LAO State Budget Update Jennifer Kuhn Legislative Analyst’s Office October 4,

LAO State Budget

LAO State’s General Fund Condition In Millions

LAO Major Actions Taken to Balance Budget: Proposition 98 Prop. 98 Funding Level Assumes Lower State Revenues

LAO Major Actions Taken to Balance Budget: Relies Heavily on Special Funds  Uses almost $1.3 billion in transportation funds to relieve General Fund  Uses about $1.3 billion in tobacco securitization funds to relieve General Fund

LAO Major Actions Taken to Balance Budget: Scores New General Fund Revenue  Scores $1 billion in one-time revenue from sale of EdFund  Scores almost $300 million in new revenue from amended tribal gambling compacts

LAO Major Actions Taken to Balance Budget: Achieves Some Savings  Achieves almost $250 million in social services savings  Achieves about $330 million in Medi-Cal savings

LAO Major Risks to State Budget  Volatility of General Fund revenues  Transportation lawsuit  Sale of EdFund  Amount of tribal gambling revenue  Court-ordered CalSTRS payment

LAO General Fund Spending by Major Program Area Dollars in Millions

LAO K-12 Budget

LAO Funding From All Sources Dollars in Millions

LAO Ongoing Proposition 98 In Millions

LAO Ongoing Proposition 98: Major Actions In Millions

LAO One-Time And Special Funds: Major Actions In Millions

LAO Governor’s Vetoes In Thousands

LAO K-12 Proposition 98 Spending Per Pupil In Billions

LAO Balance on Education Credit Card Grows In Millions

LAO A Look at the Coming Year

LAO Budget Outlook  Heavy reliance on one-time monies for ongoing costs means large operating shortfall in  looks to be tight for K-12 education

LAO Year of Reform?  State Budget Reform?  Year of Education Reform?

LAO State Budget: Considerable Volatility in General Fund Revenues Year-to-Year Percent Change in General Fund Revenues

LAO State Budget: Considerable Volatility in Annual Allocations Year-to-Year Change in General Fund Revenues ( In Billions)

LAO K-12 Education: Possible Finance Reform  Adequacy initiative or lawsuit  Weighted student formula  Categorical block grants

LAO LAO Work-in-Progress Relating to K-12 Finance Reform  Overview of programs serving economically disadvantaged students  Analysis of how districts use EL funds  Response to “Getting Down to Facts” studies