February 10, 2017 - Our 2016-17 Proposition 98 Education Analysis provided an in-depth analysis of the county office of education “minimum state aid” provision. In this analysis, we provide an update on the escalating cost of the provision and recommend the Legislature repeal the provision.
February 11, 2021 - This publication examines the impacts of the novel coronavirus disease 2019 (COVID-19) pandemic and prior-year reductions on trial court operations. The publication also identifies issues for the Legislature to consider when determining the appropriate level of overall funding for trial court operations in 2021-22 and our analysis of three of the Governor’s major budget proposals for trial court operations.
May 16, 2016 - In this brief, we analyze the Governor’s Proposition 98 May Revision budget package. In the first section, we focus on changes in the overall Proposition 98 funding level under the May Revision compared to the Governor’s January budget. In the next three sections, we describe and assess the major changes in specific Proposition 98 proposals for K-12 education, early education, and the California Community Colleges (CCC), respectively.
January 12, 2018 - This publication is our office’s initial response to the Governor’s 2018-19 budget. In the proposed plan, the Governor places a high priority on building reserves, proposing a total reserve balance of nearly $16 billion. We believe the Governor’s continued focus on building more reserves is prudent in light of economic and federal budget uncertainty. In addition to building reserves, the Governor’s proposed budget allocates sizeable funding increases available within the constitutionally required guarantee for schools and community colleges and supports a variety of new infrastructure projects. This report also discusses how new federal tax changes may affect state revenues and reasons why we believe there could be more resources available in May.
April 20, 2017 - Presented to Senate Budget and Fiscal Review Subcommittee No. 1 on Education
March 7, 2017 - Presented to: Assembly Budget Subcommittee No. 2 on Education Finance
January 13, 2017 - On January 10, 2017, the Governor presented his Proposition 98 budget package to the Legislature. In this post, we provide an overview and initial assessment of the package.
May 14, 2018 - In this report, we analyze the 2018-19 May Revision education proposals. We first provide an overview of Proposition 98 funding and then focus on the Governor’s major proposals for K‑12 education, child care and preschool, community colleges, universities, and student financial aid. In the pages that follow, we offer many specific recommendations for the Legislature to consider. Our package of recommendations includes adopting some proposals, modifying others in certain ways, rejecting others but inviting better proposals next year, and rejecting some proposals in their entirety.
February 6, 2017 - In 2013-14, the state created the Local Control Funding Formula (LCFF) for county offices of education (COEs). With this funding, COEs are required to (1) provide alternative education to certain at-risk students and (2) oversee school districts’ budgets and academic plans. COEs may use any funding available after completing these tasks on optional activities that reflect their own priorities. We have concerns that providing funding directly to COEs for alternative education and optional activities detaches school districts from the decision making process of how to best serve their students. To address these concerns, we recommend the Legislature shift that funding to districts and allow them to contract with COEs (or other providers) for services. Because oversight of school districts’ budgets and academic plans likely is both more effective and efficient when performed at the regional rather than state level, we recommend the Legislature fund COEs directly for these activities. Because our recommendations signify major changes in the way the state funds COEs, we recommend the Legislature phase in the new funding model over several years.
(2/17/17 -- Corrected district services funding for district in county on figure 5.)
May 17, 2016 - At key times during the state’s budget cycle, we post tables containing important information about the education parts of the budget. This May posting reflects the 2016-17 May Revision proposals. The tables cover Proposition 98, K-12 education, child care and preschool, higher education, and student financial aid.
January 13, 2017 - At key times during the state's budget cycle, we post tables containing important information about the education parts of the budget. This initial January posting reflects the 2017-18 Governor's Budget proposals. The tables cover Proposition 98, K-12 education, child care and preschool, higher education, and student financial aid. We will publish additional tables as we have them available.
March 19, 2015 - Presented to Senate Budget and Fiscal Review Subcommittee No. 1 on Education
March 6, 2020 - This report focuses on a state law enacted in the 1990s that shifts some of the property tax revenue in certain counties from schools and community colleges to other local agencies. For historical reasons, the shifted revenue is known as “excess ERAF.” (The acronym refers to the local accounts—known as Educational Revenue Augmentation Funds—that facilitate the shift.) We recently found that some counties are calculating excess ERAF in ways that seem contrary to state law and shift too much property tax revenue from schools to other agencies. We have three specific concerns related to the calculation of excess ERAF that together affect about $350 million in annual property tax revenue. Earlier this year, the Newsom administration began to address one of these concerns. In this report, we recommend the Legislature direct the administration to enforce state law on our other two concerns. We also recommend improving oversight to prevent similar issues from arising in the future.
May 17, 2013 - In the May Revision, the administration forecasts that weaker tax collections in the coming months will erode the vast majority of the $4.5 billion of unexpected tax revenues collected since January. We do not agree with the administration's view of the state's revenue situation. As a result, our forecast now is $3.2 billion higher than the administration's May Revision total for 2011-12, 2012-13, and 2013-14 combined. While the state's fiscal condition has improved, there are many good reasons for the Legislature to adopt a cautious budgetary posture. After years of "boom and bust" budgeting, California's leaders now have the opportunity to build a budget for future years that gives the state more choices about how to build reserves in times of healthy revenue growth, prioritize future state spending, and pay off past debts. Given the improved fiscal forecast, we believe this is an ideal time for the Legislature to begin addressing its huge budgetary and retirement liabilities. In addition, given various risks to the economic outlook and the state's budgetary volatility, building larger state budget reserves in the coming years is an important priority, as doing so means there will be less necessity during future downturns to cut public spending, as occurred in recent years.
November 20, 2013 - The 19th annual edition of the LAO's Fiscal Outlook--a forecast of California's state General Fund revenues and expenditures over the next six years--reflects continued improvement in the state's finances. A restrained budget for 2013-14, combined with our updated forecast of increased state revenues, has produced a promising budget situation for 2014-15. Our forecast indicates that, absent any changes to current laws and policies, the state would end 2014-15 with a multibillion-dollar reserve. Continued caution is needed, however, given that these surpluses are dependent on a number of assumptions that may not come to pass. For example, as we discuss in this report, an economic downturn within the next few years could quickly result in a return to operating deficits. In this report, we outline a strategic approach for allocating potential surpluses that prepares for the next economic downturn while paying for past commitments, maintaining existing programs, and making new budgetary commitments incrementally to address other public priorities.