Final State Budget Largely Spares Schools and Colleges

The state budget approved by California lawmakers on Wednesday is mostly good news for schools and colleges. 

The minimum guarantee for Prop 98 is being funded at $115.3 billion ($82.6 billion General Fund). Proposed cuts for schools were paired down after negotiations.

While K-12 funding will remain steady, there are some cautionary notes, as EdSource reports. 

To balance the budget, Newsom and legislative leaders rely on budget maneuvers that would give a button-down accountant acid reflux. 

They include creating a $6 billion debt that won’t be fully repaid to the state treasury for a dozen years, and draining most of the $8.4 billion education rainy day fund.

The deal also requires delaying payments to schools and community colleges and suspending — for only the third time in its 36-year history — Proposition 98 obligations for the current school year, on the assumption the money will be repaid quickly…

Rather than punish schools for money already spent, the budget bill creates a $6.2 billion debt that the general fund, not schools and community colleges, will repay the state treasury over a decade, starting in 2026-27. The remaining $2.6 billion will be a Proposition 98 obligation pushed ahead to 2023-24; that unfunded amount is called a deferral.

A one-time investment of $895 million for electric school buses will be used to offset some of the late funding for schools. Some other noteworthy items include the restoration of $60 million for the Golden State Teachers Program and the restoration of $100 million to help preschools prepare to enroll more children with disabilities. 

“This budget remarkably insulates K-14 funding from cuts, abides by constitutional requirements to restore funding in the future, and even provides a modest cost-of-living increase, all amid a record budget shortfall. Pretty amazing,” said Kevin Gordon, President of Capitol Advisors Group.

The cost-of-living adjustment is very modest at 1.07%.

Colleges won’t fare as well as Pre-K-12, but they’re going to do better than it first seemed. The California State University and the University of California will each get a 5% budget increase, equivalent to $240.2 million and $227.8 million respectively. A second 5% increase for the two systems in 2025-26 is being delayed. UC and CSU do face cuts of $125 million and $75 million in 2024-25, but that funding will be restored the following fiscal year. 

There’s much more to unpack. Read a summary of the budget here.

 


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