Today, Governor Gavin Newsom released the 2022-23 state budget proposal that focuses on addressing five essential threats:
- Fighting COVID-19 with science
- Combating the climate crisis
- Confronting homelessness
- Tackling the cost of living
- Keeping our streets safe
The 2022-23 budget proposal projects a surplus of $45.7 billion, which includes $20.6 billion in General Fund for discretionary purposes, $16.1 billion in additional Proposition 98 General Fund support, and $9 billion in reserve deposits and supplemental state pension payments.
The budget projects the State Appropriations Limit (Gann Limit) will likely be exceeded in the 2020-21 and 2021-22 fiscal years, with funds above the limit constitutionally required to be allocated evenly between schools and taxpayers in the form of refunds. An updated calculation of this limit, and proposals to address it, will be included in the May Revision.
The details will be released as part of the trailer bill language in early February 2022. CASBO will analyze the Administration’s budget proposals and provide recommendations and position statements during this year’s budget deliberation process.
Proposition 98 General Fund
The budget projects that Proposition 98 funding levels from 2020-2021 through 2022-23 fiscal years increase by $16.1 billion over the level funded in the 2021 Budget Act due to rebenching. Test 1 is projected to be operative for all fiscal years 2020-21 through 2022-23.
Local Control Funding Formula (LCFF)
The budget proposes an LCFF cost-of-living adjustment (COLA) at 5.33%, $3.3 billion Proposition 98 General Fund. The LCFF total is proposed at $70.5 billion.
Public School System Stabilization Account
The budget includes payments of $3.1 billion in 2020-21, $3.6 billion in 2021-22 and $3.1 billion in 2022-23 into the Public School System Stabilization Account, for a total of $9.7 billion at the end of 2022-23. The balance of $6.7 billion in 2021-22 triggers school district reserve caps beginning in 2022-23.
Declining Enrollment
The budget proposes changes to the average daily attendance (ADA) component of the LCFF and the independent study program to assist local education agencies (LEAs) in managing declining enrollment and simplifying attendance collection, as follows:
- Amends the LCFF calculation to consider the greater of a school district’s current year, prior year or the average of three prior years’ ADA. The formula change is intended to help districts with significant declining enrollment.
- Intends to engage in outreach and discussions to explore options for providing declining enrollment protections for charter schools.
- Ongoing costs associated with these policies are estimated to cost $1.2 billion Proposition 98 General Fund.
Other Policy Issues
Independent Study Program
The budget proposes to allow synchronous instruction to count for instructional time in traditional independent study, in addition to student work product, and provide flexibility on the timeline for an LEA to collect a signed independent study plan.
Educator Workforce
The budget proposes $54.4 million in a mix of Proposition 98 General Fund and General Fund in a multi-year effort, as follows:
- $24 million one-time General Fund to waive certain teacher examination fees.
- $12 million one-time General Fund to extend the waiver of select credentials fees.
- $10 million one-time General Fund to support a competitive grant program to develop and implement integrated teacher preparation programs.
- $5.2 million Proposition 98 General Fund and $322,000 General Fund to re-establish the Personnel Management Assistance Team to assist LEAs in improving hiring and recruitment practices.
- $1.4 million General Fund to establish career counselors for prospective educators at the Commission on Teacher Credentialing (CTC).
- $924,000 General Fund to support CTC’s administration of multiple grant programs and fee waivers.
- $900,000 General Fund for the CTC to contract for public outreach to highlight the value and benefits of educational careers in California’s prekindergarten through grade 12 schools.
- Extends statute authorizing any holder of a credential or permit issued by the CTC to serve in a substitute teaching assignment aligned with their authorization, including for staff vacancies, for up to 60 cumulative days for any one assignment.
Early Literacy
The budget proposes the following literacy initiatives:
- $500 million one-time Proposition 98 General Fund, over five years, for grants to high-need schools to train and hire literacy coaches and reading specialists to guide productive classroom instruction and to offer one-on-one and small group intervention for struggling readers.
- $200 million one-time Proposition 98 General Fund to establish a grant program to create or expand multi-lingual school and classroom libraries offering culturally relevant texts to support reading instruction.
- $10 million one-time General Fund for the California Department of Public Health to partner with First 5 California on the Books for Children Program.
- $2 million one-time General Fund to incorporate early identification for learning disabilities into the state’s preschool assessment tools and $60 million one-time Proposition 98 General Fund to provide educator training on effective use of these tools.
- Proposes statutory language that clarifies that the Expanded Learning Opportunities Program (ELO-P) funds may be used to hire literacy tutors that would assist students as part of the program’s enrichment activities.
ELO-P
The budget proposes $3.4 billion ongoing Proposition 98 General Fund for ELO-P and $937 million one-time Proposition 98 General Fund to support infrastructure with a focus on integrating arts and music programs. The budget also continues to support one-time reimbursement rate increases for the After School Education and Safety and 21st Century Community Learning Centers programs, an investment of $148.7 million ongoing Proposition 98 General Fund.
Special Education
The budget proposes $500 million ongoing Proposition 98 General Fund for the special education funding formula with the following policy changes:
- Amends the special education funding formula to calculate special education base funding allocation at the LEA level rather than the special education local plan area (SELPA) level.
- Consolidates two special education extraordinary cost pools into a single cost pool to simplify the formula.
