Today, Governor Newsom released the 2021-22 state budget proposal that requests early action from the Legislature to provide financial relief to small businesses and re-open schools as the state faces the highest rate of COVID-19 cases. Although the state’s economic conditions have improved since the enactment of the 2020 Budget Act, the state is still projecting a structural deficit of $7.6 billion for 2022-23 that is forecast to grow to over $11 billion by 2024-25.

Immediate Action for K-12 Education Proposals

  • Re-Opening Schools. The budget proposes $2 billion one-time Proposition 98 General Fund for in-person instruction grants, described in full detail below.
  • Extended Learning Time. The budget proposes $4.6 billion Proposition 98 General Fund to expand learning time with an emphasis on increasing in-person instructional minutes, evidenced-based interventions, and support to students that are either one-grade-level- or credit-deficient in core subject matters.

Proposition 98 General Fund

The budget projects that Proposition 98 funding levels for the 2019-20 and 2020-21 fiscal years increase from the 2020 Budget Act by $1.9 billion and $11.9 billion, respectively, due to increased General Fund revenues. Test 1 is projected to be operative for all fiscal years 2019-20 through 2021-22.

Supplemental Payment. The budget projects a decline of $511 million instead of the assumed $12.4 billion drop in Proposition 98 funding in 2019-20 and 2020-21. As a result, the budget proposes to remove the supplemental payment from statute and instead includes a one-time supplementary payment to K-14 schools of $2.3 billion in 2021-22.

Local Control Funding Formula (LCFF)

The budget proposes to provide the LCFF with both the 2020-21 cost-of-living adjustment (COLA) (2.31%) and the 2021-22 COLA (1.5%) and increases ongoing LCFF funding by $2 billion Proposition 98 General Fund, when adjusted for declining average daily attendance (ADA). The total LCFF funding would be set at $64.5 billion.

In response to AB 1835 by Assemblymember Shirley Weber in the 2019-20 legislative session, the budget includes statutory changes on how local education agencies (LEAs) allocate funds for increased and improved services. The proposal would require that, once established, an LEA’s responsibility to increase and improve services continues until fulfilled and increased the specificity required of county offices of education (COEs) in their review of an LEA’s Local Control Accountability Plan.

Public School System Stabilization Account

The budget projects deposits into the account of $747 million in 2020-21 and $2.2 billion in 2021-22, for a projected balance of $3 billion, which triggers the school district reserve caps of 10% beginning in 2022-23.

Deferrals

The budget proposes to pay off the full K-12 deferral in 2019-20 and $7.3 billion of the K-12 deferral in 2020-21, which leaves $3.7 billion from the June 2022 deferral in effect to be paid in July 2022.

CalPERS/CalSTRS Contributions

The budget proposes CalSTRS apply $820 million to reduce the employer rate from 18.1% to approximately 15.92% and CalPERS to apply $330 million to reduce the Schools Pool employer contribution rate from 24.9% to 23%.

In-Person Instruction Grant and School COVID-19 Reporting

The budget proposes $2 billion to establish the In-Person Instruction Grant program for LEAs in the 2020-21 fiscal year.

Grant Requirements. LEAs, except for non-classroom-based charter schools, shall be eligible for grants if they meet all the following requirements:

  • Submit a completed COVID-19 Safety Plan (CSP) and copies of ratified collective bargaining agreements with their respective union organizations to their COEs by February 1, 2021, or March 1, 2021. Single district counties shall submit their CSPs to the California Department of Education (CDE).
    • The CSP consists of 1) the written COVID-19 prevention program required by the COVID-19 Cal/OSHA Emergency Standards, and 2) the supplemental California Department of Public Health (CDPH) COVID-19 School Guidance Checklist.
    • Post their CSPs on their LEAs’ websites.
  • Certify to their COEs that they have verified that each of their pupils participating in distance learning has access to a computing device, software and high-speed internet access necessary to participate in online instruction by February 1, 2021.
  • Conduct ongoing asymptomatic testing for staff and pupils consistent with the state-supported cadences set in the COVID-19 industry sector guidance for schools issued by CDPH.
  • LEAs applying for a grant on February 1, 2021, can begin to provide in-person instruction by February 16, 2021. LEAs applying for a grant on March 1, 2021, can begin to provide in-person instruction by March 15, 2021.
  • LEAs in counties in the Widespread (Purple) Tier must submit their CSPs to their local health jurisdictions, which must notify LEAs and their COEs within five business days if an LEA’s plan is not approved. If a plan is not disapproved within five business days, in-person instruction may commence on the sixth business day. These requirements do not apply to LEAs already opened for in-person instruction as permitted by state and local health directives prior to February 1, 2021. Disapproval of a CSP will render an LEA no longer eligible to receive grant funding, but they can reapply by March 1, 2021.

Student Prioritization for In-Person Instruction. The optional in-person instruction, using the CDPH Guidance Related to Cohorts (updated September 4, 2020), can be provided to at least all pupils in the following pupil groups:

Funding Allocation. The COE shall submit an LEA’s information to CDE by February 5, 2021, for applications received by February 1, 2021, and by March 5, 2021, for applications received by March 1, 2021. CDE will develop a form that COEs will use to submit an LEA’s information.

