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Budget Act for 2021–22: Information

This web page has information on the Budget Act for the 2021–22 year.

On June 28, 2021, Governor Gavin Newsom signed the Budget Act of 2021 to put in place a spending plan for 2021–22 and a revised spending plan for 2020–21. Additionally, he signed several education trailer bills as part of the budget package for 2021–22. 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 External link opens in new window or tab..

Overview

During the release of his budget in January, Governor Newsom stated that while California was presented with many challenges in 2020–21, the state is in a strong fiscal position and has the foundation for a strong economic recovery. This was held to be true when he signed the budget in June. With a significant increase in the revenue forecast, the 2021–22 Budget package builds on its reserves, with $4.5 billion in the Public School System Stabilization Account (PSSA), pays off all Proposition (Prop) 98 deferrals that were implemented in the 2020–21 budget, and major investments in numerous education programs such as Universal TK, University School Meals Program, and Community Schools.  

The 2021–22 budget package increases the funding level for the Local Control Funding Formula (LCFF) with an increase in funding of 5.07 percent over 2019–20 funding levels. The total overall funding (federal, state, and local) for all K–12 education programs is $124.3 billion, with per-pupil spending of $21,596 in 2021–22. For 2020–21, per-pupil funding increased from $16,881 in the 2020–21 Budget Act to $23,089 in the 2021–22 Budget Act.

Proposition 98

In January, the Governor’s Budget projected the K–14 Prop 98 minimum funding guarantee to be $79.5 billion, $82.8 billion, and $88.1 billion for 2019–20, 2020–21, and 2021–22, respectively. However, due to the significant increase in the revenue forecast, the Budget Act of 2021 estimates Prop 98 levels to be $79.3 billion, $93.4 billion, and $93.7 billion over the same time period. This is the state’s highest level of Prop 98 funding for K–14 education.

The K–12 portion of Prop 98 funding represents K–12 per-pupil funding of $13,976. The per-pupil funding level is a $3,322 increase over the 2020–21 Budget Act level, and a $1,976 increase over the per-pupil funding level the Governor projected in January 2020, prior to the COVID-19 pandemic.

The budget also includes significant deposits into the PSSA. Specifically, $1.9 billion is deposited in 2020–21 and $2.6 billion is deposited in 2021–22, for a total of $4.5 billion. This amount triggers a cap of 10 percent on school district reserves, which starts in 2022–23.

The budget package does eliminate a supplemental appropriation above the Prop 98 minimum guarantee that was included in the 2020–21 Budget Act. That supplemental appropriation would have been equal to 1.5 percent of the General Fund (GF) revenues per year, continuing until a total of $12.4 billion had been appropriated. The 2020–21 Budget Act also included a proposal to increase the Prop 98 share of GF revenues during Test 1 years, from 38 percent to 40 percent, by 2023–24, with the result being additional funding for education in future Test 1 years. However, given the substantial amount of funding available for education given the strong forecast for revenues, both proposals were removed in the 2021–22 Budget Act.

Finally, the budget changes the way Local Education Agencies (LEAs) treat 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 2019–20, any LEA with an appropriations limit that exceeds the amount required to cover revenues must transfer that excess limit to the state. LEAs with revenues in excess of their limit continue to draw down additional limit from the state, thereby avoiding a requirement for the state to issue tax refunds.

Local Control Funding Formula & Deferrals

Due to the significant increase in revenues projected for 2020–21 and 2021–22, there is a corresponding increase in LCFF funding levels. The budget package reflects an LCFF increase of $3.2 billion, 5.07 percent over 2019–20 levels. This reflects a 2.31 percent cost-of-living (COLA) adjustment for 2020–21, a 1.70 percent COLA adjustment for 2021–22, and a $520 million (1 percent) increase in LCFF base funding.

The same 5.07 percent increase applies to County of Offices of Education (COEs) as well.

The percentage for the LCFF concentration grant increased from 50 percent to 65 percent of the base grant, providing an additional $1.1 billion in ongoing Prop 98 funds to LEAs with an enrollment of 55 percent or greater of low-income, English learner, and foster youth students. The additional funds are to be used for increasing certificated and classified staffing at school sites, reducing the adult-to-student ratios at schools.

Additionally, the budget eliminates all K–12 deferrals of $11 billion in 2021–22.

COLA Outside LCFF

The 2021–22 COLA adjustment includes:

  • Special Education: Special Education Local Plan Areas (SELPA) receive an increased funding level of 4.05 percent over 2019–20. This reflects a 2.31 percent COLA adjustment for 2020–21, and a 1.70 percent COLA adjustment for 2021–22.  
  • Categorical programs that remain outside of LCFF (Child Nutrition, State Preschool, Youth in Foster Care, Mandates Block Grant, Adults in Correctional Facilities Program, American Indian Education Centers, and American Indian Early Childhood Education Program): 1.70 percent.

