Budget Act for 2022–23: Information

Overview of education-related funding included in the Budget Act of 2022–23.

On June 27, 2022, Governor Gavin Newsom signed the Budget Act of 2022 to put in place a spending plan for 2022–23 and a revised spending plan for 2021–22. Additionally, he signed several education trailer bills as part of the budget package for 2022–23. 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) website.

Overview

Despite the challenges the COVID-19 pandemic has brought about during the past two years, the 2022–23 budget package shows that the state remains in a strong fiscal position. The 2022–23 budget package uses a windfall to fully fund and build on programs established in the 2021–22 budget package, such as the major investments in Universal TK, Universal School Meals, the Expanded Learning Opportunities Program, and Community Schools. Additionally, the 2022–23 budget package increases the funding level for the Local Control Funding Formula (LCFF) beyond the statutory cost-of-living adjustment (COLA). The total overall funding (federal, state, and local) for all TK–12 education programs is $128.6 billion, with a per-pupil spending rate of $22,893 in 2022–23.

Proposition 98

The Budget Act of 2022 estimates Proposition (Prop) 98 levels to be $96.1 billion, $110.2 billion, and $110.4 billion in 2020–21, 2021–22, and 2022–23, respectively. The funding levels represent a total increase of $35.8 billion over the level funded in the Budget Act of 2021. This is the state’s highest level of Prop 98 funding for K–14 education.

The TK–12 portion of Prop 98 funding represents TK–12 per-pupil funding of $16,993. The per-pupil funding level is a $3,018 increase over the 2021–22 Budget Act level and a $1,733 increase over the per-pupil funding level the Governor projected in January 2022.

The budget also includes significant deposits into the Public School System Stabilization Account, also known as the Prop 98 Rainy Day Fund. Specifically, $3.1 billion is deposited in 2020–21, $4 billion is deposited in 2021–22, and $2.2 billion is deposited in 2022–23, for a total balance of $9.5 billion at the end of 2022–23. This amount triggers a cap of 10 percent on school district reserves, which starts 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 38.03 percent to 38.3 percent to reflect increased enrollment due to the transitional kindergarten expansion that began in the 2021–22 Budget Act.

Finally, the budget changes how local educational agencies (LEAs) treat a portion of their appropriations limit, commonly referred to as the Gann limit, which is based on LEA revenues and changes in average daily attendance (ADA) and inflation. Beginning in 2021–22, any LEA required to deposit funds into a routine restricted maintenance account shall exclude those deposits from their appropriations limit. This change, coupled with a change from the 2021–22 Budget Act that allows the state to benefit when LEAs have additional limit, prevents the state from breaching its Gann limit.

Local Control Funding Formula

The budget package reflects a 6.56 percent LCFF COLA adjustment for 2022–23, as well as a $4.32 billion (6.7 percent) increase in LCFF base funding for school districts and charters and a $101.2 million increase for county offices of education (COEs).

The 2022–23 Budget Act includes multiple changes intended to increase school funding stability by addressing declining enrollment and increased absences in the 2021–22 school year due to COVID-19. School districts may now use an average of the three prior years of average daily attendance (ADA), in addition to the existing ability to use the greater of current or prior year ADA, when calculating LCFF funding. Similarly, the Budget Act provides one-time relief to all classroom-based LEAs to mitigate year-over-year declines in attendance experienced in 2021–22 by using pre-COVID-19 attendance rates applied to their enrollment. School districts and COEs must certify that they provided independent study pursuant to statute during 2021–22 to use pre-COVID-19 absence rate adjusted enrollment in place of ADA for the 2021–22 school year. The budget allocates $2.8 billion in ongoing and $413 million in one-time funding for these proposals.

Major Proposition 98 Adjustments

Significant Block Grant Funding

The 2022–23 budget package includes two large block grants. The Learning Recovery Emergency Block Grant is $7.9 billion in one-time funding to support LEAs creating learning recovery initiatives through the 2027–28 school year. Funds may be used for increased instructional time, closing learning gaps, pupil supports to address barriers to learning, additional instruction, and academic services.

