CAVANAUGH: This is KPBS Midday Edition. I'm Maureen Cavanaugh. The board of trustees of the California state university had a small riot on their hands Wednesday as they approved a 9% rate hike. The third rate increase in a year. The rate hike will kick in if the system doesn't receive more money in next year's state budget. The possibility of more money for education went down dramatically yesterday with a grim prediction on an increasing state deficit and more budget cuts. I'd like to introduce my guest, Julian Betts is professor in the department of economics in UC San Diego, and executive director of San Diego research alliance. Welcome to the show. BETTS: Glad to be here. CAVANAUGH: And we invite our listeners to join the conversation. What do you think about more cuts to education? Is quality education a priority in California anymore? Give us a call at 1-888-895-5727. Now, Julian Betts, can you give us an overview of the report that came over from the legislative analyst's office yesterday and about the trigger cuts that are involved in all of that? BETTS: Sure. Let's back up a few months this summer below the state budget was passed in Sacramento. Basically overly rosy projections about tax revenues. If tax revenues were going to fall short by more than a billion dollars, government agencies such as Cal State, and University of California programs for seniors and disabled would be cut. And if tack revenues were $2 billion short of what was projected this summer, then public schools will be cut as well. And quite drastically by as much as $1.5 billion, which would be about a 3% mid-year cut. CAVANAUGH: And this projection basically said that it would be almost 4 million less than projected BETTS: 4 billion. CAVANAUGH: Sorry. BETTS: Everyone was hoping that it would be less than 1 billion. It turns out to be 4 billion. It seems inevitable that some additional cuts will be considering this year CAVANAUGH: We've seen a series of cuts to public schools. San Diego unified, our largest Kthee 12 school district has been cutting for six years now. And I'm just wondering if your opinion, what is left to cut? BETTS: Well, there's not much left. San Diego unified like most other districts state wide has been trying to protect the classroom. And you can see that by looking at the figures. San Diego unified over the last four years there's been a cutback of about 25% of the number of employees in the central office. They're down to a skeleton crew. Of the teacher numbers have gone down by about 10%. They're trying to protect the classroom. But with mid-year cuts come, it's hard to know what a district would do next. CAVANAUGH: Now, I believe on the line with us now is San Diego school superintendent, Bill Kowba. Welcome to the show. KOWBA: Thank you, Maureen. CAVANAUGH: After the analysis released yesterday, are you now bracing for these trigger cuts as almost inevitable? KOWBA: Well, I think we're preparing for them in a very serious and deliberate manner. The great unknown, and probably not so great anymore, is what is the department of finance going to say in mid-December? The governor has to assess both LOA legislative analyst's office and the department of finance and make a decision. We've got one significant assessment out of the way. And unfortunately not a good one as far as the public sector, and school districts in particular. And waiting on the second 1. With that in mind, we're going to proceed with identifying for the board a strategy for accommodating mid-year cuts CAVANAUGH: And those cuts would be the equivalent of about $30 million; is that right? KOWBA: Well, that would be the high side. If in fact there was a very recovery of $4 billion in revenue, it would be the high side 30 million. But there's a proportionate part to the formula. The LOA said that we'll miss on $3.7 billion. So there's a $300 million differential there, which proportionally applied to San Diego unified, instead of the high number, 30 million, today's numbers would be about 25 to 26 million CAVANAUGH: What does that mean though? What does that mean to the number of teachers, to the quality of education at San Diego unified? What would you possibly be cutting to equal out 25 to $30 million in mid-year cuts? KOWBA: Well, it means nothing but significant negative impacts on San Diego unified. Of we would most likely look at reducing our reserve down to a very, very small amount of money, which is a reserve used for economic uncertainty, but certainly not for a mid-year cut of this magnitude in the normal course of budget planning. We cannot lay off of any our certificated staff, teacher, librarians, counselors, nurses. That is not possible once the year begins. With that in mind, your layoffs are limited to your classified personnel. Those are individuals such as your maintenance people, your front office ad-Minn supporter. The only other option is looking at sales of property proceeds or lease money that's out there. You put it all together and try to come up with that figure. The only tool that the state authorized