Gov. Gavin Newsom displays the Golden State Literacy Plan, a compilation of actions he has taken to improve reading in early grades, during an appearance at Clinton Elementary School in Compton on June 5.
California Gov. Gavin Newsom confirmed Thursday that the state budget will include hundreds of millions of dollars to fund legislation needed to achieve a comprehensive statewide approach to early literacy.
Assembly Bill 1454, which passed the Assembly on Thursday with a unanimous 75-0 vote, would move the state’s schools toward adopting evidence-based literacy instruction, also known as the science of reading or structured literacy.
Although phonics, the ability to connect letters to sounds, has drawn the most attention, the science of reading focuses on four other pillars of literacy instruction: phonemic awareness, identifying distinct units of sounds; vocabulary; comprehension; and fluency. It is based on research on how the brain connects letters with sounds when learning to read.
“Learning to read is life-changing for a child,” Assembly Speaker Robert Rivas, D-Salinas, said in a statement. “And strong reading skills are the gateway to academic success, lifelong confidence, and opportunity. With this legislation, we take a clear and necessary step toward ensuring every child in California learns to read, and read well. This bill is supported by a broad and growing coalition all united in one belief: That we can and must do better for our students.”
Rivas forged a deal for AB 1454 after ordering the sponsors of the bill, which included advocacy groups Decoding Dyslexia CA, EdVoice, and Families In Schools, to settle their differenceswith advocates for English learners and the California Teachers Association.
The compromise legislation would provide funding for optional teacher training in evidence-based practices, require that all TK-5 textbooks that districts adopt be aligned to in this approach, and ensure all newly credentialed administrators are trained to support evidence-based instruction.
Assemblymembers Blanca Rubio, D-Baldwin Park, and Al Muratsuchi, D-Torrance, co-authored the bill.
“We attached that bill to the budget, so we mean business,” Newsom said during a press conference at Clinton Elementary School in Compton. “We wanted to get that done, and we got it done. We hope we’ll get it done with an additional $200 million attached to it.”
Advocates of a comprehensive statewide approach to early literacy say the bill would fill in significant gaps in the state’s current policy of local control over instructional decisions. It completes a comprehensive plan to improve literacy in the state, said Newsom, introducing the Golden State Literacy Plan.
“This Golden State Literacy Plan is a step-by-step plan to make real what we are promoting,” Newsom said, holding up the nine-page document — a compilation of actions the state has taken, culminating with additional funding for literacy-related programs and actions.
While states like Mississippi, Tennessee and Colorado have started with a framework grounded in the science of reading and a comprehensive plan for early literacy, California, over the past five years, adopted disparate parts: new evidenced-based reading standards for teacher preparation programs, state funding of an early grade diagnostic screening system for reading challenges like dyslexia, and funding reading coaches in the state’s lowest-performing schools. It also included the expansion of transitional kindergarten and expanded bilingual programs.
Newson talked about his personal experience with dyslexia and how it has motivated him to improve literacy in the state.
“There’s not a day where my dyslexia does not expose itself,” he said. “If anyone’s seen my writing, they can attest to how it exposes itself. So this has been an imperative for me to do more and do better in this space.”
Newsom also took the opportunity Thursday to talk about some of the state’s successes, including improved scores on the National Assessment of Educational Progress in reading in both fourth and eighth grades between 2011 and 2022.
The Compton Unified School District was selected for the press conference to highlight the district’s increased test scores and graduation rates.
“Today’s event reflects a shared purpose, ensuring literacy for all,” said Compton Unified Superintendent Darin Brawley. “The governor’s emphasis on literacy is both timely and essential. Research and experience tells us that if students are not reading by grade three, it’s going to be a struggle. Thereafter, their academic path becomes increasingly difficult.”
Compton Unified has worked to eliminate the opportunity gap by expanding access to early literacy programs, multilingual education and STEAM pathways, he said.
“Compton Unified is proof that demographics do not determine destiny,” Brawley said. “With the right investments, the right leadership, the right vision, the right partnerships, we can transform outcomes and unlock the full potential of every single child.”
Martha Hernandez, executive director of Californians Together, which advocates for English learners, said the state literacy plan supports a diverse student population. The organization, which had opposed the original bill, was satisfied that the materials and training in the new bill would incorporate the specific literacy needs of English learners.
“The recently launched literacy and biliteracy resources, the literacy content blocks and the preschool through third-grade learning progressions provide critical guidance to help educators support young learners in both English and their home language,” Hernandez said. “Thank you, Governor Newsom, for ensuring that multilingual learners are at the center of California’s literacy promise.”
The Golden State Literacy Plan also highlights the state’s investments in literacy in the governor’s upcoming budget, including $1.7 billion for a block grant to fund professional development for teachers, $500 million for TK-12 literacy and math coaches, $387.6 million for additional Learning Recovery Emergency Block Grant funding, $40 million to support literacy screenings, and $25 million to support implementation of math and literacy initiatives, elevate best practices, and establish a clearinghouse for state-developed math and literacy resources.
The increased state funding for literacy comes amid criticism of Newsom’s spending plan for education, which the Legislative Analyst’s Office has said will create new debt and rely on one-time funding to pay for ongoing operations.
Trump is directly infringing on freedom of the press, punishing NPR because it is not slavishly devoted to him and his views.
I listen to NPR for straightforward, unbiased news. I appreciate their long-form reports on a wide array of subjects. Many parts of the country are news deserts, where the only media available are the rightwing Sinclair radio stations and FOX News.
The nation needs NPR, just as the world needs Voice of America, which Trump is defunding.
As with so many of his decisions, I wonder who benefits? I have no answer.
Darcy writes:
When Trump signed an order to defund NPR, the network faced a choice over how it would respond—but CEO Katherine Maher made one thing clear from the start: there would be no backroom negotiations.
In the days following Donald Trump’s May 1 executive order to strip NPR of all federal funding, leaders at the public broadcaster began deliberating their options. But even before the network’s legal team got to work on the litigation, one decision had already been made. NPR chief executive Katherine Maher made clear that the outlet would not quietly negotiate with the White House—an approach other media companies have recently taken under immense political pressure.
“As an independent media organization,” Maher told me by phone Tuesday, “we wouldn’t go ahead and have that conversation because that would be negotiating on editorial principle.”
On Tuesday morning, NPR and three of its member stations in Colorado filed a federal lawsuitagainst Trump and his administration, alleging the executive order he signed was not only punitive, but also unconstitutional. In a 43-page complaint, the stations argued that Trump’s directive violated theFirst Amendment, usurped Congress’authority over federal spending, and more broadly, posed a threat to the editorial independence of public media nationwide.
The language of the filing was unambiguous. It framed the executive order not as a routine dispute over funding priorities or media policy, but as a retaliatory strike designed to punish critical coverage and reshape the information environment in Trump’s favor. “The Order’s objectives could not be clearer,” the lawsuit stated. “The Order aims to punish NPR for the content of news and other programming the President dislikes and chill the free exercise of First Amendment rights by NPR and individual public radio stations across the country.”
I asked Maher what it felt like to take a sitting president to court. She didn’t hesitate. “What did it feel like?” she rhetorically asked me. “It felt like recognizing that there are responsibilities that one takes on in running a media organization, and this was one of those.” She emphasized that the case wasn’t just about NPR’s national desk or morning programming—it was about the entire public media system: “We did this on behalf of our newsroom. We did this on behalf of our editorial independence. We did this on behalf of public media at large.”
