This minimum funding requirement is commonly called the minimum guarantee. The state calculates the minimum guarantee by comparing three main formulas or “tests.” (Figure1). Each test takes into account certain inputs, such as state General Fund revenue, per capita personal income, and K-12 student attendance. The state can choose to fund at the minimum guarantee or any level above it. It also can suspend the guarantee with a two-thirds vote of each house of the Legislature, allowing the state to provide less funding than the formulas require that year. The state meets the guarantee through a combination of state General Fund and local property tax revenue.
As Figure2 shows, the estimates of the guarantee under the June 2022 budget plan are up significantly compared with the June 2021 estimates. For 2021-22, the guarantee is up $16.5billion (17.6percent), representing one of the largest upward revisions since the adoption of Proposition98. This increase is attributable to substantially higher estimates of General Fund revenue. For 2022-23, the guarantee increases by an additional $117million (0.1percent) relative to the revised 2021-22 level. This increase is attributable to growth in local property tax revenue and is mostly offset by a modest year-to-year decline in required General Fund spending. Test 1 is operative in both years, with the change in the General Fund portion of the guarantee equating to about 40percent of the change in General Fund revenues. For both 2021-22 and 2022-23, the budget plan funds at the revised estimate of the guarantee.
Proposition2 (2014) established a constitutional reserve account within Proposition98. The purpose of this reserve is to set aside some Proposition98 funding in relatively strong fiscal times to mitigate funding reductions during economic downturns. Under the adopted budget plan, the state deposits a total of $9.5billion into this account across the 2020-21 through 2022-23 period—an increase of $4.5billion compared with the estimates made in June 2021. These deposits reflect the strong estimates of capital gains revenue across the period. The deposits required in 2020-21 and 2021-22 also trigger a statutory cap on school district reserves in 2022-23. (The cap applies the year after the balance in the reserve exceeds 3percent of the Proposition98 funding allocated to K-12 schools.) The cap prohibits medium and large districts—those with more than 2, 500 students—from holding general purpose reserves that exceed 10percent of their annual expenditures. Districts can respond to the cap by designating their reserves for specific purposes, seeking exemptions from their county offices of education (COEs), or spending down their reserves.
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The June 2021 budget plan established a plan to expand eligibility for TK beginning in 2022-23. Under the plan, all four-year old children will be eligible by 2025-26. The Legislature and Governor also agreed the state would “rebench” (adjust) the Proposition98 guarantee for the additional Local Control Funding Formula (LCFF) base, supplemental, and concentration grant amounts generated by the newly eligible students. Consistent with this agreement, the budget plan includes an increase in the 2022-23 guarantee of $614million related to the first-year costs of the expansion.
Level. This increase—combined with the upward revision to the 2021-22 guarantee and various other adjustments—provides almost $33billion for new K-12 spending. Figure3 shows how the budget allocates this funding. In the remainder of this section, we describe the K-12 spending actions in greater detail. (The changes related to State Preschool will be covered in our forthcoming publication,
BBackfills rate increases for After School Education and Safety Program and 21st Century Community Learning Centers programs, which were provided in 2021‑22 with one‑time federal funds.
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CIncludes funding for Medi‑Cal billing resource lead, a study of English Language Proficiency Assessments, and support for the administration of the physical fitness test.
The budget provides $5.1billion to increase LCFF rates by 13.25percent in 2022-23. This includes $772million to make attendance adjustments and cover the cost of a 6.56percent statutorily required cost-of-living adjustment (COLA), plus an additional $4.3billion to increase rates above COLA.