in significantly considering a major cut was to say that districts could reduce their school year by another 7-days. If you recall in the last two years, they've authorized a five-day reduction in most district, including San Diego unified. Now the state is saying for this mid-year cut, you have authorization to take that from 175 to 168. But that's a collectively bargaining requirement CAVANAUGH: Right. You don't really have the option of shortening the school year all by yourself, right? KOWBA: Not unilaterally. CAVANAUGH: Just one last quick question for you, superintendent Kowba and I'm afraid it's a rather glum one. If you dip into the reserves to pay for a mid-year budget cut, a mid-year deficit, what happens when you have a deficit at the end of this school year? In the beginning of the -- I guess it's the 2013-fiscal year? Where will that money come from? KOWBA: Well, I think that that will drive us to additional, larger layoff option, seeking larger concessions if possible, looking at other 1-time fixes. It just digs our hole much deeper. With the mid-year cut, it has a multiplicative or compounding effect into next year. You take what will have been a 60 or $80 million problem and push it toward $100 million. CAVANAUGH: Thank you for speaking with us and telling us this news that we don't want to hear but have to hear. Thank you very much, San Diego school superintendent, bill copea KOWBA: Thank you. CAVANAUGH: And Julian Betts, professor of economics at UC San Diego, and executive director of San Diego Education Research Alliance. I want to first off perhaps get your reaction to what you just heard from superintendent Kowba. BETTS: Well, I'm not surprised by anything he said. His hands are tied for this school year. And the real issue here facing San Diego unified, but all districts state-wide, is when -- typically about 80% of your school budget has to do with salaries, either there are going to be layoffs or there have to be negotiated salary decreases or some combination of the two. So it's a pretty heart wrenching situation. CAVANAUGH: Let's move to higher education, if we could, professor Betts. You know, despite the rate hikes to CSU, and the UC system, there are a lot of people who are concerned about the quality of our higher education in California because of the amount of money that it is not getting from the state, and the cuts that it has to make. Are those concerns valid? BETTS: Oh, I've been at UCSD since 1990, so I have seen a steady increase in class sizes over the years, and I think I can speak for all professors and say we're very concerned about the tuition hikes because it raises questions about access. Not just the university of California but to cal state as well. And we are doing things to try to make things more financially feasible for lower income families. For instance, at UC, for every dollar in tuition generated through hike, $0.30 goes to financial aid. But if this continues much longer, it's really going to be the middle class that's going to start finding public edhigher education in California unaffordable CAVANAUGH: We have been on a long-term slide, California has, when it comes to our ranking in the nation in school funding, and basically in the quality of the education. We used to be at the top. Now we're near the bottom. How did that happen? BETTS: The honest thing to say is that the recession here is worse than in the rest of the country. But that's only part of the problem. There's been a three-decade trend to lower spending on education here relative to the rest of the country. Prop 13 probably has something to do with that. It used to be the case that property taxes went to districts. So a district could propose an increase in the local property taxes that would go to the the district. That's no longer the case, with the state effectively controlling local property taxes, and those capped. And school psychiatrics have one option, which is a parcel tax, which is a tax of a certain amount per piece of property. That was tried last year, and failed locally. I think there's been a long-standing downward slide in -- at least in relative terms in funding for public schools in California, relative to the rest of the country. And can be be traced back to proposition 13, to a very important legal case that proceeded that, Serrano -- priest, which said you could equalize a series of legislative actions. Combined with those two thing, it led to a smaller increase in funding over time CAVANAUGH: When you do look at a list about school funding and teacher to pupil ratios and so forth, basically overall test scores, up to the top come some what would seem to a Californian unlikely states. New Jersey is really high on a list like that. What is New Jersey doing? What do people in jersey pay for that we don't? BETTS: Right. The NO. 1 difference between California and most other states on average is the class sizes are much higher in California. So the people to teacher ratio is not quite the same thing as class size. But the simple ratio is about 15.5 nationally, and