Today, Governor Gavin Newsom released the 2024-2025 state budget proposal and delivered a strategic approach to maintaining and enhancing educational support in California amidst fiscal constraints, with a particular focus on vulnerable and special needs populations, and a commitment to sustaining key educational initiatives. Throughout the budgeting process our legislative team and committee members at CASBO will work diligently to protect and promote public school resources and allocations in collaboration with the Governor’s office, key stakeholder, local and state leaders.

The budget proposal forecasts a balanced budget of $291.5 billion, which will be sent to the legislature and the general fund for this year is $208.7 billion.  The proposed budget acknowledges a $37.9 billion shortfall, roughly $30 billion less than projected by the Legislative Analyst Office back in December. Although closing this shortfall may bring a challenge, the 2023 budget act set aside just under $38 billion in reserves, which the budget proposes to withdraw from.

During the press conference, the Governor reminded us of the $29 billion in key investments made to core programs for education including: learning recovery, community schools, special education, educator workforce and more.

 

Proposition 98 General Fund

The Budget proposes a total Proposition 98 General Fund funding level of $98.3 billion in 2022- 23, $105.6 billion in 2023-24, and $109.1 billion in 2024-25. The Guarantee continues to be in Test 1 for all years 2022-23 through 2024-25 and is “rebenched” from 38.6% to 39.5% to accommodate enrollment increases for implementation of Universal Transitional Kindergarten (UTK) and the implementation of the Arts and Music in Schools—Funding Guarantee and Accountability Act.

These revised Proposition 98 General Fund levels represent a decrease of approximately $11.3 billion over the three-year period relative to last year and the Budget proposes $8 billion in statutory changes to address this shortfall. The $8 billion comes from a prior year adjustment based on the delayed tax receipts over multiyear and not anticipated to take money back from schools. The rest would be covered by the rainy-day fund.

The Budget includes total funding of $126.8 billion ($76.4 billion General Fund and $50.4 billion other funds) for all K-12 education programs, with per-pupil funding totaling $17,653 and $23, 519 per pupil when accounting for all funding sources. Due to continued declining enrollment, per-pupil funding remains relatively stable.

Proposition 98 Funding

2012-13 to 2024-25

(Dollars in Billions)

Proposition 98 Rainy Day Fund

The Budget reflects revised 2022-23 and 2023-24 payments, and a 2024-25 payment, of roughly $339 million, $288 million, and $752 million, into the Public School System Stabilization Account (PSSSA), and withdrawals of roughly $3 billion in 2023-24 and $2.7 billion in 2024-25, for a total revised account balance of more than $3.8 billion at the end of 2024-25

The Budget also reduces the current year Rainy Day fund balance to $5.7 billion and continues to trigger the statutory 10% school district reserve cap.

 

Local Control Funding Formula (LCFF)

In significant contrast to last year’s 8.22% cost-of-living adjustment (COLA), the Budget includes an LCFF COLA of 0.76%, resulting in a decrease of about $1.4 billion. To maintain the current year principal apportionments and fully fund the LCFF. The same 0.76% COLA ($65 million) is applied to those categorical programs outside of the LCFF, such as special education, school nutrition, LCFF equity multiplier and others.

The Budget proposes to withdraw about $2.8 billion from the PSSSA to support ongoing LCFF costs in 2023-24, $2.2 billion in 2024-25, and using available reappropriation and reversion funding totaling $38.6 million for 2024-25.

We anticipate facts and figures to be released either this evening or tomorrow morning. The Department of Finance will be working with the Fiscal Crisis & Management Assistance Team to provide out-year projections on the COLA.

 

Instructional Continuity

To address attendance and instructional challenges, the Budget proposes the following statutory changes:

  • Allow LEAs to add attendance recovery time to the attendance data submitted to the Department of Education, both for funding purposes (ADA reporting) and chronic absenteeism (individual student attendance reporting).
    • Attendance recovery programs can take the form of Saturday school, intersessional school, or before/after school, and would be exempt from minimum day requirements.
  • Require LEAs to provide students with access to remote instruction or support to enroll at a neighboring LEA for emergencies lasting 5 or more days.
  • Encourage LEAs to provide hybrid or remote learning opportunities to students unable to attend school.

The Budget also includes $6 million one-time Proposition 98 General Fund to research models of hybrid and remote learning to support attendance and make recommendations for LEAs to be able to report individual absence data to the state, in a disaggregated manner, using local student information systems.

 

Teacher Preparation and Professional Development

To support the educator workforce, the Budget provides funding in addition to statutory changes.

Using Proposition 98 General Fund, the Budget proposes funding $25 million ongoing through the K-12 Mandate Block Grant, to support training educators to screen students in K-2nd grade for reading difficulties, including dyslexia and $20 million one-time for a county office of education to work with other entities, for math coaching, in anticipation of a 2025 new mathematics framework adopted by the State Board of Education in 2023.

Statutory changes proposed include focusing the use of unexpended allocated Learning Recovery Emergency Block Grant funds to address the needs of students most impacted by learning loss, based on an assessment of needs and incorporated into the existing Local Control and Accountability Plan development process and clarify that the allowable uses of the funds include professional development aligned to the new mathematics framework as well as tools for staff to recognize and offer mental health support to students.

 

School Facility Program

Due to the projected budget shortfall, the Budget proposes to adjust the investment planned for 2024-25 from $875 million to $375 million one-time General Fund. Understanding the continued need for facilities, the Budget mentions that the Administration expects to negotiate with the Legislature this spring, to discuss the school facility bond proposals to be considered for the November 2024 ballot.

