Overview of the Proposition 98 2017-18 Governors Budget April, 2017 - PowerPoint PPT Presentation

Overview of the Proposition 98 2017-18 Governor’s Budget April, 2017 Jeff Bell Program Budget Manager

Proposition 98 has grown 55% over the last 7 years. 2 73.5 Dollars in Billions 71.4 68.7 67.1 58.9 58.0 47.3 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

3 LCFF Projected to be 96% Implemented in 2017-18 Dollars in Billions GAP Funding Target 56.6 55.8 52.8 48.0 41.7 39.0 Base Target GAP Base 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 72% 80% 90% 96% 96% Percent of LCFF Target Level Funded

Proposition 98 K-12 per pupil funding 4 has grown 56% over the last seven years. Dollars in Thousands $3,900 10.9 10.6 per pupil 10.2 10.0 increase 8.7 8.7 7.0 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 K-12 Funding per Average Daily Attendance

5 Now, for the bad news… The Budget reflects a revised revenue forecast that is $5.8 billion lower for 2015-16 through 2017-18. Without action, the state would face annual deficits of up to $2 billion.

6 Current Recovery Already Two Years Longer Than Average Current (July 2009) Average Month that Expansion Started December 2001 April 1991 December 1982 August 1980 April 1975 December 1970 March 1961 May 1958 July 1954 0 20 40 60 80 100 120 140 Number of Months

7 Balanced Budgets Have Been Quickly Followed by Huge Deficits 7

8 Top 1% of Taxpayers Proportion of Income and Income Tax California 60.0% 50.6% 48.7% 48.0% 47.5% 50.0% 45.4% 40.0% 36.9% 27.5% 30.0% 33.3% 24.7% 24.9% 23.9% 20.0% 21.8% 18.4% 10.0% 13.8% 0.0% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Top 1% Top 1% Proportion of Income Proportion of PIT

9 Unpredictable Capital Gains 9

10 What’s new in 2017-18? IT’S BACK! The Deferral!

Deferral Balances 11 Dollars in Millions 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 $5,002 $1,653 $0 $0 $0 $10,430 $859 Deferral Balance

12 What’s different? • It is less than 3% of the overall apportionment – 1/3 of June Pmt • Does not roll forward • Paid back in early July

13 But wait, there’s more to talk about! One-time discretionary funding 6000 $4.9 billion 5000 4000 $3.2 billion 3000 2000 $1.1 billion 1000 $287 million 0 2014-15 2015-16 2016-17 2017-18 Total

14 Proposition 98 Debt Reduced by Over $23 Billion $27.5 B $4.1 B 2011-12 2016-17

15 What’s no longer in the budget… • $400 million for affordable housing. • $227 million in child care increases and COLA. • Middle Class Scholarships to new students. • $300 million to modernize state office buildings. • New spending proposals from other state departments that were otherwise justified.

16 General Fund Expenditure by Agency 2011-12 2017-18 9% 9% Others Others 9% Corrections & Rehabilitation 9% Corrections & Rehabilitation Health & Human Health & Human Services 28% 31% Services 12% 11% Higher Education Higher Education Education $52.2 B Education 42% 39% $34.0 B

17 Education Still the Big Dog in the House!

Thank You!