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LAO Forecasts “Substantial Funding” for Schools, Community Colleges in 2018-19 Budget Cycle

December 4, 2017

On November 15, the California Legislative Analyst’s Office (LAO) released an optimistic forecast for education funding in the state for the 2018-19 budget cycle.

According to the executive summary of the LAO’s report:

Substantial Funding Available for Schools and Community Colleges in Coming Budget Cycle. Each year, the state calculates a “minimum guarantee” for school and community college funding based upon a set of formulas established by Proposition 98 (1988). Under our near‑term outlook, we estimate that the 2017‑18 guarantee is up $651 million (0.9 percent) from the level assumed in the June budget plan and the 2018-19 guarantee is up $2.6 billion (3.4 percent) over the revised 2017-18 level. After accounting for growth in the minimum guarantee and backing out prior-year one-time spending, among other adjustments, we estimate the Legislature would have $5.3 billion in uncommitted Proposition 98 funds to allocate in 2018-19. The state could use this funding to reach full implementation of the Local Control Funding Formula (estimated to cost $2.7 billion) and provide select K-14 programs a 1.8 percent cost-of-living adjustment (estimated to cost $228 million). Even after making these augmentations, the state would have another $2.4 billion available. A key decision for the Legislature will be the amount of this funding to allocate for ongoing versus one-time activities. Ongoing augmentations would help districts manage various cost pressures, including notable increases in pension contributions, whereas one‑time funding would provide a buffer in case the guarantee drops in 2019-20. Having such a buffer would mitigate possible future cuts to ongoing K-14 programs.

The complete report is available online at the link below:

http://www.lao.ca.gov/Publications/Report/3716

Source:  Legislative Anlyst’s Office



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