Four years ago California voters overwhelmingly passed Proposition 30, the emergency ballot measure that Governor Jerry Brown and state education leaders had argued was needed to rescue public schools and community colleges from the fiscal free-fall of the 2008 Great Recession.
The good news, according to the California school teachers and officials, parents, college professors, health-care advocates and economic researchers interviewed by Capital & Main for this series, is that the initiative not only performed as advertised, but it may be the most spectacularly successful ballot initiative in the state’s notoriously uneven history of direct democracy.
By raising income taxes on the wealthy and the sales tax on everyone, Prop. 30 dramatically stabilized school funding in the wake of the recession, averting thousands of new teacher layoffs while beginning the work of restoring the jobs and programs lost during the first years of the crisis. It was also instrumental in allowing the state legislature to balance its budget for the first time in years without slashing social programs.
Together with a recovering economy, the temporary tax measure has to date reinvested more than $31.2 billion in preschool, K-12, and community colleges. By boosting per-pupil funding by more than 14 percent, Prop. 30 bumped the state’s Great Recession-battered national ranking from dead last in 2010-11 to 40th among all states at $10,493 per student in 2016-17. It’s still a far cry from California’s long-ago position as a top funder of public education, and a 2016 report estimates that merely moving California to the average funding level of the top 10 states would require roughly a doubling of current state funding under Prop. 30.
Superintendent of Public Instruction Tom Torlakson
But the measure is scheduled to expire at the end of 2018. And that, say Great Recession survivors, will again place California’s still-wobbly public schools on the edge of the same fiscal precipice that made the system so vulnerable in 2008.
“There was a cluster of bad things happening simultaneously as districts struggled to balance their budgets,” Tom Torlakson, the State Superintendent of Public Instruction, recalled in a phone call to Capital & Main. “We saw a suspension of money for curricular materials, so teachers had to do with somewhat outdated text books. Parents who wanted to see their children in a small class of 25 or 30 students were seeing classes with 38 and 40 students.”
Those memories are still fresh for Torlakson, who took office in January 2011, when the shock waves of the global financial crisis had opened up a two-year, $18 billion budgetary abyss — at a cost of nearly $3,000 per student — beneath the state’s already badly strapped public schools. Barely three days into his new job, he declared a state of financial emergency.
It was the most significant economic crisis for California public education since the Great Depression. But because California schools were in a very different place than they were in the 1930s, in many ways, it was the most devastating financial blow ever to hit the system. What had begun in 2008 as a “$28 billion hole,” according to numbers provided by California’s Department of Finance, by the 2011-12 budget, ballooned to a $98.3 billion cumulative deficit. Balancing the budget meant all services in the state felt the impact of cuts — cuts so deep that they quickly spilled over into the constitutionally protected funding for K-12 education and community colleges.
California public schools arguably had already been among the leanest in the nation. Considered a “low-spending” education state even before the crisis, the system had ranked among the lowest in terms of per-pupil K-12 spending (41st in 2007) on the eve of the crash. The nearly 14 percent budget hit (compared with nine percent to health and human services and nine percent to the prison system) had, by the 2009–10 school year, seen the state drop to 46th place.
How individual schools coped depended on how fiscally sound their parent agencies had been going into the crash, or whether or not a school had the kind of robust PTA that could offset crippling shortfalls with parental fundraising. Most quickly burned through their cash reserves as superintendents and school boards desperately attempted to insulate classroom instruction; 188 districts — including some of the state’s largest — teetered on the brink of insolvency.
“Nobody was spared,” remembered current Los Angeles Unified School District (LAUSD) board president Steve Zimmer. “And poor children were hurt the most often and the most severely. And they were hurt in ways that affluent families cannot understand. Because we don’t have the type of educational safety net that is available to folks living in communities of economic stability. The savage inequities of these cuts can’t be logged.”
Some school districts lost as much as a week of instructional days. Art, music and even athletic programs were eliminated. Afterschool and summer school were cut — programs essential to keeping in school students who were on the verge of dropping out or who lacked the credits needed to graduate or advance to the next grade.
“Seeing teachers laid off who had gone through their teacher training, had passion about helping kids, making a better life for their students — that was hard,” Torlakson admitted. “Those teachers were demoralized by the fact that they had worked so hard to become a teacher and then were laid off.”
Before it was over, California schools would bleed 82,000 teaching and classified jobs — teachers, counselors, psychologists, school nurses, custodial staff, cafeteria workers, bus drivers and librarians.
“The pink slips — we called it the ‘March 15th letter,’” recalled Torlakson’s predecessor, Jack O’Connell. “What’s that do to the morale, not just to the teachers leaving but even to those that are staying when their peers, their colleagues, their classroom neighbors have to look for a job while they’re still expected to teach for the last quarter of the year?”
In 2009 alone, the California Teachers Association estimated that approximately 17,000 teachers (or five percent of the state’s teaching force) had been laid off. The following year, another 22,000 teachers (approximately nine percent of the state’s teaching force) had received layoff notices. More were on the way. (Disclosure: CTA is a financial supporter of this website.)
