[Email notice of this letter was sent on July 20, 2026, to the PASE and CDEfisc email distribution lists.]

July 20, 2026

Dear County Superintendents of Schools:

2026–27 Advance Principal Apportionment

The California Department of Education (CDE) certified the 2026–2027 Advance Principal Apportionment (Advance) on July 20, 2026 pursuant to California Education Code (EC) Section 41330. The statewide total was $59,090,514,758. At the end of each month from July 2026 through January 2027, county treasurers will receive warrants that reflect state aid for Advance programs for local educational agencies (LEA). County superintendents of schools should advise school districts and charter schools of this apportionment immediately.

The 2026–27 Advance is apportioned on the basis of an LEA’s Second Principal Apportionment (P-2) funding from the preceding fiscal year (FY) pursuant to EC Section 41330 and funding appropriations provided in the 2026–27 Budget Act and related trailer bills (Assembly Bill [AB] 109, Chapter 19, Statues of 2026, Senate Bill [SB] 111, Chapter 21, Statutes of 2026 and AB 126, Chapter 65, Statutes of 2026).

A summary of the Advance calculations is provided below. This letter, as well as Excel files that provide funding and monthly payment amounts, are available on the CDE website at https://www.cde.ca.gov/fg/aa/pa/pa2627.asp. Additionally, the CDE has posted the 2026–27 Funding Rates and Information web page at https://www.cde.ca.gov/fg/aa/pa/pa2627rates.asp.

2026–27 Advance Calculations by Program

The following provides specific details regarding the calculation of funding for each program, including the Local Control Funding Formula (LCFF). Because this apportionment is merely a means to begin allocating funds in accordance with EC Section 41330, it should not be used by LEAs for budgeting.

Local Control Funding Formula State Aid – County Offices of Education

The estimated 2026–27 LCFF State Aid for each County Office of Education (COE) is based on funding from the 2025–26 P-2 certification and reflects the following:

1. The 2025–26 LCFF Entitlement was adjusted to reflect the 2.87 percent statutory cost of living adjustment (COLA), as well as 1.44 percent adjustment pursuant to EC Section 42238.022 for COEs funded based on the LCFF Target and LCFF Floor.
2. COE LCFF add-on funding components, and additional funding for Local Control and Accountability Plan support for COEs funded on the Target formula as of 2016–17 P-2, pursuant to EC Section 2575.1, is included in the Advance state aid amount and was adjusted to reflect the 2.87 percent statutory COLA.
3. In accordance with AB 126, the Universal and Targeted Assistance Funding Grant was calculated and applied as a part of the 2026–27 Advance COE LCFF Entitlement Calculation, replacing County Funding based on Districts and Charters identified for Differentiated Assistance.
4. The 2025–26 P-2 local revenue amount was used to determine the COE’s Advance state aid and excludes any one-time Redevelopment Agency (RDA) Asset Liquidation funds reported as part of the COE’s 2025–26 P-2 property taxes.
5. The Education Protection Account (EPA) Entitlement, which is an offset to state aid, has been recalculated to reflect the 2026–27 funding estimate of $12.5 billion. See the EPA section below for additional details.
   

Local Control Funding Formula State Aid – School Districts and Charter Schools

The estimated 2026–27 LCFF State Aid is based on funding from the 2025–26 P-2 certification and reflects the following:

1. The 2025–26 P-2 Entitlement was recalculated with adjusted base grant rates to reflect a statutory COLA of 2.87 percent, as well as a 1.44 percent adjustment pursuant to EC Section 42238.022.
2. A 2.87 percent COLA was applied to the 2012–13 Home-to-School Transportation add-on, 2012–13 Small School District Bus Replacement add-on, and Transitional Kindergarten (TK) add-on.
3. The Necessary Small School Allowance was recalculated with revised funding bands reflecting a 20 percent increase and a 2.87 percent COLA adjustment.
4. 2025–26 class size penalties (reflected in the miscellaneous adjustments and minimum state aid adjustments lines of the P-2 School District LCFF funding exhibit) have been excluded from the Advance.
5. The 2025–26 P-2 local revenue amount was used to determine the school district’s Advance state aid and exclude any one-time RDA Asset Liquidation funds reported as part of the district’s 2025–26 P-2 property taxes.
6. The EPA Entitlement, which is an offset to state aid, has been recalculated to reflect the 2026–27 funding estimate of $12.5 billion. See the EPA section below for additional detail.

