SCHOOL FUNDING INCREASES CRITICS SAY 42% OF STATE BUDGET NOT ENOUGH.

Byline: David M. Drucker Sacramento Bureau

Public-school funding has increased the past two fiscal years, and it represents 42 percent of Gov. Arnold Schwarzenegger's 2005-06 budget proposal - more than any other program - but Democrats and education advocates on Monday demanded more.

Of the $88.5 billion state general fund, which encompasses the bulk of Schwarzenegger's $115.7 billion spending plan for fiscal 2005-06, $36.8 billion is allocated to K-12 schools and community colleges. Add $13.2 billion in property tax revenue and $11.5 billion in federal money, and taxpayers would spend $61.5 billion on California's public schools in the fiscal year beginning July 1.

Additionally, school funding represented 40 percent of the 2003-04 budget, and 41 percent of the 2004-05 budget - a steady annual increase.

That's not enough for the governor's critics.

``We cannot afford to underfund education,'' said Kerry Clegg, spokesman for the California School Boards Association. ``You cannot expect schools to prepare our students to compete in the global economy, and then fund it with a Third World budget.''

Revenues are up this year, and Schwarzenegger has proposed increasing education funding by about $3 billion. But Democratic legislators, the California Teachers Association, the PTA and others say the Republican governor owes public schools $4 billion more in exchange for their agreeing to his plan to suspend the education funding guaranteed under Proposition 98 in the 2004-05 budget that expires June 30.

``The governor has broken his promise to public education once again,'' said Assembly Speaker Fabian Nuez, D-Los Angeles. ``Democrats will not retreat on our commitment to our schools.''

The Schwarzenegger administration says the $50 billion in state tax dollars recommended for K-12 schools and community colleges next year - a proposal formalized Friday when the governor unveiled the final version of his $115.7 billion spending plan - lays to rest the contention that the governor is proposing a substandard education budget.

Administration officials defend Schwarzenegger's funding choices, noting the relatively upbeat critique of his budget by the nonpartisan Legislative Analyst's Office.

This disagreement is shaping up to be a deal-breaker that could delay timely passage of the 2005-06 budget, due on the governor's desk June 15.

``(Our critics) think they're entitled to more (education money),'' said Schwarzenegger's chief budget spokesman, H.D. Palmer. ``While I can understand that, you would have to fund it one of three ways: cutting into Health and Human Services, raising taxes or spending one-time money that will only create bigger deficits in future years.''

Legislative Analyst Elizabeth Hill commended Schwarzenegger for using one-time revenues for one-time expenditures such as traffic-relief projects. She cautioned that the governor's budget still contains risks and depends on deficit-reduction solutions that might not pan out.

But her review estimates that the long-term gap between revenues and expenditures will shrink from $5 billion in 2006 to under $3 billion in 2008.

``Certainly a positive feature of the May revision proposal is to try to reduce either new debt or existing debt,'' Hill said. ``But even pulling this back, we still have roughly $26 billion of budgetary borrowing.''

Staff Writer Harrison Sheppard contributed to this report.

David M. Drucker, [phone]

david.drucker(at)dailybulletin.com