Levels of pain if revenues fail

Lawmakers want furloughs not more layoffs
By

Community college students, already facing a 38 percent increase in course fees, will be among the first to pay the price if state revenues come up short next year. Next will be rural and urban students, who’ll lose their bus rides to school. Then, finally, teachers and staff at K-12 schools, who may be docked as much as 3.5 percent in pay though additional furlough days.

The state budget that Democrats in the Legislature passed late Tuesday by majority vote – with no Republican support and no votes to spare in the Senate – layers a series of budget cuts if the $4 billion in extra revenue that Democrats built into the budget fails to materialize. Many economists believe it won’t.

Optimists – if any are left – can take comfort in knowing that K-12 schools will be spared from any additional cuts if at least $2 billion of the $4 billion comes through. But if there is less than $2 billion, K-12 schools will bear the brunt of the cuts. And they could be as much as $1.9 billion, mostly in end-of-the-year furlough days, if the shortfall reaches as much as $4 billion. The state will save between $200 million and $225 million for every fewer day that schools are open.

The prospect of cutting the school year another seven to 10 days from the already short 175-day calendar once would have been dismissed as preposterous in a state worried about losing its economic edge in a competitive world. But those who attended education briefings on Tuesday report that the language of the budget or trailer bills to come will make clear that legislators prefer furloughs to any more layoffs.

Adopting a furlough day until now has been subject to union and district negotiations – a process that could stretch out for months if teachers and classified workers oppose the idea. One of many unanswered questions, says Bob Blattner of Blattner & Associates, an education consulting firm based in Sacramento, is whether the Legislature planned to give school trustees the power to unilaterally impose a furlough day.

$2.5 billion cuts in tiers

The Legislature laid out $2.5 billion worth of budget cuts if revenues fail by next January. Here are the details:

  • If the state takes in over $3 billion of the $4 billion, there would be no cuts.
  • If the state takes in between $2 billion and $3 billion, there would be $600 million in cuts, known as Tier 1. In the area of education, the University of California and California State University systems would be docked $100 million each in addition to the $650 million cut already in the budget, equal to one-fourth of state support, in the case of CSU. Higher tuitions would be a near certainty.

Community college students have already seen fees rise from $26 to $36 per credit. A $30 million Tier 1 cut to the system would lead to another $10 per credit increase, to $46, a 77 percent jump in 18 months.
And that’s not all.

  • If revenues were less than $2 billion, as much as $1.9 billion in Tier 2 cuts would be imposed.  Included would be an additional $72 million cut to  community colleges, resulting in a loss of 35,000 students, according Erik Skinner, vice chancellor of this system. And this would be on top of $400 million cut imposed earlier in Gov. Jerry Brown’s January budget, which would cause 130,000 students to be turned away. “We will prioritize, but there is no getting around that California has taken steps backward to training future workplace,” Skinner said.

Another Tier 2 cut would be $248 million from school bus transportation – half of the account. Stephen Rhoads, the principal consultant for Strategic Education Services in Sacramento, said the word around the Capitol was this was a cut aimed at Republicans, many of whom represent rural areas. But urban districts also receive the money. “By and large, the cut would hurt poor children, and that’s unfortunate,” he said.

Finally, there would be the $1.5 billion cut in the school year, equaling between seven and 10 days, depending on the size of the missing revenue. The school year, for school districts left with no alternative, could be as few as 168 days, compared with 180 days two years ago.

8 Comments

  1. Wow. Our teachers are literally among the highest paid in the country, and they will see a 3% decrease in salary, while community college students see a 38% increase in fees.
    If the CTA cut the amount it collects in dues to fund political activities, it would make up for the pay cuts to the teachers. But then the Legislature wouldn’t be in their pocket anymore.
    This budget, and its gimmicky predecessor, are disgusting.

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  2. How about CUTTING down the size of State Government?  With hundreds of thousands of State Workers, and the State is broke, does it not make sense to start trimming the payrolls?  How about declaring that the State DOES NOT NEED a full-time Legislature?  Make it part-time, eliminate all the perks, let them start serving the Citizens of the State instead of them holding us hostage……
     
    Why no mention of cuts to Corrections?  Oh, I forgot, they have a stronger Union than the Teachers……..
    Keep it up Jerry, You’re doing a great job……NOT…….

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  3. I would like to know where you got the  statistical information for you post.  I believe it is regrettable that you have a misinformed opinion about teacher salaries in California.  What is the amount of CTA money you are talking about that could make up for pay cuts?   I would like to see the factual evidence.  The budget problems and the impact these will have on California’s future are the responsibility of every citizen.  The seriousness of this issue requires careful investigation, critical thinking, and thoughtful response.

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  4. The state of California is actually at an 80 year low for state budget per state GDP.
     
    http://articles.latimes.com/2009/oct/29/local/me-cap29
    It doesn’t take much digging to learn that general fund spending “in the last 10 years” has risen just 27%, according to finance department data. Adjusted for inflation and population growth, spending actually has decreased by 16.6%.”


