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Gov. vows to cut funds for schools

Schwarzenegger tells educators that he will slash $2 billion to $4 billion and that he seeks a sales tax hike.

October 29, 2008|Evan Halper and Nancy Vogel | Halper and Vogel are Times staff writers.

SACRAMENTO — Gov. Arnold Schwarzenegger told education leaders Tuesday that he would push for a tax hike and deep cuts to schools to help close the state's yawning budget gap, according to several participants in a meeting with him.

The news, delivered in a conference room outside the governor's office, came as a shock to the educators, who were told to prepare for immediate cuts in the range of $2 billion to $4 billion.

"There is just no way we would be able to cut that much," said Scott Plotkin, executive director of the California School Boards Assn., who was at the meeting. "For virtually every district I know of, this would be catastrophic."

Administration officials confirmed that the meeting took place but refused to discuss details.

"We never talk about the governor's private meetings," said Schwarzenegger spokesman Aaron McLear.

Several educators who were present said the governor stated clearly that he would renew his push for a sales tax hike in the special legislative session that is scheduled to begin next week. The governor unsuccessfully championed a temporary increase in sales taxes during the summer budget debate.

After the meeting, California Assn. of School Business Officials Vice President Renee Hendrick and Executive Director Brian Lewis sent an e-mail to members quoting the governor as saying, "I don't like raising taxes, but this is a moment when we have to."

Lewis elaborated in an interview: "He said we're in a very serious time and we're not looking at a swift upturn."

Analysts say early data indicate that the state budget -- passed only a month ago -- has fallen about $10 billion into the red. A deficit that size represents nearly 10% of all general fund spending. The governor and lawmakers say the rapid swelling of the deficit is related to the recent plunge of the stock market and the broader economic troubles gripping the nation.

The governor has announced that he will call sitting lawmakers -- whose terms end Nov. 30 -- back to Sacramento next week to deal with the shortfall.

Political strategists have said the governor stands a greater chance of pushing through new taxes with the lame-duck Legislature, which includes several members who are leaving office this year, than with the group to be elected Nov. 4.

School officials say that making billions of dollars of cuts in the middle of a school year would be devastating.

Los Angeles Unified School District Supt. David L. Brewer said that Schwarzenegger's proposal would cost the district as much as $440 million. He called cuts of that magnitude "impossible."

"They're going to have to go out and borrow money because we'd go bankrupt," Brewer said. "Fiscally, we can't do that without literally having to shut down schools."

By law, teachers cannot be fired unless they are told months in advance.

"You can't just hand out pink slips," Brewer said. Teachers "have protections, they have union agreements."

The looming cuts for L.A. Unified would follow $190 million pared last year.

The district also had to borrow $550 million last summer to get by while the Legislature and governor were deadlocked over a state budget.

On Monday, Brewer sent all L.A. Unified employees a letter warning them that "California's financial picture is getting worse every day" and "without substantial, systematic, responsible districtwide cuts and help from Sacramento, LAUSD will not be able to make payroll by the end of next school year."

Brewer said he had convened a blue-ribbon committee to find ways to generate more revenue for the district, including putting billboards on freeway-facing schools, which could generate $20,000 to $30,000 a month.

School officials statewide issued thousands of pink slips when the budget was being negotiated earlier in the year, bracing for multibillion-dollar cuts proposed by the governor.

But they were told by the governor and lawmakers that the state would provide enough money to avoid them.

"They told us not to do layoffs, because they would solve our problems," said Kevin Gordon, a lobbyist who represents hundreds of school districts. "Then they put together a budget with fake numbers. . . . I don't know how schools would keep their doors open with cuts of this magnitude."

Schwarzenegger told the officials that even if lawmakers approved a sales tax hike, deep cuts to schools may be unavoidable. The temporary one cent-on-the-dollar sales tax hike the governor had earlier proposed, which was blocked by legislative Republicans, would close only a fraction of the shortfall.

School officials say the governor is focused on the sales tax because it is one of the few available sources of new revenue that would create immediate cash. Other potential tax hikes, such as increased income taxes for the wealthy, would not boost state coffers for more than a year, when taxpayers begin to file under the new rates.

GOP legislative leaders predicted that their caucuses would continue to stand firm against a tax hike.

They suggested that school cuts could be averted by moving money out of other parts of the budget.

"The last thing Republicans want to do is take money out of classrooms," said Assembly Republican Leader Mike Villines of Clovis.

"There are plenty of fast-growing programs that should be looked at first. . . . Raising taxes is not on the table. Raising taxes on hard-working Californians is the worst thing we could do in this bad economy when many people are losing their jobs, their homes and are struggling to make ends meet."

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evan.halper@latimes.com

nancy.vogel@latimes.com

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