Two Sides Move Closer on Budget

Wednesday’s education funding compromise, which commits almost $1 billion of the state’s revenues to cutting class size next year, moved the Legislature and the governor a crucial step closer to resolving the ongoing budget stalemate.

Agreement on the class size package was reached after five hours of negotiations between legislative leaders and Gov. Pete Wilson, and announced at 12:30 a.m. Wednesday.

The plan offers school districts $771 million to cut class size in the primary grades to 20 students per teacher. The state also intends to spend an additional $200 million to buy 5,000 portable classrooms to house the new classes created by the reductions, Senate budget analysts said.

“We’re going to hope that parents and teachers and school leaders will be creative in using the available money,” said Senate President Pro Tem Bill Lockyer (D-Hayward).

Democrats and public school lobbyists initially opposed Wilson’s class reduction plan, contending that the governor was not offering enough money to pay for the new teachers and classrooms the plan would require. They also argued that many schools, particularly in crowded urban districts, would not be eligible for the funds because they could not lower class size by the beginning of the school year in September.

Agreement came after the governor agreed to increase the amount he was offering by an additional $95 million and keep any unspent class reduction money in an escrow account to be used once schools are ready to lower class size.

With the class size deadlock resolved, Wilson and legislative leaders turned later Wednesday to the remaining issues separating them as they try to agree on California’s $63-billion budget for 1996-1997.

Those issues include prison spending, various programs that provide state funding of abortion and Wilson’s proposal to allow taxpayers to allocate $1 on their income tax returns for local police.

California has been operating without a budget since Monday, the July 1 start of the fiscal year and the state constitutional deadline for having a new spending plan.

Lawmakers working on the budget were planning to return Friday to finish negotiations, in preparation for a possible budget vote on Sunday night.

The class size reduction deal comes as officials look for ways to spend an additional $2.8 billion required to go to public schools next year under Proposition 98, the school funding initiative. California schools will be getting a record $28 billion in the new budget.

“This has been one of those dreams we’ve been talking about for years,” said California Supt. of Public Instruction Delaine Eastin. “We’ve been accused of being insane because the dollar amounts are so huge.”

Wilson initially offered to spend $678 million to lower class size in first, second and third grades. Democrats persuaded him to increase it by almost $100 million.

Some of that money will come from a Republican-backed effort to redistribute $106 million that had been earmarked to help schools to comply with court-ordered desegregation plans. To the glee of Los Angeles Democrats, Lockyer and Assembly Democratic Leader Richard Katz of Sylmar killed that plan, rerouting $106 million of that to other projects, including class size reduction.

The Los Angeles delegation fought the GOP effort after the Department of Education issued a report revealing that Los Angeles schools would lose $28 million, while suburban and rural schools generally would gain money.

“The desegregation issue is behind us,” said state Sen. Richard Polanco (D-Los Angeles), who led the drive to kill the run at the desegregation money. “The class size reduction helped bring this about.”