The budget includes $2.8billion to cover the costs associated with modifying the LCFF calculations for school districts with declining attendance. For the purposes of determining their LCFF allotment, districts will be credited with their attendance over the three prior years if it exceeds their current- and prior-year attendance. (For 2022-23, attendance would be based on the average of 2019-20, 2020-21, and 2021-22.) Furthermore, 2021-22 attendance may also be calculated by applying districts’ 2019-20 pre-pandemic attendance rates to their 2021-22 enrollment. (If actual 2021-22 attendance is higher than the alternative calculation, then 2021-22 attendance would be used.) Trailer legislation specifies that this alternative 2021-22 calculation could only be used to calculate LCFF allotments for school districts that complied with short-term independent study requirements included in the 2021-22 budget. This alternative 2021-22 attendance calculation will apply for determining LCFF allotments in future years.
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The budget plan specifies that, for 2021-22 only, charter schools’ LCFF calculations will be made using the greater of their current- or prior-year attendance. The budget estimates the associated costs will be $413million. Beginning in 2022-23, charter schools would return to being funded on their current-year attendance, as they had been prior to the pandemic.
Trailer legislation included in the 2021-22 budget package gradually expanded TK eligibility beginning in 2022-23, with all four-year olds eligible for TK beginning in 2025-26. The budget package assumes the two-month expansion in 2022-23 will increase LCFF costs by $614million. In addition, the budget package establishes an ongoing LCFF add-on of $2, 813 per TK student beginning in 2022-23 for school districts and charter schools to maintain average TK classroom enrollment of no more than 24 students for each school site. Trailer legislation also specifies that in 2022-23, school districts and charter schools must maintain at least 1 adult for every 12 students in TK classrooms, and commencing in 2023-24, maintain at least 1 adult for every 10 TK students. Beginning in 2023-24, the add-on will annually increase at the same percentage as the statutory COLA. Unlike the existing K-3 add-on, districts cannot collectively bargain for higher TK staffing ratios. The budget assumes the additional add-on will cost $383million in 2022-23. In addition, trailer legislation allows the Commission on Teacher Credentialing (CTC) to issue one-year emergency specialist teacher permits in early child education that allow permit holders to teach TK if they meet certain conditions.
The budget package provides a $101million ongoing increase to COEs through LCFF, representing roughly a 15percent increase in total COE LCFF funding. This includes an increase to the county operations grant, which provides flexible funding for COEs and is intended to support regional services to school districts. Only COEs that are funded at their target LCFF entitlement will receive additional funding through the increase in the county operations grant. For COEs that are funded above their LCFF targets (33 of 58 COEs in 2021-22), the budget package establishes an ongoing add-on equal to the annual statutory COLA that COEs funded at their target receive.
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The budget package increases ongoing funding for ELOP by $3billion, bringing total program funding to $4billion ongoing. Trailer legislation also modifies the two-tiered ELOP rate structure, which provides funding to school districts and charter schools based on the number of students in grades TK-6 who are English learners or from low-income families (EL/LI). School districts and charter schools with a student body that is at least 75percent EL/LI will receive $2, 750 per EL/LI student, while the rate for other school districts and charter schools will be based on the amount of funding remaining. To provide time for programs to be developed and staff to be hired, school districts and charter schools will not be required to comply with any programmatic requirements in 2022-23 or be subject to an audit. Beginning in 2023-24, school districts and charter schools with an EL/LI percentage of 75percent or more will be required to offer the program to all of their elementary students and provide access to any student whose parent or guardian requests placement in the program. Those with an EL/LI share of less than 75percent will be required to offer the program and provide access to all EL/LI elementary school students, though their rates would continue to vary depending on the amount of funding available.
The budget package provides a total of $149million ongoing Proposition98 for two expanded learning programs—$95million to the After School Education and Safety program and $54million to the 21
Century Community Learning Centers program. These increases provide ongoing funding for the temporary rate increases provided in 2021-22 with one-time federal funds.
