Budget Analysis
This paper analyzes the most recent budget request of the state of California. The state is approximately 158,706 square miles, and it is the 3rd largest state by size. The highest level of population recorded was 37,396,000 by the department of finance. It is nicknamed the Golden state. The current Governor holding office is Edmund G. Brown Jr. The California budget is carried out through a year long process. The Department of Finance is responsible for the preparation, explanation and administration of the state annual financial plan. The Governor then submits the budget request in January to the legislature. In May the budget is revised, and the fiscal year starts on first July.
Governor’s budget summary
According to Edmund G. Brown Jr. the budget lives within its means. The budget indicates that the functions of the state will run smoothly considering the huge expenditure reductions made in the previous two periods. Furthermore, the residents of California voted for proposition 30. According to the budget students will have a greater opportunity to achieve their dreams; this is because the K-12 school districts will be given more funds while schools serving with challenges will receive even better increases in funds. The budget proposed an increase in the funding of public higher education. As such, students will have affordable education with all the necessary resources.
The budget seeks to source out funds to implement the health care reforms. The objective is to ensure that the financial risks present in the expansion of health care are minimized. According to Brown, the budget ensure long term fiscal stability and facilities discipline in the application of fiscal policies involving borrowing and spending. In the year 2011, the annual gaps between spending and revenues amounted to $20 billion. After a period of two years, the state has had the most stable fiscal policies. This has been possible through cutting spending over the same period. However, challenges are still present due to the accumulated debt over the previous years. It is estimated that the debt is several million dollars. The previous two budgets 2011-2012 and 2012-2013 achieved various goals including; changing the public safety programs, implementation of downsizing of Corrections and Rehabilitation Department, increasing funding to the police, schools, fire and other services provided in the state. In addition, the previous budgets were able to reduce California’s workforce by almost 31,000 positions. As such, the state achieved one of the lowest government employment levels in the country. The spending of the General fund reduced to $93 billion in the 2012-13 fiscal periods from $103 billion in 2007-2008 fiscal periods. This was a 10 percent decline in General fund spending, and it was the lowest since 1972-1973. In comparison to states, California has broader health care coverage which enables access to home care services, persons with disabilities and assists children whose parents have lost eligibility. The health care system also provides financial assistance to students seeking higher education.
The budget policy is to reinvest in education. As such the education funding will be boosted instead of experiencing cuts. In 2007-08, the value budgeted for was $56.6 billion, it declined to $47.3 billion in 2100-2012. However, in 2012-13 it rose to $53.5 which was below the amount in 2007-2008. It is estimated that the value will continue to rise to a high of $66.4 billion in 2016-2017, a 40 percent increase.
The economic conditions facing the state are influenced by various factors. California is among the states that have seen an increase in both international and domestic migrants. The population has grown over the years due to the increase in the number of residents. However, in 2000-2010 the population growth reduce although compared to other states California had the second largest population growth of 3.4 million. By 2017, the population is estimated to be 39.5 million. The demographic changes have an impact on the economic conditions. It is observed that the economy is recovering. However, this is at a lower rate than previously observed recoveries. Various economic sectors have been improved; the value of homes has been rising, household spending is rising, and the credit accessibility is improving. In addition, employment level has been improved although at a modest rate considering that job creation opportunities are limited. The economic recovery has gathered momentum due to improved customer attitudes and a better housing market. The sales have improved while available houses for sales have reduced. The state gained on average 21,000 jobs per month. This has occurred in the private sector because the government has reduced the number of employees.
The growth in job creation has resulted mostly from the technology industry, consulting and science and research. Consumer spending has improved as evidenced through the purchase of new vehicles and taxable retail sales. However, the nation is experiencing the uncertainties in the fiscal policies implemented, and as a result the economic growth is not accelerating at the expected rate. It is thus predicted that the economic recovery of California will accelerate considering the positive gains in the job creation and real estates. The economic prospects still face some risks; the spending cuts and federal tax increases will take effect from 2013. Furthermore, the debt limit regulations will also take effect from 2013. The effects of the changes can only be incorporated in the budget revision in May.
