For K-12 school agencies in California, the funding picture is brighter than it has been since 2001 due mainly to increases in the Proposition 98 guarantee for prior years and resulting adjustments. This two-page summary highlights the increases and explains where the dollars are going for the 2006-07 school year. Findings include: (1) Funding in 2006-07 erases much of the state's debt to K-14 education; (2) General purpose funds and select programs receive large increases; (3) Policymakers also make adjustments in revenue limits; (4) The state supports old and new programs; (5) Lawsuit settlements provide extra funds for facilities and low-performing schools; and (6) The state projects that tough times are likely to return. This summary report also finds that California's community colleges are also doing well. Figure 1 shows, in pie chart form, that estimated revenues for 2006-07 from five sources totaled $67.1 billion. Figure 2 breaks down how lawmakers support schools with one-time funds.