Major Proposition 98 Adjustments

Universal Transitional Kindergarten and State Preschool

The 2021–22 budget package adopts universal TK as part of a mixed delivery system for early education. The budget includes $300 million for a transitional year, $200 million to create or expand California state preschool programs (CSPP) or TK programs, and $100 million to increase the number of teachers available to serve CSPP and TK, and provide professional development (PD). Universal TK will be phased in over five years. For 2022–23, LEAs will start receiving funds to incrementally establish universal TK, phasing in expanded age eligibility to full implementation in 2025–26. The Prop 98 minimum funding guarantee may be “rebenched” to provide ongoing funds for TK.

Community Schools

The 2021–22 budget package expands the California Community Schools Partnership Program with $2.8 billion in one-time Prop 98 funding through 2028, and aligns program requirements to Healthy Start program best practices, with planning, launch, and ongoing coordination grant types. Program to include:

  • $141.8 million to contract with LEAs to create regional technical assistance centers.
  • At least 10 percent for planning grants (up to $200,000), up to 70 percent for implementation grants (up to $500,000), and at least 20 percent for coordination grants (up to $100,000, with a 1:1 match).
  • Funds are available for 7 years, until FY 2027–28.

Expanded Learning Opportunities

The budget package creates an Expanded Learning Opportunities program to provide funding for afterschool and summer school enrichment programming with a focus on LEAs with the highest concentrations of low-income students. In 2021–22, the budget provides $1 billion ongoing Prop 98 funds, and $753.1 million one-time funds, with the intention to increase rates to $2,500 per unduplicated pupil in future years pursuant to availability of funds. Funds would be provided on a per-ADA count of low-income, English learner, and foster youth students from TK through grade six.

The Expanded Learning Opportunities program will have similar elements as the After School Education and Safety (ASES) program, including an educational element in which tutoring and homework assistance is provided, and a supplemental element such as Science, Technology, Engineering, and Mathematics (STEM), arts, career technical education, or physical fitness.

Additionally, the program will have the following requirements:

  • LEAs to offer at least 9 hours of combined instruction and in-person before or after school learning opportunities. Applies to each school day and for at least 30 non-schooldays during intersession periods.
  • LEAs to offer to all unduplicated pupils and provide services to at least 50 percent of unduplicated pupils in grades 1-6 in 2021–22 school year, and all pupils in grades 1-6 starting in the 2022–23 school year.

Educator Preparation, Retention, and Professional Development

The 2021–22 budget package provides funding for numerous programs to prepare, recruit, retain, and train teachers, administrators, and classified staff in K–12 education. The following are programs with funding adjustments:

  • Educator Effectiveness Block Grant—$1.5 billion one-time Prop 98 funds, available over five years, to provide PD for teachers, administrators, and other in-person staff that work with students.
  • Golden State Teacher Grants—$500 million one-time GF, available over five years, to support at least 25,000 grants for teacher credential candidates who commit to teaching at a priority school, in a high-need subject matter area, for four years.
  • Teacher Residency Grant Program—$350 million one-time Prop 98 funds, available over five years, to support teacher preparation residencies and other grow-your-own teacher credentialing programs.
  • National Board Certification Incentive Grant Program—$250 million one-time Prop 98 funds, available over five years, to provide incentive grants to recruit and retain National Board-certified teachers to teach in high poverty schools, serve as mentors for other instructional staff, and support other teachers in pursuing National Board certification.
  • Classified School Employee Teacher Credentialing Program—$125 million one-time Prop 98 funds, over five years, to support more than 5,000 classified school staff in becoming credentialed teachers.
  • Classified School Employee Summer Assistance Program—$60 million one-time P 98 funds to provide matching funds for intersession pay for classified employees that work less than 11 or fewer months per year.
  • Learning Acceleration—$50 million one-time Prop 98 funds for the California Collaborative for Educational Excellence to administer evidence-based professional education for educators that can support learning acceleration for California’s diverse student population, particularly in mathematics, literacy, and language development.
  • Social-Emotional Learning—$50 million one-time Prop 98 funds to create statewide resources and PD on social-emotional learning and trauma-informed practices.
  • California Early Math Initiative—$45 million one-time Prop 98 funds, available over three years, for the California Early Math Initiative at the Fresno COE to continue to provide PD and resources for early math educators through the statewide system of support.
  • Mental Health and Wellness—$25 million one-time Prop 98 funds to develop mental health and wellness instructional resources and trainings for caregivers, educators, and youth to address the impacts of the pandemic on children’s mental health.
  • 21st Century School Leadership Academy—$25 million one-time Prop 98 funds, available over five years, to support the 21st Century School Leadership Academy and provide PD to school administrators and other school leaders.
  • Credential Fee Waiver—$20 million one-time GF to provide a credential fee waiver in 2021–22 for individuals entering the K–12 educator workforce.

