School Officials Push for Prop. 98 as Way of Getting ‘Fair Share’ of Funds

The frustration in Lee Eastwood’s voice was palpable. The superintendent of the Whittier Union High School District, a small district of 8,500 students in east Los Angeles County, said he was tired of “fighting like heck for dollars” every year to keep his six high schools running.

The state government in Sacramento, which provides California’s school districts with the bulk of their operating revenue, has sent the public schools on a wild roller-coaster ride the last several years, he said. Whittier and other districts received healthy increases between 1983 and 1986, but barely got enough to keep up with inflation the last two years, Eastwood argued. And, because of the unpredictability of the political process, Eastwood and the state’s more than 1,000 other district superintendents rarely find out how much money they have to spend until just before school opens.

‘Never Enough Money’

“We realize there is never going to be enough money” for schools, Eastwood said, echoing the feelings of school officials up and down the state. But “we’ve been floating on the whims of the Legislature for the last 15 years. Now, we just want our fair share. We don’t want California to slip behind.”

Educators, after years of frustrated budget dealings with Gov. George Deukmejian and the Legislature, have taken matters into their own hands and are pushing Proposition 98, the school-funding initiative on the Nov. 8 ballot.

If approved by voters, the measure would make the following amendments to the California Constitution:

- Require that at least 39% of the state’s $36-billion general fund be spent on grade school, high school and community college programs.

- Guarantee schools automatic increases tied to inflation.

- Amend the state spending limit so that schools, rather than taxpayers, will get first crack at future tax rebates resulting from budget surpluses.

- Establish a new system of evaluating public schools by requiring each district to issue an annual report card, beginning in 1989, on such

things as class size, student achievement, dropout rates, quality of textbooks and other issues.

Supporters of the measure view Proposition 98 as a way to end years of tight budgets, political failures and disappointments.

“This (proposition) guarantees us a floor,” said state Supt. of Public Instruction Bill Honig. But opponents view the measure with alarm because they believe that it would enrich schools at the expense of health, welfare, law enforcement and other programs. Anti-tax crusader Paul Gann also says the measure would “completely destroy” the state limit on government spending, which he sponsored in 1979.

Legislative analyst Elizabeth G. Hill said that had Proposition 98 been in effect when the state experienced a $1-billion drop in tax revenues last May, “it would have forced the Legislature to make even deeper cuts in other state programs while guaranteeing a funding increase for K-12 education.”

The current wave of problems began in 1978, with passage of Proposition 13, the landmark tax-cut initiative that dried up the schools’ well-established and rapidly growing property tax base.

Gov. George Deukmejian and the Legislature, to make up for several lean years, approved a hefty budget increase for schools in 1983. But then, in subsequent years, the gains gradually eroded because of sharp increases in school enrollments and other factors, according to school officials.

In 1984, voters approved the lottery initiative, which guarantees that schools will receive 34% of the proceeds from lottery sales. The money was to be supplementary and was not to be used to substitute other revenue sources. Schools received an estimated $750 million last year and will get about the same this year. But school officials complain bitterly that the governor and Legislature are, in fact, using the money to replace state dollars that should go to education.

Lottery Gain Offset

Honig said schools received about 39% of the general fund two years ago--a high-water mark that was used as the basis for the Proposition 98 formula--but the amount slipped to 37.5% this year. Honig said the amount of slippage is almost “dollar for dollar” the amount of lottery revenues that the schools received.

State Finance Director Jesse R. Huff disagrees with Honig’s contention that lottery revenues are going elsewhere. “His claim is simply untrue,” Huff said. “He says that education a couple of years ago was getting 39%, now it is getting 37%. He says that is proof. It is no such thing. What it shows is that in recent years there is greater growth in other budgets, like corrections, which is growing better than 10% a year because of the prison-expansion program. At the same time, education budgets have been consistently increasing.”

Honig and other local and state school officials also note that California is falling behind most other large industrial states in the amount of money spent on public education.

California spent $3,892 per student in 1987-88, tying North Carolina for 29th place nationally, according to the National Education Assn.’s annual rankings of the states. That was $3,000 behind Alaska, New Jersey, New York and Connecticut, the top four spending states, and $324 below the national average.

Less Tax Income

The NEA figures also show that although California had a higher total personal income in 1986 than any other state, its residents contributed a smaller proportion of their income in taxes to support public schools than most other states. Californians spent about $32 out of every $1,000 earned on public elementary and secondary schools, ranking 47th in the nation. Only Florida, Missouri, the District of Columbia and New Hampshire spent less.

Honig and other educators insist that Proposition 98 would not mean a bonanza for schools. They say it would allow schools to catch up and perhaps begin paying for systemwide improvements, from reducing class size to funding training programs for teachers.

California Teachers Assn. President Ed Foglia, whose organization is raising most of the $4 million being spent in an effort to pass Proposition 98, said the teachers’ top priority for spending any new money would be to reduce class size. “That comes before their salaries,” he said.

