Is This Bad News?


Governor Signs Budget Bills

Posted on 07/29/2009
California Capitol
Photo by: Randy Bayne, OTAN

Gov. Arnold Schwarzenegger signed a package of budget bills on Tuesday that helped to balance a state budget that was $24 billion out of balance. Calling it “the good, the bad and the ugly,” he indicated that it included no new tax increases (the good), deep cuts in education and health care (the bad), and was $156 million in the red because the legislature did not act on several components of the deal. This has caused him to make additional cuts through his line item veto authority (the ugly). “We are not out of the troubled waters yet,” he said. “We are ready if our revenues drop further to make the necessary cuts to again live within our means.”

The Governor vetoed a total of $489 million from the budget. The only education cuts he made were the following:

  • $705,000 to the California Department of Education to reduced costs in the Curriculum Development Commission and Supplemental Materials Commission given the change in the budget trailer bills that created a 5 year moratorium on new textbook adoptions.
  • $3,894,000 in Proposition 98 funds that had been budgeted for student transportation at State Special Schools. Because the legislature provided federal funds for this purpose, the Governor is deleting this duplicate funding.
  • $1,000,000 reduction to the Hastings College of Law to be made up by increased student fees.
  • $6,300,000 reduction to the Student Aid Commission, of which $4,300,000 is set aside to be restored contingent on the enactment of legislation that authorizes the decentralization of the Cal Grant Program.

2008-09 Categorical Fund Cuts

The budget deal hinged on the ability of the legislature to reduce funding in 2008-09 in order to not suspend Proposition 98. This was done by cutting unallocated categorical funds, which would then be restored in 2009-10, and a cut to revenue limits would be made in its place. Adult education is included in the list of categoricals to be cut, and has been cut by $19,691,825. This amount, along with other categorical cuts, will be replaced in the 2009-10 budget and a cut of the same amount will be made to the district ADA.

Information provided by Jeff Frost of Frost and Donnelly


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