HEADLINES : California

LAO has 'serious concerns' with Governors' Prop. 98 calculation

EdSource | by Kathryn Baron | February 22, 2013

The State Legislative Analyst's Office is calling into question the legality of Gov. Brown's proposal to count new revenue from Proposition 39 toward funding for education. In a report released Thursday, the LAO warns that the governor's plan for the initiative, the California Clean Energy Jobs Act, violates the intent of the law.

Proposition 39, is projected to raise up to half a billion dollars in revenue this fiscal year and as much as a billion per year starting next year for clean energy projects. At issue is a provision of Prop. 39 that requires the state to put half of the revenues raised for each of the next five years into a new Clean Energy Job Creation Fund for energy efficiency projects in local communities, such as hospitals. The other half of the money would go into the general fund, where it would increase the minimum school-funding guarantee of Proposition 98 by as much as $500 million this year and go up from there.

The Legislative Analyst's Office finds little to like in Governor Brown's proposal for using Proposition 39 revenues to boost the Proposition 98 school funding guarantee. The Governor's budget plan would count all the revenue raised by the initiative toward calculating the minimum school funding guarantee of Proposition 98. Brown also wants to allocate all Prop. 39 funds for the next five years to K-12 schools and community colleges to reduce their energy costs by using energy efficient construction for new school buildings and modernizing their aging buildings.

The LAO report calls this approach "a serious departure from our longstanding view of how revenues are to be treated for the purposes of Proposition 98," and says it "is directly contrary to what the voters were told in the official voter guide as to how the revenues would be treated."


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