Transcript State Budget Update LAO Jennifer Kuhn Legislative Analyst’s Office

State Budget Update
Jennifer Kuhn
Legislative Analyst’s Office
October 4, 2007
www.lao.ca.gov
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2007-08
State Budget
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State’s General Fund Condition
In Millions
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Major Actions Taken to Balance Budget:
Proposition 98
Prop. 98 Funding Level Assumes Lower State Revenues
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Major Actions Taken to Balance Budget:
Relies Heavily on Special Funds
 Uses almost $1.3 billion in transportation
funds to relieve General Fund
 Uses about $1.3 billion in tobacco
securitization funds to relieve General
Fund
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Major Actions Taken to Balance Budget:
Scores New General Fund Revenue
 Scores $1 billion in one-time revenue
from sale of EdFund
 Scores almost $300 million in new revenue
from amended tribal gambling compacts
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Major Actions Taken to Balance Budget:
Achieves Some Savings
 Achieves almost $250 million in
social services savings
 Achieves about $330 million in
Medi-Cal savings
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Major Risks to State Budget
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Volatility of General Fund revenues
Transportation lawsuit
Sale of EdFund
Amount of tribal gambling revenue
Court-ordered CalSTRS payment
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General Fund Spending by
Major Program Area
Dollars in Millions
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2007-08
K-12 Budget
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Funding From All Sources
Dollars in Millions
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Ongoing Proposition 98
In Millions
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Ongoing Proposition 98:
Major Actions
In Millions
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One-Time And Special Funds:
Major Actions
In Millions
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Governor’s Vetoes
In Thousands
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K-12 Proposition 98
Spending Per Pupil
In Billions
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Balance on Education Credit Card
Grows
In Millions
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A Look at the
Coming Year
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2008-09 Budget Outlook
 Heavy reliance on one-time monies for
ongoing costs means large operating
shortfall in 2008-09
 2008-09 looks to be tight for
K-12 education
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Year of Reform?
 State Budget Reform?
 Year of Education Reform?
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State Budget:
Considerable Volatility in General Fund Revenues
Year-to-Year Percent Change in General Fund Revenues
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State Budget:
Considerable Volatility in Annual Allocations
Year-to-Year Change in General Fund Revenues (In Billions)
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K-12 Education:
Possible Finance Reform
 Adequacy initiative or lawsuit
 Weighted student formula
 Categorical block grants
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LAO Work-in-Progress Relating to
K-12 Finance Reform
 Overview of programs serving
economically disadvantaged students
 Analysis of how districts use EL funds
 Response to “Getting Down to Facts”
studies
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