Budget Notebook: New governor asks for tax extensions to ward off more cuts


California may have new faces in the governor’s office and the Legislature, but the revenue problems that have long plagued the Golden State look all too familiar.

For his part, newly elected Gov. Jerry Brown is proposing to combat the state’s budget crisis by making additional cuts and extending taxes that would otherwise expire. But the latter will require voter approval, and there’s no guarantee that will happen. In fact, there’s no guarantee the measure will even make it to the June ballot, as that requires a two-thirds vote of the Legislature.

So, once again, the Irvine Unified School District and its counterparts throughout California are left in a fiscal fog, waiting for Sacramento to establish a budgetary framework as we contemplate two scenarios: Plan A, in which the tax extensions are approved, generating much needed revenue; and Plan B, in which the extensions don’t make it to the ballot – or are rejected by voters.

Closer to home, our Board of Education and staff have done a remarkable job of planning prudently and proactively, enabling IUSD to certify its First Interim financial report with the ideal “positive” certification. That means if current assumptions hold, we will not need to take additional steps to produce a balanced budget for 2011-12. However, IUSD continues to project a shortfall for 2012-13 that must ultimately be resolved, and experts warn that school funding will further erode if the governor does not get his tax extensions.

So what exactly would the latter scenario, or Plan B, look like for Irvine? It’s difficult to say – and in fact no one is saying at the state level. There seems to be some debate in Sacramento over whether to publicize the cuts that would be needed to balance California’s budget if the tax extensions don’t materialize. While some lawmakers feel voters won’t be able to make an informed decision without knowing how much more could be cut from schools, Gov. Brown is opting to keep many of these details close to the vest, believing voters might cynically perceive his “Plan B” as a scare tactic.

At least one thing is certain about Plan B: Proposition 98, which guarantees funding for public education, would most certainly take another hit, possibly by as much as $600 to $1,000 per student. And that would be unwelcome news in IUSD, which has been forced to make $38 million worth of one-time and ongoing reductions in recent years.

ACLU sues the State of California

I would be remiss in not mentioning another significant development that could impact our budget. As you may have read, the American Civil Liberties Union recently sued the state of California over fees charged to public school students for a wide array of materials and supplies, including workbooks, lab provisions, P.E. clothes and athletic equipment. This lawsuit has now been settled, and while many of the details will be revealed in subsequent legislation, it is clear that schools will no longer be able to charge for many materials and supplies.

This will present significant funding challenges for programs throughout California, including those in Irvine. At the same time, we are pleased to have clarity on this complex issue. Our district was already in the process of analyzing its own practices related to student fees before the ACLU filed its lawsuit. While our mission is to provide the highest level of instruction and enrichment given limited resources from the state, we agree that some fees are not consistent with the tenets of a free public education, and it has always been our practice not to exclude students from participating in activities when their families choose not to contribute.

Instead of using fees to help pay for the programs and services desired by our community, our sites will now seek donations. This will almost certainly impact on our financial bottom line – and therefore our programs – but only time will tell to what extent. Either way, we believe it’s the right thing to do. And, as affirmed by the ACLU case, it’s the law.

IUSD begins budgeting for 2011-12

Ever vigilant of the seismic shifts that can rock our financial landscape, IUSD has already embarked on the long path toward producing a budget for the next fiscal year, which begins July 1, 2011. (Our budget is due a day earlier, on June 30, though deadlines mandate that many of the big decisions be made earlier.) Meanwhile, our Board of Education has wisely directed members of the district’s Finance Committee, which has traditionally offered oversight and advice, to explore potential new sources of revenue to help our schools offset some of the recent state cuts. And the Irvine Public Schools Foundation is continuing its important work to generate funds for our schools through its annual campaign. Remember that the City of Irvine is matching contributions to IPSF – dollar for dollar, up to nearly $900,000 – as a result of last year’s local Measure R initiative.

Again, I can’t say enough to tout the financial stewardship of our Board of Education, the sacrifices of our staff, the generosity of our community and this district’s longstanding efforts to maximize resources. All of these factors have buoyed IUSD during extraordinarily challenging times, positioning us favorably relative to other school systems throughout the state.

While we continue to operate in a hazy fiscal environment, our collective commitment to education in Irvine – and to the next generation of leaders – has never been more clear.