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Proposition 98
is known as the "Classroom Instructional Accountability and Improvement Act of
1988." Incorporated into the state constitution as Section 8 of Article XVI,
it was meant to guarantee a minimum level of funding for K-12 schools and
community colleges. Unfortunately, Prop 98 is an extremely convoluted statute based on
a myriad of factors such changes in enrollment, per capita personal income and projections of state tax
revenues...and it also some serious loopholes. (More about that later.)
Proposition
98 consists of three "tests" that apply under varying economic and fiscal
conditions.
F
In years of normal or stronger revenue growth,
the Prop 98 guarantee is the LARGER of:
Test 1:
the same share of the General Fund as in the base year of 1986–87
or
Test 2: the prior
year's funding from state and property taxes, adjusted for
growth in per capita
personal income and
enrollment growth
F
In years of low revenue growth, when
General Fund revenues rise more slowly than personal income, the Proposition
98 guarantee is:
Test 3:
the prior year's funding
from state and property taxes, adjusted for growth plus 0.5 percent. (In other words, this
test applies only when
the percent change in state
general fund revenue growth plus 0.5 percent is less than the
percent change in personal income.)
Any reduction--compared to the previous year--must
be no worse than cuts in state spending per capita for other budgeted
services.
The legislature has the authority to allocate
Proposition 98 dollars to individual programs through the budget process and
legislation.
Suspending the provisions of Proposition 98 requires a two-thirds vote of the
legislature and agreement by the governor.
PROPOSITION 98 AND
THE CALIFORNIA COMMUNITY COLLEGES
Unfortunately,
as far as
California's 108 community colleges are concerned, Proposition 98 has not
worked out as intended. According to the Contra
Costa Community College District Chancellor's Office, Proposition 98--the measure that was supposed to
help California's financially-strapped community colleges--has in fact done
just the opposite: it has under-funded them by as much as $201
to $440 million annually during the last 10 years.
How? By a little bit of legislative
sleight-of-hand.
Each year, the Legislature
suspends
Education Code 43201.1, which was written to guarantee community colleges 10.93% of all Proposition 98 funds. Their rationale is that ever since the
passage of Proposition 13, local tax funding for
K-12 schools has dried up...so they simply shift the Prop 98 money intended
for community colleges to K-12 schools.
While
this has given K-12 education a fiscal shot in the arm, it has
also done something else far less constructive: it has set the K-12 system and
the community colleges against one another in the budget planning process. And
it has created a situation where California's community colleges are now
ranked among the worst-funded 2-year educational institutions in
the nation.
Welcome to the
Not-So-Wonderful World of Proposition 98.
The above information was adapted from
EduSource, the California Budget Project, and the Contra Costa Community
College Chancellor's Office
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