May 2022

Proposition 98 Overview

LAO May Outlook Estimates of Proposition 98 Guarantee

Dollars in Millions

  2021-22 2022-23 2023-24 2024-25 2025-26
Minimum Guarantee          
General Funda $84,382 $81,935 $84,877 $88,203 $88,468
Local property tax 26,944 29,172 31,155 32,850 33,762
   Totals $111,325 $111,107 $116,032 $121,053 $122,230
Change From Prior Year          
General Fund $14,178 -$2,447 $2,942 $3,326 $265
   Percent change 20.2% -2.9% 3.6% 3.9% 0.3%
Local property tax $1,075 $2,228 $1,983 $1,695 $912
   Percent change 4.2% 8.3% 6.8% 5.4% 2.8%
Total guarantee $15,253 -$219 $4,925 $5,020 $1,177
   Percent change 15.9% -0.2% 4.4% 4.3% 1.0%
Inputs          
General Fund taxesb $221,964 $214,349 $220,546 $227,538 $225,527
K-12 average daily attendancea 5,394,150 5,564,477 5,629,203 5,680,357 5,686,255
Growth Factors          
K-12 average daily attendance -8.1% 3.2% 1.2% 0.9% 0.1%
Per capita personal income 5.7% 7.6% 1.1% 2.8% 4.7%
Per capita General Fundc 20.8% -2.6% 2.9% 3.1% -0.9%
Operative Test 1 1 1 1 1
Proposition 98 Reserve          
Deposit/withdrawal (+/-) $4,958 $2,850 $493 $502 $118
Balance 8,260 11,111 11,603 12,105 12,223
Statutory Cost-of-Living Adjustment 5.1% 6.6% 7.0% 3.7% 3.9%
           
Note: No maintenance factor is created, paid, or owed over the period.
a Includes increases related to the expansion of Transitional Kindergarten.
b Reflects General Fund revenue that affects the calculation of the guarantee.
c Reflects per capita General Fund plus 0.5 percent (one of the Test 3 factors).