Schools stand to receive a historically high level of funding next year in a final state budget that also protects them from funding drops due to declining enrollment and COVID-related absenteeism.

After months of negotiations, Gov. Gavin Newsom and the Legislature came to an agreement on the state’s spending plan for the 2022-23 fiscal year, which was approved by the Legislature June 29.

Proposition 98 is funded at $82.3 billion and the Proposition 98 Rainy Day Fund will hit $9.5 billion.

The LCFF receives a historic increase with a 6.56 percent cost of living adjustment and an additional 6.28 percent base grant increase. Combined, LCFF funding will increase by 12.84 percent.

To maintain fiscal stability amid an unprecedented number of absences during the pandemic, the budget adopts two policies that alter how Average Daily Attendance is calculated. LEAs will be allowed to use a three-year average to determine ADA. LEAs may also use their 2019-20 attendance rates in lieu of 2021-22, as long as they offered independent study in 2021-22 or were granted a waiver.

“ACSA has been advocating for attendance relief for those COVID-related absences that were out of [districts’] control,” said ACSA Legislative Advocate Megan Baier. “It was a difficult fight, but we’re very happy that that was ultimately included in the package. It’s going to amount to about $2.8 billion dollars [that’s kept] in schools.”

Baier credited ACSA members for their advocacy on another front — transportation funding — which resulted in a win for schools. The budget increases home-to-school transportation funding by $637 million and enables LEAs to recoup up to 60 percent of their prior year cost.

“Right now, districts are getting about 10 to 20 percent reimbursement,” Baier said. “We haven’t seen amounts like this be dedicated to transportation in years, and it should relieve some pressures on your general fund.”

Baier said ACSA is pleased to see a nearly 13 percent increase in discretionary LCFF dollars for schools rather than the creation of new programs, which is typical in high-revenue years.

However, a big disappointment in the budget is the lack of pension relief for CalSTRS and CalPERS, which could effectively wipe out a large portion of the LCFF increases as districts look to fulfill their pension obligations.

The LCFF increase is also lower than the Legislature’s 15 percent proposal. Baier said the scaling back may be due to warning signs of an economic downturn on the horizon.

“There’s definitely some nervousness about what the budget will look like next year,” she said.

Other budget highlights include:

Discretionary block grants

The budget creates two distinct block grants:

Special education sees a $500 million increase to the AB 602 funding formula, bringing the base rate up to $820.

The budget allocates the remaining Proposition 51 bond funds, approximately $1.4 billion, to support school construction projects and commits $4.2 billion from the General Fund to fund projects through 2025. Further, the budget provides $650 million for the preschool, transitional kindergarten and full-day kindergarten facility program.

Transitional Kindergarten is expanded to children who turn 4 prior to Feb. 2 and provides $383 million to reduce student-to-adult ratios. The budget also includes $300 million for Planning and Implementation Grants that may be used for training, recruitment and materials, among other purposes.

The budget provides $600 million to increase reimbursement rates for universal school meals for a total of $1.2 billion ongoing funds. Additionally, $600 million is allocated for the Kitchen Infrastructure Grant Program and $100 million for the Food Best Practices Procurement Grant to promote best practices, such as buying California-grown produce.

The budget provides $4 billion for the ELOP. LEAs that have an unduplicated pupil percentage over 75 percent must offer the program to all students and will receive $2,750 per unduplicated pupil. LEAs who have less than a 75 percent UPP must offer the program to half of their unduplicated students and will receive $1,250 per unduplicated pupil. LEAs will be given a grace period in the 2022-23 school year and will not be audited on the program until the 2023-24 school year.

The budget provides $1.13 billion, to be allocated in the 2023-24 school year, for community schools implementation grants and grant extensions.

The budget invests $100 million in the Community Engagement Initiative Expansion, to increase and enhance pupil, family and community engagement.

The budget invests $200 million in dual enrollment for high school students and establishes the Golden State Pathways Program, providing $500 million to support the development and implementation of college and career educational pathways in critically needed sectors.

The budget increases funding for the existing program by $184 million and makes aspiring school counselors eligible for grant funds.

The budget extends, through Jan. 1, 2024, the authorization for CalPERS retirees to continue teaching without jeopardizing their retirement benefits. This flexibility was initially established via executive order.