BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                   SB 851|
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                              UNFINISHED BUSINESS


          Bill No:  SB 851
          Author:   Senate Budget and Fiscal Review Committee
          Amended:  10/7/10
          Vote:     27  Urgency 

           
          PRIOR VOTES NOT RELEVANT

           ASSEMBLY FLOOR  :  Not available


           SUBJECT  :    Budget Act of 2010  Proposition 98

           SOURCE  :     Author


           DIGEST  :     Assembly Amendments  delete the Senate version of  
          the bill which expressed the intent of the Legislature to  
          enact statutory changes relating to the Budget Act of 2010,  
          and add the current content relating to Proposition 98.

          This bill now suspends the state constitutional requirement  
          that the state spend a specific minimum amount for school  
          districts and community colleges in 2010-11.

           ANALYSIS  :    This bill suspends the Proposition 98 minimum  
          funding guarantee for school districts and community  
          colleges in 2010-11.  Specifically, this bill:

          1.Makes finding and declarations that the Proposition 98  
            minimum required spending level for school districts and  
            community colleges in 2010-11, derived from the  
            application of the constitutional funding requirements  
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            related to the minimum funding obligations for 2008-09  
            and certified per statute, including allocation of  
            maintenance factor in 2009-10 and 2010-11, exceeds the  
            state's available revenues for this purpose in 2010-11.

          2,Invokes the provision of the California Constitution that  
            allows the Legislature to suspend the Proposition 98  
            minimum required spending level for school districts and  
            community colleges in 2010-11 as calculated by  
            subdivision (b) of Section 8 of Article XVI of the  
            California Constitution.

          3.Specifies the amount of state support that will be  
            provided to school districts and community colleges in  
            2010-11 is $49.658 billion, which includes the amount of  
            the outstanding maintenance factor required to be  
            allocated in 2010-11.  Provides that this level shall not  
            be decreased without subsequent invocation of the  
            provision of the California Constitution that allows the  
            Legislature to suspend the Proposition 98 minimum  
            guarantee.

          4.States that the amount of maintenance factor created in  
            2010-11 shall be calculated pursuant to the Constitution  
            and shall be added to the adjusted maintenance factor  
            outstanding as of the end of 2009-10, less the amount of  
            maintenance factor allocated in the 2010-11 fiscal year.

          5.Declares that this bill take effect immediately as an  
            urgency statute.

           Background

           Subdivision (b) of Section 8 of Article XVI of the  
          California Constitution requires the state to spend a  
          minimum amount of funding on school districts and community  
          colleges every fiscal year, based on specific calculations  
          built on a percentage of General Fund revenues or  
          prior-year education appropriations, enrollment, and  
          economic growth.

          Subdivision (h) of Section 8 of Article XVI of the  
          California Constitution allows for the suspension of  
          subdivision (b) for one year by the enactment of an urgency  







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          statute separate from the budget bill.

          When the state suspends the Proposition 98 minimum funding  
          guarantee, the Proposition 98 formula calls for the  
          creation of maintenance factor that reflects the difference  
          between the amount appropriated for school districts and  
          community colleges and the amount of the minimum guarantee.  
           The maintenance factor allows funding for school districts  
          and community colleges to eventually return to the level  
          that would have otherwise been required without suspension.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          CPM:cm  10/7/10   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

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