California has the largest classes in the country, according to NEA figures on pupil-teacher ratios.

Substantial Difference

California averages 23 students per teacher, compared to Massachusetts, Vermont, Connecticut, New Jersey and New York, which average 13 students per teacher. And actual class size in California is larger, state Department of Education figures show. More than half of all California high school students are in classes of 31 or more, and more than one-fourth are in classes of 36 or more. Almost one-third of all elementary students are in classes of 31 or more students.

Money from Proposition 98 could only be spent on instructional purposes--such as teacher salaries, books and other supplies--however, and could not be used to build schools.

But the high cost of the measure has officials involved with other state programs fearful that they would have to fight for an ever-shrinking share of state revenues.

Passage of the initiative would immediately require the state to put an extra $215 million into public school programs, according to legislative analyst Hill.

That is a low estimate. A nonprofit, corporate-sponsored group, the California Taxpayers Assn., estimates that the cost of the initiative the first year would be $796 million. Estimates by the state Department of Education fall somewhere between $450 million and $500 million. It is possible the courts would be asked to decide the precise amount schools would have coming.

Enough in Reserve

The state now has enough in its budget reserve, about $600 million, to cover the cost of the measure for the first year, if it called for the $215 million Hill estimates.

But Deukmejian, an opponent of the measure, has been reluctant to take big chunks of money from the reserve to pay for sudden increases in state costs. So it is likely that Deukmejian would ask the Legislature to support a mix of budget cuts and withdrawals from the reserve. Thus, the money to pay for education could come directly from other programs.

County officials fear that one likely target would be the $206 million appropriated last month to help pay for the cost of county trial courts for the last six months of this fiscal year.

Counties want the money not only to help finance trial courts, but also to relieve the budget squeeze they are feeling as they struggle to find money to finance law enforcement, health and other county programs.

Problem for Health Programs

Other targets of budget cuts could be health programs--which account for about 32% of the general fund budget--the University of California and California State University system, and state adult and youth prisons.

Opponents of Proposition 98 say these programs are as short of funds as schools. Law enforcement agencies say they are having trouble recruiting and keeping police officers because of low starting pay. Jails are overcrowded. Counties have been unable to keep up with the rising costs of drugs, doctor and hospital care. Trauma centers have closed in some counties, libraries in others.

Dr. Richard Corlin, a Los Angeles-area physician and member of the California Medical Assn., recently told the Assembly Education Committee during a Proposition 98 hearing that “22 years ago California was No. 1 in the country in spending on mental health. Now we are 33rd in spending on mental hospitals. It is not going to do any good to have a superb school if you have Medi-Cal expenditures at such a low rate that you do not have an obstetrician available (when needed for poor women) and that results in delivery of a brain-damaged baby.”

Despite the potential damage caused by budget cuts, opponents have had a hard time mustering opposition because there is widespread agreement that schools are badly in need of more money. And many opponents have children or other ties to public schools.

Proposition 98 SCHOOL FUNDING PLAN

WHAT PROPOSITION 98 WOULD DO Main Sponsor: California Teachers Assn.

Other Supporters: State Superintendent of Public Instruction Bill Honig, California State Parent Teachers Assn., California Federation of Teachers, Assn. of California School Administrators.

Opponents: California Taxpayers’ Assn., Peace Officers Research Assn., California Correctional Peace Officers Assn., California Medical Assn., California Chamber of Commerce, California Assn. of Public Hospitals, California Tax Reduction Movement.

Key provisions of Proposition 98:

--Establishes minimium level of funding for public elementary and high schools and community colleges. The amount is equal to the percentage of revenues received from the state general fund in the 1986-87 fiscal year (about 39%) or the level of support received during the prior budget year--whichever is greater--plus increases reflecting the rate of inflation and student enrollment growth.

--Schools would receive an immediate increase of $215 million. This year’s general fund appropriations total $36.1 billion. At 39%, schools would be due $14.1 billion. Since they only received $13.9 billion in the budget signed by Gov. George Deukmejian, the schools would be due an additional $215 million.

--Basic money guarantees for the schools could be suspended by a two-thirds vote of the Legislature.

--Surplus revenues resulting from the state spending limit, now rebated to taxpayers, would be turned over to schools. The amount would be limited to 4% of a school’s annual state aid. Under the formula, California’s schools now could receive up to about $550 million of any surplus, if there was one. But state budget officials do not anticipate a surplus this year.

--Surplus revenues would automatically be given to schools until the director of state Department of Finance and state school superintendent agreed that annual expenditures per student and average class size in California met or exceeded the averages of the top ten states in each category.

--Charges Legislature with responsibility for establishing a “prudent” budget reserve, but only after meeting financial requirements for education.

--Requires the state superintendent of public instruction to develop a School Accountablity Report Card that would be used by all school districts to evaluate such things as student achievement, drop out rates, class sizes and teaching loads, quality of textbooks, teacher training and school upkeep.

--Local school districts would be required to begin to issue accountability report cards for the school year beginning September 30, 1989.