Maher, who only took the helm of NPR in January 2024, told me that the legal option became increasingly clear as the organization studied the implications of the executive order. “We took a look at [the order] and wanted to be able to make sure that we really analyzed it,” she said. “We got to understand what avenues existed for us to be able to seek relief—and litigation was something that we came to once we realized that fundamentally this was a First Amendment issue.” The legal review moved quickly. “Obviously, it’s only been four weeks,” Maher added, “and so you can imagine it happened on a pretty quick timeline.”
The lawsuit was filed by not just NPR, but also Colorado Public Radio, KSUT Public Radio, and Aspen Public Radio. Together, they asked the court to block enforcement of the order and affirm that federal support for public broadcasting, which Congress has repeatedly approved, cannot be overturned by presidential fiat. For its part, NPR receives just 1% of its annual operating budgetdirectly from the Corporation for Public Broadcasting, the private nonprofit that distributes federal funding. But local member stations across the country receive a much larger slice of their budgets from the $535 million in taxpayer funds CPB distributes. PBS, facing a similar predicament, said Tuesday it is also actively weighing a legal challenge of its own.
While Trump has long treated NPR as a proxy for elite coastal media (he’s referred to it as a “liberal disinformation machine,” among other insults), Maher declined to say in her own words why he despises the outlet with the white-hot passion of a thousand suns. “I really couldn’t say what the president thinks or doesn’t think,” she told me. “It’s beyond my powers to get inside his mind.” At the same time, she acknowledged the broader context in which public broadcasting has become a partisan target. “I think that we recognize that there has long been pushback about public media,” she said.
In any case, the legal issue, she insisted, is separate from any political debate. When asked whether she worries that suing the president could further cement in the minds of the MAGA faithful that NPR has a bias against him, she pushed back.
“I fundamentally reject the idea that defending the Constitution is partisan,” Maher told me. “We are taking this action on behalf of the First Amendment. We’re taking this action on behalf of the free press. Regardless of your political beliefs, we all benefit from that.” She added that the lawsuit should be viewed as an act of civic duty, not political retaliation: “I would much rather people saw this as an act of patriotic commitment to our Constitution on behalf of citizens rather than saying that this is somehow partisan or political.”
Of course, that’s not how her actions have been portrayed by MAGA Media, which—similarly to Trump–views NPR as a liberal mouthpiece of the so-called “deep state.” Maher seemed to acknowledge that reality, but said she would continue to work to get the outlet’s message out. She even said she would be willing to appear on outlets like Fox News to do so. “I’m always happy to talk to people who are happy to talk to us,” Maher said. “I think that we’d be open to having that conversation.”
What happens if the court doesn’t rule in their favor? Maher didn’t give the possibility of such an outcome any oxygen. “I’m really confident that we will [win],” she said. “I feel that we’re on very, very solid ground, so I’m not concerned about the downside.”
Sen. John Laird, D-Santa Cruz, right, listens as Ken Kapphahn of the Legislative Analyst’s Office critiques Gov. Gavin Newsom’s proposed education budget at a hearing on May 22.
Credit: State Senate Media Archive
Top Takeaways
A drop in project state revenue projections from January to May, while avoiding cuts, would compound a dilemma.
Newsom also would increase funding for early literacy and after-school programs.
Key legislators share concern about draining the rainy day fund and deferring payments.
The Legislative Analyst’s Office is criticizing Gov. Gavin Newsom’s spending plan for next year for schools and community colleges. It says the May revision of the 2025-26 state budget would create new debt, rely on one-time funding to pay for ongoing operations, and drain the education rainy day fund to pay for new programs and enlarge existing ones.
The Legislature should reject the financially unsound practices, which would “put the state and districts behind the eight ball” if state revenues fall short of projections, Ken Kapphahn, senior fiscal and policy analyst for the LAO, told the Legislature’s budget committees on May 22.
The LAO provides the Legislature with nonpartisan analysis and advice on fiscal and policy issues.
In his budget for 2025-26, Newsom would protect TK-12 and community colleges from a $4.4 billion drop in projected state revenue between his January and revised May budgets and add $2 billion in spending to the administration’s priorities, which include:
Qualifying more students for coverage of summer and after-school learning through the Expanded Learning Opportunities Program ($526 million).
Hiring more math and literacy coaches and training teachers in literacy instruction ($745 million). The money would reflect legislation that the Legislature is expected to pass requiring textbooks and instruction practices to incorporate phonics and foundational skills.
Reducing the student-to-staff ratio in transitional kindergarten from 12 to 1 to 10 to 1 ($517 million).
Paying stipends for student teachers ($100 million).
The biggest budget challenge is that the projected Proposition 98 guarantee for 2025-26 — the minimum portion of the state’s General Fund that must be spent on TK-12 and community colleges — fell $4.4 billion — from $118.9 billion in the initial budget in January to $114.5 billion in May — because of revised revenue forecasts for California that project a drop in stock market earnings and uncertain impacts from President Donald Trump’s economic policies.
Newsom’s May budget would include some cuts and savings from, for example, lower projected enrollment in transitional kindergarten. It would also withdraw or reduce nearly $400 million in community college funding for updating data systems and investing in Newsom’s Master Plan for Career Education (see Page 28 of his budget summary).
But he’d primarily rely on financial tactics that the LAO cited as fiscally risky and unwise:
Committing $1.6 billion in one-time funding for ongoing funding, a strategy that could leave the state short of funding starting a year from now;
Depleting the Prop. 98 rainy day fund by $1.5 billion;
Issuing a $2.3 billion IOU by pushing back paying $1.8 billion for TK-12 and $532 million for community colleges from June 2026 to the next fiscal year in 2026-27. This deferral, though only for several weeks, creates a debt that must be repaid. Paying it off will eat into state revenue for districts and community colleges in the subsequent year.
Issuing deferrals and digging into the state’s reserves have been done before during recessions and financial emergencies, but should be viewed as “a tool of last resort,” not as solutions to difficult spending choices, Kapphahn said.
“The state historically has tried to contain spending during tight times to protect funding for core programs,” its critique said. “May Revision would task districts with hiring staff and expanding local programs based on funding levels that the state might be unable to sustain.”
Neither LAO nor Newsom is predicting a financial recession, but both project weakened state revenues over the next two years.
The LAO’s option
The LAO put forward an alternative budget that it claims would meet the revised, lower Prop. 98 minimum funding guarantee for 2025-26, including a required 2.3% cost-of-living adjustment for community colleges and schools. It would avoid deferrals, reduce $1.6 billion in ongoing spending, and reject many of Newsom’s one-time spending proposals, including literacy training and materials.
Instead, consistent with local control, it would increase an existing discretionary block grant to let districts choose how to spend much less new money.
Negotiations in the coming weeks between Newsom and legislative leaders will determine what’s in the final budget. However, two Democratic leaders who chair budget committees overseeing education in the Assembly and Senate said they shared the LAO’s skepticism.
Sen. John Laird, D-Santa Cruz, said he felt uncomfortable recommending increased funding for individual programs that “set us on for being in trouble next year.”
“If we do all this, and the projections are accurate,” he said at the May 22 hearing, “there will not be enough money to pay off deferrals and make the COLA. The decision to put us in that position we are making now, potentially creating a bad situation for next year.”