Education Protection Account

EPA revenues, as authorized by Section 36 of Article XIII of the California Constitution, are generated by an increase in the personal income tax rates for upper-income taxpayers. All LEAs will receive quarterly EPA payments through the 2030–31 fiscal year, which will be paid outside of the Principal Apportionment. For most LEAs, EPA funding offsets state aid allocated through the Principal Apportionment.

Using the 2026–27 EPA revenue estimate of approximately $12.5 billion, the CDE calculated estimated EPA entitlements using a factor of 43.6007948500 percent based on the adjusted 2025–26 P-2 statewide total of revenue limits and charter school block grant funding, adjusted to reflect the statutory COLA of 2.87 percent, and 2025–26 P-2 local revenue data, adjusted to exclude one-time RDA Asset Liquidation funds. If an LEA’s 2025–26 P-2 EPA entitlement was based on the minimum $200 per average daily attendance (ADA), the 2026–27 estimated EPA entitlement was not recalculated for the Advance.

While the funding is not allocated through the Principal Apportionment, estimated 2026–27 EPA amounts are provided on the Advance Apportionment Summary available on the CDE’s website for your convenience. For additional information on EPA calculations, letters of apportionment, payment schedules, spending restrictions, frequently asked questions, Standardized Account Code Structure financial reporting and more, please refer to CDE’s EPA web page at
https://www.cde.ca.gov/fg/aa/pa/epa.asp.

Basic Aid “Choice”, Court-Ordered Voluntary Pupil Transfer, and Charter Supplement

The 2026–27 Advance funding for Basic Aid “Choice”, Court-Ordered Voluntary Pupil Transfer, and Charter Supplement was adjusted to reflect a statutory COLA of 2.87 percent, as well as a 1.44 percent adjustment pursuant to EC Section 42238.022.

Adults in Correctional Facilities

LEAs that participate in the Adults in Correctional Facilities (AICF) program receive funding on a reimbursement basis. The 2026–27 Budget Act provides $9,701,000, which will be used to fund the 2025–26 program. Advance funding for the AICF program is equal to the 2025–26 P-2 state aid amounts for each LEA adjusted for the statutory COLA for 2025–26 at 2.30 percent.

Special Education – Assembly Bill 602 Program

The 2026–27 Budget Act provides $6,999,976,000 for the AB 602 program, including an increase of $2.357 billion to raise the base funding rate to $1,340. The estimated 2026–27 state aid for each Special Education Local Plan Area (SELPA) is based on the funding from the 2025–26 P-2 certification and reflects the following adjustments:

1. The 2025–26 Special Education Property Tax amount was used to determine the SELPA’s Advance state aid and excludes any one-time RDA Asset Liquidation funds reported as part of the county’s 2025–26 P-2 property taxes.
2. A factor of 1.5307967476 was applied to each SELPA’s adjusted 2025–26 state aid amount.

Special Education – Infant (Ages Two Years and Younger) Program

The 2026–27 Budget Act provides $94,782,000 for the Infant program. The Advance is based on the 2025–26 P-2 undeficited amounts for each LEA, increased by a factor of 1.0288541027.

Special Education – Mental Health Services

The 2026–27 Budget Act provides $464,498,000 for Mental Health Services. The Advance calculation is based on the 2025–26 P-2 amounts for each LEA, increased by a factor of 1.0092497679. New charter schools were not included in the Advance calculation and will be included at the 2026–27 First Principal Apportionment when current year ADA are available.

Special Education – Early Intervention Preschool Grant

The 2026–27 Budget Act provides $260,000,000 for Early Intervention Preschool Grant. The Advance is equal to the 2025–26 P-2 amounts for each LEA.

Expanded Learning Opportunities Program

SB 111 provides $4,672,910,000 for the Expanded Learning Opportunities Program (ELO-P). Of this amount, the CDE has set aside $7.5 million of the total appropriation for COE apportionments to provide technical assistance, evaluation, and training services to support program improvement (EC Section 46120[d][8]). The total appropriation to eligible school districts and charter schools at Advance is $4,665,410,000.

The 2026–27 ELO-P entitlement is calculated based on each LEA’s 2025–26 Second Principal (P-2) unduplicated pupil percentage (UPP) for grades TK/Kindergarten (K)–12 and classroom-based ADA in grades TK/K–6 (EC Section 46120[d][1]).

AB 126 added the requirement that Rate 2 be no less than $1,800 beginning in fiscal year 2026–27 (EC Section 46120[d][1][D]), and the 2026–27 budget appropriation was sufficient to meet this threshold. Details on the 2026–27 rates and funding calculation are available at https://www.cde.ca.gov/fg/aa/pa/pa2627rates.asp#elop.

