CASBO Secures Amendments to Major LCFF Bill; Senate Releases Budget Priorities Ahead of the May Revision


AB 938 (Muratsuchi) to be Amended

AB 938 by Assemblymember Al Muratsuchi passed out of the Assembly Education Committee today with bipartisan support. As amended on April 7, 2023, the bill creates new Local Control Funding Formula (LCFF) funding targets, with specific legislative intent stating that the funding would be used to increase school site staff salaries by 50%.  The bill also includes reporting requirements, under which school employers would report the changes in wages over time.

CASBO worked alongside a coalition and submitted a Support if Amended letter which highlighted the following concerns:

  • The funds are intended to increase salaries for classified and certificated staff by 50% by the 2030-31 fiscal year, but the bill is unclear whether that includes the corresponding impact on the cost of the statutory benefits that also would be factored into the cost of total employee compensation.
  • It is unclear whether this would result in a mandate on community-funded school districts that would not receive additional funding under this model.
  • Many local educational agencies (LEAs) would likely not see the full increase due to declining enrollment and average daily attendance (ADA) losses.

CASBO legislative committee members met with the committee consultant to share these concerns and as a result, the following committee amendments were accepted in today’s hearing:

  1.  Delete the intent language regarding raising school site staff salaries by 50% and instead specify that it is the intent of the Legislature to close the wage gap for classified and certificated school site staff in order to recruit and retain school site staff.
  2. Require schools to report the total compensation (salary & benefits) on form J-90.
  3. Clarify that the intent language does not apply to community-funded school districts.
  4. Specify that County Offices of Education and necessary small schools shall receive the same 50% LCFF funding increase.
  5. Require classified salary reporting on the J-90 for certain classifications.

Senate Budget Priorities

This morning, the Senate Democrats unveiled the “Protect Our Progress” budget plan, which centers on responsible investments and actions. The plan includes $26 billion in solutions and builds total reserves to $38.1 billion. The plan comes just weeks before the Governor’s May Revision and CASBO will continue to monitor the budget process.

The plan provides over $4 billion in tax relief with a 25% cut to taxes for small businesses and tax cuts for renters and workers, provides over $3 billion in new ongoing funding for schools and community colleges, $1 billion in ongoing local homelessness reduction funding, and over $1 billion to increase access to childcare. Other highlights include:

  • No ongoing cuts to core programs or middle-class tax increases.
  • Preserves the Rainy Day Fund for future years, where multi-billion dollar shortfalls remain under the Governor’s economic forecast.
  • Doubles the Safety Net Reserve to over $2 billion.
  • Creates a ‘budget resiliency tool’ that will allow net operating loss (NOL) deferrals for businesses tax liabilities during budget emergency years and allows for dollar-for-dollar tax credit for future.
  • Rejects proposed cuts and delays to key infrastructure investments, such as broadband, transit, student housing, climate package investments, libraries, and more.

In response to the Governor’s January proposal, the Senate plan:

  • Approves the increases to the LCFF that were included in the 2022-23 Budget and the 8.13% cost-of-living adjustment (COLA) for the LCFF and affected categorical programs.
  • Rejects the $1.2 billion Proposition 98 reduction to the Arts, Music, and Instructional Materials Discretionary Block Grant, and augments this block grant by $232 million and the $100 million General Fund reduction to the School Facility Program and rejects the delay of $550 million General Fund for the Preschool, Transitional Kindergarten, and Full Day Kindergarten Facility Grant Program.
  • Funds the current year shortfall of $99 million Proposition 98 General Fund in the universal school meals reimbursement program.

The Senate is also proposing the following to address staffing challenges:

  • Provide $1.1 billion one-time Proposition 98 in a noncompetitive block grant to address local certificated and classified staff recruitment needs.
  • Add $1.1 billion ongoing Proposition 98 into the LCFF, on top of the 2022-23 increases and the 8.13% COLA, for local discretionary purposes.
  • Increase funding for the Teacher Residency Grant Program by $150 million Proposition 98, for a total of $500 million.
  • Augment the Kitchen Infrastructure and Training Funds by $100 million Proposition 98.
  • Moves toward childcare rate reform by increasing rates to support and stabilize childcare providers, including providers of State Preschool programs.
  • Overhaul the current childcare family fee structure, including for State Preschool programs, to prevent low-income families from losing access to childcare.