Assemblymember David Alvarez, D-San Diego, who chairs the Assembly Budget Subcommittee on Education Finance, said he too is concerned that the proposed budget would deplete the last $1.5 billion of the rainy day fund, which was $8.4 billion only two years ago.
At the same time, he agrees with Newsom’s new spending on literacy instruction and funding for stipends for student teachers. And he would add in money for ethnic studies that Newsom didn’t include. Without the funding, the mandate for a semester-long ethnic studies course that the Legislature required, starting in 2025-26, cannot take effect.
Alvarez didn’t suggest budget cuts to make room for ethnic studies.
Legislation that calls for providing all state teachers and aides with math and reading training passed its first legislative hurdle despite the uncertainty of funding and the skepticism of advocates for English learners who dislike the bill’s nod to instruction in the “science of reading,” including phonics.
Senate Bill 1115 has no secure source of money heading into a tight fiscal year, with Gov. Gavin Newsom all but ruling out money for new programs. His January budget includes $20 million for a designated county office to train coaches who would then train their own teachers in what they learned.
Neither the bill’s author, Sen. Monique Limon, D-Santa Barbara, nor its sponsor, State Superintendent of Public Instruction Tony Thurmond, offered a cost estimate at a hearing of the Senate Education Committee last Wednesday, though it would cost at least hundreds of millions of dollars to train 300,000 teachers. They said they were willing to phase in and focus funding, such as concentrating on early literacy and numeracy skills, and to look for federal and dedicated sources of money.
Thurmond said training teachers to enable all students to read effectively “is an issue of moral clarity.” Neither he nor Limon offered a cost estimate that could run into hundreds of millions of dollars.
“In an age when we have access to substantial brain science about how students learn, it should be unacceptable to train only some educators in the best strategies to teach essential skills,” he said.
School districts have received billions of dollars between federal and state Covid relief funding, including money to address learning loss — money that could be used for teacher training — but none of that has been earmarked for that purpose.
State budgets have set aside $50 million to hire and train reading teachers in the most impoverished 5% of schools. But Thurmond said training of trainers, however, does not substitute for providing sufficient funding to ensure training for all teachers and support staff in “high-quality” programs in math and literacy.
The bill calls for the Department of Education to identify and recommend those high-quality programs by Jan. 1, 2026. For transitional kindergarten through sixth grade, those should align with “the science of reading” by focusing on results-driven methods of teaching, which may include, but is not limited to, offerings such as Lexia LETRS and CORE Learning.”
Singling out those specific trainings in the bill were red flags for two nonprofits that advocate for English learners: Californians Together and California Association of Bilingual Educators (CABE). The science of reading refers to research from multiple fields of science that confirm or discount theories on how children learn to read. LETRS and CORE Learning are intensive programs that explain a systematic approach to teaching phonics and other elements of reading consistent with the science of reading.
Californians Together and CABE, however, complain that those programs overemphasize phonics and “structured literacy” at the expense of English learners’ need for more attention to oral language and vocabulary development.
Calling Californians Together’s position on the bill a “tweener,” legislative advocate Cristina Salazar testified at a hearing last week, “We agree that we need more professional learning for educators, but we do have concerns with the bill. Specifically, it mentioned the science of reading, and it also names commercial programs.”
CABE legislative advocate Jennifer Bakers said her organization shares the same concerns and “hopes to have a collaborative conversation about a path to move forward.”
Sen. Rosilicie Ochoa Boch, R-Yucaipa, asked Thurmond whether the intent is to train existing teachers in the new standards that new teachers will be trained on.
“Yes, that is correct,” Thurmond said.
Opposition from Californians Together and CABE this month factored into the quashing of a bill that would have required school districts and charter schools to train all TK to fifth-grade teachers and literacy coaches in instruction based on the science of reading and to buy textbooks from a list endorsed by the State Board of Education. Assembly Speaker Robert Rivas, D-Salinas, ordered Assembly Bill 2222 shelved without a hearing to give time for negotiations with opponents, including the California Teachers Association.
At the hearing, Thurmond acknowledged similarities between the two bills, although AB 2222 would have been a mandate, while AB 1115 would recommend the selection of trainings.
Along with mandating the science of reading approach to instruction, AB 2222 would have required that all TK to fifth-grade teachers, literacy coaches and specialists take a 30-hour minimum course in reading instruction by 2028. School districts and charter schools would purchase textbooks from an approved list endorsed by the State Board of Education.
Thurmond said the language of AB 1115 is well balanced in that it refers to both the science of reading and the state’s English Language Arts/English Language Development framework, which includes multiple strategies necessary for all students, including English learners, to learn how to read.
New math framework
July will mark a year since the State Board of Education adopted a revised California Mathematics Framework, which took four years and three revisions to pass. The drafters and supporters agree that the framework, with emphasis on tangible applications of math, as well as a deeper conceptual understanding of it, will require a shift in teaching and extensive training. But no significant money has been allocated yet, and the process of reviewing textbooks and materials has yet to begin.
In an interview, Limon said it is important to raise the issue of teacher training now, even if legislation is tied to a future appropriation.
Part of the public debate in committing public dollars should be, What would the program look like, and how will it serve diverse students? she said. “There is value to that discussion,” she said. Before her election to the Legislature, Limon served for six years on the Santa Barbara Unified school board.
In 2022-23, only 46.7% of California students met grade standards on the state’s English language arts test; the percentages were 36.6% for Hispanic, 29.9% for Black, and 35.3% for economically disadvantaged students. The scores were worse in math: 34.5% of students overall, with 22.7% of Latino, 16.9% of Black, and 22.9% of economically disadvantaged students meeting standards.
Gov. Gavin Newsom unveils his revised 2024-25 state budget during a news conference in Sacramento on May 10.
Credit: AP Photo/Rich Pedroncelli
The Newsom administration has settled a disagreement with K-12 education groups over multiyear funding that will provide nearly all of the money the groups had demanded, although deferring and delaying several billion dollars for at least a few years.
Pending legislative approval, the compromise that the California Department of Education negotiated with the California Teachers Association (CTA) would remove an obstacle to resolving the 2024-25 state budget by the June 15 deadline.
The deal would preserve Gov. Gavin Newsom’s promise to exempt TK-12 schools and community colleges from appreciable funding cuts that other areas of the state budget would face, including the California State University and the University of California.
The proposal also would meet the legal requirements of Proposition 98, the 4-decade-old formula that calculates the minimum portion of the general fund that must be spent on education. It was Newsom’s plan in his original January budget to spare schools and community colleges immediate cuts while scaling back Proposition 98 growth in future years that led CTA and the California School Boards Association to threaten to take Newsom to court with a lawsuit it had reasonable odds of winning.
“This is a good deal for public schools. In its simplest terms, this agreement will protect the state’s core TK-12 investments, like the Local Control Funding Formula and new whole child programs,” said Derick Lennox, senior director of governmental relations and legal affairs for the California County Superintendents Association, who was briefed on the negotiations Tuesday. “If approved by the Legislature, the governor will be able to honor his commitment to protect school funding amidst a challenging budget.”
