The 2026-27 Budget: Proposition 98 Guarantee and K-12 Spending Plan

Feb 4, 2026 - If the stock market declines or an economic downturn occurs, the deficits would be much larger. Moreover, these estimates exclude the future cost of providing the $5.6   billion payment. Making that payment in next year ’s budget, for example, would increase the deficit to about $32   billion (holding other factors constant).
https://lao.ca.gov/Publications/Report/5110

Assessing a Shift to Enrollment-Based School Funding

Jan 6, 2026 - (The  state adopted this mechanism in the early 1990s to prevent disproportionate funding reductions during economic downturns.) The state could use this approach during a transition period while districts adjust to enrollment ‑based funding, and then repeal it once attendance rates stabilize.
https://lao.ca.gov/Publications/Report/5100