Despite a possible budget deficit next year, state education spending appears to be stable because of education-specific reserves built up over the past years.

In mid-November, California’s Legislative Analyst’s Office (LAO) announced that the state faces a potential $25-billion budget deficit next year driven by high inflation and the threat of a recession.

The LAO, which advises lawmakers on California’s fiscal outlook, stated that much of the projected revenue shortfall could be offset by lowering spending, but that state revenue could be worse if the nation’s economy goes into a recession.

A spokesperson for the state Department of Finance said Gov. Gavin Newsom’s administration anticipated the economic slowdown and planned accordingly, which means California is in a good position to weather the impact. Newsom will present a proposed 2023-24 state budget in January.

“Thanks to our responsible approach, we are confident that we can protect our progress and craft a state budget without ongoing cuts to schools and other core programs or taxing middle class families,” Senate President Pro Tem Toni Atkins (D-San Diego) said in a statement. “The bottom line is simple: We are prepared to hold onto the gains we’ve made and continue where we left off once our economy and revenues rebound.”

Proposition 98, passed in 2014, was an amendment to the state Constitution that guarantees a minimum level of funding for public schools and community colleges(approximately 40 percent of the total General Fund budget). The LAO estimated a decline of $2 billion instate budget education funding next year, but the state could still fully fund schools by reducing some spending in response to a decrease in student attendance and by making withdrawals from a robust “rainy day” fund specifically created for education.

According to the LAO, and “by historical standards, the school funding picture remains strong.”

CTA is optimistic about education funding in the future, because of collaborative budgeting and healthy reserves. California remains in a strong position to continue prioritizing equitable teaching and learning conditions and addressing the critical educator shortage.

Photo by Giorgio Trovato/Unspalsh