Why care about economic forecasts?
Proposition 98 is considered the “holy grail” of the school finance. Local education agencies (LEAs) pretty much live, die or, more often, limp along according to it. And Prop. 98 is directly linked to the overall economic health of the state. Cloaked in a series of complex formulas, it essentially behaves this way: When state revenues go up; the Proposition 98 minimum guarantee goes up. When revenues drop; the guarantee drops. There is a repayment mechanism when this happens, but that matter is for another article. For us school finance and budget folks, the changeable, up-and-down nature of Proposition 98 funding transforms us into part-time economists. Watching and understanding current and future economic conditions is critical to analyzing future K-adult funding trends. National and California forecasts The UCLA forecasters noted that after a long tumble, national economic conditions are beginning to level off. But they are forecasting “the weakest economic recovery of the postwar