Universal School Meals

The 2021–22 budget package launches the Universal School Meals Program, with an increase in state meal reimbursements by $54 million in the 2021–22 fiscal year and an estimated $650 million ongoing Prop 98 funding beginning in 2022–23, to cover the costs of offering breakfast and lunch for all students, regardless of income eligibility. LEAs will be required to apply for federal meals provision by June 30, 2022, to maximize the federal meals reimbursement. The state will provide cover any remaining unreimbursed costs up to the federal free per-meal rate.

The budget also provides $150 million one-time Prop 98 funds for kitchen upgrades and training for food service employees to promote nutritious foods and healthy food preparation. The amount of $120 million ($25,000 per district) will be used for kitchen upgrades and equipment. The remaining $30 million ($2,000 per district) will be used for training and promoting nutritious foods and healthy food preparation.

Special Education

The 2021–22 budget package includes several key investments to special education, including:

  • $396.9 million ongoing Prop 98 funds to increase the statewide base rate for special education funding.
  • $260 million ongoing Prop 98 funds to support early intervention services for preschool-aged students. The funds shall be used to provide early education services and supports for special education students aged birth to five. The budget package also changes the funding methodology, specifying that funding provided to preschool students with exceptional needs will be proportional to the total number of pupils with special needs in first grade that are residing in the district.
  • $450 million one-time Prop 98 funds to provide learning recovery supports for students with disabilities. The funding is for learning disruptions stemming from the COVID-19 pandemic. The funds will be allocated to SELPAs on a per-pupil basis, based on pupils with exceptional needs from age 3 to age 22.
  • $100 million one-time Prop 98 funds for dispute resolution to provide more opportunities for efficient resolution of special education services complaints. The funds will be allocated to SELPAs on a per-pupil basis, based on pupils with exceptional needs from age 3 to age 22.
  • $15 million one-time Prop 98 funds to the CDE for allocation to the Riverside COE and the El Dorado COE in support of the Supporting Inclusive Practices project. Funds are to be used to increase opportunities for pupils with disabilities to meaningfully participate in the least restrictive environment, as appropriate, and improving local educational agencies’ outcomes on performance indicators as mandated by the federal Individuals with Disabilities Education Act.

Other K–12 Prop 98 Adjustments

A–G Completion Improvement Grant Program

The budget package provides $547.5 million one-time Prop 98 funds for the A–G Completion Improvement Grant Program to help increase the number of high school students, particularly unduplicated students, enrolled in grades 9-12 who graduate from high school with A–G eligibility with greater access and resources to complete A–G courses. The funds will be allocated to LEAs in equal amounts per unduplicated pupil enrolled in grades 9-12 for the 2020–21 year. Otherwise, eligible LEAs that receive concentration grant funding shall receive not less than $75,000. The funding is distributed as follows:

  • A–G Access Grants—$300 million to LEAs with an overall A–G completion rate of less than 67 percent. The funds are available through 2025–26.
  • A–G Success Grants—$100 million to LEAs with a completion rate of 67 percent or higher. Funds are to be used for direct support for pupils to complete the A–G course requirement, such as providing additional PD opportunities, tutoring programs, and expanding access to coursework to improve the LEA’s A–G completion rate.
  • A–G Learning Mitigation Grants—$147.5 million to create opportunities for pupils who received a grade D or F, or who failed an A–G approved course in the spring semester of 2020 or the 2020–21 school year to retake those courses.

Anti-bias

The budget package provides $10 million 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, to 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, or language. 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. These funds are available for expenditure or encumbrance through the 2025–26 fiscal year.

Dual Immersion

The budget package provides $10 million one-time Prop 98 funds, available over a three-year period, to the CDE to administer the Dual Language Immersion Grant Program (DLIGP) to expand access to quality dual language learning. A minimum of 25 one-time grants will be awarded, over a period of three years, to LEAs to expand or establish DLIGPs that provide integrated language learning and academic instruction for native speakers of English and native speakers of another language. Funds may be used for instructional materials, PD, teacher recruitment, and family outreach.

Ethnic Studies

The budget package provides $5 million to the CDE to enter into a contract with a COE or consortium of COEs to provide PD and resources to support LEAs offering new and expanded ethnic studies courses. The COE(s) shall use funds to provide training for LEA staff to support the creation or expansion of ethnic studies model curriculum and to provide access to an online repository of courses.

Additionally, $50 million is provided for allocation to LEAs and state special schools for the creation of the Ethnic Studies Curricula Block Grant. The funds are to be used to create or expand ethnic studies course offerings.

