State budget agreement pays down all deferrals in a win for education advocates

The final state budget agreement between the Legislature and Gov. Gavin Newsom, Senate Bill 129, includes the full elimination of all funding deferrals — a major win for schools — and addresses areas of great need for California’s students, though concerns remain about funding for program expansions and the future of virtual learning.

Referred to as “Budget Bill Junior,” the Budget Act of 2021 outlines many of the agreements reached between the Governor and the Legislature but leaves several items outstanding. It remains to be seen which of these outstanding issues will be resolved in budget trailer bills, which may be released in the coming days.

Proposition 98

Adopting more conservative revenue estimates from the Newsom administration, the budget agreement includes a $93.7 billion Proposition 98 guarantee for 2021–22. Major components include:

  • $11 billion to fully pay down all remaining apportionment deferrals
  • A 5.07 percent “super-COLA” for the Local Control Funding Formula
  • An increase in the LCFF concentration grant from 50 to 65 percent of the base grant equal to $1.1 billion in ongoing funding, to be used to increase staff for direct services

Unemployment insurance

As part of the budget trailer bill package, AB 138 contains language that limits the contribution rate for the 2021 and 2022 fiscal years to 0.5 percent, which would be significantly lower than the 1.24 percent rate proposed by the Employment Development Department.

Transitional kindergarten

The agreement would adopt a mixed delivery system for universal transitional kindergarten. Once fully phased in in 2025–26, the program is estimated to cost about $2.7 billion. Program details include:

  • Expansion of age cohorts by two month increments per year, beginning in 2022–23 and reaching full expansion in 2025–26
  • Full school day instruction
  • A staff to student ratio of 1:12 in 2022–23 and 1:10 by 2023–24; subject to future budget appropriations
  • A mixed delivery system allowing for California State Preschool Program wraparound for after-school and summer school care, and parent choice for entering or retaining children in state preschool programs, child care or Head Start programs

Special education

While less than the increase proposed by the Legislature, the final agreement boosts special education by $656 million, including:

  • $396.8 million ongoing Proposition 98 funds to increase the base rate for the special education formula
  • $260 million in ongoing Proposition 98 funds for Early Intervention Grants to provide services for children ages 0-5
  • A 4.05 percent cost-of-living adjustment for the special education formula
  • $550 million in one-time funding for increased support to the Special Education Alternative Dispute Resolution and learning recovery supports for special education students due to the impacts of COVID-19

Teacher recruitment and retention

The agreement includes $1.5 billion in one-time funds over five years for a new Educator Effectiveness Block Grant, as well as $1.3 billion in one-time funding for teacher recruitment, retention and professional development.

Expanded learning and learning recovery

The agreement includes significant funding for expanded learning and learning recovery programs to combat the effects of the COVID-19 pandemic, including:

  • $1 billion in 2021–22, growing to $5 billion at full implementation, for an Expanded Learning program providing before- and after-school programs. Funds will be provided on a per-average daily attendance count of low-income, English learner and foster youth students in grades TK-6.


The agreement includes funding to launch a Universal School Meals Program, a Legislative priority, by providing:

  • $54 million to increase state meal reimbursements in 2021–22
  • $650 million in ongoing Proposition 98 funds, beginning in 2022–23, to provide breakfast and lunch to all students


While not specific to education, the budget agreement includes $6 billion for broadband infrastructure and improved broadband access, including $3.75 billion for a statewide open-access, middle-mile network.

Other programs

  • $150 million in additional ongoing funding for the Career Technical Education Incentive Grant Program
  • $3 billion in one-time funding through 2028 to expand the California Community Schools Partnership Program
  • $547.5 million in one-time funds for the A-G Completion Grant Program

What’s not included?

Many significant issues remain outstanding, which may be addressed in the forthcoming education budget trailer bill. These could include:

  • Details on how schools may use independent study to continue to offer remote options for families who do not wish to return to in-person instruction
  • Actual rebenching of Proposition 98 to reflect the Governor’s announcement of his intention and the Legislature’s agreement to rebench Proposition 98 to reflect the anticipated growth associated with the implementation of universal TK
  • Additional allocation of General Fund revenues to buy down the long-term pension liability and rates on behalf of LEAs

What’s next?

Once the Legislature approves the agreement, Gov. Newsom will have until June 30 to sign the budget bill. After the bill is signed, any remaining points of disagreement and topics needing further clarification will be addressed in budget trailer bills. Any number of budget trailer bills are still expected to address remaining outstanding issues. CSBA will continue press the Governor and Legislature to resolve outstanding issues.