“The governor’s budgeting philosophy continues to be a prudent one for the most part,” is how the California’s Legislative Analyst’s Office described Gov. Jerry Brown’s 2015-16 budget proposal.
Although the LAO review noted some differences with the governor, such as the possibility that revenues this year would exceed the administration’s estimates, in general, the LAO supported Brown’s budget.
“In the near term, the governor’s reluctance to propose significant new program commitments outside of Proposition 98 could help avoid a return to the boom and bust budgeting of the past. Moreover, his proposal to address the state’s retiree health liabilities over the next few decades would, if fully funded, address the last of state government’s large unaddressed liabilities. Over the long run, eliminating these liabilities will significantly lower state costs, affording future generations more flexibility in public budgeting,” was the LAO conclusion.
Unless an unexpected financial market downturn occurs, the LAO estimates state revenue will be $1 billion to $2 billion higher this fiscal year. However, Prop 98, which constitutionally specifies educational funding, will control the use of most the extra funding.
This raised a concern for the LAO. If state revenues falter in a future downturn and the budget is already growing for education spending, this “present[s] a potential challenge for the state budget.”
While the governor’s budget includes a $3.4 billion reserve, the LAO dismisses that as “little protection” if budget deficits similar to the past re-appear.
Educational spending will increase $2.5 billion in 2015-16, in addition to a $2.3 billion upward revision this year. Next year’s budget increases the Local Control Funding by $4 billion, a significant increase for state school districts.
“The governor’s budget is a positive change for Hemet USD. The main element is the increase in the 2015-16 [Local Control] funding … This is about a $6.1 million positive change for Hemet USD next year,” HUSD’s Assistant Superintendent for Business Services Vince Christakos wrote in an email.