No on 76 Advocacy Kit

PROPOSITION 76

School Funding. State Spending. Initiative Constitutional Amendment

The California State PTA has voted to OPPOSE Proposition 76, an initiative measure that would amend the California Constitution, which will appear on the November 2005 Special Election ballot. The California Attorney General has provided the following Title and Summary for Proposition 76:

School Funding. State Spending. Initiative Constitutional Amendment Changes state minimum school funding requirements (Proposition 98), permitting suspension of minimum funding, but terminating repayment requirement, and eliminating authority to reduce funding when state revenues decrease. Excludes above-minimum appropriations from schools' funding base. Limits state spending to prior year total plus revenue growth. Shifts excess revenues from schools/tax relief to budget reserve, specified construction, debt repayment. Requires Governor to reduce state appropriations, under specified circumstances, including employee compensation, state contracts. Continues prior year appropriations if new state budget delayed. Prohibits state special funds borrowing. Requires payment of local government mandates. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Spending limit could constrain state expenditures over time. Other provisions would have major impacts on state budget decision making, which could lead to varying outcomes regarding the level of state spending and on the composition of that spending among education, transportation, and other state programs. Provisions allowing Governor to reduce appropriations could result in lower state spending in certain years when the state was facing unresolved budget shortfalls.

The official summary of Proposition 76 prepared by the independent Legislative Analyst's Office states that Proposition 76 would make major changes to California's Constitution relating to the state budget. The measure would create an additional state spending limit, grant the Governor substantial new power to unilaterally reduce state spending, and revise key provisions in the California constitution relating to the minimum funding guarantee for K-12 schools and community colleges.

BACKGROUND INFORMATION
Governor Schwarzenegger in his January 2005 State of the State message announced his intent to amend Proposition 98, either through the legislative process or in a statewide ballot measure. ACAX1 4 (Keene), State Finances, was introduced in the First Extraordinary Session of the Legislature on behalf of the administration as part of a package of reform proposals for addressing issues facing California. ACAX1 4 was never acted on by the Legislature. A business-backed coalition, Citizens for California, with the support of the Governor then qualified Proposition 76 for the Special Election ballot; this proposition is similar to ACAX1 4 and would radically restructure the rules governing the state's budget process.

Proposition 76 would impose a new state spending limit, give the Governor broad authority to cut spending if revenues fall below forecast levels, and make changes to the Proposition 98 school spending guarantee.
In 1988 California voters approved Proposition 98 to provide schools with stable reliable funding. Proposition 98 provides K-14 schools with a guaranteed funding level that grows each year with the economy and the number of students. The intent of Proposition 98 is for school funding to grow with attendance and the economy. There is, however, a provision to allow some flexibility in times of budget shortfalls. This allows funding to be reduced and then later restored when the economy improves. Proposition 76 changes this. Under present law, in hard budget times, Proposition 98 may be suspended or may allow school funding to grow more slowly than the economy. If the state has provided less growth in funding than the growth in the economy, this funding gap is called the maintenance factor. Proposition 98 contains a mechanism to restore school funding by accelerating Proposition 98 spending in future years. This is called restoration of the maintenance factor.
ARGUMENTS FOR
Proponents of Proposition 76 say that the State Legislature is chronically late in passing the annual State Budget and for the past four years California has enacted budgets that spend billions of dollars more than the State receives in revenue. They note that California voters by a large majority expressed their desire for a balanced State Budget when they approved Proposition 58, "The California Balanced Budget Act," in March 2004. Proponents further state that the Governor's authority to veto or "blue pencil" appropriations from the annual Budget Bill is not enough to deal with spending mandates built in to current law, and that the Governor needs to be given authority to act in budget emergencies. Finally, proponents of the measure argue that "auto-pilot spending formulas" enacted by the Legislature have necessitated the borrowing of billions of dollars from schools, transportation funds, and local government in order to "balance" the budget. They say Proposition 76 would prohibit such budget "gimmickry" and require the borrowed funds to be repaid "without making current deficits worse."

