On June 1, 2021, the Senate President pro Tempore Toni Atkins, Assembly Speaker Anthony Rendon, and the chairs of the Assembly and Senate Budget Committees issued a joint statement that they have reached a joint legislative version for the 2021-22 state budget that uses the Legislative Analyst’s Office higher revenue forecasts, which are $4 billion higher than the Governor’s May Revision estimates. Combined with other legislative tax changes, it produces a spending package of $267.1 billion, of which $196.1 billion is state General Fund. Yesterday, the budget package was adopted by the fiscal committees, which will now bypass the need to convene a Joint Budget Conference Committee.

The legislature will need to negotiate its joint package with Governor Newsom to meet the June 15 budget deadline. This report provides an overview of the Legislature’s education section major proposals and various funding changes.

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Major Education Changes

The legislative plan includes an additional $1.8 billion in funding for Proposition 98 General Fund and increases the reserve deposits by a total of $673 million. The plan includes the following actions that differ from the Governor’s May Revision, as follows:

  • Fully pays off the $11 billion in Proposition 98 General Fund deferrals for K-12 education and $1.45 billion for community colleges.
  • Provides about $3 billion Proposition 2 Budget Stabilization Account (BSA) funding, over a four-year period, for supplemental pension payment for schools and community colleges, including $400 million in 2021-22 to offset future costs.
  • Adopts the Governor’s May Revision proposal to eliminate the Proposition 98 supplemental payment obligation.

May Revision Proposals Eliminated

The legislative plan rejects the Governor’s May Revision proposals that would have provided $2 billion one-time Proposition 98 General Fund for In-Person Health and Safety Block Grant and $623.2 million one-time Proposition 98 General Fund and $2 billion one-time federal funds for the Targeted Intervention Block Grant in order to free up resources for other purposes, including establishing the A-G and College Readiness Grant Program with a $700 million one-time Proposition 98 General Fund.

Early Education and Facilities

The legislative plan makes significant changes to the early education and child care programs, by providing:

  • $1.1 billion in ongoing General Fund support above the Governor’s May Revision to update the reimbursement rates for child care providers and state preschool programs.
  • A total of 206,500 child care slots, instead of 100,000 as proposed by the Governor’s May Revision.
  • $250 million in one-time General Fund for child care infrastructure, $300 million for preschool/transitional kindergarten (TK) facilities and $500 million for school facilities.

Local Control Funding Formula (LCFF)

The legislative plan adopts the Governor’ May Revision proposal to provide 5.07% to the LCFF formula. However, the legislative plan amended the Governor’s May Revision proposal to distribute $1.1 billion ongoing Proposition 98 General Fund through the concentration grant, and instead provides the same level of funding to increase the LCFF supplemental grant from 20% to 23.3% of the base grant, and allows these funds to be used to increase custodial staff.

Cost of Living Adjustment (COLA) for Categorical Programs

The legislative plan redirects $206.7 million Proposition 98 General Fund to provide categorical programs outside of the LCFF with 4.05% COLA, instead of the Governor’s May Revision proposal of 1.7%, and $58.4 million to provide 4.05% COLA for the after-school and before-school programs and the California State Preschool Program (CSPP).

Community Schools

The legislative plan reduces the Governor’s May Revision proposal to expand grants through the Community Schools Partnership Program by $1 billion one-time Proposition 98 General Fund, for a total of $1.836 billion. The revised plan would also require universal meals as part of this education model.

Career Technical Education (CTE) Incentive Grant

The legislative plan provides an additional $150 million ongoing Proposition 98 General Fund, for a total of $300 million, to the CTE Incentive Grant.

Child Nutrition

The legislative plan makes the following changes to the Governor’s May Revision child nutrition proposals, as follows:

  • Reduces the child nutrition reimbursement rate funding from $150 million ongoing Proposition 98 General Fund to $54 million ongoing Proposition 98 General Fund in the 2021-22 fiscal year.
  • Provides an additional $100 million one-time Proposition 98 funding to professional training and kitchen infrastructure updates, for a total of $200 million.
  • Adopts the Governor’s May Revision proposal of $257.3 million one-time Federal Trust Fund to offset COVID-19 related costs to nutrition program operators.
  • Creates a pathway for every local education agency (LEA) to participate in the Universal Meals Program with $650 million ongoing Proposition 98 funds, beginning in 2022-23.

Expanded Learning Time Program

The legislative plan amends the Governor’s May Revision by providing additional federal funds ($1.02 billion Proposition 98 General Fund and $1.5 billion federal funds in 2021-22 and $752 million one-time Proposition 98 General Fund in 2022-23) for all LEAs based on their counts of unduplicated student enrollment in grades K-6, with the exemption of non-classroom-based charters. LEAs would receive a minimum of $50,000 and be required to extend learning opportunities to at least 50% of their unduplicated student count. Instead of phasing in this program over five years, the legislative plan would implement over a three-year period, to $5 billion at full implementation, and require quality standards, including U.S. Department of Agriculture meals, and staffing minimum ratios.

Independent Studies

The legislative plan 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. This is an area that is still under negotiations with the Newsom Administration.

The plan also adopts the Governor’s May Revision extension of the existing moratorium on the approval of new non-classroom-based charter schools until January 1, 2025.

Special Education

The legislative plan makes several changes in the special education program, as follows:

  • Supplemental Federal Individuals with Disabilities Education Act (IDEA) Funding. Adopts the Governor’s May Revision $277.7 million in federal IDEA, Part B funding from the American Rescue Plan Act to supplement current year IDEA funding.
  • Special Education Early Intervention Grant Program. Provides $260 million ongoing Proposition 98 General Fund to modify the special education base formula, instead of the Governor’s May Revision funding level of $300 million.
  • 4.05% COLA and Base Rate Increase. Provides $934 million ongoing Proposition 98 General Fund to increase the special education base rate and the out-of-home formula.
  • Inclusive Early Education Expansion Program. Provides $500 million one-time Proposition 98 General Fund for this program.
  • Special Education Learning Recovery Grants. Provides $500 million one-time Federal Stimulus Funds for learning recovery support with a match fund requirement on a one-to-one basis for use of voluntary alternative dispute resolution practices and implementing a plan for family engagement.
  • Inclusive Practices. Provides $20 million in one-time Proposition 98 General Fund, over a three-year period, for the Supporting Inclusive Practices project to provide technical assistance and grants to LEAs to increase inclusive practices.

Universal TK

The legislative plan adopts the Governor’s May Revision proposal of $900 million ongoing Proposition 98 General Fund, beginning in 2022-23, to increase to $2.7 billion at full implementation in 2025-26. However, the legislative plan makes the following changes:

  • Increases age cohort increments of two months of age per year, until all four-year-olds are eligible for the program.
  • Requires quality standards for TK such as full school-day instructional minutes and 1:10 staff to student ratio.
  • Provides parent choice for entering or retaining children in state preschool programs, child care or Head Start programs that are age-eligible for TK.
  • Allows CSPP wrap-around services such as after-school and summer-school care for TK/kindergarten.
  • Adopts the Governor’s May Revision proposal to rebench Proposition 98 Guarantee to provide ongoing funding at about $2.7 billion at full implementation.

Workforce Programs

We will continue to report on further developments as the 2021-22 state budget is adopted and signed by Governor Newsom.

In Other News

The Division of the State Architect and the California Department of Public Health released the letter to LEAs regarding processes and resources related to Elementary and Secondary School Relief funds and plans for school facility improvements in response to COVID-19.