February 27, 2008

LAO Response to the Governor’s State Budget Proposal

Just as Governor Schwarzenegger starts the annual State Budget dance, the Legislative Analyst’s Office (LAO) releases her response on how the dance should progress.  The LAO has made the following major recommendations:

• No COLA for 2008-09 and suspend Proposition 98, but no cuts to ongoing programs between 2007-08 and 2008-09.  (For example: No reduction in base revenue limit per ADA funding).

• Fund $205 million for 2008-09 K-14 mandates (but delete $150 million in prior year mandate settle-up funds).

• Delay Quality Education Investment Act (QEIA) implementation for one year (saves $450 million).

• Create four new base program and categorical education grants by consolidating existing programs. Click here to view the LAO’s K-12 Categorical Reform section.

• Statutory COLA of 5.4% (but recommends a new COLA calculation different than current law and the Governor’s new COLA index proposal).

The following link goes directly to the LAO's full education analysis:  http://www.lao.ca.gov/analysis_2008/education/ed_anl08.pdf

School districts need to continue developing their 2008-09 budgets based on the Governor’s original proposals.  The LAO includes new revenues as part of their budget solution.  If the Legislature does not pass new revenues, then the Governor’s more draconian cuts will be considered.

The legislative budget subcommittees will start their hearings in the next two weeks.

~Dave Walrath

dwalrath@m-w-h.com