BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 851
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          SENATE THIRD READING
          SB 851 (Budget and Fiscal Review Committee)
          As Amended  October 7, 2010
          2/3 vote.  Urgency 

           SENATE VOTE  :Vote not relevant.  
           
           SUMMARY:   Suspends the Proposition 98 minimum funding guarantee  
          for school districts and community colleges for fiscal year (FY)  
          2010-11.  Specifically,  this bill  :

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

          2)Invokes the provision of the state constitution that allows  
            the Legislature to suspend the Proposition 98 minimum required  
            spending level for school districts and community colleges for  
            FY 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 FY 2010-11 as $49.6  
            billion.  Provides that this level shall not be decreased  
            without subsequent invocation of the provision of the state  
            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)Urgency Clause.  Declares this bill take effect immediately as  
            an urgency statute.

           EXISTING LAW  : Subdivision (b) of Section 8 of Article XVI of   
          the California Constitution requires the state to spend a   








                                                                  SB 851
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          minimum amount of funding on school districts and community   
          colleges every fiscal year, based on a specific calculation that  
           considers enrollment, prior-year education appropriations, the  
          growth of the economy and growth of General Fund revenues.   

          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 statute separate from  
          the budget bill.  When the state suspends the Proposition 98  
          minimum funding guarantee, the Proposition 98 formula ensures  
          that the state eventually gets back to the funding level that   
          would have existed had the state not suspended the guarantee.  

           Fiscal Effect  :  This bill suspends, for FY 2010-11, the  
          requirement that the state spend a specific minimum amount on  
          K-14 education, (the minimum Proposition 98 funding guarantee),   
          which is estimated to be approximately $54 billion.
           

          Analysis Prepared by  :   Misty Feusahrens / BUDGET / (916)  
          319-2099 

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