Newsom, Legislature settle for final passage this week of 2023-24 budget with fewer cuts for K-12


Deal raises subsidies for child care for low-income children, places cap on family fees 

Having finagled over several billion in TK-12 cuts and settled other bigger, non-education differences, the Legislature will vote this week on a $310 billion 2023-24 state budget. It will provide slightly less funding for schools and community colleges than last year, yet assures school districts will have a sizable increase in general operating money by fully funding a cost of living increase.

The final deal also offers more immediate relief for struggling child care providers that Gov. Gavin Newsom had offered and help for parents of young children by capping the amount of their income they must pay for child care.

For higher education, the budget spares delays and cuts to construction and student housing projects by shifting costs to bonds, provides debt-free college to foster youth, and assures that the current $289 million for the middle-class scholarship program will continue through 2024-25.

The new state budget, which takes effect July 1, marks a retrenchment from three years of record education funding supplemented by tens of billions in one-time federal and state Covid relief, which together set in motion ambitious new programs. These include $4.4 billion for community schools and $4 billion for after-school and summer programs for low-income children through the Expanded Learning Opportunities Program.

Funding for all of those Newsom priorities remains intact in the new budget, as does an 8.2% cost of living for the Local Control Funding Formula, special education and other ongoing programs — the top priority of school districts and charter schools.

Funding for Proposition 98, the formula that sets the portion of the state general fund going to TK-12, community schools and some child care funding, will be $108.3 billion. That is $2.1 billion less than the Legislature adopted a year ago for the current year.

But it is also $1.5 billion more than Newsom had proposed in January for 2023-24. The difference is in higher projected revenue from local property taxes going to the state for Prop. 98, enabling the Legislature to substantially reduce cuts in one-time funding that Newsom had suggested. Instead of reducing $1.8 billion from the $3.6 billion arts, music and instructional grant program, the cut will be only $200 million. Instead of cutting $2.5 billion from the $7.5 billion learning recovery block grant, the cut will be $1.6 billion.

The COLA will raise the funding formula, which is the primary source of funding for general expenses and additional money for high-needs students, by 4.5% to $79 billion. The additional funding takes into account a projected 3.16% decline statewide in average daily attendance, including fewer students than projected enrolling in traditional kindergarten.

Other additional spending items in the education budget include:

$300 million in ongoing money for the funding formula to create what Newsom is calling the “equity multiplier” program; it will require several hundred of the state’s highest poverty schools to create individual learning plans for the lowest performing racial and ethnic student groups, students with disabilities and English learners in those schools.

$250 million in one-time money to double funding for reading coaches and materials in the state’s poorest schools.

$20 million in professional development grants for bilingual teachers.

$1 million to fund a screening instrument to identify students at risk for dyslexia and other reading difficulties. Starting in 2025-26, all districts and charter schools must implement screening.

Child care

California’s beleaguered child care sector will finally be getting a raise, in the form of up to $2.8 billion to boost subsidies to care for low-income children as well as a cap on family fees, under the new state budget agreement.

“This budget is a great victory for child care,” said Scott Moore, head of Kidango, a nonprofit organization that runs many Bay Area child care centers, “The huge reduction in child care co-pay fees is a giant win for low-income families.”

Early childhood advocates are calling this much-needed progress toward helping child care providers, many of whom subsist on survival wages. Family fees will be capped at 1% of family income.

“Subsidized child care providers should get a big bump in pay from this budget deal,” said Moore. “It is a giant step in the right direction.”

There is also a provision to develop an alternative rate model because current rates are outdated, many experts say, pegged to 2016 costs. This has put great financial pressure on child care providers, a sector already strained by the pandemic. California currently pays some child care providers as little as a quarter of what the service costs, research suggests.

However, details on the nature of the rate increases remain unclear pending bargaining with the Child Care Providers United, a union that represents 40,000 home child-care providers across the state.

“We are still in wait-and-see mode because decisions are being made in union negotiations,” said Mary Ignatius, statewide organizer of Parent Voices, a California parent advocacy group. “If we come out with short-term stipends that won’t go to every provider or program that needs it to maintain the current workforce or attract new early educators, we’ll remain in crisis.” 

Higher education

The agreement approves 5% base funding increases for both university systems — $215.5 million in ongoing general fund support to the University of California and $227.3 million to California State University. Both increases come with a stipulation that each system increases its enrollment targets. UC would be expected to add 7,800 full-time students this fall. CSU would be expected to add 4,057 more full-time students this fall and increase enrollment by 9,866 students in 2024 and 10,161 students in 2025.

The budget agreement remains the same as the May revision for community college funding. The 116 campus system’s base funding is tied to Proposition 98, which determines the portion of the state’s general fund that goes to education.

The agreement also includes the shift in funding Newsom proposed for several projects, including student housing, to use community college-, UC- and CSU-issued bonds. The state would cover the debt payment for those bonds.

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