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					                    The California State Budget
                           STATE BUDGET TIMELINE

January – Governor’s Proposed Budget
This budget reflects the Governor's goals and objectives for the forthcoming year
including significant issues, policies, and initiatives of the Administration.

May – May Revision (AKA The May Revise)
Revised budget provides an update of revenues, expenditures, and reserve estimates
based upon the latest economic forecast and changes in population, caseload, or
enrollment estimates

June – Final Budget
The Enacted Budget reflects the state spending plan passed by the Legislature and signed by the Governor. The
Legislature is constitutionally required to pass the budget by June 15, though in recent years it rarely has met the
deadline. The Budget needs a 2/3 vote of each house to pass. (In most states only a simple majority is required.)
The Governor may use line-item vetoes.

                        TERMS
Revenue Limit                                                 Equalization
General purpose money districts receive per pupil (ADA)       Funds allocated, on occasion, by the Legislature to
from a combination of state taxes and local property          address inequalities and raise the funding level of school
taxes. Originally, revenue limits were calculated for each    districts with lower revenue limits toward the statewide
district based on historical spending patterns and varied     average based on size and type of district.
considerably.
                                                              Mandate
Categorical Funding                                           Federal or State required services and programs that
Funds to qualifying districts for a particular purpose or     must be provided by a school district.
special program in addition to their revenue limit.
Special Education and Class Size Reduction are two of                     IMPORTANT EVENTS
the largest state programs in terms of dollars. In general,         IN CALIFORNIA SCHOOL FUNDING
schools or districts must spend the money for the
specific purpose.                                             Serrano v. Priest - 1976
                                                              California Supreme Court decision declared the local
ADA - Average Daily Attendance                                property tax-based system of school funding to be
A measure of student attendance--the total number of          unconstitutional, violating the equal protection clause.
days of student attendance divided by the total number        Required basic per pupil funding of school districts
of days in the regular school year— used by the state to      (within categories of districts) to be equal or within a
determine a school district’s general purpose funding. A      small margin. Categorical funding is excluded from the
school district’s general fund or unrestricted money is       formula.
figured by multiplying ADA times the district’s Revenue
Limit. Schools are funded based on the number of              Proposition 13 – 1978
students in attendance, not the number of students            Constitutional amendment passed by California voters.
enrolled.                                                     Capped property tax rate & limited increases in
                                                              assessed values. Required two-thirds vote for new local
COLA - Cost of Living Adjustment                              taxes. Local property taxes no longer the major source
Increase in state or federal funding based on inflation       of school funding—shift to state funding. The governor
figures. In California, the law states that schools should    and the legislature took over the allocation of local
receive a certain COLA based on the Implicit Price            property taxes to schools, cities, counties, and special
Deflator for State and Local Government Purchases of          districts.
Goods and Services.
                                                              Proposition 98 – 1988
Lottery                                                       Constitutional amendment passed by California voters.
Gambling games approved by California voters in               Guarantees a minimum funding level for K-14 public
November 1984. 34% of lottery revenues are distributed        education, figured by a complex formula based on tax
to public schools, colleges, and universities educational     revenue. The Prop 98 guarantee may be suspended for
purposes. Lottery income comprises less than 2% of K–         a year by a two-thirds vote of the legislature with the
12 education funding annually.                                governor’s signature.