Transfer of Funds for County Served District Funded Average Daily Attendance

EC Section 2576 requires the CDE to transfer funds from the district of residence to the COE for District Funded County Program ADA at the per-ADA LCFF rate of the school district, unless the school district and COE agree on an alternative. Transfer of Funds for County Served District Funded ADA is based on the 2025–26 P-2 amounts, adjusted to reflect the 4.31 percent 2026–27 COLA applicable to the per-ADA LCFF rates.

Other State Aid

Other State Aid appropriations for the 2026-27 Advance can be found in Section 147 of AB 130 (Chapter 44, Statutes of 2021), Section 111 of SB 153 (Chapter 38, Statutes of 2024), and Sections 9 and 89 of AB 126 (Chapter 65, Statutes of 2026).

Home-to-School Transportation Reimbursement

The 2026–27 Advance carries forward the 2025–26 P-2 Home-to-School Transportation Reimbursement (HTSTR) calculated for each eligible county office of education and school district. The 2026–27 HTSTR apportionment will be determined no later than the 2026–27 Second Principal Apportionment when the unaudited actuals data is updated.

Proposition 28: Arts and Music in Schools

For FY 2026–27, the total appropriation for Proposition 28: Arts and Music in Schools (AMS) is approximately $1.06 billion. This total available funding amount was final as of the 2026–27 May Revision of the Governor’s Budget published May 2026. Of this amount, 70 percent is allocated based on the share of statewide total enrollment, and 30 percent is allocated based on the share of statewide enrollment of economically disadvantaged pupils in the prior year (EC Section 8820[c]).

In the Advance, 2026–27 allocations have been estimated based on the total amount appropriated, using 2025–26 TK/K–12 and preschool enrollment. Entitlements will be recalculated at P-1 and P-2 and may change as the result of school closures or other factors. Significant revisions to entitlement amounts are not anticipated.

AMS allocations are calculated at the school site level. Pursuant to EC Section 8820(d), LEAs must allocate AMS funds to each school site, including California State Preschool Programs, in the amount calculated by the CDE, as shown on the Proposition 28: Arts and Music in Schools - School Site Calculation Excel file available on the CDE’s website at https://www.cde.ca.gov/fg/aa/pa/iassf26adv.asp. Because funding is based on prior year enrollment, newly operational school sites do not have a current year allocation of AMS funding. Additionally, school sites that closed in the prior fiscal year are not entitled to AMS funds. AMS Allocations in the Advance Apportionment reflect closure information in the California School Directory as of July 9, 2026.

LCFF Equity Multiplier

Funding for the LCFF Equity Multiplier is not included in the Advance Apportionment. Eligibility for this funding program is determined in each fiscal year based on prior year data published in CDE’s stability rate report, which is not expected to be available until December 2026. Funding for this program will be included in the 2026–27 P-1, certified in February 2027.

Student Support and Enrichment Block Grant

Pursuant to EC 2575.5, COEs with Alternative Education Grant will receive a grant of $3,000 per unit of alternative education grant ADA to use for student support and enrichment opportunities. The 2026–27 Advance carries forward the allocations calculated in 2025–26 P-2.

Charter School Overpayments

Charter schools with a 2025–26 overpayment will see the amount reflected in the Advance Apportionment Summary on Line A-23, Prior Year Amount Charter Overpaid. The negative adjustment on this line decreases the charter school’s total 2026–27 Principal Apportionment, which has the effect of decreasing current year monthly Principal Apportionment payments to repay the prior year overpayment.

Payment Schedule

Monthly payments for the Advance (July 2026 – January 2027) are available on the CDE’s website at the county summary level and by LEA. For cash flow planning, LEAs should refer to the Principal Apportionment Payment Schedule web page at https://www.cde.ca.gov/fg/aa/pa/papayschedule.asp. The State Controller’s Office website provides monthly payment information, including offset amounts at https://www.sco.ca.gov/ard_payments_k12.html and estimated payment dates at https://www.sco.ca.gov/Files-ARD-Payments/sched_2026.xlsx.

If you need assistance, or have any further questions, please contact the Principal Apportionment Section by email at PASE@cde.ca.gov or by phone at 916-324-4541.

Sincerely,

Ian Cambridge, Administrator
Principal Apportionment Section

Shawna Shepley, Administrator
Principal Apportionment Section

IC/SS:cw