California Proposition 98 (1988)
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California Proposition 98, or the Classroom Instructional Improvement and Accountability Act, was on the 1988 ballot in California as an initiated constitutional amendment, where it was approved.[1]
Proposition 98 requires a minimum percentage of the state budget to be spent on K-14 education, guaranteeing an annual increase in education in the California budget. As a result of Proposition 98, 40% of California's general fund spending is mandated to be spent on education.[2]
Proposition 98 amended the California Constitution to mandate a minimum level of education spending based on three tests:
- Test one, applicable only from 1988 to 1989, required spending on education to make up 39% of the state budget.
- Test 2, applicable to years of strong economic growth, requires spending on education to equal the previous years spending plus per capita growth and student enrollment adjustment.
- Test 3, used in years of weak economic growth, guarantees prior years spending plus adjustment for enrollment growth, increases for any changes in per capital general fund revenues, and an increase by 0.5 percent in state general funds.
This is accomplished by shifting specified amounts of property tax revenues from cities, counties and special districts to "educational revenue augmentation funds" (ERAF) to support schools statewide. [3]
Prop 98 can be suspended with a 2/3 vote of the California State Legislature.
Election results
| California Proposition 98 (1988) | ||||
|---|---|---|---|---|
| Result | Votes | Percentage | ||
 Yes
| 4,689,737 | 50.7% | ||
| No | 4,500,503 | 49.3% | ||
| Total votes | 9,190,240 | 100.00% | ||
| Voter turnout | % | |||
"Education Coalition"
According to Dan Walters, Proposition 98 grew out of "the infighting among education groups in the uncertain days following passage of Proposition 13 in 1978...That's why the California Teachers Association and other school interests created an Education Coalition that wages constant war in political and legal arenas to protect its share of the state budget."[4]
Background
The initiative was a result of 1978's Proposition 13, which limited assessed property taxes to one percent of a home's value in California and thus limited the amount of local funds that could be spent on school districts.[5] It was amended two years later by Proposition 111.
Constitutional changes
| California Constitution |
|---|
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| Articles |
| I • II • III • IV • V • VI VII • VIII • IX • X XA • XB • XI • XII XIII • XIII A • XIII B XIII C • XIII D • XIV XV • XVI • XVIII XIX • XIX A • XIX B XX • XXI • XXII XXXIV • XXXV |
The parts of the California Constitution affected by Proposition 98 are:
- Section 5.5 was added to Article XIII B.
- Section 2 of Article XIII B was amended.
- Section 8 of Article XIII B was amended.
- Section 8.5 was added to Article XIII B.
Critiques
Proposition 98 has been attacked by some groups because it mandates "auto-pilot spending" and reduces the legislatures' budgetary flexibility.[6]
Complexity of Prop 98
Proposition 98 is notorious for its complexity. The California Legislative Analyst's Office produced a 20-minute video in 2009 to explain it to members of the California State Legislature.
Changes in 2009
Reform proposition rejected
The California state budget problems in 2009 led to the possibility that Proposition 98 from 1998, Proposition 10 from 1998 and Proposition 63 from 2004 would be altered in a special 2009 election so that dedicated funds approved by the voters when these propositions were passed can be used for the state's general fund.[7]
Schwarzenegger proposes suspending
In late June 2009, Gov. Schwarzenegger proposed that Proposition 98 be temporarily suspended as a way to help close the state's $26.3 billion budget shortfall. Schwarzenegger wants to cut $3 billion from the state's contribution to public schools, which would be difficult to do under Prop 98's provisions. The governor is said to feel that since the state's voters on May 19 rejected a package of ballot propositions, including a tax hike, that he and the state legislature unsuccessfully urged them adopt, spending cuts are now the only route available to close the state's budget gap.[8]
The idea of suspending Prop 98 is regarded by some Democrats as a "nuclear option" in the ongoing 2009 budget deliberations. The well-heeled California Teachers Association, which worked hard against Schwarzenegger's 2005 ballot propositions, is said to be preparing a series of television ads to attack Schwarzenegger.[9]
Ron Nehring, chair of the state's Republican Party, says, "The labor folks are on the defense to a much greater degree than I've seen, pushing for tax increases when the people oppose them ... and their ad campaign is about pressuring Democrats to go along. We're united behind the governor 100 percent."[9]
Two-thirds of the members of the California State Legislature would have to vote to suspend Proposition 98.[10] Proposition 98 has been suspended by the state legislature twice since it passed in 1988, once in the early 1990s when tax revenues plummeted as the result of the decline of the aerospace industry and again in 2004 when tax revenues in the state declined following the decline of Silicon Valley dot-com businesses.[11]
Spend now, restore later?
As deliberations over short-term solutions to the state's budget woes continue into the third week of July 2009, Schwarzenegger remains firm on not raising taxes on oil or tobacco. This leaves cuts to schools as one of the last available ways to restore equilibrium to the budget.[11]
One question under consideration, if Prop 98 funds are dipped into, is what kind of guarantees will be set in place to ensure that they are restored later.[11]
External links
- Proposition 98 Primer
- Proposition 98 Primer
- Proposition 98: Too complex, even for the experts
- The Basics of Proposition 98: A Tutorial for State Lawmakers. A 20-minute webcast tutorial released in May 2009 by the California Legislative Analyst's Office
References
- ↑ Education Week, "Fiscal Deadline, Thorny Deficits Bedevil States", July 10, 2009
- ↑ Proposition 98 Primer
- ↑ Fact Sheet: The ERAF Property Tax Shift
- ↑ Fresno Bee, "Dan Walters: Judges quarrel as California fiscal crisis worsens", November 16, 2009
- ↑ Cure Prop. 13 'Sickness' by Reassessing Commercial Property, Boosting the Homeowners' Exemption and Cutting the Sales Tax
- ↑ California Family Council
- ↑ Inside Bay Area, "Editorial: Budget deal a step forward, but voters must pass five ballot measures", February 15, 2009
- ↑ San Francisco Chronicle, "Governor backs off plan to suspend Prop. 98", July 4, 2009
- ↑ 9.0 9.1 San Francisco Chronicle, "Schwarzenegger holds his ground on budget", July 8, 2009
- ↑ Mercury News, "State education leaders decry governor's proposal to suspend Proposition 98", July 8, 2009
- ↑ 11.0 11.1 11.2 Los Angeles Times, "Proposition 98, which guards funding for state's schools, is tested again", July 17, 2009
