Proposed State Budget Is A Cause For Guarded Optimism

By: Beth Meyerhoff, California State PTA Legislative Advocate 

Each January in California, a new legislative year kicks off with the governor submitting a proposed state budget. This year, the Governor’s Budget proposal includes funding for many PTA priorities. Nevertheless, in a recent statement, California State PTA  noted “While this proposed budget significantly increases investments in California education, it does not address the inadequate base funding of our schools”

On January 24, 2022, more than 100 people joined the California State PTA Legislation Team virtually to learn more from School finance expert Kevin Gordon, president and a co-founding partner of the Capitol Advisors Group. Originally slated to speak during the postponed Legislative Conference, Mr. Gordon’s presentation enabled advocates across the state to participate. Watch the recording now.

Gordon noted that while California lags behind the rest of the country in education spending, the Governor’s proposed budget could close the gap for California in education spending. (See the  proposed budget by clicking here)  A major caveat for local school districts is that some of the proposed budget increase is one-time money and some is restricted. That means that not all districts/schools will see the same increases.

The budget proposal increases state funding for K-12 schools by  $16 billion over the current year, due to the Proposition 98 minimum guarantee, (Here is a basic explanation of Proposition 98 and how state funding and local property taxes are combined to fund schools.) Gordon noted that California schools have never seen this kind of investment in public education before and the nonpartisan Legislative Analyst’s Office (LAO) projects the entire budget to be $10 billion higher than Governor Newsom’s projections, Gordon expects the financial picture to be even stronger in May.

The Budget Recommends New Investments

In his presentation, Gordon identified three key policy areas in which the budget proposes new investments:

  • Funding for Early Education
  • Ongoing money for a phased-in 3-year rollout for preschool and universal Kindergarten and Transitional Kindergarten (TK).
  • $670 million this year, increasing to $2.7 billion. 
  • Investment in extended learning
  • Permanent, ongoing funding. 
  • Funding increased from $1 billion last year to almost $5 billion this year. 
  • $4.4 billion for learning and almost $1 billion in one-time funding for the arts and music. The ongoing challenge remains Covid and staffing issues. 
  • No opt-out: districts must spend this money on extended learning. 
  • Money may not be the issue in supporting extended learning – it may be an issue of capacity.
  • Funding for Universal meal programs
  • $700 million so that all students can now eat at school and no longer have to apply or qualify for free or reduced priced meals. 
  • School districts must apply for the federal program and drain down the maximum under the school meals program, then California will fund the difference.

Some Specific Funding Needs were Not Addressed

Despite the dramatic increase in funding contained in the governor’s proposal, Gordon identified several areas of opportunity that he expects will get legislative attention as the session progresses.

“The budget is not comprehensive enough around school facilities,” he said. General fund money of $3 billion is allocated for school facilities. Gordon believes a state bond of around $10-15 billion is needed to fund the necessary modernization and new construction needs. Local bonds will not raise enough funds. He noted that Assembly Bill 75 (O’Donnell) would fund $10 billion for school facilities. (Link to bill:

In addition, Gordon said an increase in base funding for school districts needs to continue to be a focus. “Focusing on the base makes sure that we are paying attention to all kids. Targeted funds for some do not leave sufficient funds to keep schools open for all.” He also noted that the Cost of Living Allowance (COLA) is 5.3 percent this year to cover increased costs. However, inflation is approximately 7 percent.

PTA Advocates’ Questions Answered

Q: How should supplemental and concentration grants be calculated?
A: Schools are allocated a base grant plus extra funding (supplemental) for certain categories of students plus additional funding (concentration) if the identified students exceed 55% of the student population. The number of students who count for these supplemental and concentration funds was in part determined by the number of applications for free or reduced-price lunch. California needs a new metric to calculate supplemental and concentration grants now that applications for free and reduced meals will no longer be required.

Q: What is the discussion around Average Daily Attendance (ADA) vs. Enrollment to determine local school funding?
A: Schools in California are funded based on their Average Daily Attendance (ADA). There was a drop-off in attendance for most districts in 2021-22, so the state allocated funds based on ADA from 2019-20. School districts that experienced increases in ADA have complained that this is not fair for them. 

Overall, there is long-term declining enrollment in addition to recent, multi-year enrollment declines in most districts due to Covid. Currently, school districts can be funded based on the current year’s ADA or the prior year’s ADA. The governor has proposed several funding scenarios where districts can choose: 1) the current year; 2) the prior year; 3) the average of the past 3 years. Gordon is advocating that districts be able to use enrollment in 2019-20 as an option as well.

State Senator Anthony Portantino proposes a different approach with Senate Bill 830. It would fund school districts based on enrollment, instead of ADA, and create a new categorical program. Under his bill, funding is determined by calculating ADA and then calculating enrollment and the difference is given to districts. Half of the difference is to be used permanently to address truancy. Gordon’s suggestion is to reduce the amount from 50 percent to 10 percent to be used for truancy and once truancy issues are resolved, districts can use the variance for other needs.

