Sometimes there’s such a thing as being too prompt. Although an ACSA budget advisory was released within hours of the May Revision’s announcement, a mere four hours after the ACSA Alert went out the Legislative Analyst’s Office announced it had discovered a technical error in the Department of Finance calculation of Proposition 98, creating a large shortfall in the May Revision.

As a result of this miscalculation, the May Revision is off by $364 million in ongoing expenditures. The error occurred when the governor’s staff forgot to factor in the cost of the 2006-07 equalization appropriation, which amounted to $350 million. Then, with 2007-08 statutory COLA added in, this amount becomes approximately $364 million.

This error will have serious ramifications on the administration’s K-12 May Revision proposals.

“We note that equalization dollars are not at risk,” said ACSA Legislative Advocate Brett McFadden. “School districts will receive those dollars per existing statute. The problem now is that there is a $364 million ongoing hole in the budget that needs to be refilled.”

The administration has admitted the error and stated that it will fix the problem in a manner that does not adversely impact such areas as Prop. 98 revenue limits or equalization, COLA and growth funding. ACSA and the Education Coalition have recommended addressing the $364 million shortfall by eliminating all of the administration’s new ongoing programs and using a portion of one-time dollars proposed in the May Revision.

ACSA will keep members of the association apprised of budget developments as they occur.