LAO proposes cutting $10 million and 150 jobs from CDE

A plan to cut $10 million and eliminate 150 positions at the California Department of Education drew skepticism but no action Tuesday from an Assembly budget subcommittee.

The proposal from the non-partisan Legislative Analyst came in recognition of spending flexibility that the Legislature gave local educational agencies last year for over 40 categorical programs - programs that the CDE, in theory, also no longer has to oversee.

But members of the Assembly education subcommittee took no action and gave little inkling that they would heed the proposal.

A representative of the CDE said the proposed cut would go well beyond administration of categorical programs.

The LAO seems to believe that most of our staff is occupied in administering categorical programs, and that is not the case," said Carol Bingham, director of the fiscal policy division at the CDE.

The proposal is one of dozens of ideas that the LAO has made aimed at helping the state close a shortfall that remains close to $20 billion.

Gov. Arnold Schwarzenegger is expected to release this revised budget plan on May 14.

At the hearing, representatives from the nonpartisan LAO noted a disparity between the roughly 40 categorical programs that were relieved of mandated funding allocations in last year's agreement and the corresponding CDE employees tasked with overseeing those programs.

"There certainly have been cuts that have occurred, but it's been unclear whether or not any of them have had any influence on the positions related to these programs that are in flexibility," said Jim Soland, education programs specialist from the LAO.

Categorical flexibility was a major component of last year's budget agreement. In the spring of 2009, lawmakers grouped the state's categorical programs into three tiers, and eliminated funding requirements for 40 "Tier III" programs for a five year period ending June, 2013.

While the CDE has adjusted its oversight, Bingham said Tuesday the LAO's proposed reduction would eliminate about half of the department's staff that are supported through the state's general fund.

She noted that several state-funded department divisions - such as the testing division - do not administer any categorical programs.

Further, she argued, the shuttering of program spending mandates does not always eliminate CDE's responsibility to oversee and help administer programs. She noted that some categorical programs are part of larger federal programs that do not eat up state resources.

Also opposed to the measure was Liz Guillen, director of legislative affairs with Public Advocates Inc, who said that local education agencies still depend on CDE representatives to help administer categorical programs.

"If you're intending to eliminate any oversight of categorical programs at the state level, it's akin almost to eliminating the program itself," said Guillen. "And if that's something you're planning on doing, I think that decision needs more transparency."

Assemblywoman Wilmer Carter, D-Rialto, subcommittee chair, asked CDE staff for a list of department personnel whose salaries are supported through the general fund and which ones had been impacted by categorical flexibility provisions.

The majority of CDE funding comes from the federal government. The remainder is supported through a combination of special state funds and a state general fund allocation that is not related to Proposition 98 funding.

The governor's 2010-11 budget provides $213 million in total funding for CDE headquarters staff and assumes about 1500 positions. The allocation would result in an ongoing reduction of $7.9 million and an additional$4.3 million cut related to a state employee pay cut and retirement contribution increase.

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