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Budget Act for 2023–24: Information

Overview of education-related funding included in the Budget Act of 2023–24.

Governor Gavin Newsom signed the Budget Act of 2023 on June 27, 2023. This act put in place a spending plan for 2023–24 and a revised spending plan for 2021–22 and 2022–23. The budget package includes several education trailer bills, which are additional legislative measures related to education, for the 2023–24 fiscal year. This letter, prepared by the California Department of Education (CDE) fiscal policy staff, provides information on the budget actions that affect Transitional Kindergarten through grade twelve (TK–12), adult education, and early education programs.

Copies of this document, as well as other budget-related documents, are available on the CDE Education Budget web page. Official state budget documents are available through the California Department of Finance (DOF) websiteExternal link opens in new window or tab..

Overview

The 2023–24 Budget Act addresses a significant decline in revenues following two years of unprecedented General Fund growth, resulting in a budget shortfall of more than $30 billion. Despite this shortfall, education funding remains strong due to the provisions of Proposition (Prop) 98. Funding is maintained for several recent investments, including universal school meals, transitional kindergarten, community schools, and the expanded learning opportunities program. The total overall funding (federal, state, and local) for all TK–12 education programs is $129.2 billion, with a per-pupil spending rate of $23,791 in 2023–24.

Proposition 98

The Budget Act of 2023 estimates Prop 98 levels to be $110.6 billion, $107.4 billion, and $108.3 billion in 2021–22, 2022–23, and 2023–24, respectively. The TK–12 portion of Prop 98 funding represents TK–12 per-pupil funding of $17,661. The per-pupil funding level is a $668 increase over the 2022–23 Budget Act level and a $152 increase over the per-pupil funding level the Governor projected in January 2023.

The budget also includes significant deposits into the Public School System Stabilization Account, also known as the Prop 98 Rainy Day Fund. Specifically, $4.8 billion is deposited in 2021–22, $1.8 billion is deposited in 2022–23, and $902 million is deposited in 2023–24, for a total balance of $10.8 billion at the end of 2023–24. This amount continues to trigger a cap of 10 percent on school district reserves, which started in 2022–23.

The budget package also rebenches the Prop 98 guarantee during Test 1 years, years when Prop 98 funding levels are based on a percentage of total State General Fund revenues. The Test 1 percentage is increased from 38.2 percent to 38.5 percent to account for increased enrollment due to the transitional kindergarten expansion that started in the 2021–22 Budget Act.

Local Control Funding Formula

The budget package includes an 8.22 percent Local Control Funding Formula (LCFF) cost-of-living adjustment (COLA) for 2023–24. It also provides an additional $80 million for county offices of education (COEs) serving students in juvenile court and other alternative school settings.

The 2023–24 Budget Act includes multiple changes to the accountability and continuous improvement system. This includes the new LCFF Equity Multiplier, which allocates $300 million in ongoing Prop 98 funding for schoolsites with a non-stability rate greater than 25 percent and a socioeconomically disadvantaged pupil rate of greater than 70 percent. The funding must be used to support evidence-based services and supports for students. Schoolsites must demonstrate how the funded services and supports are increased or improved in comparison to if there was no additional funding. There is a requirement that the funds supplement, and not supplant LCFF, Expanded Learning Opportunities Program, Literacy Coaches and Reading Specialist Grant Program, or California Community Schools Partnership Act funding. The budget package also includes $2 million ongoing Prop 98 to support the work of new Equity Leads within the statewide system of support.

Major Proposition 98 Adjustments

Literacy

The 2023–24 budget package makes several investments in the area of literacy, including:

  • Allocates $250 million in one-time Prop 98 General Fund to build upon the existing Literacy Coaches and Reading Specialists Grant Program.
  • Provides $1 million in one-time Prop 98 General Fund to convene an independent panel of experts to create a list of approved screening instruments for LEAs to use when screening students in kindergarten through second grade for reading difficulties, including dyslexia, by the 2025–26 school year.
  • Allocates $1 million in one-time General Fund to develop a Literacy Roadmap to assist educators navigate state-provided literacy resources.

