, but comparatively modest increases in most families earnings. National productivity increased by an average of 1.9 percent per year between 1973 and 2010, after adjusting for inflation, while US workers inflation-adjusted hourly compensation their total wages, salaries, and benefits increased by an average of just 1.0 percent per year.The gap between productivity and pay was particularly large during the economic expansion that preceded the Great Recession. Between 2000 and 2006, national economic output per hour worked rose by 2.7 percent per year, on average, Workers inflation-adjusted earnings increased at less than half that rate an average increase of just 1.2 percent per year. Such a large disconnect between productivity and earnings growth is unprecedented and reflects a giant-scale shift from wages to profits. Californias Franchise Tax Board data show that net corporate income profits reported for state tax purposes more than quadrupled between 2000 and 2006, increasing by 314.4 %, while the total AGI of personal income taxpayers rose by just 19.4%.More than one-quarter (29.1 percent) of the increase in total AGI during that period went to the top 5 percent of Californias taxpayers.*11/19/11California Teachers AssociationState of the State BudgetThis is a particular problem because the sources of revenue for the state budget has also changed and become more volatile over time.In the early 1970s, sales and use taxes were the largest component of tax revenues and personal income tax was less than 30% of the pie. Today, personal income tax makes up over 50% of the total revenue and sales and use taxes are below 30%. This shift in tax base has caused additional volatility in the state budget since personal income taxes tend to fluctuate more than other tax revenues from year to year.

**Although these graphs suggest that corporate income tax has not changed much as a percentage of the state revenues over time, it has, in fact, varied greatly. During the 1950s & 60s, corporate income tax as a percentage of state budget revenues averaged 15.7%. Since the early 1970s, corporate income taxes were at a high of 15.6% of state revenues in 1978-79 and a low of 7.4% in 2001-02.*11/19/11California Teachers AssociationState of the State Budget**Although the prior slide suggested that corporate income tax has not changed much as a percentage of the state revenues over time, it has, in fact, varied greatly. During the 1950s & 60s, corporate income tax as a percentage of state budget revenues averaged 15.7%. Since the early 1970s, corporate income taxes were at a high of 15.6% of state revenues in 1978-79 and a low of 7.4% in 2001-02. It has, in fact, been on a major down slide since 1981. Corporations have paid a higher income tax rate in the past and survived.

POINTS TO NOTE:Corporate income tax rates have been on the decline since 1981.Most small businesses pay taxes as individuals, and therefore this chart represents mostly large corporations.*11/19/11California Teachers AssociationState of the State BudgetREAD: This graph shows how California families compare in taxes as a percentage of family income. This includes all state and local taxes paid, not just income tax, but sales tax, vehicle license fees, etc. Notice, the least able, pay the largest percentage of their income in taxes. Is this progressive?

POINT TO NOTE: 1. This is a quality of life issue. Those in the lowest income brackets have the least amount of disposable or discretionary income and taxes are a greater hardship to them that those with more income.

*11/19/11California Teachers AssociationState of the State BudgetThis is how schools are funded today. We went from 60% prop taxes (which were stable and predictable) to 60% state funding (volatile).

POINTS TO NOTE:Our two largest funding sources are also the funding streams we are most able to increase by organizing.Expanding local property taxes are limited by Prop 13 and our ability to win parcel tax elections. Remember, personal income taxes are somewhat volatile (a major portion of state budget revenue) and over reliance can exacerbate the funding instability.

*California Teachers AssociationHow does CA funding compare to the rest of the US? In the mid 1970s, our portion of funding from the state budget was about 35%. Today, the state budget makes up over 55% of school funding. Over-reliance on the state budget has contributed to the overall volatility of school funding in CA. Most other states receive a majority of their funding from local property taxes.*CTAREAD: So where did we stand before prop 13 in per pupil funding in the nation?

POINTS TO NOTE:Per pupil funding was 20th in the nation prior to Prop 13.Even after Prop 98, our per pupil funding rank has continued to drop.

