Prop 30 taxes passed: What’s next?

Dollars and sense

School employees are winding down from months of plugging for Prop 30, the recently enacted measure that will raise taxes to stave off massive cuts to public education.

The initiative passed during the November 2012 election by a close margin, with 53 percent of California voters agreeing to pay an increased sales tax by 0.25 percent for four years. The measure’s success brightens the fiscal panorama for Gilroy and Morgan Hill school districts that faced $4.7 million and $3.2 million in midyear trigger cuts, had the measure failed.

“Voters really saved us from going off a financial cliff,” said MHUSD Superintendent Wes Smith. “We were dangling there and if they hadn’t voted for Prop 30, we would have gone over.”

California’s public schools aren’t “out of the woods,” he added.

Looking ahead, educators are “thrilled” and “grateful” for the passage of Prop 30 but grounded by looming fiscal challenges. Years of deferrals, or underfunding from the state imposed crippling financial drawbacks for districts including Gilroy Unified, which shaved more than $27 million from its budget in the last five years.

“My main concern about budget issues is the continued financial stability of the district,” said President Paul Winslow with the Gilroy Teachers Association. “Even though Prop 30 has passed, GUSD will still be looking at multi-year deficits and will have to deal with additional cuts.”

Recently re-elected trustee Bob Benevento with the Morgan Hill Unified School District Board of Education cuts straight to similar sentiments.

“I think it’s really important for the public to understand that passing Prop 30 does not make us whole,” he explained. “This is not a surge of money coming in to the school. This is money the state already owes the schools. As they continue to defer payments every year, they build up this wall of debt – and it’s somewhere north of $20 million owed to education. (Prop 30) is like a down payment towards that debt.”

The 9,000-student Morgan Hill  school district’s operating budget is $65 million with 80 percent spent on personnel, but the district has made $15.7 million in reductions during the last five years.

Proposed by Gov. Jerry Brown and known as the “Schools & Local Public Safety Protection Act,” Prop 30 will generate an estimated $6 billion annually over the next few years. It will temporarily increase the personal income tax on the state’s taxpayers who earn more than $250,000 by up to 3 percent for seven years, and increase the sales tax by 0.25 percent for four years.

Benevento, Smith and Winslow touched on the perpetual thorn in California schools’ side: The state’s failure to fully adhere to Proposition 98.

The voter-approved measure guarantees minimum state funding for education, but the state continues defer the actual amount owed to schools, thanks to California’s $16 billion budget deficit.

“We only get 77 cents on every dollar the state guarantees us through Prop 98,” Smith pointed out.

GUSD, for example, should technically be getting $6,720 in state funding per student this year according to Prop 98, but the district will actually receive $5,223.

On the immediate flipside, Prop 30 will offset imminent midyear trigger cuts for GUSD and MHUSD.

GUSD dodged $8 million in cuts thanks to the measure, which will save the 11,301-student district from having to slash $4.7 million.

In turn, Gilroy teachers, management and district office staff and will be spared the 10 unpaid furlough days that would have equated to a five percent pay cut. That’s on top of a four percent pay cut they took last year.

“Everywhere I’ve gone this week, people are thrilled,” GUSD Superintendent Debbie Flores recently said. “On a personal level everyone is just so relieved to have their salary restored and not have to take another pay cut … we have many staff that are having a really hard time making ends meet.”

Prop 30’s success also means GUSD can finally go with one calendar and confirm its June 14 graduation date for Gilroy and Christopher high schools.

Not knowing if Prop 30 would pass, the district created two calendars for the school year. One factored in the 10 furlough days, shortening the school year from 180 days to 173 days and ending May 31. Seven of those furlough days would have been instructional days; the other three were staff development days.

Those 10 furlough days are now canceled, and the last day of school for everyone in the district is June 14.

With the five percent pay reduction having already commenced in September, the difference will be restored to staff retroactively in December.

“GTA is extremely grateful that the community has chosen to continue its support for public education,” noted Winslow. “Our members are extremely relieved that the 10 furlough days will be rescinded.”

MUHSD had less drastic plans than GUSD. The Morgan Hill district took one furlough day in October and had another planned in the spring if Prop 30 didn’t pass.

Still, “clearly we dodged that bullet,” agreed Benevento, of the $3.2 million in trigger cuts the district was facing. “Where those hits would have been taken quite frankly, had not been confirmed yet.”

GUSD is still left with a $3.3 million budget gap and planned ahead for the cut by increasing class sizes; a move that will remain in effect.

“It’s $4.7 million out of an $8 million cut,” said Flores. “This didn’t fix our entire budget problem.”

Studying a possible parcel tax proposal or looking to the city for help – the district recently explored a joint city-school sales tax, which the city shot down – isn’t off the table, Flores confirmed.

MUHSD, on the other hand, successfully took things into its own hands by pushing for the $198 million Measure G bond voters approved this month with a 64 percent vote. The money will be used for capital improvements and is controlled by the school district and not the state or federal government.

While teachers such as Winslow can only hope that “California decides to fully fund education based on its constitutional obligations,” school staff and students in the interim are at least better off than they would have been.

“Obviously the voters of California saw the need and they came through for us,” said Flores. “Prop 30 didn’t cure our problem. But it was a huge relief.”

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