ARGUMENTS AGAINST
Opponents to Proposition 76 argue that the initiative would make major changes to Proposition 98, the voter-approved constitutional funding guarantee for California's public elementary and secondary schools. Proposition 76 would make California's base school funding level among the lowest in the nation by eliminating the school funding maintenance factor, which would reduce the education-spending guarantee by $4 billion per year, or about $600 per student for K-12 education. These cuts could lead to more overcrowded classrooms, teacher layoffs, fewer textbooks, an increased reliance on private donations to maintain programs such as arts and music, an increased disparity between schools and school districts, and continuation of the student achievement gap.

Opponents further argue that Proposition 76 would give the Governor sweeping new powers by allowing him or her to declare a fiscal emergency and to cut General Fund spending, including education funding, if revenues fall 1.5% or more below forecast levels (a figure well within the range of error and not statistically significant). Proposition 76 would allow the Governor to make midyear cuts without any input from the Legislature, other state and local agencies, or the public. The measure would continue to permit the Legislature and the Governor to suspend the Proposition 98 funding guarantee. Opponents claim that Proposition 76 would change California's budget priorities by placing education behind transportation and local government with respect to constitutional spending guarantees.

Some analysts believe that because Proposition 76 would fundamentally change the structure of government, including the balance of powers between the Legislature and the executive branch, it is not a constitutional amendment, but a constitutional revision. A proposed constitutional revision requires that it be placed on the ballot by a two-thirds vote of the Legislature or a constitutional convention. Proposition 76 was placed on the ballot through the initiative/petition process, and therefore could be declared unconstitutional by the courts.

RATIONALE FOR PTA OPPOSITION
Proposition 76 makes significant changes to school funding formulas that would result in lowering funding for California schools. Proposition 76 would eliminate the Proposition 98 requirement to restore funds to K-14 education that were used to balance the 2002-03, 2003-04 and 2004-05 State Budgets (the maintenance factor). Beginning with the
2006-07 State Budget, Proposition 76 eliminates the state's ability to adjust K-14 education funding in difficult fiscal years and later restore that funding. Proposition 76 would further specify that the funds owed to schools in the 2005-06 State Budget because of General Fund revenue growth would never be repaid.

The California State PTA is committed to the principle of public education having a constitutional guarantee of first call on revenue in the state General Fund. For years the California State PTA has been a leader in the effort to secure adequate and equitable financing for our public schools. General Principal #7 of the California State PTA Legislation Platform calls for "budgets and financial support to provide needed public services for all children and youth, with the continued constitutional guarantee of financial support for public schools as the first claim on all state revenues in the General Fund."

The California State PTA has a long history of support for Proposition 98, which
provides a stable funding base for K-14 education in California that does not require
more than a fair share of state funds. The California State PTA actively participated in the
development and passage of Proposition 98 in 1988. Delegates to the 1991 California State PTA convention reaffirmed support for Proposition 98 with adoption of the resolution "Nonsuspension of Proposition 98." Proposition 76 and the Governor's stated intention to reform California's education funding system have resulted in a statewide campaign to save Proposition 98 and to protect guaranteed funding for California's schools and students.

PTA is further concerned that Proposition 76, by allowing the Governor to authorize midyear budget cuts without legislative approval or public input, would disrupt the balance of power between the executive and legislative branches of government. The California State PTA strongly supports principles of democratic government and believes the established democratic process must include checks and balances between the executive, legislative and judicial governance systems.

CONCLUSION
While Proposition 76 would have a significant impact on many areas of the State Budget, PTA's primary opposition to the measure focuses on provisions that would result in major cuts to school funding and elimination of the Proposition 98 school funding guarantee. Proposition 76 would shortchange our children and our schools by billions of dollars. At a time when California's spending for education is already well below the national average, Proposition 76 proposes to create a constitutional mechanism to lower the education base funding even more. Proposition 76 would reduce the long term Proposition 98 spending guarantee by $4 billion per year. At schools throughout California, existing budget shortfalls are already causing teacher layoffs, increases in class size, cuts in arts and music programs, and the elimination of librarians, physical education specialists, nurses and counselors. The California State PTA will be actively involved in the statewide campaign against Proposition 76 and strongly urges all PTA units, councils and districts to join the effort on behalf of all children and public schools to defeat this initiative.

PROP. 76 DOWNLOADS

Talking Points

Election Mailing Cover Letter

Sample Letter to the Editor

Sample Newsletter Article