Governor Newsom approached his first budget with the possibility of an economic downturn clearly on his mind. A large portion of new revenue went to pay down general fund debts and liabilities, and a high percentage of new spending was provided on a one-time rather than ongoing basis. With many economists continuing to predict a downturn in the coming months, it is likely the Governor will remain fairly cautious with his second budget proposal.
Currently, state tax receipts remain in line with the estimates made in the last budget, and if this trend continues it would mean another year of continued growth for the general fund and for Prop 98. But there are concerns the budget could be impacted by slower growth in the second half of the fiscal year. From a political perspective, there could be some left over tension from the battles and bruises at the end of the last legislative session, and it remains to be seen if the Democratic supermajority in both houses will continue to defer to the Governor on the budget and other priorities. As always, our team will focus on the complex fiscal and political factors that will impact the development of the next budget.
With respect to the K-12 budget, our primary concern in the short-term is that an economic slowdown could lead to slower growth in the Proposition 98 guarantee, creating major challenges for schools managing rising costs related to high COLAs, increased pension contributions, etc. This year, some of the issues we expect will draw attention include:
- LCFF, including discussions of funding sufficiency and possible ballot measures to raise additional revenues for schools
- Special education, including both funding and reform proposals
- Possible assistance with CalSTRS/CalPERS costs
- Early Childhood/Early Learning/Child Care expansion
- Mental health programs and funding
We will also discuss the latest information and polling on the state school facilities bond (Proposition 13), which will appear on the March 2020 ballot.
These workshops are presented by Capitol Advisors Group in collaboration with your county office of education, ACSA, CSBA, AALRR and SSDA. The workshops and materials are provided at no-cost to attendees.