Other

  • Career Technical Education Incentive Grant Program (CTEIG)—The budget package provides $150 million ongoing Prop 98 funds for the CTEIG, bringing the total funding to $300 million for the program.
  • LGBTQ+ Cultural Competency Training—The budget package provides $2.4 million one-time Prop 98 funds to support the creation of an online repository focused on strategies to support LGBTQ+ pupils. $1.8 million will be used to develop online training content, in consultation with the advisory committee established in the budget. The remaining $600,000 is for the CDE to develop an online platform for the training developed per the above.
  • Broadband Infrastructure Grant Program—The budget package provides $5.2 million one-time Prop 98 funds, available over a three-year period, for the Broadband Infrastructure Grant Program for identified broadband connectivity solutions.
  • Holocaust education—The budget package provides $2 million one-time Prop 98 funds, available over a three-year period, for the CDE to allocate to Marin COE for Holocaust education. Funds shall be used to develop and provide curriculum resources and PD, including educator trainings, related to genocide and Holocaust education.
  • Model Curricula—Contingent upon enactment of legislation, the budget package provides $1.2 million Prop 98 funds to the CDE to support the development of model curricula for Native American, Vietnamese American, Cambodian, and Hmong history and cultural studies.

Independent Study

The budget package includes several new provisions and amendments to the existing Independent Study (IS) Program:

  • Requires school districts and COEs to offer an IS program for the 2021–22 school year only. School districts and COEs may seek a waiver if it would create an unreasonable fiscal burden due to low numbers of participating pupils, and the LEA does not have an option to enter into an interdistrict transfer agreement with a school district or a contract with a COE to provide an IS program option.
  • Expands the reasons for using an IS program to include pupils whose health would be put at risk by in-person instruction, as determined by the parent or guardian.
  • Requires LEAs to have written policies for:
    • Pupils’ satisfactory educational progress, based on indicators such as achievement and engagement, completion of assignments, and progress.
    • Tiered re-engagement strategies.
    • Daily live interaction and synchronous instruction, with the frequency of each dependent on grade level.
    • Transitioning students to in-person instruction expeditiously.
  • Requires LEAs to provide documentation of live and synchronous instruction for each school day that an IS program is provided and document students who are non-participatory.
  • Requires LEAs to provide content aligned to grade-level standards that are equivalent to in-person instruction, including access to courses for graduation and meeting college admission requirements, and teacher ratios.
  • Requires each written agreement to specify, among other things, the resources that will be made available to the pupil, which must include the confirmation or provision of connectivity and devices adequate to participate in the program and complete assigned work.
  • Requires LEAs with a material decrease in ADA due to fire, flood, epidemic, etc., when submitting a waiver (J13-A) to the SSPI, to certify the LEA has a plan for an IS Program to be offered to all pupils within 10 days of a school closure, and to reopen as soon as allowable by a local health officer.

Federal Funds

In response to COVID-19, the U.S. Congress passed the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act, which was signed on December 27, 2020, and the American Rescue Plan (ARP) Act, which was signed on March 11, 2021. These Acts build upon earlier relief efforts, including the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The main funding sources administered by the United States Department of Education are the Elementary and Secondary School Emergency Relief (ESSER) Fund and the Governor's Emergency Education Relief (GEER) Fund. Additional funding includes the Emergency Assistance for Non-Public Schools (EANS) program and the ESSER Homeless Children and Youth (HCY) Funding. While some of this federal funding was appropriated prior to the 2021–22 Budget Act through Section 28 letters, the budget package does include the following:

  • Authorizes the remaining 25 percent of ESSER III funding that must flow directly to LEAs. This $3.5 billion is on top of the initial $10 billion approved through a Section 28 Letter.
  • Uses $671 million, the entire State Education Agency (SEA) Reserve for ESSER II, for the Expanded Learning Opportunities Grant originally established by Assembly Bill (AB) 86).
  • Uses $154 million, the entire GEER II amount, for the Expanded Learning Opportunities Grant originally established by AB 86.
  • Uses $437 million, the entire ESSER III SEA Reserve for discretionary purposes, for the Expanded Learning Opportunities Grant originally established by AB 86.
  • Uses $754 million, the entire ESSER III SEA Reserve for Learning Loss, for the Expanded Learning Opportunities Grant originally established by AB 86.
  • Uses a combined $301 million, the entire ESSER III SEA Reserves for Summer Enrichment Programs and Comprehensive After School Programs, to increase rates for the ASES Program and expanded access to summer learning in 2021–22 and 2022–23, and to increase rates in the 21st Century Community Learning Centers Program.

Budget and Trailer Bills

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

Questions:   Fiscal Policy Office | 916-319-0821
Last Reviewed: Tuesday, October 5, 2021
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