A summary of proposed K-12 educational spending in California for 1998-99, comparing today's proposals with expenditure patterns of the recent past, is presented in this report. The text highlights current spending proposals and provides some background on historical spending patterns and their causes, as well as demographic information on the 5.3 million children enrolled in California's 999 public school districts. It also describes the major issues facing state policy makers as they consider school funding issues in the upcoming months. The paper focuses on how California's spending compares to other states; the state's class-size reduction program; school finance equalization; and categorical programs, which account for 30 percent of total school district revenues. The paper argues that, in the future, California legislators will need to concentrate efforts on constructing new facilities and maintaining existing ones; simplifying the existing finance system; focusing categorical programs on students and not on districts; and funneling more money to the schools. Four tables provide further information on sources of revenue for education, the ratio of staff to students by position, and other information. (RJM)