K THRU 12 Education Budget
This department, supports over six million students in more than 11,000 schools in California. K THRU 12 means the budget for students in grades from kindergarten to grade twelve. There are 58 education offices in the state, and through both local and chartered schools the students are provided with knowledge in mathematics, sciences, history and English. The students gain skills that can help them gain entry into higher education or the job market.
The K THRU 12 Education budget can be classified as an incremental budget. This is attributed to the fact that the California State through the Governor aims at reinvesting in education. As such, the estimates in the education funding will continue to rise over the years. For example, 2013-2014 budgets propose a $56.2 billion funding; this is a $2.7 billion increase from 2012-13 period. Furthermore, it is predicted that the funding will gradually increase to $66.4 by 2016-2017. The Proposition 30 ensures that the schools will not experience reductions cumulating to billions that usually happened during the in mid-year after revisions to the budget.
The budget can be classified as well document and reasonable. This is because it considers the impact of education on the nation and the need to invest in it. Furthermore, the provision of enough resources ensures that the students will acquire quality education and thus have a solid ground in developing individual skills. This will be a catalyst in ensuring that the job market has the necessary workforce. The budget is well documented considering the fact that it evaluates the investment in education, program reforms needed, school attendance and spending, school facilities and subsidized child care. In addition, the budget can be classified as transparent considering that it focuses on accountability in the budgeting process. The budget requires that the school districts adopt a student’s achievement plan that will compliment the annual spending and total budget. The plan will address how schools will receive funding depending on the basic student achievement conditions such as, having qualified teachers and instructional materials. The plan also involves a program meant to benefit low income learners.
The budget is presented well. However, the budget does not clearly break down how the estimated funding of $56.2 billion will be spent. The budget only outlines the new funding requirement. As such, I would recommend that more clear details should be provided on the expenditure of $56.2 billion. Furthermore, the new rules for providing funding for schools should be clearly outlined.
K THRU 12 Budget request
The budget proposes funding of $56.2 billion. This is an increasing of $2.7 billion considering the previous period. The budget also proposes funding of deferred payments incurred by schools during the economic downturn. The proposed amount is $1.8 billion necessary to cover the deferred payments reducing the interest costs that were being incurred by the schools. There is a proposal to transfer $450 million of revenues that will be generated in 2013-2014 for projects aimed at ensuring energy efficiency in schools and community colleges. One of the goals in promoting education in the state of California is to ensure that the residents are subjected have equal opportunities. The consistent rise in the funding would ensure that the schools expand their support and teaching personnel, have better facilities and improve on the education infrastructure. According to the Governors budget this would maximize student achievement and reduce the inequalities present in the state. As such the state would have a stable foundation and sustainable growth (Newmann, 2012).
According to the 2013-2014 an additional $69 million will be set aside for the provision of mental health services to students under the special education program. The previously allocated amount was $357 million in 2012-2013. In the previous period, the budget provided for the compensation of state mandated activities. As such, the schools are mandated to appropriate an amount of $200 million as a grant of building two new blocks. It is estimated that the grant blocks will be incurring costs. The budget proposes an additional $100 million to the grant so as to fund the costs incurred. The current education system in the state allows schools to provide adult education. As a result, the budget proposes $315.7 million to fund the delivery of efficient adult education system. $300 million will be used to support the schools while $15.7 million will be used for the apprenticeship programs in the schools. Most schools have been modernizing their facilities through funding from bonds. The budget proposes $450 million in 2013-2014 and $550 million up to 2016-2017 fiscal periods. This money is expected to fund the use of renewable energy in schools and reduce the current utility bills in the institutions. The objective of using renewable energy sources is to ensure that the schools recover from reductions in funding allocated over the last five years. This will be possible because utility costs will be declining.
