(CN) — California's Legislative Analyst's Office, a nonpartisan agency that gives the Legislature fiscal and policy advice, released a series of reports Thursday that were all sharply critical of Governor Gavin Newsom's plans for education spending.
Newsom's budget for the 2024-25 fiscal year, announced in January, was an attempt to close a projected $38 billion shortfall, and included proposals to dip into emergency reserve funds, cut $8.5 billion in spending from various programs, including those to build housing to fight climate change, and to delay a raise for healthcare workers.
Many were relieved to see that the state's $128 billion education budget remained largely intact. But the three reports by the legislative analyst "strongly" recommend lawmakers reject Newsom's education spending plan, citing "major concerns" with funding "maneuvers."
The critique echoed another by Christian Barnard, the assistant director of education reform for the libertarian Reason Foundation, who wrote that the budget relied on "creative accounting and rosy economic forecasts." And columnist Joe Mathews compared Newsom's budget to baseball player Shohei Ohtani's new contract to play for the LA Dodgers, which defers some $680 million in payments to more than a decade from now.
California's public schools are funded by a complicated formula. They are essentially guaranteed a certain percentage of the overall revenues — meaning the overall education budget can ebb and flow along with tax revenue, which is heavily reliant on high income earners, whose fortunes are tied to the stock market and the economy. Individual school districts and schools receive a portion of that money according to an even more complicated formula, which takes into account the percentage of low-income children and English language learners.
Newsom's biggest "maneuver" to preserve education spending during the next year, according to the legislative analyst, is to "delay recognizing the budgetary cost of payments the state provided to schools in 2022-23."
"This proposal," the report added, "worsens future budget deficits and sets a problematic precedent."
The analyst also pointed out school funding is likely to be billions of dollars lower than Newsom says it will be, and criticizes the $1.4 billion Newsom has earmarked for new school spending.
"To fund these increases, the budget relies upon onetime funds — setting up an even larger shortfall next year when those funds expire," the analyst says.
A different report knocked a proposal by Newsom to allow schools and community colleges to keep $8 billion in cash disbursements, but delay recognizing them until 2025-26.
"This maneuver generates short-term budgetary savings by creating a misalignment between the state’s cash position and its budget," the analyst says in its report. "It creates a new type of budget solution: effectively, an interest-free loan from the state’s cash resources and, as such, it sets a problematic precedent."
The tactic also "raises transparency concerns by obfuscating the true condition of the budget," the legislative analyst says.
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