The Prop 30 windfall – not yet
November 9, 2012 | By Kathryn Baron | 6 Comments
When Proposition 30 won on Tuesday, it led a sweep of nearly two dozen local school parcel taxes and close to a hundred local school bonds approved by Californians that together will bring in tens of billions in new revenue for education. And some of those voters are already asking when their local schools will be rehiring laid-off teachers, reopening school libraries, and installing new technology. It will not be easy to explain that, at least for this year, new revenue from Proposition 30 won’t be visible to the naked eye.
As EdSource Today has reported more than $2 billion of Prop. 30 funds will go toward paying down some of the state’s late payments to schools. Remaining funds won’t backfill the $8 billion that K-12 schools have been cut in the past five years, about $1,400 per student.
“In some ways, I worry about it being very similar to what happened when the lottery came in,” said Molly McGee Hewitt, executive director of the California Association of School Business Officials (CASBO), during a post-election webcast Thursday afternoon produced by School Services of California. “The number one question I’ve been asked my entire professional career since the lottery is ‘What the heck have you all done with all that lottery money?’ As if we’re keeping it in a back room.” [The state lottery provides about 1.5% of K-12 education revenues, or some $800 million per year]. She said she worries that maybe backers of the ballot measures oversold it a little bit to the public.
“Proposition 30 wasn’t a windfall for anybody; it sort of stops the bleeding,” explained Rick Simpson, deputy chief of staff for Assembly Speaker John Pérez. “But it does help stabilize the state general fund as well as public schools.”
Ron Bennett, the president and CEO of School Services, who moderated the event, underscored that point, telling about a meeting he had in a large school district a few days ago. District officials told him that if Prop. 30 had failed, they would have had to cut $60 million this year. “Now they only have to cut $19 million,” said Bennett, noting, with some irony, that they’re very relieved about that.
That’s because in its first year, more than $2 billion of Prop 30 funds will be used to start paying off the nearly $10 billion in deferrals, those late payments that forced cash-strapped district to borrow money. Those payments should free up funds so in 2013-14, districts will start to see some real money.
But that’s not what the public is necessarily expecting, and the finance experts spent a good part of the hour-long webcast discussing the need to make sure people understand the situation. They called for greater transparency regarding education spending by putting more effort into keeping the public informed.
“Proposition 30 creates a massive communication problem. Business folks now have to go out and talk to people who have a particular expectation,” said panelist Joel Montero, CEO of the Fiscal Crisis and Management Assistance Team (FCMAT), which helps school districts manage their finances. Their task, said Montero, is to explain the deferral situation and emphasize that it took a while to get into this situation and it will take a while to get out of it. “Eventually that does save school districts money, but that’s a fairly complex concept when everybody thinks that Proposition 30 passes and all of a sudden we have more money to spend.”
It’s not just the public that may not understand where the Prop. 30 money is going this year, but teachers, administrators, and even school board members aren’t necessarily clear about it, added McGee Hewitt. She said groups like CASBO and School Services will need to step up training for school boards, and called for greater collaboration and cooperation between district business officials and superintendents.
“I think that it’s a wonderful day and I’m grateful to where we’re going,” said McGee Hewitt. “I’m a little bit hesitant to think that happy days are here again. I think that we have a long way to go to get to that again.”