Legislative Analyst’s Office report suggests changes to governor’s budget plan

A report released Wednesday by the state Legislative Analyst’s Office on higher education outlines recommended changes to Gov. Jerry Brown’s 2012-13 state budget plan.

The report suggests changes to a number of the features of Brown’s proposal, including changes to Cal Grant eligibility criteria and the removal of earmarks on state funding to the UC and the CSU.

Under Brown’s plan, the GPA requirements for Cal Grants would increase, thereby reducing state expenditures by an estimated $131 million. Nearly one-third of current recipients would be cut off from grant money, according to the report.

Holding off on the GPA requirements in favor of more modest requirements would avoid disproportionate harm to students in need of financial aid, according to the report. Still, the report does not specify an alternate threshold, citing a lack of “data linking financial aid to student outcomes.“

Additionally, the report cautions against Brown’s proposal to afford more financial flexibility to UC and CSU administrators by eliminating earmarks on state appropriations.

Such a change in funding policy “would reduce the Legislature’s ability to ensure that state funds are spent in a manner consistent with its intent,” the report states.

The report also recommends that the state budget not be designed based on the assumption that Brown’s tax initiative — which would temporarily raise income taxes on wealthy Californians and the state sales tax — will pass.

If voters reject Brown’s tax initiative, the UC and the CSU each face a $200 million cut.

“The Legislature could instead take the opposite approach: build a budget that does not rely on the Governor’s tax package, with contingency augmentations if the tax package is approved,” the report states.

Curan Mehra covers higher education.