May 2025

Proposition 98 Overview

LAO May Outlook Estimates of Proposition 98 Guarantee

Dollars in Millions

  2024-25 2025-26 2026-27 2027-28 2028-29
Minimum Guarantee          
General Fund $86,524 $81,634 $85,179 $91,466 $96,131
Local property tax 32,699 34,243 35,309 36,586 38,464
   Totals $119,223 $115,876 $120,488 $128,052 $134,595
Change From Prior Year          
General Fund $19,509 -$4,890 $3,546 $6,287 $4,665
   Percent change 29.1% -5.7% 4.3% 7.4% 5.1%
Local property tax $1,229 $1,544 $1,066 $1,277 $1,878
   Percent change 3.9% 4.7% 3.1% 3.6% 5.1%
Total guarantee $20,738 -$3,346 $4,612 $7,564 $6,543
   Percent change 21.1% -2.8% 4.0% 6.3% 5.1%
Inputs          
General Fund Tax Revenuea $208,611 $206,516 $214,157 $227,868 $240,979
K-12 average daily attendance 5,453,903 5,479,503 5,451,558 5,418,849 5,357,074
Growth Factors          
K-12 average daily attendance —   0.5% -0.5%b -0.6%b -1.1%
Per capita personal income 3.6   6.4   4.7   4.9   4.8  
Per capita General Fundc 8.7   -0.8   4.0   6.7   6.1  
Maintenance Factor          
Amount created (+) or paid (-) -$4,788 — $776 -$1,515 -$1,000
Total outstandingd 3,507 $3,751 4,702 3,417 2,539
Proposition 98 Reserve          
Deposit/withdrawal (+/-) $1,266 -$412 -$854 $133 $964
Cumulative balance 1,266 854 — 133 1,097
Operative Test 1 1 3 1 1
           
a Excludes nontax revenues and transfers, which do not affect the calculation of the guarantee.
b The change in attendance for calculating the guarantee is deemed to be zero in these years. Under the State Constitution, the guarantee is not reduced for declining attendance unless attendance declined in the two previous years.
c As set forth in the State Constitution, reflects change in per capita General Fund plus 0.5 percent.
d Includes adjustments to the previous year's maintenance factor for growth in per capita personal income and K-12 attendance as required by the State Constitution.