Challenging is an understatement. Because the state will fall short of full funding for the current year, 2023-24, the Legislature would suspend Proposition 98 for the first time since the height of the Great Recession in 2010-11 by $5.5 billion. The money owed, an IOU called the “maintenance factor” under Proposition 98 terminology, would be repaid over multiple years, as determined by the growth in state revenue. The repayments would start with $1.3 billion in 2024-25.
The deal would reintroduce funding deferrals — another accounting maneuver from the Great Recession, though at a smaller magnitude. As opposed to a funding suspension, a deferral is a late payment, in which the Legislature shifts funding by days or months from one fiscal year to the next, and districts are on the hook for money they’ve already spent.
The settlement calls for three years of deferrals, ranging from $1.3 billion to $2.6 billion, from 2023-24 through 2025-26. The last deferral, for $2.4 billion, would make up about 2% of funding to community colleges and school districts. Together, the three deferrals should have no appreciable impact on school and community college budgets but will require $2.4 billion in future school funding to pay off. They will involve an accounting shift from June, the last month of one fiscal year, to July, the first month of the next.
“The agreement reached with the governor to protect public school funding is a critical step forward for California’s schools and communities,” said CTA President David Goldberg. “It ensures that students, educators, and families aren’t impacted by cuts to the classroom and includes protection against additional layoffs of educators.”
The revenue conundrum reflects a slow rebound from an unexpected drop in state revenue following the Covid pandemic. Because of winter storms in early 2023, the federal government and California pushed back the filing date for taxes by six months. Without accurate revenue estimates when they set the 2023-24 budget in June, Newsom and the Legislature appropriated $8.8 billion more than the Proposition 98 minimum.
Since TK-12 and community colleges had already budgeted and spent the money, Newsom promised to hold them harmless. But in his first budget draft in January and his May revision, Newsom proposed to treat the $8.8 billion as an off-the-books, one-time overpayment; CTA and school groups viewed it as an ongoing obligation, that, as spelled out by voters in approving Proposition 98, would become the base for the following year’s minimum level of the guarantee.
“They arrived at a solution that gives the Governor and Legislature near-term budget flexibility while abiding by the state’s constitutional provisions related to minimum funding for schools,” education consultant Kevin Gordon said. “A negotiated suspension of Prop 98 has been the obvious solution since the outset of the debate.”
Here’s how the negotiated deal resolves the dispute over the three-year period covered by the budget:
2022-23
Original Proposal: Newsom proposed an unorthodox move: holding the general fund, not Proposition 98, responsible for paying for the $8.8 billion shortfall over five years, starting in 2025-26, at $1.8 billion per year.
Compromise: Shift an unallocated $2.6 billion in one-time funding from 2022-23 into 2023-24. That would lower the ongoing Proposition 98 increase from $8.8 billion to $6.2 billion. The effect would be to cut general fund repayments by $500 million to $1.3 billion per year for five years. And it would lower the calculation for the following year’s Proposition 98 minimum.
2023-24
The state would drain $8.4 billion from the Proposition 98 reserve fund, built up during a half-decade of good revenue years, to pay off a continuing Proposition 98 shortfall, including the $2.6 billion deferral from 2022-23.
Compromise: The $6.2 billion rise in the Proposition 98 base in 2022-23 would raise the Proposition 98 minimum by $4.2 billion. Lacking the money to pay for it, the Legislature, by an anticipated two-thirds majority, would suspend the Proposition 98 base by $5.5 billion; this would include $1.3 billion, the first installment of the maintenance factor, due to be repaid in 2024-25. As a result of the $5.5 billion suspension, the Proposition 98 base would be lowered to $101.3 billion.
2024-25
The level of Proposition 98 is determined by several factors, called “tests,” that are tied to changing economic conditions, such as a rise in state spending or personal income, and the increase in the base from the year before. The 2024-25 Proposition 98 level, under Test 1, would be set at about 39% of the general fund: an estimated $110.6 billion. This would include a $1.3 billion maintenance factor repayment.
The Department of Finance says that “overall, the Agreement provides stability for schools both in the short and long-term.”
That’s true as long as the governor’s revenue projections for the next two years hold. But if they come up short, expect additional deferrals or cuts without a state rainy day fund to cushion the impact; many districts were already required to reduce their local rainy day funds this year. And heading into 2025-26, the state will still owe districts and community colleges a $4.5 billion maintenance factor, an IOU with no immediate deadline for repaying it.
“We’re encouraged that the administration has found a way to address the constitutional concerns, and this might be the best funding package that schools could hope for in this budget environment,” said Rob Manwaring, a senior adviser for the nonprofit Children Now. “At the same time, it is difficult to support suspending the constitutional funding guarantee when California schools are still in the bottom five states in terms of student-teacher ratios and other staffing supports.”
State Sen. Roger Niello, R-Fair Oaks, vice chairman of the Senate Budget and Fiscal Review Committee, back to camera, urges lawmakers to reject a measure to reduce the state budget deficit at the Capitol in Sacramento on April 11, 2024.
Many details of the spending plan will be hashed out in the coming days and weeks, but Thursday’s action will allow lawmakers to continue getting paid because it meets the constitutional requirement that they pass a budget before June 15.
The bare-bones plan passed Thursday would increase the size of the can lawmakers had previously contemplated kicking down the road in order to deal with lagging revenue. It would increase the amount of Proposition 98 funding — the amount of the overall general fund that must go to K-12 education and community colleges — that would be suspended in the current year, but with the expectation that much of it will be repaid and revenue will increase in the coming year.
Plenty of details remain unresolved. The Senate and the Assembly rejected $895 million that Gov. Gavin Newsom had proposed in one-time funding to purchase zero-emission school buses, and instead reinstated a cut that Newsom had proposed for the Golden State Teachers Grant Program, which pays $20,000 to teacher candidates who agree to teach in priority schools for four years. A supplemental bill that has not been released will detail how the rest of the money would be used. The Legislature accepted Newsom’s proposed cut of $550 million in facilities for transitional kindergarten and full-day kindergarten on the assumption that money will be included in a facilities bond that the governor and legislative leaders are negotiating to place on the November election ballot.
The framework with the California Teachers Association last month settled the question of how the state would account for an $8.8 billion shortfall in revenue below what the Legislature appropriated for 2022-23. The deal calls for suspending funding still owed for the current year ending June 30 — something that had been done only twice in the past 40 years — by $5.5 billion and delaying paying $2.6 billion appropriated for 2023-24 until 2024-25.
Suspending a portion of the Proposition 98 obligation requires creating a type of IOU that must be repaid in coming years. Newsom avoided outright cutting of TK-12 and community college funding by suspending some state funding and pushing off paying districts from the end of one fiscal year to the start of the next one — a tactic known as deferrals.
The placeholder budget passed on Thursday increases the funding that will be suspended by $2.8 billion. The Legislature assumes that higher income tax revenue next year, based on updated projections that Newsom didn’t have for his revised May budget, will help to pay down the suspended funding. The Legislature also would generate a new source of revenue by accelerating a three-year postponement of deductions that corporations can claim from net operating losses and various business tax credits. That would bring in temporarily $5 billion, of which about $2 billion would go to schools and community colleges under Proposition 98.
Newsom had proposed the three-year interruption to begin in 2025-26. Since businesses haven’t had time to plan an accelerated schedule, Newsom hasn’t said if he’d go along. Resuming the operating deductions and credits would then reduce revenues in future years.
