State Revenue Continues to Come in Under Projections

State officials painted a dire picture last week as tax revenues continue to slide well below projections.

According to the Legislative Analyst's Office, Calif. is projected to fall $3.7 billion short in revenue for the year, according to the State Controller's Office.

Total year-to-date general fund revenues are now behind by $1.5 billion, while expenditures are over projections by $1.7 billion.

With the current numbers, the shortfall will mean $2 billion in trigger cuts to many state programs, one being K-14 education. The actual amount cut from education will be determined by the Director of Finance by Dec. 15.

"Unless revenues and expenditures begin to track with projections, the State will face increasing cash pressure in the months ahead," said John Chiang, California state controller.

Mid-year "triggers" will take effect if state revenue continues to fall below estimates:

Tier I—$1 billion shortfall

• Community college funding cut by $30 million. An additional $10 fee increase would begin summer 2012.
• $6 million cut from State Preschool Program.

Tier II—$2 billion or more

• Additional $72 million cut from community colleges.
• K-12 funding would be cut by $1.5 billion, school districts have option of reducing calendars by one week.
• K-12 transportation funding ($248 million) would be eliminated.

The option of reducing school calendars by one week will depend on collective bargaining agreements between the districts and teacher unions.

After the budget was adopted in July, staff at Glendora Unified met and agreed that if the triggers went into effect all staff would take furlough days commensurate to the level the budget would be impacted.

"Although there are only estimates at this time, we are starting to inform our parents and community of the potential triggers and what they would mean to GUSD," said Robert Voors, Glendora Unified superintendent. "We have a plan in place and once we know what Sacramento will do, we will be able to react and get details out to our school community and families."

According to Kathy Perkins, Chief Business Officer at Charter Oak, officials do not want to make any decisions or reactions based on the data, which is still preliminary.

However, the district does have some ideas of what they would do to curtail some of the effects of the triggers, if they are activated, but details remain hidden.

Citrus college is well prepared for whatever may come.

"At the time that the district adopted our budget, we included the shortfall in revenue those triggers would enact," said Carol Horton, vice president of finance and administrative services.

The college would stand to lose $306,000 if Tier I cuts are triggered. If Tier II cuts are triggered, Citrus would lose a little over $336,000 from Prop 98 funding.

The college was fortunate enough to receive grants to help sustain some programs.

Citrus received two grants, one to help Hispanic students excel in science, technology, engineering and math, while the other aims to improve graduation rates of Hispanic and other underrepresented students; both grants total nearly $8 million.

"If we hadn't gotten the grants, we would have supported this for one year and then we wouldn't have been able to continue those programs," Horton said.

The Controller's Office is working with the Department of Finance to identify and create a plan for continued problems in the state's revenue.

The combined deficit numbers for this year and last year's total $20.3 billion, according to the controller. Those deficits are being handled by massive internal and external borrowing, the Controller's office said.