July 14, 2016 - EdBudget Tables (July 2016)
May 18, 2015 - In this brief, we analyze the Governor’s higher education May Revision proposals. In the first section, we provide an overview of funding for higher education. In the next three sections, we describe and assess the Governor’s major proposals for the University of California (UC), the California State University (CSU), and the Awards for Innovation program, respectively. We discuss proposals for the California Community Colleges (CCC) in our companion Proposition 98 budget brief. The Appendix to the brief contains seven figures that have detailed higher education budget data.
February 27, 2015 - In this report, we provide an overview of the Governor’s higher education budget. We then review the segments' performance in certain key areas and assess the degree to which the segments require enrollment growth funding, base funding increases, and facilities funding. We find the segments have improved performance in some areas but additional improvement is needed. We find little to warrant additional enrollment growth at UC and CSU, and available data indicate CCC likely will not use all the growth funding provided in 2014-15. We recommend against unallocated budget increases, instead recommending that the Legislature link base increases to a cost-of-living adjustment and any additional increases to specified state priorities. We review several facility proposals and make various related recommendations, including recommending the Legislature establish state facility priorities and require the segments to submit a report describing how they plan to eliminate their maintenance backlogs.
October 5, 2016 - Each year, the Legislative Analyst’s Office publishes the California Spending Plan to summarize the annual state budget. This publication discusses the 2016–17 Budget Act and other major budget actions approved during 2016. Unless indicated otherwise, figures and dollar amounts generally refer to budget actions passed as part of the June 2016 budget package, as signed into law on June 27 and July 1, 2016. In some cases, as noted, we discuss later budget actions approved during August 2016 by the Legislature. During August, for example, the Legislature and the Governor agreed to spend certain cap–and–trade funds. The budget totals include $400 million (General Fund) for affordable housing even though the Legislature and Governor have not reached agreement on this spending.
This year's California Spending Plan includes an interactive graphic to help the reader visualize how the state budget spent $167 billion in total state revenues.
November 19, 2014 - The 20th annual edition of the LAO's Fiscal Outlook—a look at possible state revenue and spending trends over the next five years—reflects anticipated progress in building budget reserves under the recently approved Proposition 2. Specifically, absent new budget commitments, we estimate the state would end 2015-16 with $4.2 billion in total reserves, $2 billion of which would result from Proposition 2's new reserve rules. A $4 billion reserve would mark significant progress for the state, but maintaining such a reserve in 2015-16 would mean little or no new spending commitments outside of Proposition 98, the funding formula for schools and community colleges. Our higher General Fund revenue estimates translate to $6.4 billion available in 2015-16 for the state's Proposition 98 priorities. The report also discusses choices facing the state in implementing Proposition 2, such as choices about which budgetary and retirement debts to repay with dedicated Proposition 2 funds over the next 15 years.
February 12, 2014 - This report analyzes the Governor’s 2014-15 higher education budget. We continue to have serious concerns with the Governor’s approach to funding the universities, particularly as it significantly diminishes the Legislature’s role in key budget decisions and allows the universities to pursue segmental over state interests. We recommend the Legislature take an alternative approach that: (1) designates funding for specific purposes (including enrollment at the California State University and debt-service payments), (2) shares cost increases among the state and students, and (3) monitors the universities’ performance in specific areas (such as student success). We think the Governor’s approach to funding the community colleges is much better but recommend various ways for the Legislature to refine specific community college proposals. Most notably, rather than augmenting a single student support categorical program by $200 million, we recommend the Legislature consolidate seven student support programs into a block grant, thereby offering colleges considerably more flexibility in deciding the best ways to support their students.
May 16, 2016 - Notable new higher education proposals in the May Revision include a $75 million increase for community college general purpose apportionments, a $26 million increase for two initiatives to improve California State University (CSU) graduation rates, and a $4 million increase to expand the University of California’s (UC’s) online A-G course offerings. We recommend adopting the proposal for community college apportionments in order to provide colleges with more flexible funding. We recommend rejecting the Governor’s proposals for UC and CSU, largely due to insufficient information about why the funding increases are needed. In this report, we also assess and make recommendations on various other higher education May Revision proposals.
