May Revision: What it means for K-12 education

Gov. Gavin Newsom’s May Budget Revision, released on May 12, reveals a budget shortfall that has grown by $9.5 billion from the Governor’s proposed January Budget to $31.5 billion. The Governor’s proposal attempts to insulate schools from the fallout by protecting recent investments and providing an 8.22 percent cost-of-living adjustment (COLA), which is appreciated. This seemingly good news is dampened by the $4.3 billion in cuts to critical one-time grant programs that threatens to overshadow the $3.4 billion COLA increase in the coming 2023–24 school year.

“As the budget process advances, CSBA will continue to advocate for restoration of this critical funding, as well as additional resources for academic interventions, supplemental services, mental health supports and infrastructure to help students rebound from the pandemic,” said CSBA President Susan Markarian.

Read CSBA President Susan Markarian’s full statement on the May Budget Revision.

CSBA’s Governmental Relations team held a webinar on May 12 analyzing the May Budget Revision. A recording is available to view here.

May Revision reflects CSBA advocacy for juvenile court and county community schools

Throughout this year, CSBA has partnered with the California County Superintendents and the Los Angeles County Office of Education (LACOE) to spearhead Assembly Bill 906 (Gipson, D-Carson) and a related budget request to provide needed funding for juvenile court and county community schools. Although more details are to come, Gov. Newsom’s May Revision proposes an additional $80 million in ongoing Proposition 98 funding to support these county office of education (COE)-operated schools. Greater detail is needed on exactly how this funding would be distributed, but this proposal reflects a significant win for CSBA advocacy and its county board member membership, especially at a time of declining revenues.

Also included in the May Revision is a proposal to increase the COE base grant by 50 percent to further support the differentiated assistance they provide to member school districts in their counties. This is to reflect the proposal included in the Governor’s January Budget to lengthen the time of differentiated assistance from one to two years of eligibility.

Prop 98 Guarantee drops to $106.8 billion; LCFF COLA rises to 8.22 percent

The May Revision proposes $106.8 billion in Proposition 98 funding, a reduction of $2 billion from the Governor’s January Budget. As in January, the Proposition 98 Guarantee is projected to remain in Test 1 through 2023–24 and continues to include a rebenching of the guarantee to accommodate the expansion of universal transitional kindergarten (UTK). Ongoing per-pupil funding levels are projected to be $23,706 per student inclusive of all funding sources and $17,460 in Proposition 98 funds.

The Governor’s revised budget increases the projected Proposition 98 “Rainy Day” fund to $10.7 billion through 2023–24, which continues to trigger the statutory 10 percent cap on local school district reserves, and would reach the state constitutional cap. The reserve cap does not apply to small school districts (2,500 ADA and below) or to community funded districts, nor does it apply to committed reserves voted on by governing boards.

The COLA for the Local Control Funding Formula (LCFF) has grown from 8.13 percent in January to 8.22 percent in May. However, the increase, which amounts to an additional $3.4 billion in ongoing funding, is overshadowed by $4.3 billion in cuts to critical one-time grant programs; cuts intended by the administration to protect COLA and ongoing base funding.

Substantial cuts to Arts, Music & Instructional Materials (AMIM) and Learning Recovery Emergency (LRE) Block Grants

The Governor’s revised plan would further reduce the amount of one-time Proposition 98 General Fund provided for the AMIM Grant by an additional $607 million. The January Budget reduced the funding for the AMIM by $1.2 billion to $2.3 billion; this additional reduction will bring the total cut to $1.8 billion, a 50 percent reduction to this program. Furthermore, the May Revision proposes a $2.5 billion decrease in one-time Proposition 98 General Fund for the LRE Block Grant, taking support for the block grant from $7.9 billion in January to $5.4 billion in the May Revision. This equates to a 30 percent reduction.

Continued commitment to Universal Transitional Kindergarten

Gov. Newsom continues the state’s commitment to fully implement UTK, including rebenching Proposition 98 to reflect enrollment growth, but with reductions based upon revised enrollment estimates. Specifically, the May Revision reduces the first-year costs for the initial expansion of eligibility from Dec. 2 to Feb. 2 from $604 million to $357 million. This includes an associated reduction in Proposition 98 General Fund for schools to add one additional certificated or classified staff person to each UTK class from $337 million to $283 million.

For the expansion of eligibility from Feb. 2 to April 2, the Governor is revising the proposed funding for the coming 2023–24 school year from $690 million to $597 million. It should also be noted that the May Revision does not include funding to trigger the statutory language requiring the lowering of the UTK teacher-to-student ratio from 1:12 to 1:10. The 1:12 ratio is proposed to remain for the 2023–24 school year.

Accountability and Equity Multiplier

The May Revision proposes to strengthen accountability for LEAs that receive funding pursuant to the Equity Multiplier, an LCFF add-on introduced in the January proposed budget. The changes also intend to ensure the quality of educator preparation provided by LEAs with low student performance. The multiplier will allocate $300 million in ongoing Proposition 98 General Fund to LEAs with high concentrations of students who are eligible for free meals.

Increased flexibility for Expanded Learning Opportunities Program

The Governor’s January Budget maintained the $4 billion in ongoing Proposition 98 funding for the Expanded Learning Opportunities Program (ELO-P) to address lost learning opportunities due to the pandemic through the provision of before-, after-school and summer programs. The May Revision maintains the Governor’s January Budget proposal to clarify that LEAs can offer 30 non-school days during the summer if they choose, without being penalized. The May Revision further builds upon this flexibility by extending the expenditure deadline by one year for ELO-P funds received in 2021–22 and 2022–23 from June 30, 2023, to June 30, 2024.