Q: What funding is proposed for Special Education and Mental Health?
A: The Governor’s budget proposes $500 million for special education expenses with some changes to a district-centric model rather than a Special Education Local Plan Area (SELPA) model. However, a proposal to collect the federal government’s share of special education is also necessary. 

There is good news in the Governor’s proposed budget as well as areas of opportunity. Increased funding for aging school facilities will address modernization and safety concerns. Raising the base grant for ALL students should remain a high priority in order for California to move from one of the lowest states in the country in education spending to one of the highest.

Family Engagement in the News

As we gear up to head back to school, our commission has been noticing a trend in the news — there has been a great deal of talk about Family Engagement! This is exciting for all of our PTA units, as this continues to show that the work you do every day to connect families to your campus is significant,  important, and valued. Here are three recent articles that might spark some discussions at your next executive board meeting or in discussions with your principal. 

Family Engagement in the News

USA Today delved into the huge rise in family engagement that came out of necessity during the pandemic, as parents and caregivers were helping their students every day participate in their online, distance learning. They share some of the best practices that came out of the pandemic, and some challenges as we return to school. The article goes on to say that parents and families shouldn’t just be told how to help their children succeed, they should be included in the discussion and treated as a valued member of the academic team.  

New Budget Brings Lots of One-Time Funding

Governor Newsom’s budget is one of the brightest spots in the news when it comes to educational funding. This budget increases funding for mental health needs that our students (and families) have experienced due to the pandemic. It creates Transitional Kindergarten for all 4 year-olds connecting children and families to schools sooner than ever before. There is also a great deal of focus on professional development for teachers- which could include time to devote to better practices for engaging and connecting with families. EdSource has a fairly comprehensive summary of the budget and what it means to the schools in California. 

To Share with our Administrators  

Tips for Communicating with Families – A school district in Florida has turned to social media and video clips to help families feel more connected to what their students are learning and how their children are using technology. Check out the article and an accompanying YouTube video for some great ideas including tech tips for families and tech tours. A great nugget from the interview: “Be where the families are- – find the best communications tools to reach them — a website alone is not enough for our diverse families.”

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Will There be More Money for Schools Next Year? Let’s See…

The headlines say California schools will get billions of dollars of new funding next year under Prop 98 which guarantees schools about 40% of the state budget.

This is great news. But it is only part of the financial picture, because last year schools lost billions of dollars of funding under Prop. 98.

We are at the start of a new budget cycle that projects how much money California will have next year, in this case 2021-22. This includes “guestimates” as to whether schools will get more money or less. Here is a quick look at how this works:

  • In November, the independent legislative analyst reports on the State’s fiscal outlook.
  • In January, the Governor releases his proposed budget, which is usually based on slightly different financial projections from the Department of Finance.
  • In May, the Budget Proposal is revised, based on the most recent economic projections.
  • In June, a final budget is adopted for the next year, starting July 1.

Just to make this a bit more complicated, schools have a special procedure in the budget called “settle up”. When the budget is adopted, there is a projection as to how much schools should get under Prop. 98. If that guess is wrong, and it usually is not quite right because it is hard to guess the future, then next year’s budget corrects this through the settle up. Schools get more money if last year’s budget projection was too low.

That’s what is happening now. The Legislative analyst report in November estimates the minimum Proposition 98 guarantee will increase by more than $13 billion for the current year, 2020–21. This is because tax receipts were higher than anticipated. This is a one-time windfall.

In upcoming years, Prop. 98 school funding is projected to have only a modest increase.

Budget Magic

Last year, based on what was known in May of 2020, the state did not have enough money in Prop. 98 to keep education funding from dropping. So as part of its budget adoption for 2020-21, it included money it hoped to get from the federal government because of the pandemic. Well, that extra money did not happen.

Deferrals: The fallback position was something called “deferrals.” If the federal government did not come through with funding help for schools, the state would have to delay about $12 billion in payments owed to local school districts. (This means school districts would have to meet their ongoing expenses by digging into reserves or borrowing.) The state planned to send schools that $12 billion as the first part of their 2021-22 funding.

Supplemental payments: Even with deferrals, the education budget was so low in 2020-21 that the state also promised to give education extra money from the general fund in 2021-22 to keep education protected.

Where are we now?

Many education advocates and the legislative analyst are recommending that deferrals be eliminated in the current year so schools get the money they are owed on time. This would use up most of the $13 billion in projected new revenue.

We still don’t know, however, what will happen to state revenues for the rest of the current year as the state builds its budget for next year. Will the picture look better or worse?

And what should happen to those supplemental payments promised to schools in the coming years? Schools certainly need the money. But so does the general fund, which pays for lots of programs that support children and families. General fund deficits are projected to grow by a substantial amount in future years given the costs created by the pandemic, the impact on various parts of the state’s economy, and the costs of such extraordinary events as this year’s wildfires. The new Legislature may also have its own ideas about how important it is to fund schools at something beyond the minimum guarantee.

This article is based on information from Ed100 on how the state budget works.