On June 28, 2021, the California State Assembly and Senate reached nearly a final budget agreement with Gov. Gavin Newsom on how to spend $262.6 billion, of which $196.4 billion is from the state General Fund. The final budget package relies on the governor’s May Revise revenue estimates, in addition to $1.6 billion in higher-than-expected April and May revenues, but does not account for June revenues.

The Legislature’s budget report recognizes that there are a few outstanding issues that need resolution, including child care rate increases and reform. The education trailer bill language is expected to be released on Thursday, July 1, 2021. The following are key elements of the overall state budget package, which will be in effect by July 1, 2021:

State Reserves: $25.2 billion in General Fund reserves.

Under the Gann Limit: Maintains total spending limit below the constitutional appropriation limit for the current year 2020-21 and budget year 2021-22.

Golden State Stimulus 2.0: $8.1 billion for direct relief to Californians with income of up to $75,000.

Small Business Grants: $4 billion in the Small Business COVID-19 Relief Grant Program.

Broadband: $6 billion over a period of years for broadband infrastructure and improved access to internet services throughout the state, including $3.75 billion for middle-mile infrastructure in unserved communities; however, details are still pending.

Major Education Actions

Proposition 98 General Fund

  • Proposition 98 General Fund will be funded at $93.7 billion, of which $66.4 billion is from the state General Fund.
  • $4.5 billion deposited into the Public School System Stabilization Account.

Local Control Funding Formula and Expanded Learning Program Add-On

  • 5.07% for the cost-of-living-adjustment (COLA) for the Local Control Funding Formula (LCFF), a $3.2 billion increase in ongoing Proposition 98 General Fund in the 2021-22 fiscal year.
  • $1.1 billion ongoing Proposition 98 General Fund to increase the concentration grant formula from 50% to 65% of the base grant for purposes of reducing student-to-adult ratios for direct services.
  • Creates an expanded learning LCFF add-on with $1 billion ongoing Proposition 98 General Fund and $753.1 million one-time Proposition 98 General Fund for all classroom-based local education agencies (LEAs) based on their unduplicated student count from transitional kindergarten (TK) through Grade 6 with higher per-pupil amounts for LEAs with concentrated poverty above 80%. A minimum amount of $50,000 for LEAs would be required to provide the proposed expanded learning opportunities to at least 50% of their unduplicated student count in the 2021-22 school year with program standards aligned to the After School Education and Safety (ASES) Program. At full implementation, the program will receive a total of $5 billion ongoing Proposition 98 General Fund.
  • Changes the multi-year nature of the LCFF Supplemental and Concentration fund tracking.

Deferrals

  • $11 billion in one-time Proposition 98 General Fund to fully pay off the deferrals for K-12 education.

Community Schools Partnership Program

  • $2.8 billion in one-time Proposition 98 General Fund, provided from 2021 through 2028, to build community wellness and student health hubs on over 1,000 school sites. It also aligns program requirements to Healthy Start program best practices with planning, launch and ongoing coordination grant types.

Child Nutrition

  • Reimbursement Rate: $54 million ongoing Proposition 98 General Fund to increase the child nutrition reimbursement rate in the 2021-22 fiscal year.
  • Universal Meals: Beginning in 2022-23, provides $650 million ongoing Proposition 98 General Fund for LEAs to offer breakfast and lunch to all students.
  • Training and Kitchen Upgrades: $150 million one-time Proposition 98 General Fund to provide training for school food service workers to promote nutritious meals and grants for kitchen infrastructure upgrades.
  • COVID-19 Offset Costs: $257 million one-time federal funds payments to child nutrition program operators to offset pandemic program costs.

Special Education

  • Base Rate Increase and COLA: $396.8 million ongoing Proposition 98 General Fund and increases the COLA from 1.5% to 4.05% for the special education formula to all special education local plan areas, including those receiving above the statewide rate, and then calculate the new statewide rate with the additional funding, including an out-of-home formula adjustment.
  • Special Education Early Intervention Grants: $260 million ongoing Proposition 98 General Fund, including funding for specified services for infants, toddlers and preschoolers.
  • Alternative Dispute Resolution: $550 million in one-time funds to invest in increased support for special education alternative dispute resolution and learning recovery supports for special education students associated with impacts due to the COVID-19 pandemic.
  • Inclusive Practices: $15 million in one-time Proposition 98 General Fund, for use over three years, to provide technical assistance and grants to LEAs to increase inclusive practices for students with disabilities.
  • Federal Individuals with Disabilities Education Act: $277,705,000 in one-time federal Individuals with Disabilities Education Act funds.