Republicans in the Legislature criticized addressing the state’s budget deficit by raising taxes on the business community and shifting funds around. The budget is “little more than a shell game meant to hide the bleak truth of our financial situation,” said Senate Minority Leader Brian W. Jones, R-San Diego, who blamed overspending for the swing from a massive budget surplus to a deficit in two years.
The advocacy group Children Now, generally an ally of the Democratic leaders on children’s issues, criticized increasing the amount of Proposition 98 suspension and the use of funding deferrals. Suspension, the group said, “should be a last resort, not a tool to manipulate education spending,” adding that suspension, with its creation of an IOU, subjects education to funding volatility and uncertainty about when the money will be repaid.
“While we understand the necessity of suspending Proposition 98 under the current circumstances, a suspension isn’t ideal, and its size should be minimized as California still ranks fifth worst in the nation in terms of student-to-teacher ratios and, similarly, has among the lowest staffing levels for other educators, including support staff, nurses, and administrators,” the letter said.
Senate President pro Tempore Mike McGuire, D-Geyserville, predicted a deal between lawmakers and Newsom as early as next week and that the final budget would be similar to what the Legislature approved.
An off-limits, aged and rusting play structure, Santa Rita Union School District
Credit: Santa Rita Union School District
In the coming days, Gov. Gavin Newsom is expected to confirm his commitment to place a state school construction bond on the November ballot.
What he hasn’t committed to yet — but must decide in the next 10 days — is whether to reform a method of sharing state matching money that has long favored property-rich districts over their property-poor neighbors.
Along with a June 27 deadline to write ballot language, Newsom and legislative leaders face the threat of a lawsuit challenging the legality of the present system that ignores vast inequalities in districts’ ability to upgrade and repair schools. The public interest law firm Public Advocates filed its warning, a 21-page demand letter, with state officials in February. Public Advocates is calling for a new method that shares more state bond proceeds with districts that need more help. Their proposal focuses only on repairing and renovating facilities, not new construction.
The possibility of litigation drawing attention to funding inequalities would endanger the chances that a bond would pass — just when the state will run out of distributing the last matching money from the last bond, eight years ago. That would leave the state with no funding to help districts meet the rising cost of school construction.
Newsom’s aides and legislative leaders have expressed interest in proposals for a fairer system of allocating state funding, “but it is far from clear where the equity conversation will land,” said John Affeldt, managing attorney for Public Advocates.
“As long as state bond funding continues to exacerbate rather than redress local wealth disparities, the constitutional problem and our legal demands remain.”
Past California State School Board President Michael Kirst agreed. “We need to complete the job of making California school finance more equitable. This is a long-overlooked and needed area for political action.”
Late last month, Assemblymember Al Muratsuchi, D-Torrance, who chairs the Assembly Education Committee and authored a bill establishing a construction bond, predicted that the measure would be between $10 billion and $12 billion for TK-12 and community colleges. Whether it would include construction money for four-year universities hasn’t been announced.
The Coalition for Adequate School Housing or CASH, the influential lobby representing school districts and school construction contractors, opposes including the University of California and California State University. It argues schools and community colleges need the full $14 billion in Muratsuchi’s bill — and more — to meet higher costs of construction, demands for climate-resilient schools, requirements for transitional kindergarten classrooms, and evolving needs for student wellness and after-school activities.
Talks between Newsom and legislative leaders must also settle how much should be designated for new construction relative to repairing and renovating existing buildings, and how much should be set aside for removing lead in water.
But the most contentious issue will be the distribution formula: determining how much money districts must raise in property taxes to qualify for a matching amount from a state bond. For the past 25 years, every district has ponied up the same percentage match on a first-come, first-served basis: a 50-50 split for new construction and 40% district and 60% match from the state for upgrading facilities.
The result has been predictable: Those districts with higher property values have gotten a disproportionately large piece of the pie.
‘The very definition of a regressive tax’
The Center for Cities + Schools at UC Berkeley examined the state funding distribution of the 813 school districts that received state modernization funding from 1998, when the current distribution method was created, through 2023. The analysis showed that the quintile of districts with the lowest assessed property value — those with a median of $798,000 per student — received $2,970 in modernization funding per student, while the districts in the highest quintile, where the median assessed property value was $2.3 million per student, received $7,910 per student — more than two-and-a-half times as much. As a result, districts with a lower assessed property value per student must impose higher property taxes on its residents than would a higher-wealth district to upgrade a school building.
“Imposing a greater tax burden on a community of lesser wealth is the very definition of a regressive tax,” said Jeff Vincent, co-director of the Center for Cities + Schools.
Compounding the problem of low property values in many districts is the state restriction that limits a district’s bonding limit to 1.25% of a district’s total assessed property value for elementary and high school districts and 2.5% of the total value for unified districts.
Combine those two factors, and you have the dilemma facing hundreds of districts including, the 3,200-student Santa Rita Union Elementary District and neighboring Salinas City Elementary School District, both in Monterey County.
“Our biggest difficulty is bonding capacity. We’ve basically bonded at our allowable capacity, and we did that to try to build up what we need for the state matching in particular,” said Santa Rita Superintendent Melissa Alderman.
The track in need of repair is at New Republic Elementary, Santa Rita Union School DistrictCredit: Santa Rita Union School District
Deteriorating school roof at Lincoln Elementary, Salinas City Elementary School DistrictCredit: Salinas City Elementary School District
Damaged outside window sill of a portable, Laurel Wood Elementary, Salinas City Elementary School DistrictCredit: Salinas City Elementary School District
A deteriorating entrance to an aging portable at Lincoln Elementary, Salinas City Elementary School DistrictCredit: Salinas City Elementary School District
With the latest bonds, Santa Rita nearly topped out at $27 million — far short of the more than $100 million the district needs to renovate, repair, and replace its four elementary and two middle schools at state standards.
The difference would provide what many districts take for granted: There would be appropriately sized gyms for middle school; the deteriorating track would be paved so that their schools could host meets; 40-year-old portable classrooms sitting on dirt would be replaced with more spacious modular classrooms on concrete foundations. There would also be transitional kindergarten classrooms the district can’t build and room for student and family service partnerships that the district has had to decline.
“All of our roofs would not be leaking; all of our gutters would be unrusted; tree roots wouldn’t be breaking up the sidewalks,” Alderman said. “Alarm systems not going off in the middle of the night because it rained too hard and something shorted.”
Santa Rita can generate only $7,740 per student in bond capacity; across the Salinas Valley, Carmel Unified can raise $190,000 per student. With English learners comprising nearly half of students and a high rate of poverty, Alderman worries about adding to families’ property tax burden — even if she could ask for another bond.
Santa Rita qualified for the state’s financial hardship assistance funding for the full cost of projects that exceeded funding capacity, but Alderman says the formula for determining the amount of hardship aid was insufficient.
“We’ve gotten just enough funding to always be making repairs and patching and hoping a big emergency doesn’t happen,” she said.
Salinas City Elementary School District, with 8,200 students whose families are similar to those in Santa Rita, is somewhat better off. It passed two bonds for $175 million two years ago, which has placed “an incredible burden” on the community but will cover about a third of its modernization needs, said Superintendent Rebeca Andrade. She worries whether, after chipping away at replacing roofs, ramps and windows, there will be enough left for a community priority: upgrading kitchens in every school so that children can eat fresh food like the vegetables grown and picked in nearby fields.
