Painful ‘trigger cuts’ likely for California in 2012

Tax revenue shortfalls resulting from a slower than expected economic recovery will trigger another $2 billion in cuts to California’s state budget, according to the Legislative Analyst’s Office. 

The cuts are triggered by a $3.7 billion revenue deficit. While the 2011-12 state budget had anticipated $88.5 billion in revenues, the LAO’s forecast projected only $84.8 billion in revenues for the fiscal year. Under the June budget compromise, if revenues fall below $87.5 billion, then a series of trigger cuts will take effect to help address the state’s $25.4 billion deficit. The trigger cuts are expected to reach $2 billion and take effect after Jan. 1, 2012.

Read more: California hit with $1 billion trigger cuts

Approximately 85% of the trigger cuts – or $1.7 billion – will fall on education spending.

The K-14 education funding guarantee under Proposition 98 will be lowered by $1.5 billion, reduced from $48.7 billion to $47.2 billion. This would mean ending the Home-to-School Transportation programs, cuts to community colleges and increased fees for students beginning in summer 2012, and cuts to K-12 education. To absorb the additional cuts, some school districts may need to draw down their reserves, lay off temporary teachers and administrative staff, and even seek emergency loans from the state if they run out of cash before the end of the school year.

Read more:  Transcript: LAO press conference on the 2012-13 California Budget

Higher education will see another $200 million in reductions, with the University of California and the California State University each receiving $100 million in cuts. The UC and CSU’s budgets were each reduced by $650 million in July. Those cuts forced the UC to raise tuition by another 9.6% on top of a 8% increase that took effect this fall; CSU increased tuition by 12% in addition to 10% tuition hike approved for the 2011-2012 school year. The trigger cuts may force the universities to increase class sizes, lay off staffs, cut academic programs, and raise student fees again.

The remaining cuts will impact state fundings for developmental services for the disabled, in-home support services for the elderly and disabled, community colleges, local libraries, criminal justice, Medi-Cal reimbursements, pre-school and child care.

Programs Impacted by Trigger Cuts: 

  • Proposition 98: $1.436 billion
  • University of California: $100 million
  • California State University: $100 million
  • Developmental services: $100 million
  • In-home supportive services: $110 million
  • California Department of Correction and Rehabilitation: $99 million
  • Community colleges apportionments: $30 million
  • Child care funding: $17 million
  • State grants for local libraries: $16 million
  • Vertical prosecution grants: $15 million
  • Medi-Cal provider cuts extensions: $15 million
  • Pre-school funding: $6 million

(Source: Legislative Analyst’s Office “The 2012-13 Budget: California’s Fiscal Outlook,” page 5)

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2 Comments on “Painful ‘trigger cuts’ likely for California in 2012

  1. The U.S. Supreme Court decision requiring California to reduce the prison population by 33,000 beds will save about $1 billion annually. Savings could be increased to $2 billion annually by reducing the prison population by an additional 48,000 inmates.
    80,000 inmates requiring Level III & IV housing would continue to be single celled in prison. 80,000 Level I & II prison inmates would be transferred to county contract facilities. County jails would continue to house 80,000 pre-trial and sentenced inmates. Savings would result due to the $25,000 cost differential between prison and local correctional beds.

  2. Pingback: CA Gov. Jerry Brown files tax initiative to avoid deeper cuts to education & public safety | What The Folly?!

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