Proposition 98 provides a process for determining the minimum amount the state must spend on K-12 schools and community colleges each year.

The complicated set of tests related to Proposition 98 also gives state leaders the ability to both adjust spending downward when state revenues are low and suspend the guarantee in a given year. But in both cases, the process also creates a promise that, over the long term, the funding levels are supposed to be restored to what is referred to as the long-term Test 2 level.

As the chart below indicates, the last year that the state funded schools and community colleges at the long-term Test 2 level was 2005-06. The gap between the "actual funding level" and the "long-term Test 2 funding level" represents education's call on state dollars in the future. When state revenue growth comes back to a healthy level, policymakers will have to get the K-14 education funding level back on track. This is not the same as paying back all the "lost" funding, but it does mean that the Test 2 funding level is the default minimum whenever the state can afford it and that some compensation is made when feasible. The restoration to the long-term Test 2 funding level does not have to occur all at once. In fact, in the past the restoration has been gradual.

K–14 Proposition 98 funding estimates, 2005–06 through 2011–12

 

Data: Legislative Analyst's Office (LAO)

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