Budget Act of 2026-27: Information

Overview of education-related funding included in the Budget Act of 2026-27.

Governor Newsom signed legislation to enact the 2026–27 state budget. On June 29, 2026, the Governor signed Assembly Bill (AB) 109, followed by Senate Bill (SB) 111, which is the superseding Budget Act legislation. Implementing legislation, the Education Omnibus Trailer Bill (AB 126) and the Early Care and Education Trailer Bill (AB 150), was also signed by the Governor. Additional clean-up bills (AB 113, AB 190, and SB 133) were signed in September.

This is a brief overview of the 2026 Budget Act and should not be used as legal guidance. Refer to actual bill language for official details. 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

The 2026 Budget Act reflects continued improvements in the state's fiscal condition and provides significant investments in education programs. As revenues improved throughout the budget development process, the enacted budget increased the Proposition 98 (Prop 98) Guarantee above prior-year funding levels, reflecting the state's ongoing commitment to supporting California's education system.

The budget includes substantial increases for the Local Control Funding Formula (LCFF) and special education, along with new investments in community schools, literacy and mathematics instruction, educator workforce programs, supports for immigrant students, and early education. In addition, the Budget Act provides one-time discretionary funding to help local educational agencies (LEAs) manage rising operating costs, support statewide priorities, and address deferred maintenance needs.

Proposition 98

Prop 98 funding (state and local) for TK and kindergarten through grade twelve (TK–12) education and community colleges (TK–14) is projected at $124.9 billion in 2024–25, $125.3 billion in 2025–26, and $128.1 billion in 2026–27. These revised funding levels represent a $29.2 billion increase over the three-year period relative to the 2025 Budget Act.

The Prop 98 Guarantee is calculated under Test 1 for all three fiscal years. Under Test 1, the funding level of the Guarantee is equal to approximately 40 percent of General Fund revenues plus local property tax revenues.

The Budget Act fully retires the outstanding Prop 98 maintenance factor balance for 2024–25 and includes a $1.9 billion settle-up payment. In addition, the Budget Act maintains a $3.9 billion settle-up obligation in 2025–26, meaning schools will initially receive less than the calculated guarantee. If revenues remain at or above current projections for the 2025–26 fiscal year, the Legislature will be required to pay back the settle-up amount beginning in spring 2027. The Budget Act also includes a provision directing 33 percent of General Fund revenues above 2026 Budget Act projections, as calculated at the 2027 May Revision, toward repayment of any remaining 2025–26 settle-up balance.

The Budget Act also shifts $813 million from the General Fund to Prop 98 General Fund resources and increases the Prop 98 Test 1 percentage from 39.3 percent to 39.6 percent to support the rebenching associated with the non-LEA State Preschool Program.

Major Budget Adjustments

The sections below provide some highlights of the Budget Act and the associated trailer bills, which are listed at the end of this letter. Section references below refer to the TK–12 omnibus trailer bill unless otherwise indicated.

Prop 98 funding is sometimes designated as “one-time,” signaling that the funding is not likely to be continued in future years. The source of one-time funding is often an unanticipated increase in the Prop 98 guarantee in a prior year. Some one-time funding can also come from budget-year Prop 98 funding identified as one-time or from reappropriations of unused funds from prior-year appropriations.

Public School System Stabilization Account

The Public School System Stabilization Account (PSSSA), the Prop 98 rainy-day fund, is projected to have a balance of $9.2 billion in 2025–26, triggering school district reserve caps 2026–27.

The budget includes an $8.7 billion mandatory deposit into the PSSSA across the three-year budget window due to adjustments in capital gains revenues. In addition, the budget provides a $500 million discretionary deposit in 2025–26, further increasing reserves available to support the state's education system during future economic downturns.

Local Control Funding Formula

The budget includes a statutory cost-of-living adjustment (COLA) of 2.87 percent for the LCFF. In addition, the budget provides $1.1 billion to support a discretionary LCFF "super COLA" of 4.31 percent. These additional resources are intended to help LEAs manage rising operating costs, offset funding reductions associated with declining average daily attendance, and support implementation of new requirements related to paid pregnancy disability leave.

The budget also provides $31.3 million to increase funding for Necessary Small Schools by 20 percent. In addition, the budget includes $11 million in ongoing funding to expand and revise the County Offices of Education funding formula to support the provision of universal and targeted assistance to LEAs.

Special Education

The budget includes a $2.4 billion increase in special education funding, increasing the per-pupil funding rate to $1,340. The additional funding is intended to support LEAs in providing services to pupils with disabilities and addressing growing costs within special education programs.

The budget also provides $80 million in ongoing funding for Special Education Local Plan Areas (SELPAs) to support pupils with rare, highly specialized needs. In addition, the budget includes $30 million one-time for the Supporting Inclusive Practices Project and $25 million one-time for the Inclusive College Technical Assistance Center to strengthen collaboration between LEAs and institutions of higher education and expand inclusive opportunities for pupils with intellectual and developmental disabilities.

The budget also includes $10 million one-time to support implementation of alternative pathways to a high school diploma for pupils with disabilities.

