Prop 2: Fact vs. Fiction

Here you will find answers to why we believe it is important to VOTE NO ON PROP 2. 

If you have questions that are not answered here, email us here. We are also collecting local information so you can see how your district is impacted; you can email us here to learn more or stay tuned.

If you care about fiscal responsibility, kids and public education, vote NO ON PROP 2.


Why has Educate Our State come out in opposition to Proposition 2?

A:

Two is bad for kids and bad for California.  It now takes money and financial control AWAY from school districts and their locally elected officials.

When we sat down in July to analyze the final 2014-15 budget, we could not escape from the fact that Proposition 2 and its last-minute statutory trigger were now both unfair and fiscally irresponsible towards schools.  When we realized no one in the political fray was willing to take on Proposition 2, we were appalled.  Since the governor has a reputation for fiscal austerity, no one could believe something this financially irresponsible was happening.  We realized parent volunteers had to take the lead.  Unlike politicians, lobbyists, and other special interests, we have nothing to lose by speaking truth to power.

Proposition 2 is a perfect example of why children always come last in Sacramento (lest we forget, we are 51st by a LARGE margin in student-teacher, student-counselor AND student-librarian ratios, not to mention at or near the bottom in the nation in per pupil funding - yes even AFTER Proposition 30).  Somehow, it's always convenient to take money out of school funding with the PROMISE, the solemn promise, that it will be repaid.  From the AB 8 Split in 1979 to the Triple Flip and VLF Swap in 2004 to the deferrals of 2008-2015, we balance our budgets on the backs of our schoolchildren.

Children have no lobby, and no money. And they cannot vote. They need us to be their voice. Do you want to give children a voice? Vote NO on Prop 2, for starters.


Why does Educate Our State say Proposition 2 is unfair and fiscally irresponsible?

A:

To begin with, Proposition 2 breeches the minimum guarantee Californians made to our schoolchildren.  For the past 26 years, there has been a MINIMUM guarantee in the Constitution -- that schools would get 40% of the state spending during the REALLY good years.  This is the only hope of leveraging us out of 50th place.  This is a guarantee that the Legislature has relied on when it's taken money away from schools -- the promise that Prop 98 would protect them.  Remember, the state diverts BILLIONS of local school property taxes that are allocated to public education each year -- $8.4 billion this year alone -- to pay its debts (you can learn more about this diversion here). 

Now the State is saying it won’t necessarily replace those funds on time.  It will put the money aside -- using it to help its own cash-flow needs.  That’s unfair.  The state pretense of being helpful -- promising to send the money to schools during down years -- has an abysmal track record.  And its a lousy use of the money.  Better to disperse it to schools, to use in managing their own cash flow, to bolster their own local rainy day reserves, or for one-time maintenance or improvements, than to paternalistically assume it is making better use of the money.

And, if that is not already devastating to schools, the Legislature decided to require local school districts to spend all but three weeks of their savings the minute the state saves a nickel!  (SB 858 [June 2014])  It did this without public comment, without committee discussion, or LAO analysis. We see this as unfair to schools and schoolchildren and extraordinarily fiscally irresponsible.

Too bad for kids.  Two bad for California.


Proposition 2 says the money gets saved, and then it is given to schools in a bad year. Isn't that a good thing?

A:

Well, the state may 'save' money (that it was constitutionally obligated to give schools), and then (eventually, actually) give it to schools.  But as soon as it has saved a nickel, schools will be forced to spend over $5 billion of THEIR savings.

What kind of deal is that?

School districts have saved money and used it in bad years themselves.  The most current data show schools saving 16.2% of their annual expenditure -- without demanding a Constitutional Amendment to force them to do it.  Yet the state is so incapable of actually saving money that it rushed to create a trigger to force schools to cut their savings to the bone.  School districts would never have survived the last seven years of cuts if they had not prudently accumulated savings.  This is backroom politics at its worst. 

And, there is a second problem. The way this legislation is written the Governor and Legislature can declare a ‘budget emergency,’ which allows them to use Rainy Day money to fund the *first dollar* of school funding – thus effectively moving it back into the General Fund, in which case it has simply let the State off the hook … again!

And, if you're brave enough to read this far -- a third!  Constitutionally, the state is supposed to catch schools up quickly when it takes advantage of Proposition 98's "Test 3" in down years to cut school spending.  The catch-up amount is called "maintenance factor" -- and is currently about $6.6 billion, about 10% of schools' funding that the state has promised to pay ... when it can.

This amount will be paid down (eventually, we hope).  But the LAO forecasts that the state will be in Test 3 from 2016-2020!  Any new maintenance factor goes to the very back of the line, after payments to the school PSSSA.  Will schools ever see it?  Doubtful.

