Page 19 - The Edge - Winter 2017

SOME GOOD AND BAD NEWS continue to be suspended, which amounts to $493 million –

CONTINUED FROM PAGE 17 most of that involves K-12, including about $372 million for
district and charter additional assistance, he said. Another
forecasters expect a faster rate of growth for revenues through assumption is that the K-12 rollover of about $931 million will
FY 2020. “The bad news is that the rate of growth is not as high continue.
as we thought it would be when we passed the current budget Among the unknowns is whether some one-time
about eight months ago,” Schimpp said. appropriations in the current budget will indeed be one-
The reason he was looking ahead to fiscal year 2020 is time, or whether there will be enough pressure to continue
because the last time a recession hit the state’s economy went them. Schimpp mentioned another unknown – the impact of
from a boom cycle to a bust quickly. “We talked about how we Proposition 206, which increases the minimum wage to $12
should really look out farther in the future,” Schimpp said, “so an hour by 2020. “This could have an impact in two different
the practice in the past several years has been to look not only directions,” Schimpp said. “We could have more people
at the next year which is FY18, but to look at the next two years earning more money which they’d be paying more taxes on.
beyond to FY19 and FY20. We don’t pass a two-year budget, Then some folks argue that there could be fewer jobs, because
but we pass the next year’s budget looking at the numbers for jobs will be less affordable. We’ll have to see how that plays
the following two years to have a little foresight.” out.”
Revenue numbers look somewhat better for 2019 and 2020. Yet another unknown involves the push to restore full-
For example, the structural balance for 2019 is estimated to be day kindergarten. The projected cost is about $240 million,
around $146 million and for 2020 about $264 million. “That Schimpp said. “That number could change depending on what
would imply that if we jumped ahead three years into the you do,” he said. “Because in fact if full-day K was restored,
future and this all turned out to be correct, the state could do it might change by counting kindergartners as Average Daily
about $264 million worth of new stuff by 2020,” Schimpp said. Membership instead of half, so $240 million is kind of a place
One thing that affects a portion of revenues, however, is holder number.”
tax credits. “The largest of those credits goes to school tuition Overall, about $6.1 billion in K-12 money goes through
organizations, which totals $150 million,” Schimpp said. the state Department of Education. Schimpp explained where
“The second largest is public school extracurricular with $46 that money comes from: $4 billion from the general fund; $1.2
million, then there are credits for research and development billion from the federal government for programs like Title I
and charitable organizations and so forth. When you add them and the school lunch program; Prop. 301, a sixth-tenths of a
all together, the total would be about $400 million, which is cent sales tax provides $551 million, and the state land trust
something like 4 percent of state revenues.” contributes $220 million. When local property tax money is
In putting together a proposed budget, JLBC assumes that added, the total for K-12 schools is around $10.6 billion a year,
any formulas that were suspended in the past budget will Schimpp said.

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