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Plan emerges to solve new $140-million gap in L.A. schools budget

October 12, 2009 |  1:10 pm

The weekend’s flurry of bill signings and vetoes included the governor’s veto of a measure that would have forestalled a new $140-million deficit affecting Los Angeles' public schools. But the deficit will likely be cured in another fashion as a result of apparently successful negotiations that preceded the veto.

Senate Bill 84 would have reversed unplanned-for cuts in supplemental funding totaling $400 million statewide and $140 million to low-performing schools in the Los Angeles Unified School District.

Last week, in the wake of intensive political pressure, the office of Gov. Arnold Schwarzenegger tentatively blessed a different financial fix. It consists of accelerating the spending of federal stimulus dollars to fill the gap.

The benefit is that many California school districts, including L.A. Unified, won’t face an immediate new deficit that could imperil their finances.

The downside is that, in the process, California would burn up more precious federal stimulus dollars, which then won’t be available for the next school year when budget deficits are expected to open up once again. In fact, if this accelerated money is used now, only 10% of the original stimulus funding would remain. School districts, including L.A. Unified, had hoped to save about 50% of the one-time federal funds for the 2010-11 school year.

“It’s not as if new money fell from heaven,” said Rick Simpson, deputy chief of staff for state Assembly Speaker Karen Bass (D-Los Angeles). "We’re getting the money early and using it for this purpose. It’s a policy trade-off.”

The need for this trade-off arose in the closing hours of summer budget negotiations in the state Legislature. Lawmakers closed part of their funding gap by, in effect, usurping money from the Quality Education Investment Act, which was being funded over an eight-year period by a $2.9-billion litigation settlement. The purpose was to conduct a grand experiment in reducing the number of students per classroom and the number of students per counselor. This money became more important as the economic crisis struck, leaving school districts strapped for cash.

School districts adopted their budgets on the presumption that the QEIA money would remain. When that was suddenly gone, lawmakers substituted future federal grant funding in a move that turned out to be speculative at best.

The subsequently passed Senate Bill 84 restored the dollars but failed to specify a funding source, which marked the bill as destined for a Schwarzenegger veto.

In their lobbying efforts, districts pointed out that the QEIA cut would fall most heavily on poor, minority students because they had been the original beneficiaries of the funding. And cutting $140 million midyear would have been a nightmare for L.A. Unified. Increasing class size, for example, from 24 students per teacher to 29-to-1 in the first four grades would save only $47.3 million over one school year. A 1% salary reduction over a full year would save only $40 million.

The new legislative fix could be introduced in the Legislature this week.

“California will have a plan to achieve the savings included in the 2009-10 Budget, while holding QEIA schools harmless,” Schwarzenegger said in a letter that accompanied his veto.

-- Howard Blume

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