The Arts, Music, and Instructional Materials Discretionary Block Grant is $3.6 billion in one-time funding through the 2025–26 school year. Funds may be used for professional development, acquiring instructional materials, improving school climate (including training on de-escalation and restorative justice strategies), developing diverse book collections with culturally relevant texts, operational costs, and COVID-19 costs.

Community Schools

The 2022–23 budget package expands the California Community Schools Partnership Program with an additional $1.1 billion in one-time funding. The funding is on top of the approximately $3 billion allocated in the 2020–21 and 2021–22 Budget Acts.

Educator Preparation, Retention, and Professional Development

The 2022–23 budget package provides funding for numerous programs to prepare, recruit, retain, and train teachers, administrators, and classified staff in K–12 education. Specifically, the Budget Act:

Expands the Golden State Teacher Grant Program to enable school counselors, social workers, and psychologist candidates to participate. The program supports individuals who commit to serve at a priority school in California for four years, within eight years of completing a preparation program.
Provides $184 million one-time to expand residency slots for teachers and school counselors.
Allocates $85 million one-time to create Pre-K–12 educator resources and professional learning to implement the Next Generation Science Standards, the California Math Framework, the California Computer Science Standards, and the math and science domains of the California Preschool Learning Foundations. The goal is to align these initiatives with other work to create a cohesive statewide continuum of instruction support for STEM educators.
Supports the educator workforce by providing $24 million one-time to waive certain teacher examination fees and $20 million one-time to support a grant program for the development and implementation of integrated teacher preparation programs.

Universal Transitional Kindergarten and Early Education

The 2022–23 budget package continues to phase in Universal TK, as outlined in the 2021–22 Budget Act. First, as outlined above, the budget rebenches the Prop 98 minimum guarantee to account for the additional enrollment. Then, the next phase of expanded enrollment eligibility is supported by an additional $614 million. Further supporting the expansion of TK are $383 million in additional funds to add one additional certificated or classified staff to every TK class to reduce student-to-adult ratios, as well as allowing the Commission on Teacher Credentialing to issue a one-year emergency specialist teaching permanent in early childhood education in order to increase the pipeline of TK teachers.

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

Invests $485 million to support providers meeting new requirements for students with disabilities, dual language learners, and childhood mental health, including that providers serve additional students with disabilities.
Provides $300 million for Preschool Planning and Implementation Grants.
Allocates $250 million to the Inclusive Early Education Expansion Program to fund infrastructure investments.
Waives $21 million in family fees in 2022–23 and another $1.1 million in 2021–22.
Provides a hold harmless for preschool providers.
Doubles continuous eligibility from one year to two and increases the income threshold for eligibility.
Establishes a workgroup to provide recommendations on best practices for increasing access to high-quality universal preschool programs offered through a mixed-delivery model.

Expanded Learning Opportunities and Related Programs

The Expanded Learning Opportunities program was created in the 2021–22 budget package, with the intent to expand funding over several years. The 2022–23 budget package accelerates program implementation by providing an additional $3 billion on top of the original $1 billion, for a total of $4 billion in ongoing funds. The accelerated funding triggers the requirements, starting in 2023–24, that LEAs offer the program to all low-income students, English language learners, and youth in foster care, and that LEAs with the highest concentrations of these students will be required to offer the program to all elementary students. The budget package also clarifies that funds may be used to hire literacy tutors.

Additionally, maintains 2021–22 Budget Act investments in the After School Education and Safety and 21st Century Community Learning Centers programs by allocating $148.7 million to continue increased provider rates.

Transportation

The 2022–23 budget package makes several significant investments and changes in transportation. For Home-to-School transportation, the budget provides $637 million ongoing to reimburse LEAs for up to 60% of their transportation costs, and adds a COLA to the current LCFF Home-to-School transportation add-on, commencing in 2023–24. The budget package also includes $1.5 billion in one-time funds over five years to support converting existing fossil fuel buses to electric.

