Transcript
Every year, by May 15, the governor has to revise his proposed budget, and this is when the budget season really kicks off.
So, just as individuals are concerned about personal finances, retirements, the impacts of inflation, and uncertainty about government services, the state is facing those same sorts of uncertainties. And in this case, uncertainty really rolls downhill. There’s national uncertainty, which is causing state revenue uncertainty and budget uncertainty, which then impacts the state’s education budget decisions, that will then impact what school districts are facing as they head into adopting their budgets by the end of June.
So, we know that the revenue outlook for the current year that ends June 30 looks pretty good, so will that protect us?
I’d sort of hoped that they would, but the short answer is no, and that’s because of some nuances in how Prop 98 works. A lot of those extra revenues that have come in are actually going to count against last year, the 2023–24 fiscal year. And in that year, the Legislature actually suspended the constitutional guarantee for a year. So even though there are extra revenues, none of those revenues will go to schools.
As we look to the future, to the 2025–26 school year, the forecasts are looking much more pessimistic. The Legislative Analyst’s Office just came out with a projection of revenues for next year being down around $8 billion. That would trickle down to schools getting about $3.5 billion less compared to what their current programs receive.
I would expect schools to get the program that’s in place for the current year, plus a cost-of-living adjustment (COLA), which is currently expected to be about 2.3%. That probably seems pretty low to most folks, especially given some of the costs districts might face—salary increases that have already happened due to inflation, the rising costs teachers are facing, plus pensions and other obligations. So, the costs districts are facing may be going up more than the 2.3% COLA they’re getting.