Governor announces trigger cuts

Director of Finance, Ana Matosantos, and Governor Jerry Brown announced Tuesday that the so-called trigger cuts would be enacted because state revenues have not matched budget projections. Included are all of the Tier 1 cuts—$100 million each to UC and CSU, $30 million to community colleges as well as significant cuts to child care, corrections, and health and human services—totaling  $600 million.

Because the projected revenue shortfall is less than the worst-case amount of $4 billion, some Tier 2 cuts are fully made while K-12 revenue limit reductions are prorated. Community colleges are cut an additional $70 million, bringing the total to about $100 million to be mitigated in part by a $10/unit fee increase for students.

K-12 districts will see their transportation funding cut in half, a cut that falls heavily on rural and poor urban districts who are more likely to provide student transportation. Districts are required by law to provide necessary transportation to special education students so they will have to continue to provide those services even if the state fails to reimburse them. Los Angeles Unified has announced that it will sue the state because of the cut. Other districts are concerned that cutting transportation services locally to save money will backfire—if students are unable to get to school, falling attendance will lead to additional revenue losses. Attached is a breakdown of district transportation cuts—note that it gives the total cut to each district or county office of education and may not represent the cut to units within the district (charter schools) or districts within a JPA that provides transportation to multiple districts.

The Budget Act had called for a maximum cut in K-12 revenue limit funding of $1.5 billion, representing a cut of 4 percent or about $250 per student (ADA), to be prorated depending on state revenue projections compared with budget projections. The triggered cut to K-12 revenue limits is about $80 million, representing a cut of .25 percent or about $13 per ADA, much less than the worst-case scenario.

The Director of Finance did refer to the trigger cuts as “ongoing cuts” that will likely be factored into the Governor’s Proposed Budget which is expected between January 10 and January 15. Most observers anticipate another difficult budget year with additional cuts despite slight improvements in the economy.

Prepared by Patty Cox, CFT Research Specialist

December 15, 2011