Educator Preparation, Retention, and Professional Development

The 2023–24 budget package continues the State’s efforts to reduce barriers for those interested in entering the teaching profession, including spouses of military personnel. Specifically, the Budget Act:

  • Increases the Teacher and School Counselor Residency Grant Program per-candidate allocation to the grantee LEA from $25,000 to $40,000 and requires a minimum stipend or salary of $20,000 be provided to residents to better enable them to afford this pathway.
  • Extends the time frame for residency candidates to complete their service requirements from five years to eight years and allows candidates to fulfill their service requirement by allowing them to teach in schools outside of their sponsoring district.
  • Allows teachers who were unable to complete their credential requirements due to the inability to take the Teaching Performance Assessment during the COVID-19 Pandemic to meet the requirement through completion of a Commission-approved induction program, or through two years of satisfactory teacher evaluations.
  • Authorizes the Commission on Teacher Credentialing to issue a comparable California credential to any U.S. military servicemember or their spouse who possesses a valid out-of-state teaching or services credential to provide instruction or services in California public schools when the candidate is relocated to California on military orders.
  • Requires the Commission to explore the use of transcript reviews as an alternative to state-mandated exams for assessing basic skills and subject matter competence in teaching candidates.
  • Establishes the Diverse Educators Pipeline Initiative and provides $10 million in one-time Prop 98 General Fund for grants to LEAs to provide culturally relevant support and mentorship for educators to become school administrators.

Universal Transitional Kindergarten and Early Education

The 2023–24 budget package continues to phase in Universal TK, as outlined in the 2021–22 Budget Act. First, the budget rebenches the Prop 98 minimum guarantee to account for the additional enrollment. Then, an additional $597 million is allocated to support the next phase of expanded enrollment eligibility anticipated in 2023–24. Furthermore, $165 million in additional funds is provided as a COLA to the existing TK add-on to support the hiring of one additional certificated or classified staff for every TK class to reduce student-to-adult ratios. The planned reduction of student-to-adult ratios of 1:10 is delayed until 2025–26 but is no longer contingent upon additional funding being appropriated for this purpose.

The budget further expands TK enrollment by allowing LEAs to enroll children whose fourth birthday falls between June 2 and September 1, referred to as early enrollment children. In order to do so, TK classrooms including early enrollment children must maintain a 1:10 adult-to-student ratio and a class size at or below 20 students. Note students enrolled as early enrollment children do not generate average daily attendance (ADA), and therefore do not generate a LCFF apportionment and are not included in enrollment or unduplicated pupil counts until their fifth birthdays. The budget also extends the deadline for credentialed teachers to have earned 24 units, or its equivalent, or a child development teacher permit or an early childhood education specialist credential, from August 1, 2023, to August 1, 2025.

Regarding the California State Preschool Program (CSPP) and other early education programs, the budget:

  • Sets aside funding for any adjustments related to reimbursement for providers that may result from a ratified agreement.
  • Revises the family fee schedule for CSPP beginning October 1, 2023, to limit family fees to one percent of a family’s monthly income. The assessment of a fee is prohibited for families with an adjusted monthly income below 75 percent of the state median income. Additionally, the Budget authorizes State Preschool Program family fee debt that accrued but remained uncollected prior to October 1, 2023, to be forgiven.
  • Delays the planned inclusivity adjustments ramp up established in the 2022 Budget Act for the 2023–24 and 2024–25 fiscal years to the 2025–26 and 2026–27 fiscal years.
  • Reallocates $4.4 million non-Prop 98 General Fund and $5.3 million Prop 98 General Fund from the 2022 Budget Act to continue to waive family fees from July 1, 2023, through September 30, 2023, and provides roughly $112 million in available federal funds to provide temporary stipends for State Preschool Program employees.
  • Authorizes CSPP providers to be reimbursed for each child’s maximum authorized care, instead of their utilized care, from July 1, 2023, to September 30, 2023.

Special Education

The 2023–24 budget package reflects the following statutory changes to invest in and improve instruction and services for students with disabilities:

  • Limits the amount of additional funding that Special Education Local Plan Areas (SELPAs) are allowed to retain for non-direct student services before allocating special education base funding to their member LEAs.
  • Extends the moratorium on the creation of new single-district SELPAs by two years, from June 30, 2024, to June 30, 2026, to stabilize current SELPA membership.
  • Requires the CDE to post each SELPA’s annual local plan, including their governance, budget, and services plans, on its website to increase fiscal transparency.