    And for the idea of a part time legislature… how exactly will that save money or help anything? What it would do is limit even further the sort of people who would be able to run for office.

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  5. It’s true that teacher salaries in California would be fabulous if only you could do the job while living in a house at North Dakota prices.
     
    As it is, there’s wide variation in salary across the state, and most teachers need a spouse who works at a higher paying job to make ends meet in the communities they serve.

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  6. The upside to this austerity budget is that it might force some re-examination of the priorities we have inherited.  The proposed higher education budgets (rounded) are:
    UC: $6B
    CSU: $5B
    CC: $9B
     
    See: http://www.ebudget.ca.gov/pdf/BudgetSummary/HigherEducation.pdf
     
    This is very elitist since we are spending more on the UCs which educate far fewer than the CSU’s.  One of the priorities we have inherited is that the top 12.5% of HS graduates can go to a UC.  That is changing and I suggest that is to the good.  About %80 of those entering UCs and 90% graduating from UCs don’t intend to go on to post-graduate schools so why are we and they paying so much to have them hang around research professors when they could get the same education at a CSU?  The CSU professors typically teach 5 classes while the UC professors typically teach 3 classes (so they can have more time for research).  We can educate more for less by making the UC’s more exclusive.  Admitting more out-of-state and foreign residents (as is happening) would cut thestate contribution, up the undergraduate quality at the UC’s thereby making it more interesting for those going on to post-grad education.
     
    The other priority we need to examine is the open admissions policy for the CCs.  They are spending an enormous amount of time and money on remedial math and English.  It does not require a master’s degree in math to help people understand pre-algebra or algebra 1.  Adult education (which locally is mostly flower arranging and yoga) could handle this at far less cost.  Or a 5th year in HS.  I think half the reason HS teachers have so much trouble with getting kids to focus is that they know they can always get into the local CC no matter how much they goof off in HS.
     
    As long as I’m waxing rhapsodic here, we could learn something from all them foreigners and make the CSU-UC experience only 3 years rather than 4 (actually it is now more like 5) by requiring that the first year basics be taken care of before entering either through a 5th year in HS of AP or a year or two at CC.  There are huge dropout rates from college (much worse than HS) and an extra year of maturity and study at a college level first could make sure that an expensive college education is provided to those that need it and can benefit from it.  This isn’t going to happen but I thought I’d throw it in just to provoke a little actual, you know, thinking about things.
     
    Just because we’ve always done things “this way” doesn’t mean it it isn’t incredibly stupid.

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  7. The productivity and effectiveness of California public K-12 schools have been quite impressive given the declines in teacher compensation relative to otherwise-similar workers, increases in class sizes, increases in unionization, and changes in student demographics that have occurred over the past 20+ years. 

    According to Decennial United States Census and the American Community Survey, in 1989 teachers in California earned about 4% more, on average, than workers in California with otherwise-similar observable characteristics:  education, experience, sex, race, hours worked per week, weeks worked per year, etc.  In 2005 California teachers earned about 10% less than otherwise-similar workers.  A teacher who entered the profession at age 23 in 1989  was 39 in 2005–well before the past few years of cuts to education funding–and earning about 14% less than she had expected upon entering the profession.  I doubt that she would agree that she is overpaid.   

    If one extends the analysis back to 1969, the decline gets even larger. 

    Teacher compensation has not kept up with the increase in the “skill premium” over the past four decades.  The rising cost of college-educated labor forced schools to increase class sizes.  And because teacher compensation did not keep up, it would not be surprising if teacher quality decreased as well.

    One might expect school quality to have declined as a result.  One might expect that increases in unionization rates also contributed to a decline in school quality, although increased unionization itself may have been a result of a shortage of highly-educated workers willing to become teachers at prevailing wage rates.  And because California’s student population also changed over this period, one might expect that student outcomes would have declined regardless of changes in school quality.

    Despite all of these changes–the decline in relative teacher compensation, increases in class sizes, higher rates of unionization, and changes in student demographics–there is zero evidence of a decline in student test scores over this period.  This is true if one looks at state assessments–the California Standards Test and the Stanford-9–or at the National Assessment of Educational Progress.  If anything, student test scores have improved.

    These latest round of cuts may be the straw that broke the camel’s back.  They may also result in a long-term decline in teacher quality that may not be recognized for some time, as individuals who entered teaching when compensation was relatively high retire and are replaced by individuals who enter the profession in the new era of larger class sizes and lower relative compensation. 

    Census and ACS samples are available from IPUMS (http://www.ipums.org).  The Economic Policy Institute (http://www.epi.org) has done impressive research on relative teacher compensation.  California test score data are available from the California Department of Education (http://www.cde.ca.gov).  NAEP test score data, including California subsamples, are available from the U.S. Department of Education (nces.ed.gov/nationsreportcard/) .  For more information about increases in the skill premium, one might start with the research of Claudia Goldin and Lawrence Katz of the Department of Economics at Harvard University.  

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