CDE will notify each LEA of the grant amount no later than 15 days after the submission deadlines for each application round, and the State Superintendent of Public Instruction shall allocate funds to eligible LEAs based on the following formula:

  • February 1, 2021, Application Cycle: $450 base grant per 2020-21 ADA, augmented for grade span adjustment and 2020-21 LCFF supplemental and concentration grant percentages.
  • February 1, 2021, Application Cycle: necessary small school districts, funded allocation using the ADA as determined in the 2020-21 first principal apportionment, as follows:
    • Less than 25 ADA: $26,464.50
    • 25-49 ADA: $52,925
    • 49-73 ADA: $79,387.50
    • 73-97 ADA: $105,850
  • March 1, 2021, Application Cycle: $337.50 base grant per 2020-21ADA, augmented for grade span adjustment and 2020-21 LCFF supplemental and concentration grant percentages.
  • March 1, 2021, Application Cycle: necessary small school districts, funded allocation using the ADA as determined in the 2020-21 first principal apportionment, as follows:
    • Less than 25 ADA: $19,846.88
    • 25-49 ADA: $39,693.75
    • 49-73 ADA: $59,540.63
    • 73-97 ADA: $79,387.50

Fund Uses and Audit Requirement. The funds shall be available to use until December 31, 2021, and for any purpose consistent with providing in-person instruction for any pupil participating in in-person instruction, including but not limited to:

  • COVID-19 testing
  • Personal protective equipment
  • Ventilation and other site upgrades
  • Salaries for certificated and classified employees providing in-person instruction or services
  • Social and mental health support services provided in conjunction with in-person instruction

LEAs shall report final expenditures of these funds to CDE by January 31, 2022, and the State Superintendent shall initiate collection proceedings for unexpended funds.

For the 2021-22 fiscal year audits, the State Controller shall include instructions in their audit guide that include procedures for complying with the grant requirements. For an LEA that is found to be non-compliant, the State Superintendent shall withhold from the LEA’s principal apportionment a percentage of funds based on a formula.

Other Policy Issues

ADA Collection. The budget establishes new expectations for LEAs in how they serve students and how the state funds education, as follows:

  • Assumes that in-person instruction is the default mode of instruction in 2021-22, understanding that alternative models of instruction may continue to be offered as a result of health and safety concerns.
  • Does not include a new ADA hold harmless in 2021-22. LEAs experiencing enrollment declines in 2021-22 will retain the ability to receive apportionment based on the higher of their 2019-20 or 2020-21 ADA.

Adults in Charter Schools. The budget clarifies existing law, which does not allow charter schools to receive state apportionment funding for students above age 19, except under specific circumstances. It also provides CDE with the authority to collect information from charter schools that receive funding for adult students and validate their compliance.

Teacher Preparation and Support Programs

Educator Professional Development – $315.3 million.  The Administration is committed to supporting educators with the support they need to successfully meet the needs of their students both in the short and long terms:

  • $250 million one-time Proposition 98 General Fund for an Educator Effectiveness Block Grant to provide LEAs with resources to expedite professional development for staff in high-need areas.
  • $50 million one-time Proposition 98 General Fund to create statewide resources and provide professional development for social-emotional learning.
  • $8.3 million one-time Proposition 98 General Fund for the California Early Math Initiative for professional development in math teaching strategies for pre-K-3 students through the statewide system of support.
  • $7 million one-time non-Proposition 98 General Fund to UC Subject Matter Projects to create professional development focused on learning loss in core subject matters.
  • $5 million one-time Proposition 98 General Fund for professional development and instructional materials for LEAs offering, or that would like to offer, ethnic studies.

Teacher Pipeline Programs – $225 million. Proposes $100 million one-time non-Proposition 98 General Fund to continue the Golden State Teacher Grant Program:

  • $100 million one-time Proposition 98 General Fund to expand the Teacher Residency Program.
  • $25 million one-time Proposition 98 General Fund to expand the Classified School Employees Credentialing Program.

Free Application for Federal Student Aid (FAFSA). The budget requires LEAs to confirm that all high school seniors complete a FAFSA or California Dream Act application beginning in the 2021-22 academic year.

Special Education. The budget proposes 1) $300 million ongoing Proposition 98 General Fund for the Special Education Early Intervention Grant for evidence-based services for infants, toddlers and preschoolers; 2) $5 million one-time Proposition 98 General Fund to establish processional learning networks to increase LEA capacity to access Medi-Cal funds and $250,000 for a lead COE to provide guidance within the statewide system of support; and 3) $500,000 one-time Proposition 98 General Fund for a study to examine certification and oversight of non-public school special education placements.

Student Health and Well-Being

Community Schools. The budget proposes $264.9 million one-time Proposition 98 General Fund for LEAs to develop or expand new or existing models of community schools while prioritizing schools in high-poverty communities.

Student Mental Health. The budget proposes $400 million one-time mix of federal funds and General Fund to implement an incentive plan to increase the number of students receiving preventative and early intervention services by schools, as follows:

  • $25 million one-time Mental Health Services Fund to expand the Mental Health Student Services Act Partnership Grant Program. Priority will be given to high-poverty and rural schools with funds supporting strategies that respond to the mental health needs of students.
  • $25 million ongoing Proposition 98 General Fund to fund partnerships with county behavioral health to support student mental health services. Funds are intended to match funding in county Mental Health Services Act spending plans.

Major K-12 Budget Adjustments

This section highlights the budget’s significant adjustments to various educational programs outside of the LCFF.

Materials