Adjustments to One-Time Resources

The 2023–24 budget package reduces or delays support for the following one-time investments:

  • Arts, Music, and Instructional Materials Discretionary Block Grant – decreases one-time Prop 98 General Fund support for the Arts, Music, and Instructional Materials Block Grant by $200 million, bringing total one-time program support to approximately $3.3 billion.
  • Learning Recovery Emergency Block Grant – decreases one-time Prop 98 General Fund support for the Learning Recovery Emergency Block Grant by $1.1 billion, but includes Legislative intent language to restore most of the cut funding with additional allocations in the 2025–26, 2026–27, and 2027–28 fiscal years.
  • Zero-Emission School Buses – delays $1 billion in one-time Prop 98 General Fund to support greening school bus fleets through programs operated by the California Air Resources Board and the California Energy Commission to the 2024–25 and 2025–26 fiscal years.
  • California Preschool, TK and Full-Day Kindergarten Facilities Grant Program – delays the planned $550 million investment for this program in the 2023–24 fiscal year to 2024–25.
  • School Facility Program – allocates approximately $2 billion one-time General Fund, $100 million less than previously planned, to support the School Facility Program in 2023–24.

Other

  • Prop 28 – Approximately $938 million to support the implementation of Prop 28
  • Categorical Program COLA – $556.3 million in ongoing Prop 98 General Fund to reflect an 8.22-percent COLA for specified categorical programs.
  • Nutrition – $154 million in ongoing Prop 98 General Fund and an additional $110 million one-time Prop 98 General Fund to fully fund the universal school meals program in the 2022–23 and 2023–24 fiscal years.
  • Bipartisan Safer Communities Act, Stronger Connections Program – $119.6 million in one-time federal funds to support LEA activities related to improving school climate and safety through the Stronger Connections Program.
  • Charter School Facility Grant Program – $30 million in one-time Prop 98 General Fund to support eligible facilities costs.
  • Bilingual Teacher Professional Development Program – $20 million in one-time Prop 98 General Fund, available through the 2028–29 fiscal year, to support the Bilingual Teacher Professional Development Program.
  • Commercial Dishwasher Grants – $15 million in one-time Prop 98 General Fund to support grants to LEAs to acquire and install commercial dishwashers.
  • Restorative Justice Practices – $7 million in one-time Prop 98 General Fund to provide support for LEAs opting to implement the restorative justice best practices that will be developed and posted on the CDE website by June 1, 2024.
  • Golden State Teacher Grant Program – $6 million in one-time federal funds to support grants for teacher candidates enrolled in a SPED teacher preparation program and agree to teach at a high-need school.
  • K–12 High-Speed Network – $3.8 million in ongoing Prop 98 General Fund to support the K–12 High Speed Network program.
  • Reversing Opioid Overdoses – $3.5 million in ongoing Prop 98 General Fund for all middle schools, high schools, and adult school sites to have at least two doses of naloxone hydrochloride or another opioid reversal medication.
  • After School Education and Safety Programs – $3 million in one-time federal funds for Save the Children, which supports after-school programs in rural districts.
  • Student Friendly Services – $2 million in ongoing Prop 98 General Fund to support the California College Guidance Initiative.
  • California School for the Deaf in Fremont – $2 million in one-time Prop 98 General Fund to support the California School for the Deaf in Fremont.
  • Professional Development and Leadership Training – $1 million in ongoing Prop 98 General Fund for Los Angeles COE to support professional development and leadership training for education professionals related to antibias education and the creation of inclusive and equitable schools.
  • Social Emotional Learning Resources – $1 million in one-time General Fund to Beyond Differences to support LEAs in implementing social-emotional learning practices.
  • Basic Aid Wildfire Property Tax Backfill – $632,000 in one-time Prop 98 General Fund to backfill reduced property tax revenues for certain school districts that were impacted by the Kincade Fire.
  • Local Control and Accountability Plan Query Tool and eTemplate – $148,000 in ongoing Prop 98 General Fund to maintain the Local Control and Accountability Plan Query Tool and eTemplate.
  • Abuse of Discretion Clarification – Includes statute clarifying that the State Board of Education has the authority to reverse the decisions of a school district governing board and county board of education to deny a charter petition only upon a determination that there was an abuse of discretion by each of these governing boards, consistent with the State Board of Education’s implementation of current law.

Budget and Trailer Bills

The Budget Act and Trailer Bills (TB) are as follows:

Questions:   Fiscal Policy Office | 916-319-0821
Last Reviewed: Thursday, October 26, 2023
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