FORECAST

Expansion for Early Education

Governor Gavin Newsom submitted his 2023-24 state budget proposal in January, which includes increased funding for K-12 education, free school meals for every child and universal transitional kindergarten.

Improving Long Term Fiscal Stability

The state budget propsal reflects $35.6 billion in total budgetary reserves. The reserves include: $22.4 billion in Proposition 2 Budget Stabilization Account (Rainy Day Fund) for fiscal emergencies; $8.5 billion in the Public School System Stabilization Account; $900 million in the Safety Net Reserve; and $3.8 billion in the state’s operating reserve.

The plan reflected in the Governor’s Budget to close the projected shortfall includes funding delays of $7.4 billion, reductions/pullbacks of $5.7 billion, funding shifts of $4.3 billion and trigger reductions of $3.9 billion.

PROPOSITION 98 –MINIMUM SCHOOL FUNDING

Proposition 98 guarantees minimum funding levels for K-12 schools and community colleges. The revised estimates of General Fund revenues reduce the Proposition 98 guarantee. Proposition 98 funding for K-12 schools and community colleges for 2023-24 is $108.8 billion. This represents a decrease of approximately $1.5 billion relative to the 2022 Budget Act.

The proposal includes an 8.13% cost of living adjustment (COLA) to the Local Control Funding Formula (LCFF), as well as an 8.13% COLA to special education and all other programs outside the LCFF. The projected 2024-25 COLA is 3.54%.

Early Childhood

The budget proposal also includes additional investments in early childhood. Building upon first-year investments, the budget includes $690 million to implement the second year of transitional kindergarten (TK) expansion. In addition, $165 million is proposed to support the second adult (certificated or classified) in each TK classroom to maintain the 12:1 ratio. Full implementation of universal TK is expected in 2025-26. The budget proposes $312.7 million Proposition 98 and $172.3 million non-Proposition 98 general fund to increase the State Preschool Program funding for students with disabilities, dual language learners, childhood mental health and an added adjustment for three-year olds.

Proposition 28 Supports Arts Education

Proposition 28 provides $900 million in funds to Local Educational Agencies, like MCOE, to support certificated and classified arts educators. The funds are not meant to replace existing arts programs, but instead complement them. School Districts can now plan for sustainable arts education at school sites.