*California Teachers AssociationState of the State Budget11/19/11CTA-NODD*1/19/11CTA-NODD*2011-12 Proposed State Budget1/19/11CTA-NODD*2011-12 Proposed State Budget1/15/2009CTA-NODD*1/19/11CTA-NODD*Little additional information on COEs2011-12 Proposed State Budget1/19/11CTA-NODD*2011-12 Proposed State Budget2011-12 Proposed State Budget1/19/11CTA-NODD*ELL added to EIA in 2010-11 (was Tier II CAT)

Transportation is $618 million statewide.2011-12 Proposed State Budget1/19/11CTA-NODD*For last 4 years Year Round Schools $ have been put into Charter School Facilities Grant. 2012-13 is the last year and then Year Round Schools program is eliminated already in statute, not part of Govs Jan Prop.2011-12 Proposed State Budget1/19/11CTA-NODD*2011-12 Proposed State Budget1/19/11CTA-NODD*1/19/11CTA-NODD*To use CAT flexibility, must have a public meeting. 2011-12 Proposed State Budget1/19/11CTA-NODD*INST MATERIALS NOTE: AB 250 (Brownley, Chaptered Oct 2011) provides that the SBE shall adopt revised curriculum frameworks and evaluation criteria that are aligned to the content standards for mathematics by May 30, 2013, and for English language arts by May 30, 2014.2011-12 Proposed State Budget1/19/11CTA-NODD*Funding would be determined using a base year and growth/COLA would be applied annually as appropriated.Balance transfer exclusion: Spec Ed, QEIA, EIA, Supp Inst, Transportation, Child development, Child nutrition, ELL Acq & Dev2011-12 Proposed State Budget1/19/11CTA-NODD*AB 3632 unfunded in 2010-11 (special ed IEP mental health) partial funding passed ($70 m) in 2011-12 to pay for portion of suspended mandate. 2011-12 Proposed State Budget1/19/11CTA-NODD*From the Govs Jan 2012-13 Summary:

Reform K14 Mandates The Budget provides a total of $200 million to fund a mandates block grant incentive program for K12 schools and community colleges. Legislation will eliminate almost half of all current K14 mandates and will create incentives for schools to continue to comply with remaining previously mandated activities. The significant shortcomings of existing mandates and the process for administering them compel this reform. Many existing mandates fail to serve a compelling purpose. The mandates determination process takes years. Reimbursement costs are very often higher than anticipated and can vary greatly district by district. Further, the reimbursement process rewards inefficiency.Eliminate Unnecessary Mandates The proposal will eliminate nearly half of all existing mandates, including Graduation Requirements (Second Science Course) and Behavioral Intervention Plans. While the mandate to perform these activities will be eliminated, local districts may choose to continue these activities at local discretion. Reform K14 Mandates The Budget provides a total of $200 million to fund a mandates block grant incentive program for K12 schools and community colleges. Legislation will eliminate almost half of all current K14 mandates and will create incentives for schools to continue to comply with remaining previously mandated activities. The significant shortcomings of existing mandates and the process for administering them compel this reform. Many existing mandates fail to serve a compelling purpose. The mandates determination process takes years. Reimbursement costs are very often higher than anticipated and can vary greatly district by district. Further, the reimbursement process rewards inefficiency.Eliminate Unnecessary Mandates The proposal will eliminate nearly half of all existing mandates, including Graduation Requirements (Second Science Course) and Behavioral Intervention Plans. While the mandate to perform these activities will be eliminated, local districts may choose to continue these activities at local discretion. Preserve Core Programs and Functions Mandates that are not eliminated will be made optional. However, the proposal creates a block grant to encourage schools to continue meeting these requirements. Receipt of funding from this block grant will be conditioned on schools complying with these provisions. The proposal will sustain core programs, including school and county office fiscal accountability reporting. It will also continue to support sensitive notification and school safety functions like pupil health screenings, immunization records, AIDS prevention, School Accountability Report Cards, and criminal background checks. The mandates block grant provides an almost 340percent increase in funding to encourage districts to perform these programs.2011-12 Proposed State Budget1/19/11CTA-NODD*SES supp ed inst servMaintenance of Effort (MoE) requires that a school districts education expenditures for the prior year must be at least 90% of the 2nd previous year amounts.Secretary of Education may waive MoE requirement if there is: an exceptional or uncontrollable circumstance, such as a natural disaster, or theres a precipitous decline in resources in that school district. Federal funds may not count toward MoE, except for state stabilization funds.School districts can reduce amount of local funds for special education by 50% of any increase in federal funds; local funds can be spent for any purpose under ESEA

COBRA subsidy has income limitations ($125k indiv and $250k family). To qualify for premium assistance, a worker must be involuntarily terminated between September 1, 2008 and May 31, 2010. Upto 15 mos of benefits (changed in Dec 09)The phase-out is complete at $145,000 of AGI for single filers and $290,000 for joint filers. SFSF funds for K-12 in Ca may come out less than expected due to additional cuts to higher ed in 08-09, larger percentage of SFSF may go to high ed.

