California Teachers Fear `Amputations' as Brown Seeks to Cut $28 Billion

California teachers and school administrators asked Governor-elect Jerry Brown to increase taxes and refrain from cutting their budgets at a forum he convened on closing projected deficits of $28.1 billion.

The two-hour meeting, attended by more than 300 people, illustrated the dilemma Brown may face as he tries to close the largest state budget gap in the nation. The 72-year-old Democrat takes office Jan. 3.

The governor-elect benefited from tens of thousands of dollars in donations from state teacher unions in his battle to defeat billionaire businesswoman Meg Whitman. The 120,000-member California Federation of Teachers plans to lobby Brown to extend $8 billion in temporary taxes to help limit budget cuts, said Fred Glass, a spokesman. Last week, Brown said the state faces budget deficits of $28.1 billion over the next 18 months.

“This is a huge challenge, unprecedented in my lifetime,” said Brown, 72, who served as California governor from 1975 to 1983. “I didn’t know it was going to be this bad.”

Brown, joined in the meeting by state Controller John Chiang, Treasurer Bill Lockyer and Finance Director Ana Matosantos, highlighted California’s financial issues, including pension liabilities of as much as $500 billion, a $10.3 billion deficit in its unemployment-insurance fund and federal health- care changes that could add $3.5 billion to annual expenses. The event, held yesterday on the University of California, Los Angeles campus, was the second in a series of public meetings on the budget.

Falling Education Budget

California’s education spending fell to $43.5 billion this year, compared with an inflation-adjusted $54 billion in 2008, according to Tom Torlakson, superintendent-elect of the Education Department. The state ranks last in the U.S. in teachers, guidance counselors and librarians per 1,000 students, said Torlakson, a former Assembly Democrat from Contra Costa County.

The state’s $8,322 in spending per pupil ranks it 43rd among states, according to information Brown presented.

California voters have approved $82 billion of education- related bond issues since June 2003, illustrating “a sign of support from the local community,” Lockyer said.

Local school officials at the meeting suggested alternatives for using available funds for education.

More resources should be devoted to online education, said Elliott Duchon, a Riverside school superintendent. Federal money from the Race to the Top Fund should be shifted to a national program that aids poorer school districts, said Bernie Rhinerson, a San Diego Unified School District representative.

Tax Votes

The voter approval threshold for special property taxes should be lowered to 55 percent from the current two-thirds majority, according to both Duchon and Rhinerson. Accomplishing that would require a statewide ballot measure, Rhinerson said in an interview after the event.

“There are just no more cuts to be made without devastating our system of public education,” Joel Shapiro, the South Pasadena School District superintendent in suburban Los Angeles, told Brown. “The only way is to increase revenue from taxes and the federal government.”

Extending $8 billion in temporary tax increases due to expire next year and raising income taxes on Californians who earn more than $400,000 a year will be lobbying goals for the state teachers federation, Glass said in a telephone interview before the meeting. He said higher rates for the wealthiest taxpayers may bring in as much as $6 billion a year.

Union Donations

The teachers federation gave Brown’s campaign at least $25,900 earlier this year, according to state records. Another education union, the California Teachers Association, gave at least $51,000, the records show.

“There is no more meat on this bone to carve, the only thing left is amputation,” said David Sanchez, president of the state teachers association. “If we do what Mr. Grinch wants us to do, the possibility of shutting down schools is a reality. Is that really what we want to do?”

Educators at the meeting only requested more money and didn’t offer ideas for reducing expenses, Lockyer said.

“It’s time to make cuts, I believe deep cuts,” Lockyer said, speaking of the overall state budget. “I’d do 25 percent cuts across the board. Those who wanted less government, you’re going to get your wish.”

Brown already has plans to cut the budget of the governor’s office by 20 percent, he said. Then later he said he would go deeper, to reduce it by 25 percent.

Finding Cuts

Currently the state attorney general, Brown said he cut spending in that office and that there are probably ways to further reduce expenses. Voter unhappiness over high municipal pensions has created an environment “hostile to government” and tax increases, Brown said.

Brown said he hoped to have an agreement on a spending plan for the next fiscal year ironed out with legislators within about 60 days after introducing his budget on Jan. 10. The National Conference of State Legislatures estimated California has the biggest projected deficit for the next 18 months, in a report last month.

Brown sounded like “a household financial adviser saying, ‘We’re going to have to cut up the credit card,’” California Community Colleges Chancellor Jack Scott said at the meeting.

Brown asked about the status of some education programs he recalled from his previous days as governor.

“I feel kind of like Rip Van Winkle coming back 28 years later and still having the same discussion,” he said.

To contact the reporters on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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