Budget squeeze threatens California educational reform. Other states cut back reforms enacted after `A Nation at Risk'

Bill Honig has declared war. The state superintendent of public instruction, flanked by charts and graphs to shore up his position, stood before his department managers like a general before his troops. ``This is a fight over reestablishing the education-reform movement in California,'' Mr. Honig says, with all the zeal of a crusader.

But he is pitted against a formidable adversary - none other than the immensely popular governor of California, George Deukmejian. Honig's mission, in short, is to convince the governor that without more money for public schools in next year's state budget, education reform will grind to a halt in California.

So far, Governor Deukmejian remains unmoved. ``It's a tight budget,'' says Jesse Huff, the governor's director of finance. ``We're getting complaints about the budget from other [interest group] areas, too, so it's not as if education is the only one that's unhappy about it.''

The tug-of-war here underscores a difficulty faced by many other states: how to pay for educational improvements at a time when budgets are increasingly lean.

``Education is definitely the biggest spending issue in the states,'' says Steven Gold of the National Council of State Legislatures. Generally, states ``put in a lot of money'' for elementary and secondary schools between fiscal years 1983 and 1986, he says. ``State spending overall went up 31 percent in those years, while inflation went up only 15 percent.''

Now, however, 23 states have been forced to cut their budgets for the current fiscal year. It's too soon to tell what effect the cuts will have on education reforms, which many states began to enact after publication of the 1983 presidential report ``A Nation at Risk.''

For Honig, the issue is simply a matter of setting policy priorities - and sticking with them. He acknowledges that the Deukmejian administration has made education its top spending priority for the past four years, substantially increasing expenditure per pupil. As a result, the school year is longer, test scores are up, and teacher pay is improving, he says.

``But now, after a few years, everyone is saying that they've got to do other things - build prisons, deal with toxics,'' he says. ``That's fine, but you can't sabotage and sacrifice the schools for it.'' While there are more dollars for schools in the new budget, the increase is completely exhausted - and then some - by inflation and rising enrollment, he says.

At least the two sides agree what would be the most probable solution - higher taxes. The Deukmejian administration doesn't think ``the political climate is there'' to raise taxes, Mr. Huff says. Honig, on the other hand, intends to demonstrate that it is.

Anything having to do with taxes, however, is complicated in California, birthplace of the tax-reform movement. Seven years ago, more than 4 million Californians voted in a state constitutional amendment to limit annual budget increases. Written by tax reformer Paul Gann, the amendment ties state budget increases to a formula based on changes in population and inflation. The state has easily remained under the spending limit until this year. Rising state revenues and low inflation have brought Deukmejian's new budget within one-tenth of 1 percent (or $50 million) of the ceiling.

Honig wants to modify the formula, to provide more leeway in the future. A bill to do so has recently been introduced in the state Senate, but political observers say it is unlikely ever to see the light of day. Already, Honig is rallying a grass-roots coalition of parents, educators, and business people to put an initiative measure on the ballot.

His efforts have not only raised the ire of the governor, but also the wrath of tax-reform advocates. ``If they go after Article 13B [the spending limit], then you will see every little taxpayer organization in this state go after them and beat them down,'' says Lee Phelps of Alliance of California Taxpayers and Involved Voters (ACTIV).

Mr. Phelps also wonders what taxpayers are getting in return for all the money that has been poured into the ``bottomless pit'' of public education.

And he is not alone. The Commission on State Government Organization and Economy, known as the Little Hoover Commission, recently reported that the school system needs to improve its financial accountability.

If there is one thing educators across the US can be faulted for, it's failure to produce hard data linking increased education spending to benefits for society at large, says John Augenblick of AVA, a private consulting firm in Denver that works with state governments nationwide.

Still, there's no disputing that education reform costs big money, he says. Simply reducing class size from 20 students to 19 students per teacher will raise costs 5 percent, Mr. Augenblick says. Other popular reforms - including raising teacher salaries, longer school days, more courses, and an extended school year - are also expensive.

California's Honig, a nationally known education reformer, has implemented many of these changes in state schools - but not to his satisfaction. He convinced Deukmejian to come up with more money for schools in 1983, another tight year. He's convinced he can do it again.

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