BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 851| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 CONTINUED SB 851 Page 2 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 SB 851 Page 3 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 **** END ****