Schrag: Schwarzenegger’s Budget Gamble Not Facing Up to Real Choices Between Quality Services and the Revenues of Mediocrity

By Peter Schrag

Ever since 1984, when Scientific Games of Atlanta ponied up $2.3 million to persuade California voters that a lottery would be a great way to help schools, the California Lottery has been an unmitigated headache.

It's rarely raised more than 3 percent of the costs of K-12 education – and of late much less – although for many years a lot of voters thought the schools were well-fixed with the lottery proceeds and didn't need any more money. And it opened the door to the Indian casinos now plaguing communities from one end of California to the other.

Gov. Arnold Schwarzenegger's gimmicky proposal to pawn the whole deal to Wall Street for some quick upfront money thus may not be such a bad idea. It's part of yet another final Schwarzenegger solution to the state's chronic budget mess – although this time there are no promises to tear up the credit card.

The lottery deal, which would require the approval of the voters, isn't getting much enthusiasm from the school lobby: Beggars can't afford to spurn pennies. Given the likely fine print in the deal, the schools aren't sure they'll ever recoup all their meager lottery revenues. And in the end it will almost certainly put the state still deeper in hock.

This, somebody said, is like putting lipstick on a pig. But what if the deal included a provision that shifted the risk to the state, say by guaranteeing the schools the equivalent of the expected future lottery proceeds as part of the Proposition 98 K-14 education funding formula? That would get the schools out from under the lottery onus.

The worry of the education establishment is that Proposition 98 might still get suspended, as Schwarzenegger threatened to do this year, but the widespread celebrating even by no-new-tax Republicans that under the governor's revised budget schools will be "fully funded" – meaning that Proposition 98 won't be suspended – indicates that the measure, now 20 years old, remains a powerful club.

Of course, the schools aren't fully funded. Whether their revenues are in fact a "dismal" 46th among the states, as state schools chief Jack O'Connell complained the other day, or only among the low 40s depends a little on the criteria of comparison. But by whatever measure you use, they're far below the states – New York, New Jersey, Massachusetts, Connecticut, Rhode Island, Pennsylvania, Minnesota, Michigan, Wisconsin – that are highly regarded for their education efforts. A number of other states are now recruiting teachers who've gotten pink slips in the expectation that there'd have to be cutbacks in the next budget.

Comments

Get Email Updates

Want the California Progress Report by email? Once a week, we'll send you the latest and greatest headlines.