Prop. 98 School Funds Not Expected Until Spring

State Supt. of Public Instruction Bill Honig has warned school districts that checks they might be expecting from Proposition 98, the school-funding initiative, have not been put in the mail yet--and he does not know when they will be.

“Although everyone is understandably anxious to determine the immediate and long-term fiscal impact of Proposition 98, I must counsel patience at this time,” said Honig, who helped write the initiative, in a memo mailed to local school administrators Wednesday.

Honig and other state officials have indicated that they are looking ahead to months of hard bargaining over provisions of Proposition 98.

Most estimates are that legislation implementing the measure will not emerge until late next spring. And even then there may be a legal challenge.

One stumbling block is the $215 million that Legislative Analyst Elizabeth G. Hill and state Finance Director Jesse R. Huff say is owed to schools under Proposition 98 in the current fiscal year, which ends June 30, 1989. A budget increase for schools most likely will come from allocations that would have gone to other programs.

There are also questions about how Proposition 98 will be interpreted. For example, it calls for funding increases for public schools and community colleges, but it does not contain a formula on how the money will be divided. Should the split be 50-50, in proportion to what the two education entities are receiving now, or based on need?

Proposition 98 also requires that community colleges and kindergarten through high school programs receive about 39% of the general fund budget, but it does not make clear exactly what programs are included in the spending increase. Is the money solely for classroom instruction, or does it also include teacher pensions, schooling provided for youthful offenders by the California Youth Authority? One legislative analysis even suggested that private child-care programs might be included.

Huff, Gov. George Deukmejian’s top budget adviser, said the governor probably will not make any formal proposals until he releases his new state budget in January.

“The governor and I have discussed Proposition 98, but no decisions have been made,” Huff said.

A senior Senate legislative aide who will be close to the negotiations predicted that implementation of Proposition 98 may not come until May.

“There are a whole lot of questions that must be answered before we send out a check for $215 million. No one will know for sure how much money will be available until May,” said the staff member, who asked to remain anonymous.

Honig, in his memo, conceded that a number of questions must be answered before Proposition 98 can be fully implemented. He said legislation “will be required to reduce uncertainty and avoid disputes over levels of support.”

The memo comes at a time when supporters of Proposition 98 are expressing alarm that opponents may want to “tamper” with the measure.

California Teachers Assn. President Ed Foglia, without any evidence that tampering is going on, said this week he is worried that Deukmejian, who campaigned against the initiative, might cut health, higher education and other programs “in hopes of setting their proponents at odds with teachers and other Proposition 98 backers.”

Another California Teachers Assn. official, Dick Hodges, said the alarm being expressed by teachers’ union officials stems in part from an analysis of Proposition 98 done by the Senate Revenue and Taxation Committee.

Steps to Lessen Impact

The analysis outlines steps that can be taken to lessen the impact of Proposition 98, several of which would nullify key provisions of the measure.

The analysis outlined a way for the state to give the schools the additional $215 million or more due them under Proposition 98 while not actually increasing their overall budgets. Basically, money going in one pocket could be taken out of another, the report suggested.

“The state could give schools this additional amount but shift an equivalent amount in property taxes away from schools and to local governments. . . . This outcome is clearly not what was intended by the proponents, as it would keep schools funded at their current level . . . (but) the language in the initiative would appear to allow the Legislature to make such shifts,” the report said.

Martin Helmke, a tax committee consultant who helped write the report, said the analysis was intended to point out loopholes in Proposition 98, not to suggest ways to circumvent the initiative. “It was merely an analysis of how we read the proposition. It certainly wasn’t designed as a manual,” Helmke said.