On November 17, 2021, the California LAO published their report for the 2022-23 Fiscal Outlook for Schools and Community Colleges. Due to an unprecedented increase in revenue, from both income and sales taxes, the forecast is very good for public education.
Understanding how the Proposition 98 guarantee to school funding works is key. As you probably know, this doesn’t mean that per pupil ADA simply goes up. Instead, decisions by the State Legislature drive how prop 98 funds are used, either for one-time or ongoing program expenses. Much of this new revenue, for example, may actually go to programs we’ve already heard about: expanding TK to all 4-year olds, decreasing TK class sizes, increasing access to summer and intersession programs, and more.
Notes of Caution: You may already know these important details, but other constituents might need your help understanding them:
- Pension costs are also predicted to rise. While the Legislature reduced school districts’ increased payments to CalSTRS and CalPERS over the past three years, it’s due to end. The LAO projects those contributions to rise by $1.6 billion next year.
- The LAO is projecting a 5.35% cost of living increase next year.
- Enrollment is projected to continue its decline. And while some of that decline will be offset by the expansion of TK, it is too difficult to predict.
TRiGroup’s Advice: The important thing here is to pay attention to ongoing developments in the coming months and to communicate frequently and broadly. In most cases, people are getting their news about this through short, often sensationalized and agenda-specific sources. As school leaders, you’ll need to have a deeper understanding and be prepared to respond to questions when your budgets for 2022-23 are proposed.