Education Publications

The 2021-22 Budget: Analysis of the Major University Proposals

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February 1, 2021 - This report analyzes the Governor’s major budget proposals for the universities, covering base funding, enrollment, students’ basic needs, faculty professional development, and deferred maintenance.

The 2021-22 Budget: Overview of Higher Education Budget

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February 1, 2021 - Assembly Budget Subcommittee No. 2 on Education Finance.

Follow-up Evaluation of the District of Choice Program

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February 1, 2021 - The District of Choice program is one of several laws allowing students to transfer from one school district to another school district. The program is scheduled to sunset on July 1, 2023. This evaluation, prepared at the request of the Legislature, assesses recent trends in the program and provides our recommendations regarding reauthorization. It is a follow-up to our previous evaluation, published in January 2016.

The 2021-22 Budget: Extended Learning and Academic Support

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January 29, 2021 - In this post, we provide background on school closures and recent funding to address learning loss, describe the Governor’s proposal to allocate $4.6 billion to schools in spring 2021 to address student learning loss caused by the coronavirus disease 2019 pandemic, assess the proposal, and describe our recommendations to the Legislature.

Update on Community College Reserves

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January 27, 2021 - In this post, we describe community college reserve policies and track local reserve levels over time. We focus on local reserve levels because they are a key indicator of the overall fiscal health of community colleges.

The 2021-22 Budget: Overview of Proposition 98 Budget Proposals

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January 25, 2021 - This handout analyzes the overall architecture of the Governor's plan for school and community college funding, including major spending proposals and underlying estimates of the Proposition 98 minimum guarantee.

Second Round of Higher Education Federal Relief Funds

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January 20, 2021 - The Coronavirus Response and Relief Supplemental Appropriations Act provides the second round of federal relief funding for higher education. In this post, we recap the first round of federal relief funding for higher education, then describe the key elements of the second round of funding. We also compare funding allocations for higher education institutions in California under the first and second rounds of funding.

The 2021-22 Budget: In-Person Instruction Grants

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January 20, 2021 - This handout provides background on school reopening in California, describes the Governor's proposal for immediate action to encourage schools to reopen for elementary students, details issues for the Legislature to consider, and offers options for the Legislature to modify the proposal.

The 2021-22 Budget: Overview of the Governor's Budget

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January 10, 2021 - This report provides a brief summary and initial assessment of the proposed 2021-22 Governor’s Budget.

Correction 1/11/21: Totals for immediate and early action proposals have been corrected.

California Community Colleges—Managing Cash in a Time of State Payment Deferrals

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December 18, 2020 - To help address the state’s large budget deficit as estimated in June 2020, the 2020-21 budget package deferred a substantial amount of General Fund payments to schools and the California Community Colleges (CCC). In this post, we (1) provide background on community college cash flow and cash management, (2) describe the community college deferrals included in the state’s 2020-21 budget package, (3) explain how the CCC Chancellor’s Office is implementing these deferrals, (4) discuss how community college districts are responding, and (5) present options for the Legislature to consider, particularly given the improved budget outlook.

The 2021-22 Budget: The Fiscal Outlook for Schools and Community Colleges

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November 18, 2020 - This report provides our fiscal outlook for schools and community colleges. State budgeting for schools and the California Community Colleges is governed largely by Proposition 98. The measure establishes a minimum funding requirement for K‑14 education commonly known as the minimum guarantee. This report provides our estimate of the minimum guarantee for the upcoming budget cycle. (The 2021‑22 Budget: California’s Fiscal Outlook contains an abbreviated version of our Proposition 98 outlook, along with the outlook for other major programs in the state budget.)

The 2021-22 Budget: California's Fiscal Outlook

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November 18, 2020 - The annual Fiscal Outlook publication gives our office’s independent assessment of the California state budget condition for the upcoming fiscal year and over the longer term. We find the budget situation has improved considerably relative to the June budget act with an estimated $26 billion windfall in 2021-22. However, the state also faces an operating deficit beginning in 2021-22 and throughout the outlook period, growing to $17 billion by 2024-25. Our analysis also finds it is quite unlikely for revenues to grow fast enough for the budget to break even and erase the operating deficit.

In addition to The 2021-22 Budget: California’s Fiscal Outlook report and the accompanying The 2021-22 Budget: The Fiscal Outlook for Schools and Community Colleges report, several related posts on health and human services, economics and taxes, and other issues will be published in the coming days.

Update on School District Budgets

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November 16, 2020 - This post provides an update on the fiscal condition of California’s school districts as the state begins the process for developing its 2021-22 budget.

An Analysis of University Reserves

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November 10, 2020 - The coronavirus disease 2019 (COVID-19) pandemic, the shift to campuses operating re-motely, the economic downturn, and state funding reductions have created fiscal challenges for the California State University (CSU) and the University of California (UC). To help address these challenges, the 2020-21 Budget Act signaled the Legislature’s intent that the universities begin drawing down their core reserves for academic programs. Prior to the pandemic, the most recent data available showed that core reserves totaled $1.7 billion at CSU and $1.2 billion at UC. CSU and UC also plan to use their noncore reserves to maintain their self-supporting pro-grams (such as housing and parking), which have lost revenue due to remote operations. Importantly, though the state viewed the universities’ reserves as a budget tool for mitigating funding reductions this year, state law is silent on the level of reserves CSU and UC are to carry, the purposes of those reserves, and the interaction of those reserves with the state’s reserves. We encourage the Legislature to set clearer expectations regarding the state’s and the segments’ responsibilities for building reserves for future economic uncertainties. Developing a specific policy in this area would benefit from further analysis, as the reserve levels required to respond to any future situation would depend upon many factors (including the magnitude of a future economic downturn and the likelihood the state reduces funding for the universities).

Updated 12/10/20: This post has been updated to reflect new reserve levels at UC Santa Barbara.

An Analysis of University Cash Management Issues

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November 10, 2020 - In contrast to the state, the California State University and the University of California typically do not face cash timing issues. The universities also tend to have relatively larger cash cushions, which have allowed them over time to invest more of their cash in long-term investment accounts and even assist the state in managing its cash challenges. The coronavirus disease 2019 (COVID-19) pandemic and recession, however, have changed these dynamics. While the state has a larger cash cushion compared to previous recessions, the pandemic has resulted in notable revenue declines at campuses, which have weakened their cash positions. To weather the reduction in revenues, the universities have implemented, or are considering, internal borrowing and transfers, shifting more money back into short-term investment accounts, and issuing bonds to help cover operating costs. These actions will help the universities meet the unprecedented challenges wrought by the pandemic, but they come with trade-offs and risks. Given these developments, monitoring the universities’ fiscal condition over the coming years will be especially important for the Legislature.