What We’re Watching in California Education: May 2024 Edition

Welcome to the May 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.

Governor Newsom recently released the May Revision of the proposed 2024-25 state budget. The biggest takeaway is that despite the state being in a very difficult fiscal environment, K-12 education was largely spared from major cuts. Here are the toplines:

K-12 Education Funding: Challenges and Adjustments: Governor Newsom’s May Revision of the California State Budget maintains K-12 education funding at $109.1 billion for 2024-25 and preserves $8 billion in additional 2022-23 spending outside of Proposition 98 calculations, raising concerns about future spending stability. 

Instructional Continuity and Attendance Recovery Initiatives: The May Revision proposes initiatives to enhance instructional continuity and stability funding tied to attendance, allowing Local Educational Agencies (LEAs) to include attendance recovery time for funding purposes and requiring remote instruction access during extended emergencies.

Higher Education Funding Cuts: Scholarships and Employment Programs: Significant cuts were made to higher education funding, including reducing the Middle Class Scholarship Program by $510 million and the Learning-Aligned Employment Program by $485 million, impacting financial aid and employment opportunities for students. 

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K-12 Education Funding: Challenges and Adjustments

Governor Newsom’s May Revision for the 2024 California State Budget has brought significant updates to K-12 education funding, reflecting a challenging fiscal environment. The revised Proposition 98 funding for K-12 schools is set at $109.1 billion for 2024-25, consistent with the Governor’s initial budget proposal in January. However, funding levels for previous years have been adjusted downward: the 2022-23 funding is now $97.5 billion (down from $98.3 billion), and the 2023-24 funding is $102.6 billion (down from $105.6 billion).  

Because 2022 tax revenues ended up lower than initially expected, the state has spent approximately $8 billion more for education in 2022-23 than the legally required minimum established by Proposition 98. To avoid retroactively cutting that spending, the Governor’s budget proposes an unusual maneuver to preserve that additional funding, but designate that spending as outside of the Prop 98 calculations. This maneuver has generated some controversy, with worries about whether this merely delays difficult decisions or could lead to an erosion of education spending a few years down the line. 

The total per-pupil expenditure from all sources is projected to be $23,878 in 2024-25, up from $23,519, while per-pupil expenditure from Proposition 98 funds will be $17,502, slightly down from the January estimate of $17,653. The budget proposes a 1.07% cost-of-living adjustment (COLA) for the Local Control Funding Formula (LCFF) and other categorical programs, adding approximately $3 billion in new funding. However, much of this increase may be absorbed by rising costs, offering limited financial relief to districts.

Significant withdrawals from the Public School System Stabilization Account (PSSSA) are projected, with $1 billion and $2.6 billion required in 2023-24 and 2024-25, respectively. These withdrawals, coupled with a discretionary withdrawal of $4.8 billion in 2023-24, aim to balance the fiscal shortfall but risk depleting reserves, impacting school district financial stability.

Key Reductions and Delays to K-12 Education Funding:

• School Facilities Aid Program: Eliminates $375 million in one-time support.
• California Preschool, Transitional Kindergarten, and Full-Day Kindergarten Facilities Grant Program: Delays $550 million planned for 2024-25 to 2025-26.
• Golden State Teacher Grant Program: Reduces by $60.2 million, leaving $50 million.

Key Increases to K-12 Education Funding:

• Universal School Meals: Increases funding by $122.2 million, ensuring continued support for free meals for all students.
• K-12 High Speed Network: Increases funding by $3.2 million ongoing Proposition 98 General Fund.
• Zero-Emission School Buses: Maintains $500 million one-time Proposition 98 funding initially enacted during the 2022-23 Budget Act, but pre-pays the 2025-26 amount with an additional $395 million.

Instructional Continuity and Attendance Recovery Initiatives

The budget proposes some initiatives to respond to ongoing challenges in maintaining instructional continuity, and the volatility of school funding being tied to attendance. If this is adopted, starting July 1, 2025, Local Educational Agencies (LEAs) will be allowed to add attendance recovery time to attendance data submitted for funding purposes, including Saturday school, intersessional school, and before/after school programs, exempt from minimum day requirements. Additionally, LEAs will be required to provide pupils with access to remote instruction or support to enroll at a neighboring LEA during emergencies lasting five or more days. This initiative also encourages LEAs to offer hybrid or remote learning opportunities to students unable to attend school.

Higher Education Funding Cuts: Scholarships and Employment Programs

While K-14 education was largely spared in the May revision, this was not the case for higher education funding, including affecting scholarships and grants that are crucial for student access and affordability. Despite strong advocacy from our GO Fresno families, who engaged Central Valley legislators in nuanced discussions about the need for Cal Grant Reform, the funding for its implementation was not included in the Governor’s proposal. This setback underscores the complexities of budget negotiations, especially during a period marked by significant cuts impacting high-need populations.

The budget also reduces funding for the Middle Class Scholarship Program by $510 million, leaving only $100 million in ongoing support. This substantial cut jeopardizes the financial aid available to middle-class students, during a time of rising college costs. Additionally, a one-time reduction of $485 million in the Learning-Aligned Employment Program reflects the balance of unspent funds. This reduction could limit valuable employment opportunities for students that align with their academic pursuits, potentially affecting their overall educational experience and financial stability.

Key Increases to Higher Education Funding:

• Cradle-to-Career: $5 million ongoing Proposition 98 General Fund to support the California College Guidance Initiative, part of the Cradle-to-Career Data System
• Inclusive College Technical Assistance Center: Increases funding by $2 million ongoing Proposition 98 General Fund to support a technical assistance center that assists LEAs with submitting the Free Application for Federal Student Aid, among other activities.

For additional information on the Governor’s May Revise, check out these analyses from our colleagues:

• Legislative Analyst’s Office: The 2024-25 Budget: Proposition 98 and K-12 Funding in the May Revision
• California Budget & Policy Center: Understanding the Governor’s 2024-25 May Revision
• Californians School Board Association: 2024-25 Education Budget Resources
• California Community Colleges: Joint Analysis on Governor’s 2024-25 May Revision