With Monday marking the beginning of a new fiscal year, California lawmakers scrambled last week to balance the budget, with Gov. Jerry Brown signing the final budget into law Wednesday.
The catch: The budget depends on Californians voting to pass a $6 billion tax increase in November, or else education funding will face cuts.
"This budget reflects tough choices that will help get California back on track," Gov. Brown said in a statement, pointing to more than $600 million in cuts to welfare and across-the-board pay cuts. "All this lays the foundation for job growth and continuing economic expansion."
But if Californians do not pass a ballot measure that will raise sales tax by a quarter percent and income taxes on those making more than $250,000 by up to 3 percent, trigger reductions - almost exclusively to education - will result.
Those cuts will force K-12 schools to shorten the school year by up to 15 days, community colleges to offer few classes, and California State schools to significantly reduce enrollment for Fall 2013. University of California schools will admit fewer California residents, opting instead to accept higher-paying out-of-state and international students.
Critics of the tax increase doubt the measure will raise the $6 billion and think the measure could hurt the state's economy. Others point to the already large amount of the budget going toward education - education currently makes up more than 52 percent of the state's general fund and even with the cuts, will still be a hefty 45 percent.
"I think you need to be careful in structuring a system that only asks certain groups to pay for the increased cost of government," said Mark Robyn, economist at the Washington D.C.-based Tax Foundation. "It's not a sustainable path and can have detrimental effects."
He pointed out that the increased tax on wealthy Californians could encourage them to leave the state, leading to less money in taxes and spending. The increased sales tax would take money out of consumers' pockets that they would have spent on goods, services, or savings, he said.
And while the cuts on education would hurt, education spending increased $4.5 billion this year while other areas shrunk to fill the $15.7 billion deficit. The budget made cuts to senior care, childcare support, city redevelopment agencies, courts, and welfare.
Education spending in California is protected by Proposition 98, a voter-approved amendment passed in 1988 that requires the state to spend at least 40 percent of its budget on education, plus increases every year to accommodate more students.
Retired Sen. Gloria Romero, executive director of Democrats for Education Reform, appreciates the intent behind Proposition 98, but thinks the impact on the state budget is unfortunate. "The positive is that Californians do want to fund education. The negative, is that it's basically almost half of the state budget," she said. "It makes it difficult to balance all other aspects of state government."
While many assume more spending is needed to improve the state's schools - which currently ranks 30th in the country - Neal McCluskey of the Cato Institute found this is not the case. In documenting the federal spending on K-12 education from 1970 to 2006, he found that the total real spending per pupil rose 122 percent, yet the scores of 17-year-olds on the National Assessment of Educational Progress were virtually unchanged.
Even Prop 98 founder John Mockler believes that it takes more than just funding to improve education. He stressed the importance of getting more "qualified people" working with children, and suggested teacher evaluations and streamlined school administrations as solutions.
With already record-high taxes in California, Howard Jarvis Taxpayer's Association's Kris Vosburgh doubts the measure will pass. Californians have rejected the past eight proposed tax increases, he said.
"[The Legislature is] counting on people to trust them and to trust them with more money … it counts on funds that in all likelihood will never be there."