We are saying, ENOUGH shenanigans, Sacramento!  It's time to stop putting children LAST.  Two bad for kids.  NO on 2.


But the marketing says that Proposition 2 is trying to protect schools from devastating cuts. Are you saying it will not do that?

A:

Proposition 2 isn’t about putting or keeping money in education – it’s about holding money back from education

The reason a Constitutional Amendment is required is because the Legislature wants the right to give schools LESS than the minimum guarantee for school funding, while squirreling away the difference to help its cash flow.  Then, in a bad year, it will ‘give’ schools their own money, while spending the State’s money elsewhere. 

Proposition 2 is about creating options for politicians to concentrate resources on areas other than education. 

Please, Proposition 2 is for politics, NOT for public education or schoolchildren.

 


Isn’t Proposition 2 all about saving for a rainy day?

A:

We WISH it were about saving for a rainy day! Politicians tipped their hand in June when last-minute budget changes illustrated just how much Proposition 2 is a smokescreen.  Now it isn’t about putting money into a state reserve for schools – it’s about squeezing money out of local school reserves. 

If $1 goes into the state's school reserves account, $5 BILLION will have to be squeezed out of local reserves and carryover funds.  this includes as much as $2 billion of property and parcel taxes -- which are only paid in April and December.  The April disbursement MUST carry districts through the fall.  Do we really want to force districts to spend all their money in June, then borrow in August, September, October, and November?!  Honestly ... why didn't this go through LAO analysis, committee discussion, and public comment?  Do our politicians really think they don't need common sense?

Please, if you care about schools and kids, vote NO on 2. Questions? Contact us here.


Why should I care about Prop 2?

A:

Over 100 years ago, California voters said that our first priority would be funding public education (California Constitution Article XIV Section 8). 

Over 25 years ago, California voters said that we would spend at least the proportion of state revenues on schools and community colleges that we had in 1986-87, roughly 40% (Proposition 98). 

We have never seen a poll (or heard a politician) say that education is a low priority for Californians – and yet the state is trying now, having already cut schools’ share of local property taxes down to 33%, to cut public education’s share of State’s income taxes below 40%!

Time and time again we see money taken FROM schools, while pretending to be helping schools. Why? In part, we believe, because children cannot vote and they do not have expensive lobbyists representing their interests. Sacramento seems to have a lot more to gain from rhetoric than it does from results for public education.

Put kids first. Vote NO on Prop 2. Show Sacramento you don't buy the rhetoric. We are at the bottom of the nation in public education - what's the excuse?


Why does it matter if we move money from one year to another?

A:

California was ranked 50th in the nation for per-pupil expenditure by Education Week in January 2014. 

  • If we divert money to a “Rainy Day Fund” every time the State collects a little extra revenue, we have no chance of getting anywhere near average in public education funding in the country.  
  • Proposition 2 says, as soon as schools’ share of state revenues is more than inflation tempered by headcount growth, put it aside. What does that mean? Let's keep public education underfunded. 
  • If we don’t start investing in our kids, when we have a little extra, prisons will be the only possibility. Where, yes, California IS at or near the top in funding. See the analysis from Education Week below.

Education Week Analysis

  • California is ranked 50th in the nation for cost-adjusted per-pupil expenditures and 37th for state expenditures on K-12 schooling as a percent of state taxable resources, earning a D+ and ranking 37th overall for equity and adequacy of school finance.
  • Unsurprisingly, we also get a D+ (ranking 33rd) in Achievement overall.  On standardized national tests, less than a third of our 4th or 8th graders are proficient in math or reading – leaving us ranked between 42nd and 47th in an objective measure of learning. 
  • Our students’ overall “Chance for Success” in life ranks us 42nd in the nation – wedged between South Carolina and Oklahoma – behind Texas, Tennessee, Georgia, Idaho, and Kentucky. 
  • Detractors would say, but the 2014 report used 2010-11 data, and that was the worst year in California school funding!  Well, it was a pretty dim year all over the nation.  And California didn’t drop to 50th from the middle of the pack.  It dropped from … 49th.  And 48th the year before that.  And 47th in 2009 (pre-recession 2006 data).  So let’s smell the coffee.

If you care about public education and the children of California, vote NO on 2.


"Maybe 50th in the nation in education funding is the best we can do? Anyhow, I’ve heard rankings in the low 30’s and high 40’s elsewhere."

A:

Education Week is highly respected because it takes regional cost of living into account and rates all 50 states plus the District of Columbia.  So it can’t fudge the numbers. 

