Legislation Update - 03/21/2010

Last week California ended $2 billion better as a result of the Governor signing a number of extraordinary session measures tackling the state's budget. However, the Governor also vetoed ABx8 2, a measure that would have resulted in an additional $2.1 billion in solutions.

Two important special session bills remain on the Governor's desk awaiting action:

The deferral clean-up bill: ABX8 14, would clean-up the K-12 payment deferral legislation by requiring the state treasurer, controller and Department of Finance to confirm the date and size of any payment deferrals by March 31, 2010 – giving schools more time to plan. The bill would also require that a March 2011 deferral be repaid by April 29, 2011.

The "gas tax" bill: ABX8 6 makes various amendments to the budget to lower certain gasoline taxes and increase others to provide funding for transportation, transit and General Fund relief. The bill would hold Proposition 98 harmless so that any decline in gas sales tax revenue would not impact schools. A similar tax swap measure proposed by Governor Schwarzenegger would have cut schools by at least $800 million because it would have resulted in an overall reduction to the state's General Fund – thereby lowering the Prop 98 guarantee.

After sending the final budget-related measures to the Governor, the Legislature closed the 8th Extraordinary Session on the State Budget, despite protests from Republicans who complained they had not done enough to address the budget in the current year.

In asking his colleagues to vote to close the special budget session, Senate Leader Darrell Steinberg said, "I suppose I would like to use my very brief closing just to cite from an article from one of the respected education trade publications, by Tom Chorneau [SI&A Cabinet Report], who used to write for the Chronicle. March the 9th, 2010, he reports the following, and I quote, ‘The U.S. Department of Education has notified the governor's office that California's application for a second phase of federal stimulus money – about $400 million – is being held up over concerns the state has not met Congressional maintenance of effort requirements.' Now, what does that mean? How do you translate that legislative-ese? We cut $32.5 billion last year, including huge cuts to public education. Now, if it is your perspective that we should cut even deeper in a way that jeopardizes our Race to the Top application or other opportunities for federal funds, we disagree. I urge an aye vote on closing this session."

The Senate voted 21-11 to close the session with Republicans voting no.

The letter from the US Department of Education shows the Governor is on shaky ground with his proposals to further cut schools. It also raises issues with California's Race to the Top application. One of the pre-conditions for ultimately receiving a Race to the Top grant is for a state to also qualify for the federal SFSF.

The Governor's Department of Finance must respond to a number of questions from the USDOE before the feds make a determination on the future of California's federal stimulus funding and RTTT eligibility.

The State Board of Education (SBE) met last week and approved a revised list of the state's 5 percent of lowest performing of schools. The modified list swaps out 37 of the 188 schools from an earlier draft with a new cohort of schools that state officials determined this week to be lower achieving. Representatives from the SBE and the CDE stressed that SIG is a voluntary grant program, and local education agencies that refrain from undergoing the severe restructuring activities required by the grants have the option of waiting a year until a new list is drawn up along with another SIG allocation. However, absent from the discussion was the fact that recently enacted state law (SBx5 1 - Steinberg) mandates that the lowest 5 percent of schools must implement one of the four federal reform models– turnaround, school closure, restart or transformation– with or without the SIG funding. Stay tuned…

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