October 19, 2015 - Each year, the Legislative Analyst's Office publishes its Spending Plan publication to summarize the state's annual budget. Passed in June 2015, with various amendments later during the year's legislative session, the state's 2015-16 spending plan includes a large increase in funding for schools and community colleges. The budget makes augmentations to child care and preschool, higher education, and various health and human services programs. The plan also creates a new state earned income tax credit to increase the after-tax income of low-income workers.
February 8, 2012 - The Governor’s budget reduces funding for state financial aid programs by over $300 million. At the same time, it generally maintains or augments funding for the public colleges and universities in 2012-13; reduces budgetary controls on their spending; and commits to annual funding increases in subsequent years, contingent on their meeting undefined performance targets. Furthermore, higher education funding would be subject to “trigger cuts” if the Governor’s proposed tax increases are not approved by voters in November. This report makes a number of recommendations for legislative consideration, including alternative ways to reduce financial aid costs that would have better outcomes for students and the state. The report also urges caution in relaxing budgetary controls in higher education, and identifies alternative ways to structure trigger cuts in order to reduce uncertainty and disruption in higher education programs.
November 21, 2019 - This post describes the key factors driving recent spending increases on Cal Grants, the state’s main form of student financial aid. It also discusses our Cal Grant spending estimates through 2023-24.
In addition to this report, you can find the main California's Fiscal Outlook report along with a collection of other fiscal outlook material on our fiscal outlook budget page.
January 13, 2015 - In the Governor's 2015-16 budget proposal, the administration raises its revenue estimates, and this results in a multibillion-dollar influx of new funds for schools and community colleges under the Proposition 98 minimum funding guarantee. The Governor's plan identifies cost pressures and budget risks in health and human services programs, and new program commitments outside of Proposition 98 are limited. The Governor's proposal to pay off the state's retiree health liabilities over the next few decades would, if funded, address the last of state government's large unaddressed liabilities. We conclude the state likely will collect more tax revenue in 2014-15 than the administration now estimates. Barring a sustained stock market drop, an additional 2014-15 revenue gain of $1 billion to $2 billion seems likely in addition to the Governor's budget projection. Even bigger gains of a few billion dollars more are possible in 2014-15. These additional 2014-15 revenues will go largely or entirely to schools and community colleges and could result in a few billion dollars of higher ongoing state payments to schools. Whether tax revenues grow further, stagnate, or, in the worst case, decline in 2015-16 will depend in large part on trends in volatile capital gains and business income.
October 11, 2021 - This budget post summarizes the state’s 2021‑22 spending package for higher education. It is part of our Spending Plan series. In this post, we cover spending for the California Community Colleges (CCC), California State University (CSU), University of California (UC), student financial aid, California State Library, and certain initiatives that crosscut the education segments.
Correction (6/10/22): Totals for on-going and one-time UC core funding have been corrected.
March 30, 2022 - This post describes the differences between the original Middle Class Scholarship program and the revamped program scheduled to go into effect in 2022-23. It then examines the estimated impacts of the revamped program and raises associated issues for legislative consideration.
November 18, 2015 - California's state budget is better prepared for an economic downturn than it has been at any point in decades. Under the main economic scenario in this year's LAO Fiscal Outlook, 2016-17 would end with reserves of $11.5 billion, assuming the state makes no new budget commitments through next year. If the economy continues to grow through 2019-20, annual operating surpluses and larger reserves could materialize, and there may be capacity for some new budget commitments—whether spending increases or tax reductions. An economic or stock market downturn, however, could occur during our outlook period. To illustrate this economic uncertainty, we provide projections under alternative scenarios such as a hypothetical recession that causes budget deficits to re-emerge. The more new budget commitments are made in 2016-17, the more likely it is that the state would face difficult choices—such as spending cuts and tax increases—later.