Another well-respected analysis comes from the National Education Association.  It does not take cost of living into account, however also compares all states and DC.  It also rates lots of different spending areas, not just education.   So, California’s rankings are higher than the actual experience on the ground, but the comparisons are interesting.  (See below.)

National Education Association Analysis:

The National Education Association rankings do not adjust for regional cost differences.  In its most recent “Rankings & Estimates” March 2014, the NEA shows:

  • California has the largest classrooms in the nation – 25 students per teacher, compared to a national average of 15.4.  The next closest is Utah, at 20.
  • California ranked 40th in the nation for expenditure per student ADA in 2011-12 (unadjusted for regional cost differences), down from 37th in 2010-11 and dropping to 42nd in 2012-13 (est.).
  • California ranked 12th for State & Local Tax Revenue per capita - $4,914 (vs. $4,295 national average). 
  • Thus one would expect us to rank around 12th in spending for each budget category.  Moving away from 12th implies investment (or disinvestment) in a given area.
  • Comparing California’s relative tax revenues vs. its investment in education vs. its investment in other budget areas shows:
  • (State & Local per capita: national rank and comparison to national average)
  • 3rd for Corrections [Prisons] - $361 (vs. $235)
  • 7th for Police and Fire - $577 (vs. $445)
  • 8th for Debt Interest - $510 (vs. $397)
  • 12th for Public Welfare - $1,795 (vs. $1,579)
  • 14th for Health/Hospitals - $880 (vs. $740)
  • 18th for Capital Outlay (Infrastructure) - $1,142 (vs. $1,078)
  • 31st for all Education (Higher + K12) – $2,712  (vs. $2,764)
  • 44th for Highways - $391 (vs. $491)
  • We have been:
    • investing extra in Corrections, Police, Fire, Debt Interest and Public Welfare;
    • holding steady in Public Welfare and Health/Hospitals;
    • disinvesting in Highways, Education, and (to a lesser extent) Infrastructure;
    • and all this despite our commitment in Section 8 of Article XVI of the Constitution that, “From all state revenues there shall first be set apart the monies to be applied by the state for support of the public school system and public institutions of higher education".

SHAMEFUL, California. Start by sending a message to Sacramento this November that this is NOT ok.  

Vote NO on Prop 2, for children and public education. No on 2 for a better future for California. When we vote to show we care about kids, we vote to show we care about our future.


But doesn't the 'Pro 2' Argument state that Newspapers and Credit Agencies endorse Proposition 2?

A:

In the Voter Guide -- dateline July 22, 2014 -- the proponents claimed that various newspapers and rating agencies endorsed A RAINY DAY FUND.  Note that they DIDN'T say PROP 2 and its related legislation.

Far from endorsing Prop 2 (formerly Prop 44 until 8/12/14) and its supporting legislation, many organizations had expressed major concerns. See below for the FACTS regarding the SPECIFICS of Prop 2 when the Voter Guide information was published.

The Sacramento shenanigans, forcing school districts to shed reserves, brought the following from the press and rating agencies:

San Francisco Chronicle - you can read the actual article here:

  • On May 11, 2014, the Chronicle lauds the prudence of a Rainy Day Fund.  Then, when politics intervene ...
  • On June 18, 2014, sighs over “a rainy day fund riddled with holes and caveats,” and says the switch is “all the worse because it comes with the blessing of Gov. Jerry Brown, a self-proclaimed apostle of fiscal restraint.”

Standard & Poor’s - The original analysis is linked here and is entitled, "The Challenge of Establishing a State Budget Reserve," and well worth reading.

  • On May 6, 2014, the S&P report actually says that, “When it comes to reaching a legislative supermajority on fiscal matters, California has a weak track record … Sorting through these tensions, as well as refining the measure in light of the technical issues the LAO has raised, represents a test of sorts for the state.  But if the legislature succeeds in assembling the consensus necessary to move the measure forward, it could mark another step in California’s ongoing journey toward a more sustainable fiscal structure.”  (Note the selective – and erroneous – quote in the proposition argument.)
  • On July 4, 2014, S&P says “In our view, statutory limitations on reserves may alter the financial management landscape for California school districts that have a consistent track record of maintaining what we view as very strong reserves. Very strong reserve levels contribute to a district's fiscal capacity to absorb episodes of unanticipated fiscal strain and, thus, affect its rating level.” Read more in “Recent Changes To A California Law on School Districts’ Reserves Result In Neutral To Negative Credit Implicationshere.