School Meals

Building on the 2021–22 budget package’s launch of the Universal School Meals Program, the 2022–23 Budget Act provides an additional $596 million in funding over the level provided in 2021–22. Furthermore, the budget includes $611.8 million in ongoing funds to increase state meal reimbursement rates to maintain the rates currently offered under an expiring federal waiver. This additional funding does have a caveat that if additional federal funding is available, the funding may be used for food procurement grants.

The budget also provides $600 million in one-time Prop 98 funds, over three years, for kitchen upgrades, and training for food service employees to promote nutritious foods and healthy food preparation. There is also includes $100 million one-time to support LEA procurement for plant-based, restricted diet, California-grown/produced, and whole or minimally processed foods.

Special Education

The 2022–23 budget package includes several key investments in special education, including:

Provides $500 million in ongoing funds for the special education funding formula, which is amended to be calculated at the LEA level rather than the special education local plan area (SELPA) level.
Requires an Individuals with Disabilities Education Act addendum to the Local Control and Accountability Plan (LCAP).
Creates a pathway to a diploma for students who take the California Alternate Assessment.
Establishes a special education resource lead to support families of pupils with disabilities.

Other K–12 Prop 98 Adjustments

Early Literacy

The budget package makes several investments in the area of literacy. It provides $250 million in one-time funds, available over five years, for grants to high-needs schools to train and hire literacy coaches and reading specialists. It also provides $10 million to the Department of Public Health to partner with First 5 California on the Books for Children Program. Finally, it allocates $15 million in one-time funds, available over three years, to support 6,000 teachers complete the necessary coursework to receive a supplementary state certification in reading and literacy.

College and Career Pathways

As part of a multi-pronged strategy to train workers to meet critical job needs, the 2022–23 budget package allocates $500 million in one-time funds, available over seven years, for a pathways program focused on technology, healthcare, education, and climate-related fields. Additionally, it allocates $200 million one-time over five years to expand student access and participation in dual enrollment opportunities.

Anti-bias Education

The budget package provides $10 million in one-time Prop 98 funds for the Anti-Bias Education Grant Program. A minimum of 50 grants will be awarded to LEAs of not less than $75,000. Grants shall be used for training and curriculum to prevent and address bias or prejudice toward any group of people based on race, ethnicity, religion, gender, gender identity, sexual orientation, disability, immigration status, language, or any actual or perceived characteristic listed in Penal Code section 422.55. Emphasis shall be on preventing anti-Semitism and bias or prejudice toward groups including, but not limited to, African Americans, Asian Pacific Islanders, and Latinos.

Facilities

The budget package makes multiple investments related to facilities:

Allocates the remaining Prop 51 bond funds to support school construction projects, totaling $1.4 billion. The budget allocates a further $1.3 billion in 2022–23 and commits to allocating $2.1 billion and $875 million in 2023–24 and 2024–25, respectively.
Appropriates an additional $100 million and commits to further allocating $550 million to the California Preschool, Transitional Kindergarten, and Full-Day Kindergarten Facilities Grant Program.
Provides $2.5 million for the study and preliminary plan phases to replace all outdoor sports fields and add a stand-alone practice soccer field at the Riverside School for the Deaf. The overall project would be $43.1 million.
Allows school districts to procure alternative design-build contracts, where a single entity provides both the design and construction of a project, for projects in excess of five million dollars.

Other

Classified School Employee Summer Assistance Program—Allocates $35 million one-time and $90 million in ongoing funds to provide supplemental pay for classified staff during the summer months.
Community Engagement Initiative—The budget package provides $100 million in one-time Prop 98 funds for the Community Engagement Initiative, which builds the capacity of LEAs to more effectively engage with their communities.
Model Curricula—Provides an additional $14 million to the CDE to support the development of model curricula for Native American, Vietnamese American, Cambodian, and Hmong history and cultural studies. The funds are on top of the $1.2 million provided last year.

Budget and Trailer Bills

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

Questions: Fiscal Policy Office | 916-319-0821

Last Reviewed: Monday, July 31, 2023

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