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Under existing law, school districts and COEs receive an “add-on” to their LCFF allotments based on the amount of funding they received for school transportation in 2012-13. These add-ons total $496million statewide. Beginning in 2022-23, the budget establishes a new funding stream to supplement these add-ons. Specifically, school districts and COEs will receive an annual allotment equal to the difference between their add-on amounts and 60percent of the eligible transportation expenditures they reported in the previous year. Trailer legislation links eligible expenditures to the definition in the state accounting manual, excluding capital outlay and expenditures related to the transportation of students attending other districts. The budget estimates the
The budget plan specifies that, for 2021-22 only, charter schools’ LCFF calculations will be made using the greater of their current- or prior-year attendance. The budget estimates the associated costs will be $413million. Beginning in 2022-23, charter schools would return to being funded on their current-year attendance, as they had been prior to the pandemic.
Trailer legislation included in the 2021-22 budget package gradually expanded TK eligibility beginning in 2022-23, with all four-year olds eligible for TK beginning in 2025-26. The budget package assumes the two-month expansion in 2022-23 will increase LCFF costs by $614million. In addition, the budget package establishes an ongoing LCFF add-on of $2, 813 per TK student beginning in 2022-23 for school districts and charter schools to maintain average TK classroom enrollment of no more than 24 students for each school site. Trailer legislation also specifies that in 2022-23, school districts and charter schools must maintain at least 1 adult for every 12 students in TK classrooms, and commencing in 2023-24, maintain at least 1 adult for every 10 TK students. Beginning in 2023-24, the add-on will annually increase at the same percentage as the statutory COLA. Unlike the existing K-3 add-on, districts cannot collectively bargain for higher TK staffing ratios. The budget assumes the additional add-on will cost $383million in 2022-23. In addition, trailer legislation allows the Commission on Teacher Credentialing (CTC) to issue one-year emergency specialist teacher permits in early child education that allow permit holders to teach TK if they meet certain conditions.
The budget package provides a $101million ongoing increase to COEs through LCFF, representing roughly a 15percent increase in total COE LCFF funding. This includes an increase to the county operations grant, which provides flexible funding for COEs and is intended to support regional services to school districts. Only COEs that are funded at their target LCFF entitlement will receive additional funding through the increase in the county operations grant. For COEs that are funded above their LCFF targets (33 of 58 COEs in 2021-22), the budget package establishes an ongoing add-on equal to the annual statutory COLA that COEs funded at their target receive.
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The budget package increases ongoing funding for ELOP by $3billion, bringing total program funding to $4billion ongoing. Trailer legislation also modifies the two-tiered ELOP rate structure, which provides funding to school districts and charter schools based on the number of students in grades TK-6 who are English learners or from low-income families (EL/LI). School districts and charter schools with a student body that is at least 75percent EL/LI will receive $2, 750 per EL/LI student, while the rate for other school districts and charter schools will be based on the amount of funding remaining. To provide time for programs to be developed and staff to be hired, school districts and charter schools will not be required to comply with any programmatic requirements in 2022-23 or be subject to an audit. Beginning in 2023-24, school districts and charter schools with an EL/LI percentage of 75percent or more will be required to offer the program to all of their elementary students and provide access to any student whose parent or guardian requests placement in the program. Those with an EL/LI share of less than 75percent will be required to offer the program and provide access to all EL/LI elementary school students, though their rates would continue to vary depending on the amount of funding available.
The budget package provides a total of $149million ongoing Proposition98 for two expanded learning programs—$95million to the After School Education and Safety program and $54million to the 21
Century Community Learning Centers program. These increases provide ongoing funding for the temporary rate increases provided in 2021-22 with one-time federal funds.
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Under existing law, school districts and COEs receive an “add-on” to their LCFF allotments based on the amount of funding they received for school transportation in 2012-13. These add-ons total $496million statewide. Beginning in 2022-23, the budget establishes a new funding stream to supplement these add-ons. Specifically, school districts and COEs will receive an annual allotment equal to the difference between their add-on amounts and 60percent of the eligible transportation expenditures they reported in the previous year. Trailer legislation links eligible expenditures to the definition in the state accounting manual, excluding capital outlay and expenditures related to the transportation of students attending other districts. The budget estimates the
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