Gov. Gavin Newsom released his January Budget Proposal on Jan. 10, with a $286.4 billion total budget, including $119 billion in funding for all TK-12 programs. Once again, the state is experiencing a significant budget surplus and the proposed Proposition 98 guarantee has grown to a total $102 billion, an $8.2 billion increase over the 2021 Budget Act.

“As the state continues to experience record-high revenues, CSBA is pleased to see that reflected in the natural growth of the Proposition 98 guarantee,” CSBA CEO & Executive Director Vernon M. Billy said. “However, we continue to be concerned about base funding issues such as Local Control Funding Formula funding beyond just the cost-of-living adjustment, continued support for pensions, declining enrollment and transportation operational costs rather than the continued establishment of new, large categorical programs that may not support every community. These one-time funds will surely put governing boards in the position of having to eventually consider cutting services when they should be expanding them for students.”

The Governor’s plan includes a cost-of-living adjustment (COLA) of 5.33 percent for the Local Control Funding Formula, adding $3.3 billion in discretionary funds for local educational agencies. A proposed, $295 million in ongoing Proposition 98 General Funds will also go to a 5.33-percent COLA for categorical programs outside of LCFF, including special education, child nutrition, youth in foster care, Mandates Block Grant, Adults in Corrections Education Program, American Indian Education Centers and the American Indian Early Childhood Education Program. Further, county offices of education will receive a 5.33-percent COLA equaling about $11.5 million in ongoing Proposition 98 funds. These funds would also incorporate potential average daily attendance (ADA) changes applicable to the LCFF for county offices.

Despite significant looming increases, however, the Governor’s budget does not include relief for school employer pension contributions, a key priority for CSBA’s budget advocacy.

“The Governor’s Budget Proposal is a good first step toward addressing student health and safety, expanding access to technology, and advancing educational opportunities for students,” said CSBA President Dr. Susan Heredia. “This budget represents the beginning of important conversations at the state level that must include added flexibility for schools as they deal with the impact of COVID-19 and the continued need for relief from skyrocketing pension obligations that would allow funds to be redirected toward the classroom.”

To address declining enrollment, the Governor proposes amending how the LCFF apportionment is calculated to consider the greater of a school district’s current year, prior year, or the average of three prior years’ ADA. The proposal also expresses the Governor’s intent to engage with stakeholders to explore options for providing charter schools with declining enrollment protections. The ongoing cost is estimated to be $1.2 billion Proposition 98 General Funds.

The proposed budget continues to allow LEAs to offer traditional independent study and course-based independent study to meet their students’ needs with short- and long-term remote instruction. The budget proposes streamlining these programs by allowing synchronous instruction to count for instructional time in traditional independent study in addition to student work product, and providing flexibility on the timeline to collect a signed independent study plan.

The 2022–23 fiscal year marks the beginning of the Governor’s proposed four-year expansion toward universal TK. Most notable is the stated intent by the Governor to “rebench” Proposition 98 from 38.02 percent to 38.4 percent of the state’s General Fund to fund the growth in enrollment from these children. In alignment with the 2021 Budget Act, the Governor’s budget proposes $639.2 million to fund the expanded eligibility for TK for children who turn 5 between Sept. 2 and Feb. 2.

The Governor also proposes to provide $383 million in Proposition 98 General Funds to add an additional teacher or paraprofessional to a TK class to reduce the student-to-adult ratio to “more closely align with the state Preschool Program,” from 12:1 to 10:1 for the 2022–23 school year. This proposed allocation of funding fulfills that intent.

As proposed, the budget includes a $3.6 billion deposit into the Public School System Stabilization Account, education’s rainy-day fund. The total balance of the account would rise to $9.7 billion, triggering local school district.

The Governor proposes an additional $3.4 billion in ongoing Proposition 98 General Funds for the Expanded Learning Opportunities Grants Fund, equaliing $4.4 billion when combined with funding allocated in the 2021 Budget Act. The proposed budget also includes $937 million in one-time Proposition 98 General Funds to support “program infrastructure,” with a focus on including arts and music programs in the grant program.

The Governor proposes providing $500 million in one-time Proposition 98 General Funds over a period of five years to high-needs schools to hire literacy coaches and reading specialists to assist in the classroom and with intervention. Also proposed is $200 million in one-time Proposition 98 General Funds to provide grants to LEAs to “expand multi-lingual school or classroom libraries.”

The proposed budget provides an additional $500 million in ongoing Proposition 98 General Funds for the special education funding formula, which is paired with the following program changes:

• Amending the funding formula to calculate base funding at the LEA level rather than the Special Education Local Plan Area (SELPA) level.
• Consolidating the two extraordinary cost pools into a single cost pool to simplify the formula.
• Allocating Educationally Related Mental Health Services funding to LEAs rather than to SELPAs.
• Developing a Special Education Addendum to the Local Control and Accountability Plan to support inclusive planning and promote cohesion by linking special education and general education planning.
• Continuing the development of comprehensive individualized education programs (IEPs).
• Establish an alternate diploma and a workgroup to explore alternative coursework options for students with disabilities.

The Governor proposes $1.5 billion in one-time Proposition 98 General Funds over a period of four years to provide additional funding to support the development of additional college and career pathways for science, technology, engineering and math (STEM), health care, education and climate pathways. Another $500 million is proposed over four years to support dual enrollment opportunities.

The Governor’s budget proposes approximately $2.3 billion in additional school facilities funding over two years for new construction and modernization, in addition to $30 million ongoing for the Charter School Facility Grant Program.

The Senate is scheduled to hold its initial budget overview hearing on Jan. 19. By May 15, Gov. Newsom will release his May Budget Revision, and negotiations between his administration and the Legislature will be ongoing until the June 15 deadline. The Governor will then have until July 1 to sign the bills.