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mactaylor.jpgIt was a bizarre component of Gov. Jerry Brown's latest budget - despite fewer revenues than expected in January, the governor said the state actually owes more to schools under its complicated funding formula.

The nonpartisan Legislative Analyst's Office says it may be wrong, not bizarre.

One of the key criticisms in the Analyst's review last week was that Brown had overstated how much money the state owes to schools by nearly $2 billion. In a presentation to school officials this weekend, the Analyst's Office said it has "serious concerns" with how the governor treated school funding and that his interpretation leads to "irrational outcomes" of the sort that results in more money to schools despite less revenue.

The outcome of the disagreement will likely affect how other programs are treated in the budget and how voters view Brown's push for tax increases in November.

The disagreement has to do with an uncharted part of school finance law. Brown and LAO agree that if the governor's tax initiative passes, tax revenues will spike in 2012-13 beyond the rate of inflation and enrollment growth over current funding levels. But they disagree on how much more money schools should receive as a result of it.

The Analyst's Office says schools are owed $1.7 billion less than the $53.7 billion Brown said they were due. The office also believes that Brown could find $200 million more in savings if it were to use a more consistent accounting method of shifting programs into and out of the state's education funding requirement.

Brown's Department of Finance disagrees, saying that the Analyst's Office has misinterpreted the state's Proposition 98 (and Proposition 111) education funding requirements. "When it comes to interpreting Proposition 98, we are strict constructionists," mused Finance spokesman H.D. Palmer.

The difference totals $1.9 billion that, in theory, lawmakers and Brown could take from schools and apply to the rest of the general fund budget. And, as we reported Sunday, Democratic lawmakers say they will search high and low for money to avoid further deep cuts in welfare, child care and college scholarships for low-income students.

The LAO laid out an alternative plan that would largely take the money from schools by not relieving their borrowing burden as much and providing less aid to disadvantaged students and English learners.

There are some political downsides. Using money that Brown has devoted to schools for safety net programs may not sit well with the state's powerful education community. It also weakens the governor's argument that his $8.5 billion tax initiative is a big education measure, since more of the tax money would help save other programs.

It would also likely push safety net programs into the "trigger" cut category. Brown may benefit in November by telling voters to approve his tax hike to avoid cuts to schools. But the message doesn't play as well if he asks voters to approve a tax hike to avoid cuts to schools and welfare. Opponents could then portray a "no" vote as a way to cut welfare.

"Convincing the state's voters to save health and welfare programs is not nearly as tight a message as saving the public schools," observed Dan Schnur, a former GOP consultant who serves as director of the University of Southern California's Jesse M. Unruh Institute of Politics.

PHOTO CREDIT: Legislative Analyst Mac Taylor, 2011. The Sacramento Bee/Hector Amezcua.



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