 

California Preschool, Transitional Kindergarten and Full-Day Kindergarten Facilities Grant Program

The 2023 Budget Act included a planned $550 million one-time General Fund investment in 2024-25. The Budget proposes to delay this $550 million investment another year, to 2025-26, in anticipation of a November 2024 school bond.

 

California State Preschool Program (CSPP)

To support reimbursement rate increases previously supported by available one-time federal stimulus funding, the Budget includes $53.7 million General Fund. These resources are in addition to the approximately $140.6 million General Fund and $206.3 million Proposition 98 General Fund identified in the 2023 budget act. These amounts reflect an identified one-time savings of $172.1 million General Fund and $446 million Proposition 98 General Fund.

 

Educational Revenue Augmentation Fund (ERAF)

Both ERAF and charter schools were established and began in 1992, but charter schools are not addressed within existing ERAF distribution statutes. The Budget proposes statutory changes to clarify that charter schools are eligible to receive ERAF.

 

Career Education

The Budget proposes to direct the Commission on Teacher Credentialing to create a new Elementary Arts and Music Education authorization for Career Technical Education teachers.

 

Major K-12 Budget Adjustments

This section highlights the Budget’s significant adjustments to various educational programs outside of the LCFF.

 

Issue Proposal
Local Property Tax Adjustment $113 million decrease for LEAs in 2023-24, and a decrease of $996 million in 2023-24, because of increased offsetting property taxes.
Cost-of-Living Adjustment $65 million ongoing increase to reflect a 0.76% COLA to programs outside of the LCFF.
County Offices of Education $5 million decrease ongoing decrease to reflect ADA changes applicable to the county office of education LCFF, and a 0.76% COLA
Zero-Emission School Buses Maintains $500 million one-time to support greening school bus fleets in 2024-25.
Curriculum-Embedded Performance Tasks for Science $7 million one-time increase to support inquiry-based science instruction and assessment through the development of a bank of curriculum-embedded performance tasks.
Cradle-to-Career Data System $5 million ongoing increase to support the California College Guidance Initiative.
Nutrition $122.2 million ongoing increase to fully fund the universal school meals program in 2024-25.
Broadband Infrastructure Grant $5 million one-time General Fund increase to extend the program through 2029 instead of through June 30, 2024.
K-12 High Speed Network $3.2 million ongoing increase to support this program.
Parks Access $2.1 million ongoing increase for a county office of education to enable fourth graders attending public schools to access California state parks.
Inclusive College Technical Assistance Center $2 million ongoing increase to establish a Technical Assistance Center.
Homeless Education Technical Assistance Centers $1.5 million ongoing increase to maintain support for Homeless Education Technical Assistance Centers This funding would continue the momentum in increasing homeless youth identification, which is essential to providing the necessary support to improve outcomes.
State Special Schools Infrastructure Support $3.4 million General Fund increase, of which $380,000 is ongoing, to replace critical servers, maintain warranty coverage for network infrastructure, and refresh laptops, tablets, and workstations for students and staff at the State Special Schools and Diagnostic Centers.

 

Budgetary Reserves and Balanced Solutions

The Budget reflects $18.4 billion in total budgetary reserves. This includes $11.1 billion in the Base Stabilizing Account (BSA), $3.9 billion in the Public School System Stabilization Account (PSSSA), and $3.4 billion in the Special Fund for Economic Uncertainties.

The Budget incorporates the following balanced combination of measures to close the shortfall in the budget year:

$13.1 billion: Reserves. The Budget draws upon funds from the state’s reserves including:

  • $10.4 billion: Mandatory BSA Balance and Transfer Suspension,
  • $1.8 billion: Discretionary BSA Balance
  • $900 million: Safety Net Reserve

$8.5 billion: Reductions. The Budget reduces funding for various items including:

  • $500 million: School Facilities Aid Program
  • $494 million: Student Housing Revolving Loan Fund Program
  • $289 million: Middle Class Scholarship Program

$5.7 billion: Revenue/Internal Borrowing. The Budget includes support from revenue sources and borrows internally from special funds, including:

  • $3.8 billion: Increasing the Managed Care Organization Tax Support for Medi-Cal
  • $300 million: Conforming to Tax Cuts and Jobs Act Net Operating Loss Limitation

$5.1 billion: Delays. The Budget delays funding for multiple items and spreads it across the three-year period, beginning in 2025-26, including:

  • $550 million: Preschool, T-K and Full-Day Kindergarten Facilities Grant Program

$3.4 billion: Fund Shifts. The Budget shifts certain expenditures from the General Fund, including:

  • $1.3 billion: state plans retirement contribution reductions using Prop 2 debt repayment
  • $100 million: Unemployment Insurance Interest Payment ($100 million)

$2.1 billion: Deferrals. The Budget defers specific obligations to the 2025-26 fiscal year. Including:

  • $1.6billion: June to July Payroll Deferral
  • $499 million: University of California and California State University Deferrals

2024-25 Governor’s Budget

General Fund Budget Summary

(Dollars in Millions)

2024-25 General Fund Expenditures

(Dollars in Millions)

What’s Next

Additional details will be released as part of the trailer bill language in the weeks to come. CASBO will analyze the Administration’s budget proposals and provide recommendations and position statements during this year’s budget deliberation process.

 

Materials

Governor’s Budget Summary

K-12 Education Summary

Education Budget Agency Report