The Associated Press reported May 29 that the state has raided a fund created to pay for scholarships for children of Californians killed in the September 11, 2001 terrorist attacks, and has used the money for state general fund spending.
The AP's review of the California Memorial Scholarship Fund (which receives money from the sale of special license plates that carry the slogan, "We Will Never Forget") found that of the $15 million collected, "$3 million was raided by Governor Jerry Brown and his predecessor, Arnold Schwarzenegger, to plug the state's budget deficit."
The news service said "only a small fraction of the money went to scholarships," while 40 percent has funded anti-terror training programs, and "millions more have been spent on budget items with little relation to direct threats of terrorism, including livestock diseases and workplace safety."
Adding insult to injury, the California Department of Motor Vehicles has been advertising the plates as helping the children of 9/11 victims, even though the state stopped funding the scholarship program seven years ago. The DMV advertises the plates with the slogan, "Be a patriot."
"I can't believe they would do that," said Candice Hoglan, who bought a plate to commemorate a nephew who was killed in the terrorist attacks. "We're paying extra for the plate. We're making a point, and it means a lot to us."
The 2008 and 2011 raids were structured as loans, with language stating that the money must be repaid if it is needed.
Reacting to the report, Governor Brown on May 30 ordered an audit of California's specialty license plate program. A spokeswoman for the governor said the administration has no immediate plans to return $3 million to the scholarship fund, but would consider repaying the loan if it was shown that the missing money was negatively affecting the memorial license plate program.
The AP report, which also found lax oversight of nine other specialty license plate funds, comes at a time when the Legislature is considering creating additional specialty plates to raise revenue, and when legislative Democrats are pursuing a business tax increase to fund a new scholarship program. (Sources: Associated Press story in the San Diego Union-Tribune, May 29; Los Angeles Daily News, May 30.)
In other state budget news:
Legislative Analyst Says Governor's Budget Would Produce "Unreasonable Outcomes" for Schools. The Legislative Analyst's Office (LAO) recommended May 31 that the Legislature reject Governor Jerry Brown's approach to education budgeting, and "adopt a budget package based upon a more reasonable approach."
The LAO wrote:
"The Governor's Proposition 98 budget package is built on two main assumptions regarding the creation and payment of 'maintenance factor.' These two assumptions produce unreasonable outcomes for schools and the rest of the state budget in the near term and long term. In particular, the Governor's approach would ratchet down the Proposition 98 base in some years (including 2011-12), ratchet up the base in other years (including 2012-13), and, in some cases (including 2012-13 and 2014-15), lead to schools receiving almost exclusive benefit from any growth in state revenues. We recommend the Legislature reject the Governor's approach and adopt a budget package based upon a more reasonable approach. Specifically, under our recommended approach, maintenance factor is created any time school funding falls below the level otherwise needed to keep pace with growth in the economy, and maintenance factor is paid such that school funding is built up to the level it otherwise would have been absent the earlier shortfalls. We believe our recommended approach both keeps the underlying rationale for the creation and payment of maintenance factor linked and goes furthest in honoring the intent of Proposition 98 and Proposition 111."
June 1, 2012
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