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LAO releases report on The 2019-20 Budget: Hastings College of the Law

In 2019-20, the Governor proposes a notable increase in ongoing state funding for Hastings College of the Law as well as a one-time augmentation for its deferred maintenance. We describe these proposals below.

Proposes $1.4 Million (10.3 Percent) Ongoing General Fund Increase for Operations and Budget Deficit. The unrestricted augmentation would provide a 2.3 percent increase to Hastings’ overall core funding. Hastings plans to use the augmentation to cover compensation and other operational increases.

Under its budget plan, Hastings would reduce its operating deficit in 2019-20 but extend the time frame for eliminating it to 2022-23 (by one year). It also would completely draw down its operating reserve in 2019-20 and begin using its maintenance reserve for operating costs. Notably, Hastings’ operating imbalance emerged during an economic expansion.

If the economy were to weaken, balancing its budget would become more difficult, likely with even more adverse effects on students (steeper tuition increases) and staff (layoffs or salary rollbacks). Given all these factors, we encourage the Legislature to be cautious in approving 2019-20 spending increases for the school and ensure a plan is in place to eliminate the schools’ operating deficit soon.

Proposes $1 Million One Time for Deferred Maintenance. The funds would address projects at Kane Hall, one of Hastings’ two academic buildings. (The state is in the midst of replacing the school’s other academic building.) Of Kane Hall’s $1.5 million maintenance backlog, some projects, such as carpet replacement and interior painting, are not critical. Moreover, Hastings has a maintenance reserve sufficient to cover these types of projects.

For these reasons, we recommend the Legislature reject the proposed augmentation and direct Hastings to use its maintenance reserve for its remaining maintenance projects. To ensure proper maintenance practices moving forward (including proper upkeep of its new building), we also recommend the Legislature direct Hastings to develop an ongoing maintenance plan by December 1, 2020.

This report is available using the following link: https://lao.ca.gov/Publications/Report/4011

This article was released by the Legislative Analyst’s Office.