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.
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
- Gov.Ca.gov: Governor’s office issues statement on LAO report
- LAO.Ca.gov: California’s Fiscal Outlook: The 2012-13 Budget
- WhatTheFolly.com: Transcript: LAO press conference on the 2012-13 California Budget
- CalChannel.com: Press conference of Legislative Analyst’s Office release of the 2012-2013 California budget report
- UniversityofCalifornia.edu: State budget shortfall forces second fee increase for fall 2011
- CalState.edu: Following $650 million budget cut, CSU trustees approve additional tuition increase for fall
- California State Assembly Republican Caucus: Statement by Assembly Republican Leader Conway on Legislative Analyst’s Fiscal Outlook
- California State Senate Republican Caucus: GOP Senate Leader Dutton on LAO budget report
- WhatTheFolly.com: California Gov. Jerry Brown & Democrats reached budget agreement
- eBudget.ca.gov: Gov. Jerry Brown’s proposed 2011-2012 state budget (revised May)
- Leginfo.ca.gov: AB 121
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