Adjustments to education workforce proposals

Continuing the theme of preserving the investments the state made in K-12 education during the pandemic, the May Revision leaves most of the teacher recruitment and retention program funding proposals largely intact, but with some adjustments:

  • Increases the Teacher and School Counselor Residency Program grants per-candidate allocation to grantee LEAs and allows candidates to complete their service requirements in eight years instead of five years, and provides flexibility for candidates to fulfill their service requirement by teaching in schools outside of the sponsoring district.
  • Permits teachers who were unable to complete their credential due to the pandemic to meet their Teaching Performance Assessments through a Commission on Teacher Credentialing (CTC)-approved induction program or through two years of satisfactory teacher evaluations.
  • Permits the CTC to issue a credential to any U.S. military servicemember or their spouse who has a valid credential from another state who is relocated to California on military orders.
  • Requires the CTC to review how transcript reviews can be used in lieu of requiring teaching candidates to take state-mandated exams to demonstrate competence.

New investments in literacy and dyslexia screening

The Governor’s May Revision continues his prioritization of identification and intervention to improve literacy rates for students, including those with dyslexia. The May Revision proposes to require LEAs to begin screening pupils in K-2 for risk of reading difficulties, including dyslexia, by the 2025–26 school year. $1 million one-time Proposition 98 General Fund will be provided to support the convening of an independent panel of experts to approve a list of screening instruments for these assessments. The administration states they intend to fund professional development for this purpose in future budgets. For students identified as at risk of reading difficulties, including dyslexia, LEAs would be required to provide supports and services. Greater detail will be provided in trailer bill language, but this proposal appears to be built upon language contained in Senate Bill 691 (Portantino, D-Burbank).

Added funding for universal school meals

The Governor’s January Budget included approximately $1.5 billion in ongoing Proposition 98 General Fund to support the Universal School Meals Program, which provides public K-12 students with access to two free meals per school day. Due to greater demand for meals, the May Revision includes an additional $110 million in one-time Proposition 98 General Fund and approximately $191 million ongoing Proposition 98 General Fund to fully fund the program in the 2022–23 and 2023–24 fiscal years.

No major changes for special education funding

There are no proposed changes to the funding proposed in the January Budget for special education, except for an increase in the proposed COLA from 8.13 percent in January to 8.22 percent in the May Revision.

Additional adjustments to education programs

The Governor also proposes a number of additional adjustments to education programs, including:

  • Categorical program COLAs: A decrease of $1.7 million ongoing Proposition 98 General Fund for selected categorical programs for 2023–24, reflecting the change in the cost-of-living factor to 8.22 percent and changes in enrollment projections.
  • The Arts and Music in Schools: Funding Guarantee and Accountability Act (Proposition 28): A decrease of $8 million to support the implementation of Proposition 28, reflecting the decrease in Proposition 98 and bringing the program to approximately $933 million in 2023–24.
  • Bipartisan Safer Communities Act, Stronger Connections Program: An increase of $119.6 million one-time federal funds to support state-level activities related to school climate and safety through the Stronger Connections Program.
  • Bilingual Teacher Professional Development Program: An increase of $20 million one-time Proposition 98 General Fund to be available through 2028–29 to support the Bilingual Teacher Professional Development Program.
  • Restorative justice practices: An increase of $7 million one-time Proposition 98 General Fund to support LEAs implementing the restorative justice best practices that are currently under development by the California Department of Education.
  • Golden State Teacher Grant Program: An increase of $6 million one-time federal funds to support grants to teacher candidates enrolled in a special education teacher preparation program who agree to teach at a high-need school site. Additionally, the May Revision alters proposed statutory changes transmitted with the Governor’s Budget to maintain the requirement that awardees serve in high-need schools.
  • California School Information Services: An increase of $2.1 million ongoing Proposition 98 General Fund to support the California School Information Services division of the Fiscal Crisis and Management Assistance Team.
  • Local Control and Accountability Plan Query Tool and eTemplate: An increase of $148,000 ongoing Proposition 98 General Fund to support refinements to the LCAP Query Tool and eTemplate.
  • Basic aid wildfire property tax backfill: An increase of $632,000 one-time Proposition 98 General Fund to backfill reduced property tax revenues for certain school districts that were impacted by the Kincade Fire.
  • LACOE professional development and leadership training: An increase of $1 million ongoing Proposition 98 General Fund for the Los Angeles County Office of Education to support professional development and leadership training for education professionals related to antibias education and the creation of inclusive and equitable schools, pursuant to Chapter 13, Statutes of 2015.
  • LACOE after-school education and safety programs: An increase of $3 million ongoing Proposition 98 General Fund to the Los Angeles County Office of Education to contract with Save the Children to support after-school programs in rural districts.

What’s next?

With the release of the May Revision, budget season will begin in earnest. Negotiations between the Newsom Administration and the Legislature, along with budget hearings in the Senate and Assembly will continue through May until the June 15 deadline to pass a budget bill. With revenues still uncertain, it’s likely that the bulk of education issues will be resolved in budget trailer bills hammered out over the summer. CSBA will continue to provide updates and opportunities for advocacy as the cycle continues.

For more budget deep dives, join CSBA for a series of Budget Perspectives Workshops in partnership with Capitol Advisors in counties across the state from May 22-June 1. Read more and register here.

CSBA is also co-sponsoring Budget Perspectives Workshops in partnership with Capitol Advisors in counties across the state from May 23 through June 1. Click here for more information and to register.