Governor Brown has acknowledged that education has been the only major program that has taken disproportionate budget reductions since 2007-08. Therefore, he committed to protect education by proposing flat funding for education for 2011-12. However, flat funding really results in about a $19 annual per pupil reduction.
The 2011-12 Governor’s Proposed Budget was submitted with an estimated 18-month budget shortfall of $25.4 billion, comprised of an $8.2 billion shortfall in 2010-11 and a $17.2 billion shortfall in 2011-12. The Governor’s proposal addresses the shortfall in three ways: (1) reducing expenditures by $12.5 billion over two years (2010-11 and 2011-12); (2) enhancing revenue by $12 billion over the same two-year period to be achieved through a June ballot measure to extend the temporary taxes enacted in 2009-10 by five years (.25 percent surcharge on income tax, 1 percent increase in the sales tax, .5 percent increase in the vehicle license fee); and (3) borrowing $1.9 billion from special funds and other one-time measures.
The success of this proposal largely depends on a two thirds bipartisan legislative approval to place the tax extension measure on the ballot and then on a majority of the voters approving the tax extension. Additionally, the Legislature would have to agree to expenditure reductions similar to ones that they have rejected in prior years. Part of the Governor’s strategy is a proposal to realign or to shift responsibility of many programs along with the revenue sources to local governments. This shift would include using one-time Proposition 63 funds of $861 million to fund community mental health services. Clearly, there are many challenges ahead for the Governor and the Legislature to balance this budget.
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