Public Advocates’ proposal
Salinas and Santa Rita would be among the districts that would get significantly more state funding under Public Advocates’ proposal.
Instead of a 60% match for all districts, money would be distributed based on assessed value per student. Under its latest proposal, the districts with the most property wealth — Beverly Hills, Carmel Valley, San Francisco Unified, and Sunnyvale School District Elementary in Silicon Valley — would be among those receiving a 5% state match for contributing 95% of the project’s cost.
The property-poorest—Bakersfield, Dinuba, Lindsay, San Bernardino City and Fresno Unified — would get a 95% match for contributing 5%. Salinas City Elementary would get an 81% match for contributing 19%, while Santa Rita would get 87% state funding for contributing a 13% local match, enabling the district to stretch its dollars and broaden its vision for creating a quality learning environment.
Affeldt said something like a 5%-95% scheme is needed to begin to offset local wealth disparities.
The Center for Cities + Schools has also calculated the impact of a 20%-80% match, which would be less progressive while flattening the gains and losses that districts would receive.
But there’s a caveat: The state match provides funding on a per-student basis, not on the size of a project, said Tom Pace, vice chair of CASH and the director of facilities of San Bernardino City Unified. “So we’re talking about a percentage of the grant amount, not a percentage of construction costs,” Pace said. “The majority of the costs associated with building schools are borne by local districts.”
Since the current system of matching funds started in 1998, school districts have raised nearly $3 for $1 contributed by the state — $125 billion to $43 billion, according to the Center for Cities + Schools.
A formula that sends a larger match to districts like San Bernardino would go a long way to solve inequitable funding, Pace said. But it will take an adequate level of state funding to address the full problem, he said. “San Marcos High School is one of the nicest high schools I’ve ever seen. I got confused with (CSU San Marcos) when I drove past,” he said. “There is no way that San Bernardino will ever have a high school that looks like that because of our low assessed value and growth.”
Big tax-base exceptions
There’s a correlation between residents’ income and assessed value per student. The quintile of districts with the highest assessed property per student generally consists of small, wealthy communities like Santa Monica, Beverly Hills, and, in Silicon Valley, Saratoga. The quintile of districts with the lowest property values per student are generally low-income communities.
But there are significant exceptions, including urban areas with big industrial and commercial tax bases. Oakland Unified, with 76% low-income families but $1.6 billion in bonding capacity, and Los Angeles Unified, with 81% low income families but $18.4 billion bonding capacity, would see their modernization match drop from 60% to 55%, under Public Advocates’ proposal. San Diego Unified, the state’s second-largest district, would see its state share drop from 60% to 51%.
CASH, which has underwritten previous campaigns to promote state school facilities bonds and on its own authored the last bond that voters passed, in 2015, also opposes Public Advocates’ proposal. Reforms that would prioritize school facility funding based on lower assessed valuation “appear to create winners and losers and disrupt the stability of the current School Facility Program,” CASH said in a May 23 letter to Newsom and legislative leaders. “CASH advises against hastily adopting significant changes to the (current program) without fully vetting their impact.”
CASH’s position is that improving access to the existing school facilities program is the way to address concerns. Tiny districts with under $15 million in assessed value would automatically get full assistance; its proposal also would reserve 20% of funding for districts that could qualify for up to 100% state aid. “Those typically end up being lower wealth districts that have struggled to provide local matches,” said CASH Chair Alan Reising, the business services administrator for Long Beach Unified.
Public Advocates argues a sliding-scale system would eliminate most of the need for the financial hardship program.
CASH would also permit supplemental funding for priorities like transitional kindergarten classrooms and climate resiliency measures. Public Advocates agrees with this concept and would include community schools’ additional space needs. It also supports setting aside 5% of state funding for technical guidance, since many districts lack the expertise to compete for what has been a first-come, first-served program.
But CASH would maintain at least the current 60% state match for all districts, with some districts entitled up to 70%, based on an index of high-needs students and bonding capacity. It’s a slight variation of Muratsuchi’s AB 247, the current proposal for the November bond. An analysis by Cities + Schools found that the nudge toward equitable funding would have little effect, other than to add costs.
“These are token changes that are really not going to move the needle in any meaningful way,” said Vincent, the co-director of the center.
Analogy with famous Serrano lawsuit
Public Advocates has filed a number of regulatory challenges and lawsuits over the past 25 years on education adequacy and funding, so it’s not surprising that it is focusing on facilities funding. What is surprising is that a similar threat hasn’t risen sooner.
Fifty-three years ago, setting a precedent for the nation, the California Supreme Court struck down relying on local property taxes to fund schools as violating the constitutional right of students in low-wealth districts to have access to an equal education. That led to a state system of equalizing K-12 funding and then, in 2013, to the Local Control Funding Formula. It directs extra resources to districts based on their numbers of English learners, low-income students, and foster children.
Public Advocates argues the current system of funding school facilities is comparable to the property-tax-based system of operating schools that the court rejected in the Serrano v. Priest decision.
Many states insufficiently fund school facilities, but California’s present system remains one of the most regressive because it ignores vast differences in property wealth, Vincent said. Public Advocates based its model on Kansas’ sliding scale.
It’s an open question whether Newsom, legislative leaders, and ultimately voters would agree to a formula with new “winners” and “losers” to achieve a more equitable distribution of state funding.
As an administrator of a district that would gain the most from Public Advocates’ plan and as one of 11 members of CASH’s board of directors, Pace said, “I like the sliding scale; I would just advocate that there be a base amount that you start with.”
Otherwise, he foresees the breaking apart of a unified front for a state bond, and it is critical for today’s children to pass a bond this year, Pace said. “To pass a bond, you have to have a coalition, and coalitions generally don’t vote for things that are equitable, because you’re going to have people that say, ‘Well, if I contribute (to the campaign), what do I get out of it?’”
Kirst, who co-authored the Local Control Funding Formula, nonetheless encourages state leaders to press forward. “The issue has flown under the radar for so many years,” he said. “School construction has been controlled by groups that sponsor the initiative, but that does not excuse the lack of attention.”
Despite Superintendent Alberto Carvalho’s promise two years ago to settle the conflict, Los Angeles Unified continues denying millions of dollars in federal aid that the Archdiocese of Los Angeles argues it is owed for ongoing services to low-income students in Catholic schools. The archdiocese maintains that the district is diverting the money to bolster its students’ funding.
Both the California and the U.S. departments of education have chastised the district for breaking federal regulations in dealings with the archdiocese. Now, a Los Angeles County Superior Court judge has ordered the district to turn over documents and data that it withheld.
That information, which should illuminate the district’s decisions, could either restart stalemated talks or lead the archdiocese to turn to the courts to order a settlement after seven years of fighting.
“We do not believe further litigation is necessary, and we can achieve equity for non-public school students,” said Paul Escala, the archdiocese’s superintendent of schools. “However, we will pursue all means to see that all students receive their legally entitled services.”
Title I rules for private schools
Congress requires that low-income students in private and public schools receive equivalent Title I funding to pay for counseling, tutoring, teacher aides, and learning specialists. The dispute with LAUSD concerns how much money should be allocated for the archdiocese’s schools and how to ensure the funding gets to the students.