- Allocates Educationally-Related Mental Health Services funding directly to the LEA rather than the SELPAs.
- Develops a Special Education Addendum to the Local Control and Accountability Plan that will support inclusive planning and promote cohesion.
- Develops comprehensive Individualized Education Programs (IEPs) by focusing a special education resource lead on IEP best practices and establishing an expert panel to continue to work of creating a model IEP template.
- Establishes an alternate diploma and a workgroup to explore alternative coursework options for students with disabilities to demonstrate completion of the state graduation requirements.
Child Nutrition
The budget proposes $596 million Proposition 98 General Fund to support universal access to subsidized school meals; $450 million one-time Proposition 98 General Fund, over three years, to update school kitchen infrastructure and equipment; and $3 million one-time Proposition 98 General Fund to support the School Breakfast and Summer Meal Start-Up and Expansion Grant Program.
The budget proposes $30 million one-time General Fund to establish additional farm-to-school programs and $3 million ongoing General Fund to expand the regional California Farm to School Network by adding 16 new positions to the California Department of Food and Agriculture.
Facilities and Transportation
The budget proposes about $1.3 billion one-time General Fund in 2022-23 and $925 million one-time General Fund in 2023-24 to support new construction and modernization projects through the School Facilities Program. Of the remaining Proposition 51 bond funds, $1.4 billion will be allocated and is expected to be exhausted in 2022-23.
The budget also includes $30 million ongoing Proposition 98 General Fund to support eligible facilities costs for the Charter School Facility Grant Program, which funds can be used for costs associated with remodeling buildings, deferred maintenance, initial installation or extension of service systems and other built-in equipment, site improvements, and facility modifications to mitigate the spread of COVID19.
The budget proposes $1.5 billion one-time Proposition 98 General Fund, over three years, to support school transportation programs, to be focused on electric school bus fleets and construction of charging stations. The grants would be of at least $500,000 with priority for LEAs with high concentration counts of unduplicated counts of students and small and rural LEAs.
Major K-12 Budget Adjustments
This section highlights the budget’s significant adjustments to various educational programs outside of the LCFF.
Early Education
Initial Reactions from Legislative Leaders
Speaker Rendon Issues Statement on Budget Proposal
Assembly Speaker Anthony Rendon (D-Lakewood) today released the following statement in response to the governor’s initial budget proposal:
“The Governor’s proposal sets the stage for continued, careful implementation of last year’s bold budget initiatives and new investments in education, transportation, and climate-related infrastructure to benefit all Californians. I want to thank the Governor for his continued support of expanding health care coverage to all Californians.
“At the start of session last week, I told my Assembly colleagues, ‘Let’s get to work.’ That work will include budget collaboration with the Governor and Senate Pro Tem Atkins to fund state and local responses to our public health challenges, especially COVID19. This is especially important to support Californians facing the Omicron spike.
“In the absence of new federal funding to assist small businesses with COVID sick leave requirements, I support augmenting the Governor’s budget to add state funding for this purpose, and we have already had a productive discussion on this.
“It truly is time to get to work.”
Senate Leader Atkins, Budget Chair Skinner Issue Statements on Governor’s 2022-23 State Budget Proposal
Senate President Pro Tempore Toni G. Atkins (D-San Diego); and Senator Nancy Skinner (D-Berkeley), Chair of the Senate Budget and Fiscal Review Committee, released the following statements regarding the governor’s proposed 2022-23 state budget:
Senate President Pro Tempore Toni G. Atkins:
“The Senate’s budget priority is to put California’s wealth to work for those who need it most — middle class families and those struggling to get by. The Governor’s initial budget proposal is in line with that goal, and we are already working to ensure the final 2022-23 budget will meet the needs of the present, build for the future, and reflect the lessons of the past. The responsible budgets Democratic Legislators and Governors have enacted over the last decade, using vital tools provided to us by the voters, have put us in position to make important investments in schools and infrastructure, grow the targeted tax credits that have proved so successful for families and small businesses, restore the California dreams of affordable housing and affordable college, and, most important, create a healthier, more sustainable and equitable California.”
Senate Budget and Fiscal Review Committee Chair Nancy Skinner:
“Gov. Newsom’s budget proposal complements priorities outlined by the Senate in our December values statement: ‘Putting Our Wealth to Work for a More Equitable California.’ I look forward to reviewing the governor’s plan and working with Pro Tem Atkins, legislative colleagues, and the administration to create a 2022-23 budget that further moves toward an equitable economy for all. As the pandemic continues to ravage families, schools and small businesses, we will pay particular attention to supporting those still struggling as well as increased investments in affordable and homeless housing, our essential workforce, health and mental health services, education infrastructure and actions that strength California’s leadership on climate protection.”
The Senate began laying the groundwork for the 2022-23 budget last summer and, in December 2021, released a set of key values that focus on putting California’s wealth to work for a more equitable economy. Those priorities include maintaining the state’s historic reserves to protect the progress we are making from future downturns; aligning new commitments with Gann Limit requirements, such as maximizing infrastructure investments, including for schools and higher education, and strengthening targeted tax relief programs; and building a more equitable economy through investments that will help get California back to work, strengthen the middle class, assist struggling families and aging Californians, address housing challenges and homelessness, and improve and broaden access to quality education. More information on the Senate’s key budget values can be found here.