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While Gov. Gavin Newsom continues galivanting around the country, the budget news in Sacramento gets worse.
This week, the non-partisan Legislative Analyst’s Office issued a budget update that put the shortfall for the upcoming year at $73 billion—adding $15 billion to its $58 billion estimate after the governor’s initial budget proposal was released in January. The primary reason is that estimated tax payments for January were nearly $6 billion below the governor’s estimate, about a 20% dip.
Ugly. California, with its revenue so dependent on its progressive income tax where the top 1% of earners account for nearly 42% of the revenue, suffers when it’s a slow year for them. So, a $100 billion surplus goes upside down by such a staggering total—sadly, the biggest shortfall ever faced by the state.
In January, the governor initially had proposed what amounted to a series of accounting gimmicks and borrowing to avoid any hard decisions. That won’t cut it if the current trend continues. Tax revenues are dropping and high earners are bailing out of California. The state lost one congressional seat in the 2020 reapportionment and might find itself down another seat or two after the 2030 census.
The Sacramento challenge comes right home to local school districts that are primarily funded by state revenues. Dublin trustees heard budget reports that week that will force tough decisions. Pleasanton is in the same boat and both are at impasse with their respective teachers’ unions.
The cost-of-living increase has fallen from almost 4% to .76%, a $4 million hit for Dublin. The administration presented $3 billion in recommended cuts that the trustees likely will take action on next week. Notably two trustees favored biting the bullet, cutting $4 million next year figuring the state financial picture isn’t going to improve any time soon.
Tonight, Pleasanton trustees will consider eliminating 17 certificated (teaching and related positions) for next year. They must take action because affected employees must be notified by March 15.
The board also will consider resolutions to eliminate classified positions and two management positions. Another resolution will eliminate positions for 50 temporary teachers.
Trustees and senior staff have been considering reductions since the Jan. 25 meeting when they received a similar budget report to the one that Dublin trustees considered Tuesday.
This evening’s meeting also includes reviewing the enrollment forecast that shows a continuing decline. More bad news.
Meanwhile, up the road in the San Ramon Valley, school trustees are moving ahead with plans to ask voters to reauthorize a $144 parcel tax and add new $98 parcel tax to raise more money. Given the changing demographics (not in terms of income) of the area, it will be interesting to see how voters receive them. The northern schools, Monte Vista and San Ramon Valley are primarily white, while Dougherty Valley and California have substantial Asian populations (more than 70% at Dougherty).
Even if Gov. Newsom wasn’t “galivanting (Tim’s misspelling) around the country,” Tim would still be attacking the Governor.