The Los Angeles Times – the link to the article is here:  

  • On May 8, 2014, the Times included an opinion piece by Jon Healey, “Gov. Brown patches leaks in his original rainy-day fund plan,” that stated, “This version addresses the glaring weakness in Brown’s earlier proposal, while also doing more to promote a culture of saving in Sacramento year-in and year-out.”
  • but then on June 17, 2014, the Editorial Board stated (in “An ill-considered mandate on school funding”), “…some things haven't changed, most notably the maddening practice of inserting controversial policy changes at the last minute with little or no public debate. This year's Exhibit A: an ill-considered mandate that could force local school districts to spend down most of their reserves in one fell swoop.” 
  • It continues, “the measure lawmakers adopted is flawed in both letter and spirit. It would require districts to spend down any reserves above the cap — including amounts held for future textbook or technology purchases, as well as funds raised from local parcel taxes — the year after the state starts building its new rainy-day fund for schools, regardless of how little that fund may hold. Proponents note that the cap on local reserves is two to three times the minimum amount the state requires districts to keep, but that generally translates into only a few weeks' worth of payroll.
  • And concludes, “… the real rationale seems to be to stop districts from being cautious about the state's boom-and-bust revenues and from saving money before they spend it. It pushes the state in exactly the opposite direction of the Brown administration's laudable efforts to take fewer fiscal risks and to transfer decision-making authority from the state to the local school boards chosen by voters.”  (emphasis added)

Moody’s:  On May 19, 2014, Moody's says, “California Plan to Save for a Rainy Day is Credit Positive.”  The fund reflects the state’s new emphasis on building reserves to cushion its finances from economic downturns.

  • Raised California’s credit rating on June 25th … then lowered Coachella Valley USD’s on July 11th, citing that, among other things, “The negative outlook reflects the recent weakening of the district's finances and the near-term challenge the district will face in regaining balance, managing liquidity and rebuilding its fund balance.”  Imagine 500 districts in the same situation.

Fresno Bee – the link to the article is here

  • On May 17, 2014, the Editorial Board said, “Thursday, the Legislature unanimously passed a rainy day fund measure — sponsored by Sen. Anthony Cannella of Ceres — to set aside 1.5% of the general fund each year to protect taxpayers against catastrophic budget deficits.”
  • It did NOT say that it WILL protect taxpayers against those deficits!  Just that protection is the purpose of setting aside the funds.  (Yet another inaccurate quotation!)
  • On May 14, 2014, the Editorial Board said, that agreeing on a rainy-day plan was an important step toward fiscal discipline, though, interestingly, also quotes Darryl Steinberg as saying that suggestions that Brown has to stop legislative democrats from overspending is “a lot of BS.”
  • And on June 16, 2014, Dan Walters (grand old man of Sacramento journalism) wrote, “This year’s poster child for budgetary sneakiness is a brief passage in a lengthy trailer bill dealing with education finance. Last week, at the last possible moment, language putting a cap on financial reserves that local school districts can maintain popped to the surface ... it quickly became evident that Gov. Jerry Brown and Democratic legislative leaders were doing the bidding of the powerful California Teachers Union and other school unions. ... Almost certainly, it was to counter an implicit threat by the unions to oppose the rainy-day fund measure that they fundamentally dislike as a de facto spending limit. Limiting school district reserves could compel them to place more money on the table in contract negotiations.  School district trustees and administrators began hammering lawmakers not only about its sneakiness, but the evident conflict between the proposal and Brown’s frequent proselytizing about local control, which he calls “subsidiarity.” ... The issue got its first public airing Sunday in the Senate Budget Committee just hours before a midnight deadline to enact the budget ... Brown’s deputy budget director, Keely Bosler, and her education aide never offered even a thin rationale in response to questions and criticism, just repetitively describing how the limit would work and insisting its impact would be scant. ... “The policy makes no sense,” Sen. Richard Roth, D-Riverside, said. “Why the rush to enact it right now?” ...No one answered…”
  • And,  on June 15, 2014, an article “Lawmakers approve California budget under Looming Deadline” by David Siders and Jeremy B. White, quotes Sen. Marty Block (D-San Diego), “My main concern truly is with the process.  This is clearly a major policy deviation from the way we’ve done business, and this is something that could have been discussed over the last several months.”  Sen. Hannah-Beth Jackson (D-Santa Barbara) is quoted as saying, “To say that this process is inconsistent, I think, is somewhat of an understatement and is the politest word I can think of.”

In short, Proposition 2 – rather than protecting citizens from our politicians – is giving politicians one more way of circumventing public process and local control.  Their disdain for accuracy and truth is illustrated above.

Take a step in stopping a political machine that harms education under the banner of saving it. Vote NO on Prop 2.



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