DEEP CUTS FOR SCHOOLS? ARNOLD DRAWING CRITICISM OVER BUDGETARY BLUEPRINT.

Byline: Harrison Sheppard Staff Writer

SACRAMENTO - Gov. Arnold Schwarzenegger's proposed spending cap faced sharp criticism Tuesday from education advocates who claimed it eventually would gut funding to public schools by $2 billion a year and strip their constitutional guarantees of funding.

Administration officials acknowledged the Proposition 98 protections would be weakened, but Education Secretary Richard Riordan insisted Schwarzenegger intends to fully fund education, even as he deals with the massive budget shortfall he inherited.

The criticism of the governor's fiscal recovery plan followed a report from the nonpartisan state Legislative Analyst's Office, which estimated that the Schwarzenegger spending cap could eventually cut $2 billion a year in guaranteed education spending by weakening the 1988 ballot measure intended to ensure growth in education funding.

To individual schools, that could mean cuts of $330 per student, or $10,000 per classroom, according to state Superintendent of Public Instruction Jack O'Connell.

The Los Angeles Unified School District has about 746,000 students, meaning it could lose up to $246 million a year.

``This will have a drastic effect on the schools in California - when we're already underfunded by any measure you can use,'' Barbara Kerr, president of the California Teachers Association, told reporters. ``It would be drastic.''

During the recall campaign, Schwarzenegger said he would not cut education spending, and Riordan said the governor's intent is to increase education funding next year.

``I can assure you they're not going to lose $2 billion,'' Riordan said in a telephone interview.

The Legislature has until Friday to approve Schwarzenegger's spending cap measure for the March ballot, as well as a plan to borrow up to $15 billion to fund the state's deficit.

During a Senate committee hearing on the cap Tuesday, some senators said they were willing to consider a spending limit but expressed concerns about the governor's specific proposal and the short time given to craft a permanent change in the state constitution. Others said they would prefer a shorter-term cap.

``There's something about caps that are forever that frightens me terribly,'' said Sen. Betty Karnette, D-Long Beach, a member of the Senate Appropriations Committee. ``My personal opinion is it's silly to have them forever.''

Los Angeles schools Superintendent Roy Romer said weakening Proposition 98 would fundamentally harm schools, which in turn would hurt the state's ability to have an educated work force.

``It would be a very bad mistake for them to carve into Proposition 98,'' Romer said. ``It would seriously damage this state's ability to educate its children. It would do serious damage to the ability to have a competitive economy in the next 25 years.''

Romer said if there was to be a spending cap it would only last as long as it took to pay off the deficit bond that Schwarzenegger is planning for the March ballot. Ultimately, Romer said, he believes that the state needs significant reform of its tax system, including Proposition 13, the voter-approved measure that limits growth in property taxes.

The $2 billion in potential cuts is a result of the governor's cap proposal weakening an element of Proposition 98 called the ``maintenance factor,'' whereby the Legislature can take money away from schools one year as long as it repays the money when the economy improves.

An alternate spending cap proposal by Assemblymen Keith Richman, R- Granada Hills, and Joe Canciamilla, D-Martinez, preserves the maintenance factor, according to Richman. His plan has elements similar to the governor's plan in that it ties spending growth to increases in state population and personal income, but differs in a handful of detailed elements.

Schwarzenegger's proposal grants the governor more power to make midyear budget cuts, a provision some legislators have criticized as tilting the balance of power between the two branches of state government. Richman's proposal creates a three-member commission, with the governor, legislative analyst and state controller, to work together to estimate revenues, rather than issue conflicting estimates.

Another spending cap plan has been proposed by Assemblyman John Campbell, R-Irvine, and Jon Coupal, president of the Howard Jarvis Taxpayers Association. Their plan ties spending growth to the cost of living and population and grants income tax rebates if the state reserve hits 10 percent of the general fund.

Harrison Sheppard, [phone]

harrison.sheppard(at)dailynews.com