Under Congress’s rules, private and religious schools do not receive Title I funding directly. Instead, districts determine the eligibility of private and religious schools within their borders, administer the funding, and provide the services directly or through vendors after consulting with the schools. Los Angeles Unified, until recently, hired the Title I staff and put them on its payroll (see Frequently Asked Questions by the California Department of Education).
The system worked amicably for years. Districts can choose from several ways to determine Title I eligibility, and LA Unified picked the fairest and most efficient method for the 100-plus schools within the archdiocese with low-income students, Escala said. The district used census data to determine the number of Title I-eligible students in an attendance area, then awarded a proportionate share of the money to archdiocese schools. Long Beach Unified uses the same method.
More paperwork, more confusion, less money
Then in 2018-19 and the following year, coinciding with the new administration of Superintendent Austin Beutner, the district chose another option for calculating private schools’ eligibility — student registrations for the federal school lunch program. Not only did this method require a lot more time, paperwork and verification by the schools, but the district changed the reporting rules several times with little notice and failed “to engage in timely and meaningful consultation,” the California Department of Education concluded in a 58-page report issued in June 2021 in response to a formal complaint by the archdiocese.
Los Angeles Unified’s Office of Inspector General removed hundreds of students’ eligibility after examining parents’ school lunch forms in the two dozen schools it chose to audit and failed to include any students from other schools it didn’t audit.
The result was to cut Title I funding to the archdiocese by more than 92%, from about $9.5 million in services 2017-18 for 102 schools to $767,000 for fewer than two dozen schools, according to Escala. In 2023-24, funding crept up to about $2 million for 43 schools. The district cut its total share allocated to private schools from between 2% and 2.6% of about $291 million to 0.5%, according to the California Department of Education.
‘Totally unreasonable’ demands
The state Department of Education harshly criticized the district. The timetable for demanding documentation was “totally unreasonable,” and the district “engaged in a pattern of arbitrary unilateral decisions” and failed to justify its decisions to the archdiocese, the report said.
In ignoring the archdiocese’s Public Records Act requests for documentation to justify the cuts, the district took a “hide-the-ball approach (that) breached both the spirit and the letter” of the law, the report said.
The spirit of Title I, as stated in the law’s preamble, Escala said, is to maximize participation. The intent of other options like surveys and free-lunch verification is for schools to prove they have higher proportions of low-income families than neighboring schools, he said.
LAUSD is doing the opposite, Escala said.
“The district’s using these other methods as a way of filtering and screening and reducing participation,” he said. “You’re extracting children you know qualify simply because a “t” wasn’t crossed or an “i” wasn’t dotted. It is beyond reproach, because they (LAUSD officials) don’t apply the same standard to their own schools.”
LAUSD had an obligation to give (the Archdiocese) the requested information. LAUSD’s hide-the-ball approach breached both the spirit and the letter of the duty to consult. — The California Department of Educationin a June 2021 ruling
LA Unified declined to comment on the state’s report, and last week, a spokesperson wrote in an email that “Los Angeles Unified does not typically comment on pending or ongoing litigation.”
Districts have a financial incentive to minimize private schools’ funding eligibility. The federal government awards the total Title I funding to districts, which determine how much should be allocated for services to private and religious school students. Lawyers for the archdiocese point out that the less money that districts award, the more Title I funding they can spend on their own students.
The district appears to understand this, said Kevin Troy, an attorney for the archdiocese, citing a Jan. 29, 2019, email from the principal auditor of the district’s Office of the Inspector General to the archdiocese, in which the auditor stated that the archdiocese “receives over $10 million of Title I funds from the LAUSD every year — money that could otherwise be allocated to LAUSD schools.”
“There’s a moral and ethical question on the table,” Escala said. “You (LA Unified) have got children in need, and you’re not serving them right,” he added, referring to students in archdiocese schools.
The impact on one high school
Mark Johnson, principal of Bishop Mora Salesian High School, has seen the effect of the cuts on students. Before the cutback, Title I paid for a reading intervention teacher and part-time aide who worked with 40 to 50 students weekly — about 1 out of 8 students at the all-boy, 400-student school in the low-income Boyle Heights neighborhood of Los Angeles. Although on the district’s payroll, the teacher fit in like any other staff member, building personal relationships with the students and collaborating with their teachers.
“She (the teacher) had her own classroom and was just a regular teacher as far as any of our kids knew,” he said. She would work with the lowest-performing students on basic reading comprehension skills. “If they were working on a tough piece of literature, she would help them break it down so that they could write an analytical paragraph or essay.”
Pulling out students also reduced the class size for the remaining students, he said. Now, there is only enough money for a two-day-a-week coach from a contractor who sees at most a dozen students a week.
“We’re serving kids who are significantly behind grade level and families that deal with poverty and all the things that come along with that,” Johnson said. “So this kind of antagonistic relationship that has developed (with the district) ultimately hurts kids.”
The California Department of Education gave the district 60 days from its June 2021 ruling to consult with the archdiocese to fix deficiencies pointed out in the report and then recalibrate the proportional share of Title I funding for archdiocese schools. It ordered the district to begin providing the increased services for 2020-21, the next school year.
Instead, the district appealed the decision to the U.S. Department of Education, which issued its own findings in November 2023. In his decision, Adam Schott, deputy assistant secretary for policy and programs, found that the district could justify reducing the eligibility count based on its analysis of parents’ forms. But by doing that, they cut the funding for the dozens of schools that the district did not audit. He credited the district with consulting with the archdiocese to an extent, but said the district’s overall approach in demanding documentation was “inconsistent and confusing.”
Schott also ruled that the district violated federal regulations by claiming it didn’t have to share data with the archdiocese on how much it spent on Title I services for students and how much was unspent at the end of each year.
In December 2021, the archdiocese sued the district in Los Angeles Superior Court for ignoring multiple requests under the state Public Records Act to turn over Title I spending records and other relevant information. The court held off ruling until the complaint process played out.
On July 16, Judge Curtis Kin ordered the district to turn over all relevant documents, emails and records to the archdiocese by Aug. 20 and to pay $82,141 to the diocese in attorneys’ fees.
Anappeal to Superintendent Carvalho
Weeks after he started work as Los Angeles Unified superintendent in February 2022, Alberto Carvalho told EdSource he had familiarized himself with the case and added, “I’m going to resolve this issue sooner rather than later.” He declined to elaborate due to litigation.
“What I can tell you,” he added, “is that we need more objective, transparent tools by which we assess and fund this guaranteed federal entitlement that’s driven by poverty.”
Escala said he remains hopeful. “I believe that Superintendent Carvalho has the ability to direct his staff towards that outcome. I have a great degree of confidence that when brought to him, this can get adjudicated appropriately.”
Secretary of Education Linda McMahon announced an increase of $60 million to the Federal Charter Schools Program, bringing the annual total to $500 million to open new charter schools or expand existing ones.
This decision ignored research produced by the Network for Public Educatuon, showing that $1 billion had been wasted on grants to charter schools that never opened; that 26% of federally funded charter schools had closed within their first five years; and that 39% had closed by year 10.
The charter sector has been riddled with waste, fraud, and abuse.
See the following reports:
Charter failures
The Failure of the Federal Charter Schools Program:
Gov. Gavin Newsom presents his revised 2025-26 state budget during a news conference in Sacramento on May 14, 2025.
