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LS HAUNTED SCHOOL 1.JPGAfter Gov. Jerry Brown released his budget Monday, the big question among education officials was whether K-12 schools had been spared from cuts.

Brown said Monday that his budget protected K-12 schools and kept them at the same level of funding they received in the 2010-11 budget passed in October. But there were different interpretations of that claim due to ambiguity surrounding payment deferrals to schools.

The problem starts with the 2010-11 budget passed in October. That budget set funding for K-12 and community colleges at $49.6 billion, plus an additional $1.8 billion in onetime funds equal to about $250 per student. The catch was that the state would defer the $1.8 billion in funds until the following year -- essentially an accounting trick much like the one-day delay in state worker paychecks.

That additional money meant schools would have about $51.4 billion in 2010-11, but Sacramento school lobbyists advised their districts not to spend the extra money because Brown might take it away.

Brown chose to keep the deferral intact. He may also want to give schools roughly the same $51.4 billion in 2011-12, though this is where things get murky.

Because tax rates go down this year, schools by formula are slated to receive only $47.3 billion. Brown wants to give them an additional $2 billion by asking voters for higher income taxes. That brings the level to $49.3 billion.

But schools say that because they plan to spend $51.4 billion in 2010-11, they still need another $2.1 billion in 2011-12 or else they have to make cuts. And Brown is on record as having said his budget keeps schools intact.

The question now is whether schools are getting that additional money. As of Monday, Brown's budget document said it included a new $2.1 billion deferral in 2011-12. But late Monday, the Department of Finance said the new deferral was only worth $400 million.

Edgar Cabral, senior fiscal and policy analyst with the nonpartisan Legislative Analyst's Office, said Tuesday that Brown's proposal has to include the new deferral or else he must add additional spending cuts to K-12 and community colleges not outlined in his budget.

"Our understanding of the proposal is that it would include a new $2.2 billion deferral of Proposition 98 payments," Cabral said, referring to the initiative that established a guaranteed funding level for K-12 and community colleges. "That would include $2.1 billion for K-12 and $129 million for community colleges."

School lobbyists are still unclear exactly what to tell district budget officials. And several people said that the Department of Finance is still discussing how it plans to handle school deferrals in its budget.

Brown's budget may not have as many gimmicks as his predecessor's, but payment deferrals are accounting tricks. By keeping the 2010-11 deferral and possibly adding a new $2 billion-plus deferral, Brown would satisfy the education community, particularly teachers' unions that stand to buy back some of the reductions they've faced in recent years. But he would do so on the back of another gimmick.

All told, Cabral said, the state would have $10.4 billion in deferred payments to schools should Brown's proposal move forward with a new $2.2 billion deferral.

PHOTO CAPTION: A student walks down the third floor hallway at Sutter Middle School in Sacramento on Friday, Oct. 29, 2010. Lezlie Sterling / Sacramento Bee



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