it's 20.8 in California. And I think there's only one state that has a higher ratio, I think it's Utah. So that is one of the main ways that we slip behind the rest of the country. That said, there's plenty of academic evidence that class size matters. But not quite as much as some people might think for achievement. You do see that California lags behind -- you mentioned New Jersey. It lags behind New Jersey by quite a bit on pupil teacher ratio. Their ratio is around 12, versus 20, 21 for us. They spend a lot on teachers as we do. I think California has the third highest teacher salaries in the country. New Jersey is fourth. That's a little bit misleading, because the cost of living is really high in California, and a lot of us feel that if teacher salaries fell a lot, we would be losing teachers to other professions or other states. So we're sort of between a rock and a hard place here CAVANAUGH: People in a state hike New Jersey pay more in taxes to education, don't want they? BETTS: Absolutely they do. And if you look at test scores, California lags behind the national average in a state like New Jersey, according to the national assessment to educational progress, if you look at the grade eight math tests, about 44% of students are proficient. California that number is only 23%. Now, part of that's got to do with funding, part of that's got to do with defense in demographics. We did some work at the public policy institute of California about a decade ago showing that maybe 1/3 of the test score difference between here and the rest of the country is due to differences in demographics. English learners have a hard time on these standardized tests. CAVANAUGH: Now, I started this conversation by talking about the disruption to the CSU board of trustees meeting and that rate hike that they authorized yesterday. There were some of the members of those -- some of those trustees who did not vote for the rate hike. And they basically said they should put the ball back in Sacramento's court and force them to spend more money on education in California. Do you think an approach like that might work? BETTS: I really don't know. University of California did something several years ago when it didn't receive funding that it was due due to population increases, and we took those students anyway. And those have been unfunded students working their way through the system. So it's a game of chicken, and it's hard to tell what the outcome of that will be. But with the state finances look look so dismal, I'm pessimistic. CAVANAUGH: And let's bring it back to people. As they hear stories about cuts to education, both K through 12, and higher education, and thinking about the future of their children, do you think that there is some sort of protest, some grass-roots protest would make any difference? BETTS: I think you need a political scientist, not an economist to answer that. There was a poll put out by the public policy institute of California today saying the majority of Californians recognize that the state's not funding cal state and UC at proper levels and would like to see better funding. But the next question was, well, would you supporter any increase in taxes to fund that? And only a minority supported that. So I think the reality is people are recognizing that there are really big shortfalls here, but we have an unusual high unemployment rate in California right now. A lot of people are suffering, and it's difficult to envisage large increases in taxes at a time like this. CAVANAUGH: Can you envision what comes next now? Just more and more cuts? BETTS: Well,ing I think No. Within, we just have to hope for economic growth. That's what's going to be the thing, the trigger that changes this downward slide we're on. Districts can -- school districts can try getting parcel taxes passed. There hasn't been a lot of success with that recently. And I think it's just because people feel that their wallets are thin, and they don't have a lot of extra money right now. It's going to be about economic growth, primarily. If you look, though, at proportion of money spent on different things by the State of California, one factor that really jumps out is spending on prisons as a proportion of the state budget has gone up a lot over the last two decades And that's counter balanced by declines in spending on education. I think that's a real concern. CAVANAUGH: I've been speaking with Julian bet, professor in the department of economics at UC San Diego and executive director of San Diego Education Research Alliance. Thank you so much for speaking with us. BETTS: Good to be here. Thank you.
The board of trustees of the California State University had a small riot on their hands yesterday, as they approved a 9-percent rate hike -- the third rate increase in a year. The rate hike will kick in if the system doesn't receive more money in next year's state budget. But the possibility of more money for education went down dramatically yesterday, with a grim prediction on an increasing state deficit and more budget cuts.