Independent Studies Program

  • Amends the independent study program and school closure statutes to provide schools and families with high-quality alternative options to in-person learning when necessary; however, details are still pending.

Non-Classroom-Based Charter Schools

  • Extends the existing moratorium on the approval of new non-classroom-based charter schools to 2026.

Teacher Preparatory Programs

  • $1.3 billion in one-time Proposition 98 General Fund for teacher recruitment, retention and professional development programs.

Educator Effectiveness Block Grant

  • $1.5 billion one-time Proposition 98 General Fund for a new Educator Effectiveness Block Grant, available over five years, to provide professional development for teachers, administrators and other in-person staff.

21st Century School Leadership Academies

  • $25 million one-time Proposition 98 General Fund, available over five years, to 21st Century School Leadership Academies.

Classified School Employees Credentialing Program

  • $125 million one-time Proposition 98 funding, available over 5 years, and to provide priority for LEAs’ expanding or providing new programs with plans to recruit expanded learning and early childhood education (ECE) program staff.

Classified School Employees Summer Assistance Program

  • $60 million one-time Proposition 98 General Fund to provide state matching funds to the Classified School Employees Summer Assistance Program.

Career Technical Education Incentive Grant

  • $300 million ongoing Proposition 98 General Fund for, and to increase the positive consideration of, existing high-quality regional-based career technical education programs.

A-G and College Readiness Grant Program

  • $547.5 million in one-time Proposition 98 General Fund for the A-G Completion Grant Program, which includes funding to all LEAs to improve A-G completion rates through staff development, pupil supports, additional A-G access, high school learning loss, credit recovery and covering advanced placement fees for students.

Family Empowerment Centers

  • $7 million in ongoing federal funding to expand family empowerment centers to all regions in the state.

California Healthy Kids

  • $10 million in one-time General Fund for the California Department of Education to make the school climate surveys available to all LEAs, develop a trauma-informed survey supplement and provide training resources to LEAs.

Universal TK

  • Phases in expanded age eligibility to full implementation by 2025-26 and rebenches the Proposition 98 Minimum Guarantee to provide ongoing funding for the TK expansion of approximately $2.7 billion at full implementation.
  • Requires quality standards for TK, including full school-day instructional minutes, 1:12 staff-to-student ratio by 2022-23, and 1:10 staff-to-student ratio by 2023-24, subject to future state budget appropriations.
  • Allows the California State Preschool Program to provide wrap-around services for after- and summer-school care to TK and/or kindergarten students; and allows parent choice to determine a child’s placement in state preschool, child care or Head Start programs that are age-eligible for TK.

ECE and Child Care

  • Child Care Slots: In 2021-22, provides 120,000 slots and phasing in of an additional 80,000 slots over the next four years and prioritizes ongoing vouchers for essential workers currently receiving short-term child care.
  • Child Care Rate Reform: Negotiations are still underway for rate reform and rate increases for child care and state preschool providers. The final budget package states that a variety of one-time investments are included to stabilize the funding for child care providers, including stipends and hold-harmless policies.
  • Preschool Slots: $130 million in ongoing Proposition 98 General Fund for increasing the number of LEA-based state preschool slots.
  • ASES and 21st Century After School Programs: Appropriates one-time federal American Rescue Plan Act funds to increase daily rates to $10.18 and increase program access.
  • California Pre-Kindergarten Program Planning and Implementation Grant: $300 million one-time Proposition 98 General Fund to support the preparation of preschool, TK and kindergarten teachers, as well as their professional development. Up to $200 million to support planning grants for the expansion of pre-kindergarten and kindergarten programs, including TK, kindergarten, Head Start and preschool programs.

Facilities

  • $1 billion for ECE and K-12 infrastructure, as follows: $250 million for child care facilities, $490 million for preschool and TK, and $250 million for school facilities.

Materials

June 28, 2021 – Senate Budget and Fiscal Review Committee Agenda

Senate Budget and Fiscal Review Committee – The June 28th Package Highlights

Senate Budget and Fiscal Review Committee – The 2021-22 State Budget – June 28th Package

Assembly Budget Committee – June 28 Agenda

Assembly Budget Committee – Budget Trailer Bill Analyses Packet (does not include education trailer bill language)

Assembly Floor Report of the 2021-22 Budget