Credit: AP Photo/Rich Pedroncelli
TK-12 schools and community colleges can expect the same funding in 2025-26 that they received this year, plus a small cost-of-living adjustment, and there will be a big boost for early literacy, Gov. Gavin Newsom revealed Wednesday in the revision to his January state budget plan.
Schools and community colleges will be shielded from the pain facing other state services because of the revised forecast of a $12 billion drop in state revenues that Newsom blamed on the “Trump slump” — the president’s erratic tariff and other economic policies that are affecting California.
For the University of California and California State University, the news was better than anticipated. The systems would face a 3% cut for 2025-26, notably less than the nearly 8% reduction Newsom proposed in January. The smaller cut may provide some relief at a time when higher education in California and across the nation is worried about losses in federal research grants and other funding under Trump administration policies.
The 2.3% cost-of-living adjustment in 2025-26 for most TK-12 programs is determined by a federal formula that does not factor in the cost of housing, the biggest expense facing teachers and other employees.
In his May budget revision, Newsom keeps significant money for TK-12 programs that he proposed in January for fully rolling out transitional kindergarten for 4-year-olds, along with additional funding to reduce class sizes, and for expanding summer school and after-school learning to more districts.
And Newsom would add $200 million to his earlier $543 million proposal for early literacy instruction, with money to buy instructional materials, hire literacy coaches and train teachers in “evidence-based literacy instruction,” which is code for teaching phonics and word decoding as well as other fundamental reading skills.
That funding would take a significant step toward creating and funding a comprehensive early literacy strategy and coincides with compromise legislation, pushed by Assembly Speaker Robert Rivas, on spelling out what the instruction and reading materials should look like.
“We’re thrilled. We’re excited,” said Marshall Tuck, CEO of EdVoice, which pushed early literacy legislation. “In a really tight budget year, prioritizing reading for California kids and investing $200 million is real leadership.”
Newsom would also add to past efforts to recruit teachers by including $64.2 million in one-time funding for the Golden State Teacher Grant Program, under which teachers receive college tuition in exchange for agreeing to teach in underserved districts and in subjects facing critical shortages, and $100 million to pay stipends to student teachers. Unpaid student teaching has been cited as one of the primary reasons teacher candidates fail to complete their credentials.
The Legislature has a month to reshape Newsom’s budget before the June 15 constitutional deadline to pass a budget for the fiscal year that starts on July 1.
What the budget doesn’t include, however, is any funding to backfill for the potential loss of billions of federal dollars in Medi-Cal funding for school physical and mental health services, cuts for Head Start programs, training grants for new teachers and research grants for the University of California and California State University, and the dismantling of the AmeriCorps program, which supplies teachers aides and tutors in hundreds of low-income schools.
“Our ability to backfill all these federal cuts — no, we’re not going to be in a position to do that, we just are not in that position,” Newsom said. “It’s the old adage, you can’t do everything but you can do anything. There may be areas where we can make adjustments.”
“I think we should be cautious about eliminating consideration of x, y, and z until we see the totality of the challenges as they present themselves.”
In one cost-cutting measure, Gov. Newsom is proposing to roll back California’s health insurance program for undocumented immigrant adults, by charging premiums and freezing new enrollment, a move that advocates said will affect their children, many of whom are U.S. citizens. One in 10 California children are estimated to have an undocumented parent.
“When a parent or family member is sick and unable to work or provide care, kids suffer as a result,” said Mayra Alvarez, president of the nonprofit organization The Children’s Partnership. “Ripping away these family members’ access to health care, while they are also under threat of cruel immigration enforcement and other anti-immigrant policies, in turn puts the well-being of our children at risk.”
Higher education
State funding for the state’s system of 116 community colleges would change little from last year, receiving 0.6% less, at $8.9 billion. However, some of its important funding — $531.6 million from Proposition 98 revenues — would be deferred for a year under the proposal.
UC would have its funding cut by $129.7 million, while CSU would lose $143.8 million. In January, Newsom’s administration had proposed deeper cuts of $396.6 million and $375.2 million, respectively.
The revised budget maintains a proposal to defer previously promised 5% budget increases until 2027-28 for both systems. Those deferrals, which were part of Newsom’s multiyear compact agreements with the systems, were also included in Newsom’s January budget proposal.
The compacts, originally agreed to in 2022, promised annual budget increases for UC and CSU in exchange for the systems working toward goals such as increasing graduation rates and enrolling more California residents.
“We were able to hold strong to that over a two-year period. And we’re struggling now with some challenges,” Newsom said during a news conference Wednesday, though he added that the compacts are “sacrosanct” and that the systems would get their deferred dollars in 2027-28.
By reducing the proposed cut to UC’s budget for 2025-26, the 10-campus system will be able to minimize cuts to student support services and preserve “critical investments like affordable student housing construction,” President Michael V. Drake said Wednesday in a statement.
CSU Chancellor Mildred García in January warned that a nearly 8% state budget reduction would result in larger class sizes and fewer course offerings for the system’s more than 460,000 students, hampering their prospects for graduating on time. With those cuts now dialed back to 3%, García praised the May revision as a “thoughtful and measured approach to addressing the state’s fiscal challenges.”
Proposition 98 maneuvers
In total, the May revision proposes $45.7 billion for the state’s higher education institutions and the California Student Aid Commission.
The minimum funding for 2025-26 for Proposition 98, the formula that determines the portion of the general fund that must go to TK-12 and community colleges, would be $114.6 billion, down from $118.9 billion in 2024-25 because of shrinking state revenues.
Newsom proposes to make up the difference by shifting numbers around, depleting what was left in the Proposition 98 rainy day fund. Among other maneuvers, he would:
Drain the remaining $540 million from a fund that was $8.4 billion only two years ago, when the state faced a fiscal crisis.
Defer $1.8 billion that would be due to schools in June 2026 by a month, to July 2026. Schools should notice little difference, although the maneuver does create a state obligation that must be repaid.
Withhold $1.3 billion due to schools and community colleges in 2024-25 in anticipation that the revenues for the rest of the year might come up short because of the further decline in state revenues.
This last maneuver grabbed the attention of the California School Boards Association, which filed a lawsuit over a similar effort last year and is threatening to do so again.
“Even in lean times, investing in public schools is California’s best economic strategy, so we cannot sidestep constitutional protections for public education nor underfund Prop 98 to offset shortfalls in other sections of the budget,” association President Bettye Lusk said in a statement.
The immediate reaction to the budget proposal was positive, with some caveats.
“The bottom line is that amid a budget crisis, the governor is protecting every major investment in education,” said Kevin Gordon, president of Capitol Advisors, a consultant for school districts. “We want to make sure Prop 98 funding is accounted for. As long as that’s the case, there’s not much to complain about.”
Scott Moore, head of Kidango, a nonprofit that runs many Bay Area child care centers, praised the commitment to universal transitional kindergarten (TK) while criticizing Newsom’s decision to suspend a cost-of-living adjustment for child care providers for low-income children and freeze funding for emergency child care services for foster and homeless children.
“We know that small class sizes and highly qualified teachers are two of the most important quality standards to ensure children benefit from pre-K. This budget invests wisely in TK,” he said. “The proposed cut to the COLA (cost of living increase) for child care providers must be restored. Now is the worst time to eliminate a small, but very much needed and deserved COLA for those who take care of our youngest and most vulnerable children.”
