Education officials allege that Gov. Brown and lawmakers illegally shortchanged them by $2 billion. And disability rights groups plan to sue to block $100 million in service cuts. The suits add to the headaches facing the Capitol.

By Shane Goldmacher, Los Angeles Times
September 28, 2011

Reporting from Sacramento — California’s precariously balanced state budget, already teetering in the continuing economic upheaval, came under further siege Tuesday as two groups announced lawsuits challenging the spending plan.

School officials, including those at the L.A. Unified School District, said they would file suit Wednesday alleging that Gov. Jerry Brown and state legislators illegally manipulated California’s voter-approved education funding formula to shortchange them by $2 billion. And a coalition of disability-rights activists said they planned to sue Wednesday as well to block nearly $100 million in cuts to services for the developmentally disabled.

The new legal challenges add to a growing list of fiscal headaches for Sacramento.

The state is already in court battling redevelopment agencies over an attempt to take $1.7 billion from them. And California officials are pleading with the Obama administration for permission to reduce Medi-Cal spending by $1.7 billion.

The sluggish economy and turmoil in the financial markets, meanwhile, remain a huge budgetary threat. Lawmakers stitched together California’s spending plan in June by building in a $4-billion windfall from a rebounding economy. It is unclear whether that money will materialize.

“The recovery is stalled out,” said Jerry Nickelsburg, senior economist at the UCLA Anderson Forecast. “Slow growth means less income; less income means less tax revenue.”

If state income falls short of lawmakers’ budget forecast, automatic cuts inserted as a fiscal safeguard will go into effect, slashing spending on schools, universities, libraries and programs for the needy. Some school districts could shorten the academic year by up to seven days.

“There is a good chance we will see some of the spending cut triggers in the budget actually pulled,” Nickelsburg said. The first tier of cuts would take effect if California finance officials determine that the state’s tax collections later this year are at least $1 billion less than anticipated.

California finance officials say it’s not time for doom-and-gloom predictions — yet.

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