The LAO's annual projection is a forecast of what to expect from Gov. Gavin Newsom's first pass next month on the 2024-25 state budget.
EdSource reports the forecast reflects a decline in funding in Proposition 98, the 35-year-old constitutional amendment that determines the portion of the state's general fund that must go to schools and community colleges. Complicating the picture is that about half of the education deficit covers money that schools and community colleges spent in 2022-23.
The overall projected state general fund budget deficit of $68 billion could also jeopardize five percent annual increases for the University of California and California State University systems that Gov. Gavin Newsom had agreed to, as well as children's services not covered by Proposition 98.
The projected shortfall is the largest financial challenge schools and community colleges will face since the Great Recession budget of 2009. However, the LAO said that schools are better positioned now because of an education rainy-day fund that the Legislature was required to sock away in the record-high revenue years of the past half-decade.
Edgar Zazueta, executive director of the Association of California School Administrators, cautioned that state leaders must avoid the sort of harsh cuts made during the Great Recession. They included forcing districts to borrow billions of dollars with the expectation they would be repaid later.