Student Support and Professional Development Discretionary Grant Block

The budget includes $5 billion in one-time funding for a Student Support and Professional Development Discretionary Block Grant. The funding provides LEAs with additional fiscal support to address rising costs and support statewide priorities, including teacher recruitment and retention, professional development, educator training, and deferred maintenance of school facilities.

Community Schools

The budget includes $1 billion in ongoing funding to expand the community school model to additional school sites serving large concentrations of pupils from low-income families, English learners, and youth in foster care. These funds are intended to strengthen integrated pupil supports, family engagement, and community partnerships that promote pupil success.

The budget also provides $50 million to support middle and high school redesign efforts aimed at improving educational opportunities and outcomes for secondary pupils.

Literacy and Mathematics

The budget includes $350 million in one-time funding to extend the Literacy Coaches and Reading Specialists Grant Program through June 30, 2031. The program supports efforts to improve literacy instruction and pupil reading outcomes by increasing access to literacy coaches and reading specialists in schools.

The budget also provides $50 million in one-time funding for the Mathematics Professional Learning Partnership to support professional development and strengthen mathematics instruction statewide.

Teacher Preparation and Professional Development

The budget includes significant investments in teacher preparation, recruitment, retention, and professional development programs intended to strengthen California's educator workforce and address ongoing teacher shortages in high-need subject areas. The funding supports prospective teachers, educator residency programs, leadership development, and initiatives designed to expand and diversify the educator pipeline.

The budget includes the following investments:

$408 million one-time to extend the Student Teacher Stipend Program and provide a $5,000 stipend for student teachers pursuing a credential in a high-need field.
$250 million one-time to continue educator residency programs through 2029-30.
$30 million one-time for the statewide teacher residency technical assistance center.
$15 million one-time to expand offerings through the 21st Century California School Leadership Academy program.
$16.2 million in ongoing federal Individuals with Disabilities Education Act (IDEA) funds and $1.6 million in one-time federal Title II funds to continue the Golden State Teacher Grant Program.
$10 million one-time for the Pathways to Bilingual Teaching Program to provide competitive grants of up to $600,000 to LEAs to create pathways that increase the number of teachers qualified to teach in bilingual settings.
$10 million one-time for the Classified School Employee Teacher Credentialing Program to provide grants of up to $24,000 to LEAs to support classified employees pursuing teaching credentials.
$5 million one-time to build and validate a statewide college transcript review system administered by the California Commission on Teacher Credentialing.
An increase in the teacher credential renewal fee from $100 to $125 every five years.

Support for Immigrant Students

The budget includes $100 million in one-time funding to establish the California's New Americans in Schools (CalNAS) program. The program is intended to provide support for newcomer pupils, English learners, and immigrant families by helping LEAs address the unique academic and social-emotional needs of these student populations.

The budget also provides $75 million in one-time funding to establish Dream Resource Centers at high schools serving grades nine through twelve. These funds are intended to support pupils through the provision of social services, state-funded immigration legal services, and expanded academic opportunities

Learning Recovery Emergency Block Grant

The budget provides $378.7 million one-time Prop 98 General Fund for another year of the Learning Recovery Emergency Block Grant, which supports programs to make up lost instructional time and mitigate learning loss resulting from the COVID pandemic (EC 32526). The funds will be distributed based on a local educational agency’s average daily attendance multiplied by its unduplicated pupil percentage.

Early Education

The budget includes $250 million in one-time funding for the Universal Prekindergarten Planning and Implementation Grant Program to support the continued expansion of the California State Preschool Program (CSPP) and TK services throughout the state.

The budget also provides $51.4 million in ongoing funding to increase monthly cost-of-care-plus payments for CSPP contractors. An additional $33.6 million in ongoing funding increases the number of professional development days available to CSPP contractors from two days to five days annually, supporting workforce development and program quality improvements.

Other TK–12 Education Issues

The Budget Act includes a variety of additional investments and programmatic adjustments to support pupils, school operations, and statewide education priorities, including the following:

$757.3 million one-time to support the Learning Recovery Emergency Block Grant; this funding represents the final payment to the program.
$500 million one-time for specialized kitchen equipment, infrastructure, and training.
$116 million one-time to improve outcomes for students experiencing homelessness; these funds will supplement existing federal McKinney-Vento Children and Youth grant program funds.
$100 million one-time to expand access to Dual Enrollment opportunities.
$40 million one-time for pupil reading difficulties screening.
$20 million ongoing for the state's Quality Rating and Improvement System.
$10 million one-time Prop 98 General Fund for the Holocaust and Genocide Education Grant Program.
$2.8 million Prop 98 General Fund to fully fund universal school meals in 2026-27.
$1.7 million in additional ongoing Prop 98 General Fund to support the menstrual products mandate.

Budget and Trailer Bills

The Budget Act and selected trailer bills (TBs) are as follows:

Questions: Fiscal Policy Office | 916-319-0821

Last Reviewed: Friday, November 13, 2026

Trending in Reports

Recently Posted in Reports

Budget Act of 2026-27: Information (added 13-Nov-2026)
Overview of education-related funding included in the Budget Act of 2026-27.