Various adjustments will have been made in the budget due to the funding of $1.8 billion the deferred payments outstanding will reduce to $5.6 billion. The new school funding formula will increase funding by 4.5% in 2013-14 through the general fund to the schools. Due to the new county office education funding formula, the budget proposes an increase of $28.2 million to facilitate the implementation of this new system. Due to the emergency repair program the budget proposes an increase of $ 9.7 million funding. In addition, adjustments were made for the child nutrition program. The budget proposed an increase of $77 million in funding to the nutrition programs in schools. The objective of the increase in funding in the 2013-14 budgets is to match the growth in the student population and requirement of the nutrition programs.
The budget request also includes the schools spending and attendance for the 2013-14 fiscal years. During the 2012-13 fiscal periods, the total expenditure pupil considering all the sources was projected at $11, 455. In 2013-14, the projected expenditure per pupil is $11,742. The K-12 propositions 98 estimates that there will be $8,304 expenditure per pupil in 2013-14. This is a rise from $ 7,967 in 2012-13. California’s K-12 schools have various sources of funds which include; state funds, federal funds, and local taxes. These funds are used for various purposes in the schools. Classroom instructions utilize an approximated 61.9% of the funds. Classroom instructions involve teacher compensation, special education and general education. Instructional support utilizes approximately 11.7% of the funds. It involves staff development, research, and curriculum development. The maintenance operations utilize around 9.8% of the funds. This includes utility costs, routine repair and maintenance, ground housekeeping and janitorial staff. General administration utilizes around 5.2% of the funds, public services utilizes 5% while other general funds and transportation utilize 3.7% and 2.7% respectively.
The K-12 education budget provides a strong justification for the proposed amounts. First, the education funding is increased to ensure that there is equality. Furthermore, the education sector needs to improve on the quality and resources available including the infrastructure so to promote the student achievement. Utility costs decline due to the use of renewable energy.
Analysis and Recommendations
The budget is well outlined with revenues, expenditures and adjustments made in comparison to the previous years. The amount of money that has been allocated for energy efficiency projects in the schools is questionable considering that it will be transferred to a special fund straight from the revenues made in the same period. The amount of $450 million dollars is also very high when compared with other budgeted costs.
According to the budget the new there new funding requirement for the schools. The budget proposes these new requirements so as to increase control reduce bureaucracy and ensure that the student needs are addressed. The objective of the new requirements is to ensure flexibility and accountability. The goals of the new formula are questionable. In the case of accountability, the schools have the mandate to design the plan in which they will receive funding using the new formula. As such, the schools can manipulate the plans and they would receive more funds unnecessarily. Furthermore, the new require that schools adopt common core content standards this will limit the schools which would want to provide more skills to the students. This will not eliminate the complexity of the compliance requirement present.
The mandate block grant is provided at $200 million for two new blocks. It is questionable why two mandate programs were not included in the grant for the previous period and these allocations have been made this year. The amount proposed $100 is also very high for the two programs. In the K-12 education budget, there were no computational errors found.
The K-12 educational budget is incremental and thus it is expected that there will not be any reduced funding or cuts. However, in case of reduced funding the budget should target various sources of funds such as property taxes and personal income taxes. The taxes should be increased so as to increase the funding to the schools. In the case of budget cuts, other measures can be used to recover the losses from the cuts. An example from the K-12 Educational budget is the investment in renewable energy to minimize the utility costs. As a result, the savings made in expenditure will be used to facilitate coverage of other costs.
Conclusion
The state of California budget lives within its means. The budget proposes reinvesting in education so as to improve equality and the development of skills. In addition, the budget also proposes the implementation of the health care reforms. The K-12 departmental budget evaluates the funding of the different education sectors for students from kindergarten to twelfth grade. The spending of the funds is also outlined.
References
Newmann, J. J., & California State University San Marcos. (2012). Effectiveness of educational
leadership in a budget crisis: Implications for faculty retention and demographics in one university system. La Jolla: University of California, San Diego.
