Key Facts About the Governor’s Proposed Budget, Part 3: Spending Per Student Rises Due to New Revenues, But Still Faces a Long Climb Back

This is the latest in a CBP chart series highlighting some of the most important aspects of Governor Brown’s 2013-14 budget proposal and the context for it.

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State spending per K-12 student will rise in the current (2012-13) fiscal year and in 2013-14 due to voter approval of two revenue measures – Proposition 30 and Proposition 39 – last November, according to the Governor’s proposed 2013-14 budget. Yet even with this increase, per student state support for public schools will remain much lower than the 2007-08 level, after adjusting for inflation.

Why is last November’s voter approval of major revenue measures – while crucial in reversing years of declining support for public schools – not enough to return state spending per student to the level it was when the Great Recession began? As we blogged about recently, state finance officials project that Propositions 30 and 39 together will increase state General Fund revenues by nearly $6 billion in 2012-13 and by $7.2 billion in 2013-14. Because increases in General Fund revenues tend to boost the state’s minimum funding guarantee for K-12 schools and community colleges – required by Proposition 98 of 1988 – California voters’ actions in November increased state support for schools in the proposed 2013-14 budget. The Governor’s proposal estimates that state spending will go up by $1,000 per student between 2011-12 and 2013-14, after adjusting for inflation. However, even with the increased taxes from Propositions 30 and 39, General Fund revenues are projected to be $2.8 billion lower in 2013-14 than in 2007-08, without adjusting for inflation. The drop in revenues compared with six years ago, which is partially due to declining incomes during the Great Recession and several corporate tax cuts passed in recent years, helps explain why state spending per student in 2013-14 will remain so far below the 2007-08 level.

The substantial new revenues approved by voters last November help stabilize the budget and allow the state to begin reinvesting in education. Still, state K-12 spending per student is unlikely to return to pre-recession levels until General Fund revenues fully recover lost ground.

— Jonathan Kaplan