See NODD CA ARRA Workbook.2011-12 Proposed State Budget1/19/11CTA-NODD*2011-12 Proposed State Budget1/19/11CTA-NODD*2011-12 Proposed State BudgetState of the State Budget11/19/11CTA-NODD*READ: Given that school funding has not been reliable, equitable, or sufficient, we have an obligation to address the funding crisis in education for future success of our children. Our union has the following goals which are supported by policy.

*California Teachers AssociationFrom Dean Vogels speech at the October 2011 state councilhttp://www.cta.org/About-CTA/Leadership/State-Council/Dean-Vogel-Council-Speech-Oct-2011.aspx *CTAPOINTS TO NOTE:Being a priority in the state budget is not enough. The budget pie is not big enough to meet our funding goals.Our current budget priority does not include most of higher education.Even with Proposition 98, we have not kept up with the rest of the nation in per pupil funding.

*11/19/11California Teachers AssociationState of the State BudgetREAD: California schools have been significantly underfunded for years ranking 47th in the nation in per student funding. Thats nearly $3,000 less per student than the national average. We need an increase of nearly $27 billion annually to reach the top quartile of states in the nation.

POINTS TO NOTE: California needs an increase of nearly $27 billion annually to reach the top quartile of states in the nation, nearly a 50% increase in school funding.

NOTE: Wyoming is currently the highest per pupil funded state at $18,068

*11/19/11California Teachers AssociationState of the State Budget1st Click: Bigger piece & state budge pie graphic. 2nd Click: pie graphic changes. 3rd Click: pie graphic disappears and bullets appear (4th & 5th Clicks). 6th Click: Grow the Pie & new pie graphic appears. 7th Click: graphic gets bigger. 8th Click: graphic disappears and Expand bullets appear.

POINTS TO NOTE:Two main ways to increase funding Increase funding priority in state budget Prop 98 did that, but excluded most of higher education.Grow the Pie increase the revenue base and/or increase the tax rates.

*11/19/11California Teachers AssociationState of the State BudgetState of the State Budget11/19/11CTA-NODD*State of the State Budget11/19/11CTA-NODD*State of the State Budget11/19/11CTA-NODD*Not yet out for signatures as of 01/11/12State of the State Budget11/19/11CTA-NODD*State of the State Budget11/19/11CTA-NODD*State of the State Budget11/19/11CTA-NODD*POINTS TO NOTE:Our union believes in a just, equitable and democratic society. Education funding is the key to fulfilling our mission.Prosperity for all helps economic expansion which increases the basis for tax revenues which provides funding for education.*11/19/11California Teachers AssociationState of the State BudgetPOINTS TO NOTE:Taxation Economic Development Education Funding are linked and we must education our members on these topics so they understand the urgency and absolute necessity to modify the tax system and improve economic development to achieve a level of education funding that gives California students the best opportunity to succeed academically.42 other states are doing a better job than California, this is not impossible and it is being done in less prosperous states.*11/19/11California Teachers AssociationState of the State BudgetPOINTS TO NOTE:1. The first step to any plan to expand education funding in California includes educating our members and eventually others on the education funding system, tax fairness and economic development.2. The solution to expanding tax revenues lies in a strong middle class. Taxing only the rich without also rebuilding the middle class, will not allow us to achieve or sustain for funding goals.*11/19/11California Teachers AssociationState of the State BudgetState of the State Budget11/19/11CTA-NODD*POINTS TO NOTE:1. More materials and resources will be available at www.cta.org/taxfairness.*11/19/11California Teachers AssociationState of the State Budget

state of the state budget 2012-13 governor’s january proposal

Documents

general fund spendingdollars

general fund revenues21

general fund revenue14

yearsgeneral fund

department of finance

health human services3

final budget summary

local property taxes