“The impact was extraordinarily personal,” Zimmer remembered. The devastation [to LAUSD] in terms of layoffs — well over 3,000 teachers; well over 8,000 classified employees — was one layer. But the other layer was that the displacement of people, especially of our classified staff, resulted in the destruction and dismantling of school communities in a way that was absolutely unprecedented.”
“We cut supplemental services,” remembered Matt Navo, superintendent of rural Sanger Unified School District outside of Fresno. “We did not fill back counselors; we didn’t backfill all of our speech pathology, all of our school psyches. We ended up cutting classified services and food service and school supervision. Every department cut 14 percent of their budget to try to make ends meet. For me, the most difficult cuts were in people … [especially] the youngest, new teachers that were just starting in the profession and who lost their jobs with no place to go.”
California’s education-funding troubles didn’t begin with the Great Recession. To get to its roots, one has to go back to 1978 and Proposition 13. The popular “taxpayers’ revolt” stripped local school boards and other entities of their authority to levy taxes by dramatically lowering property taxes 67 percent to a uniform one percent of assessed value. In most districts, however, the new assessment was not enough, and it forced Sacramento to step into the breech by shifting the burden for education to regressive sales taxes and income tax revenues.
By 1988, schools had deteriorated to such an extent that state voters narrowly passed Proposition 98. Rather than adding new revenues to the state budget, however, the ballot measure merely amended the constitution to require that a larger and more consistent piece of the state budget pie go to K-12 education and community colleges. Good for schools, but not so good for other discretionary line items during a deep recession.
“Everything was on the table,” said Chris Hoene, executive director of California Budget & Policy Center, of the Great Recession cuts. “It was not like there was some sort of part of the state budget that was sacrosanct.”
California can, for the time being, enjoy the $6 billion-per-year sigh of relief that Prop. 30 has bought for the state’s 6.23 million school children.
A recent policy brief by the California Budget & Policy Center makes clear that the law helped California reinvest in preschool, K-12 schools and community colleges by more than half. It also says that Proposition 30 has allowed California to begin restoring funding for other public services hurt by the recession, including state universities and essential health and human services. And it has significantly boosted the state’s rainy day cushion against the next global banking disaster.
But Prop. 30 was never intended as the cure for returning the system to its pre-Proposition 13 heyday. According to Hoene, education finances aren’t quite to where they were in 2007: “You can see this when you look at the Local Controlling Funding Formula, the governor’s restructuring of how we fund school districts.”
“We were short when I first took office,” Torlakson concurred. “There was a study that showed we should have been adding $10 billion and not cutting $10 billion. Once we get done with backfilling the cuts there’s still a need to have the [Common Core-driven] new kinds of teaching, the new kind of science laboratories in the schools [and] vocational shop classes. You can’t do that on thin air. You do need resources.”
How rosy or bleak the future looks in a post-Prop. 30 world depends on who is making the forecast, and whether or not that prediction includes the passage of Proposition 55. That measure, which a coalition including labor, doctors and California hospitals placed on the November ballot, would extend Proposition 30’s progressive income tax on the 1.5 percent of Californians with a single income filing of at least $263,000, or a joint income filing of at least $526,000, but without Prop. 30’s regressive sales tax component.
What will happen in the short term when Proposition 30 revenues expire on December 31 of 2018 — halfway through the 2018/19 fiscal year — is a matter of simple arithmetic: The state will lose half of the year’s funding that it would have received under Proposition 30. That’s in the range of $4.5 billion. For 2019-20, the first full fiscal year without Proposition 30 funding, double that amount, multiply it by every year into the foreseeable future and cross your fingers.
“The worst [scenario] is the economy experiences some significant recession again,” Hoene warned. “Even a moderate recession would have a dramatic impact on the state’s finances and if Proposition’s 30 revenues aren’t also there, you’re talking about really significant budget shortfalls once again.”
Even if the economy doesn’t tank in a new recession, the state’s moderate economic growth projections would still leave its budget barely balanced or with modest surpluses — and many districts on the critical list.
“My fear is that we will plunge our schools back into crisis,” Zimmer offered. “We will lose our ability to fulfill the American Dream. And that in the long term, the people that we need to go into public education on all levels will turn away again, because we cannot offer [them] stable employment.”
“It’ll be a ripple effect,” O’Connell agreed, “and affect our way of life. … [Proposition 30] helps the state general fund, so that we can basically keep the prisons closed and the schools open. Career technical education will become a thing of the past. There’ll be elimination again of arts and athletics at some schools. To me, those aren’t electives. Those are essential services.”
For Chris Eftychiou, the public information director of Long Beach’s Unified School District, the words of an LBUSB board member during the peak of the recession layoffs best sum up what is at stake for California:
“He said that these hundreds of people who we’ve laid off have just paid a 100 percent tax — they gave up all their salaries and all their benefits so that all of us could enjoy lower tax rates. I found that a powerful statement. We don’t have to go through that again.”