What We’re Watching in California Education – January 2024 Edition

Welcome to the January 2024 edition of What We’re Watching in California Education, a newsletter that we hope will offer you insight into public education conversations happening at our state Capitol. 

Last week, Governor Newsom released his proposal for the 2024-25 state budget and projected a $37.9 billion deficit. Here are the toplines: 

Withdrawal from the Rainy Day Fund Would Protect School Funding: Despite a $37.9 billion deficit, Governor Newsom proposes withdrawing funds from the state reserves to fund K-12 education.  

Governor Maintains Funding for Key Education Programs: With $126.8 billion allocated to K-12 education, the budget proposes investments that are designed to accelerate  learning and holistically support students. 

Cuts and Deferrals Proposed in Preliminary Budget: The preliminary budget proposal includes $8.5 billion in spending cuts. While education was largely spared, public schools and LEAs will see some decreases in funding.  

Withdrawal from the Rainy Day Fund Would Protect School Funding

 The Governor’s preliminary budget proposal for 2024-2025 projects a $37.9 billion budget deficit, what Newsom describes as “a story of correction, a story of normalization after a period of tremendous amount of distortion.” Newsom’s projection is more optimistic than anticipated, following the vetoes of 156 bills in 2023 citing “deep program cuts,” federal tax filing extensions, stock market downturns, and the Legislative Analyst’s Office’s estimate of a $68 billion deficit.  

The budget for TK-12 schools and community colleges currently proposes withdrawing approximately $7 billion from the state’s rainy day fund to fulfill ongoing costs for the 2023-2024 and 2024-2025 fiscal years. Overall, per pupil spending at TK-12 schools under Proposition 98 – which sets how much of the state’s general fund is spent on TK-16 education – is set to increase to $17,653 ($23,519 per pupil when accounting for all funding sources), its highest level ever, as a result of declining enrollment across the state. The budget also includes a required cost of living adjustment of 0.76%, which will result in a decrease of about $1.4 billion in discretionary funds for school districts and local educational agencies (LEA).  

Governor Maintains Funding for Key Education Programs

Slating a total of $126.8 billion for all K-12 education programs, Newsom’s budget currently maintains ongoing funding for programs including community schools, universal school meals, universal transitional kindergarten, augmentation of special education, and the California for All Kids plan—a whole child framework designed to close opportunity gaps by accelerating learning and holistically supporting student needs. He also proposes the following allocations

  • $53.7 million one-time funding for state preschool programs
  • $25 million in ongoing funding to train educators to administer early literacy screenings 
  • $20 million in one-time funding to support educators in teaching the newly adopted math framework
  • $6 million in one-time funding to research and develop models of remote and hybrid learning and support in order to address California’s attendance problem, in addition to statutory changes to offset student absences, mitigate learning loss, and reduce chronic absenteeism. 

Cuts and Deferrals Proposed in Preliminary Budget

While the proposed budget maintains and allocates funding to key educational programs, it also includes $8.5 billion in spending cuts, including a decrease of $500 million for public school construction budgets and a delay in funding the planned $550 million investment in the California Preschool, Transitional Kindergarten and Full-Day Kindergarten Facilities Grant Program (FDK Program). 

With federal pandemic funding set to expire this fall, LEAs who have relied on this funding will have to determine other sources to maintain operations. School districts that used pandemic funds for raises and hiring may face staff layoffs or resort to closing schools with low enrollment. They may also be facing deferrals– or delayed payments until the next fiscal year– meaning that LEAs without significant reserves will face budget shortfalls amid the decrease in state funding. Read more about how the upcoming “fiscal cliff” will affect school spending here.  

As always, this budget will change as we learn more about the state’s economic situation, and as the Governor negotiates with the state Senate and Assembly over the coming months. Stay tuned for the Governor’s revision to this budget proposal in May 2024. 

For additional information on the Governor’s budget, check out these analyses from our partners and colleagues:

        In Community,

        Darcel Sanders, Chief Executive Officer 

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