News: May Revise
While the issues related to the Governor’s revision of his budget proposal are far from clear, several key points are coming into focus.
The primary issue deals with the November initiative. Essentially, if the tax increase measure passes, $313M will be applied to buy back previous apportionment deferrals. This will have no impact on our overall budget, but will help with the cash flow for the District. Remember that there are currently System deferrals totaling about $1B, so this will only partially offset that amount. For PCC, the buyback would mean about $6M—of the approximately $20M.
The second main issue is that if the November measure passes, $300M will not be cut through the January 1, 2013 automatic trigger cut. Put another way, the District could expect that the base of 2011-12 would remain intact.
Factors to be considered are numerous and complex. For example, the current year budget assumes that the proceeds from the dissolution of the RDAs would mean an increase in general property tax revenues to each district. The initial expectation for that revenue was about $149M, but the May Revise assumes that number will drop to $116M. However, the Governor has stated that to the extent that RDA money comes in, there will be an offset to our revenues, meaning that there will be no chance of a windfall, but there could still be a revenue reduction in real dollars for the current year.
For the current year, the new expectation for the February Surprise is $125M, down a bit from the $149M previously estimated. For PCC, that will mean about $2.5M, rather than the $2.85M previously estimated.
At the moment, the Brown Initiative is polling somewhat above majority levels, though not by much.
The initial impact analysis for each district will be available this afternoon. Those numbers will change rapidly and dramatically as the budget develops in Sacramento.
PCC is in the process of developing a 2012-13 budget to assume the non-passage of the November ballot initiative, with a contingency plan to deal with the passage option.
Release Date: 05/16/2012
Contact: Juan Gutierrez , Director Public Relations
Phone: (626) 585-7264