Gov. to Start Repaying Schools

SACRAMENTO — Gov. Arnold Schwarzenegger offered an olive branch to educators Tuesday with a proposal to begin repaying money the state borrowed from schools in recent years to balance the budget.

The plan to give schools about $1.7 billion extra -- paid for with unanticipated state revenue -- will be part of the budget Schwarzenegger proposes next week. It signals an effort to patch up his shredded relationship with the state’s major education groups as he seeks reelection in November.

“We have the money this year to give it to the education community,” the governor told reporters after administration officials announced the proposal. “They deserve it.”

The move comes eight weeks after Schwarzenegger ended a vigorous campaign for Proposition 76, which would have capped state spending and cost schools billions. That item, rejected by voters in the November special election, had prompted school groups to bankroll a series of bruising television ads that helped send the governor’s approval rating plummeting.

Educators emerged from a meeting with Schwarzenegger on Tuesday to laud him for seeking common ground. But they said they’re entitled to billions more; that his plan shortchanges schools of money they contributed to closing budget deficits in each of the last two years.

“This is a good start,” said Scott Plotkin, executive director of the California School Boards Assn. “I think he’s moving in the right direction.”

But Plotkin said that although education groups “are not looking for another fight,” they believe the state owes local districts $3.8 billion more.

School officials were also skeptical about the strings attached to Schwarzenegger’s proposal: The governor wants some of the new money directed to his pet projects. Those include vocational education classes; grants to pay for new art, music and physical education programs; teacher training; and tutoring to help high school students pass exit exams.

“It’s not always about how much money but how do you spend the money,” he said.

Plotkin said local school officials are in a better position than the state to apportion the money effectively. Schools don’t have the funds to pay for many of their students’ most basic needs, he and others say, and they would rather be able to spend the money on such things as books and class-size reduction.

Still, officials in the Los Angeles Unified School District welcomed the news that more money could be on the way. The district has weathered years of deep budget cuts.

Supt. Roy Romer said he would use additional state funds to reduce the size of middle school and high school math classes, many of which now hover at about 40 students. The money could also help cover escalating healthcare costs, he said.

“This is a step in the right direction. I’m encouraged by it,” Romer said. “It’s not the whole package. But it’s going down the road a step. Obviously, the governor is trying to make up for the deal he did not keep before, and I applaud that effort.”

That deal was made after the governor took office in fall 2003, as he struggled to balance his first budget. Schools agreed to give up $2 billion they were owed under voter-approved spending formulas in return for his pledge that all the money would be restored in coming years.

A year later, the state still had a deficit, and Schwarzenegger kept the reduction in place. Now, as the 2006-07 budget is readied, educators say the tab has grown to $5.5 billion -- the amount schools would get if they had been fully funded since 2004.

Schwarzenegger has made several recent moves that position him closer to the political center as he prepares to launch his reelection campaign in earnest. He has also announced that he wants to cancel a scheduled tuition increase at state colleges and universities, raise the minimum wage and help Californians buy cheaper medicines.

In his State of the State address Thursday, he is expected to announce plans for a large borrowing program to improve transportation systems, hospitals, ports and levees. Tuesday he told reporters the money could also be used to build thousands of new schools and modernize others.

Legislative leaders, meanwhile, said they were encouraged by the education funding plan.

“This is a very positive step for the governor,” said Assembly Speaker Fabian Nunez (D-Los Angeles). “It does a lot to rebuild his relationship with us.”

Nunez, who in the past has sharply criticized the governor’s education agenda, suggested that the Legislature and administration could devise a plan to pay back $5.5 billion over several years. If so, he said, “the sky might clear itself of the partisan bickering we dealt with last year,” he said.

Administration officials, who contend that the governor never committed to paying that amount, said they are willing to talk about future funding.

Today, Schwarzenegger will visit a Los Angeles school to highlight a ballot initiative that he successfully championed before he was governor to fund after-school activities for students all over California. The measure is scheduled to take effect in the coming fiscal year, when the state will be required to spend $428 million for the program.

Nunez and Senate President Pro Tem Don Perata (D-Oakland) say the state cannot afford the program, and they would like to put a measure on the ballot suspending it. “Voters approved this when the state had the money to pay for it,” Nunez said, but that is no longer the case.

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Times staff writer Peter Nicholas contributed to this report from Sacramento.