On November 16, 2011 the nonpartisan Legislative Analyst’s Office (LAO) released the first of two forecasts related to the state’s “trigger cuts.” The LAO’s forecast indicated a strong possibility that the trigger cuts could be put into effect. According to the LAO’s report, the state’s budget is $3.7 million short due to declining revenues. In addition, the LAO report predicted that the state faces a $13 billion deficit by the end of the year because the economy is growing slower than legislators predicted in the 2011-2012 budget. Shortly after the LAO released its report, Ana Matosantos, Director of the Governor’s Department of Finance (DOF), said in a prepared statement that “Some level of trigger cuts will likely occur, but the exact amount will be known in December.” The DOF is the agency that will issue the second economic forecast on which the trigger cuts will be based.
Based on the language in the final state budget, there are three fiscal benchmarks related to the trigger cuts:
- Should revenues be less than $1 billion short, no mid-year cuts will be made.
- Should the revenue forecasts be more than $1 billion, but less than $2 billion below the estimate for the 2011-12 state budget, midyear cuts of up to $601 million will be implemented, including a 4 percent, $23 million cut to child care, a $30 million reduction in community college funding, and a $10 per unit increase to community college enrollment fees in the summer of 2012.
- Should the forecasts fall $2 billion or more short, then additional reductions of up to $1.5 billion (4 percent) in school district revenue limits, $248 million in home-to-school transportation, and $72 million to community colleges are triggered.
In writing this piece of legislation, the legislators suggested that one way for school districts to implement these reductions would be to shorten the current 2011-2012 school year by seven school days. EGUSD will not pursue a reduction of the 2011-2012 school year.
For more information, click below:
California Legislative Analyst’s Office November 16, 2011 Report
2012-2013 Budget: California’s Fiscal Outlook