The California Legislature approved the final 2026-27 state budget package July 2, sending Gov. Gavin Newsom a spending plan that includes major investments and policy changes for TK-12 public education but falls short of fully funding Proposition 98.

The Budget Act of 2026-27 sets the Prop. 98 minimum guarantee at $125.5 billion for 2025-26, with approximately $3.9 billion remaining unpaid until the 2027-28 May Revision. ACSA Legislative Advocate Kordell Hampton said this is the second budget cycle that includes withholding Prop. 98 funds to be paid at a later date.

“Our fear about the withholding is that it’s not only underfunding Prop. 98 and underfunding schools, but this provides a (precedent) for future years,” Hampton said on ACSA’s Legislative Lunch Break. “Will this manipulation continue going forward? It’s something to keep an eye out for.”

On the positive side, Hampton said public education “came out on top” overall. The Budget Act includes $5 billion in one-time Prop. 98 funding for the Student Support and Discretionary Block Grant, allocated based on average daily attendance and available for local priorities through 2032.

Additional investments include $2.4 billion in ongoing Prop. 98 funding to increase and equalize special education base rates across the state; $1 billion in ongoing funding to expand and maintain the California Community Schools Partnership Program; and a final payment of $757.3 million to fully restore the Learning Recovery Emergency Block Grant.

Hampton also highlighted a unique feature of the 4.31 percent Local Control Funding Formula cost-of-living adjustment. The total includes the 2.87 percent statutory COLA and a 1.44 percent augmentation intended, in part, to support costs associated with the new Paid Pregnancy Disability Leave mandate, which begins Jan. 1, 2027.

“We recognize how this may play out at the local level in terms of negotiating with your local unions,” he said. “Keep in mind this augmentation is meant for this proposal, so this is something to be cautious of at the negotiating table ... to preserve those dollars.” Hampton praised the new leave program, calling it “tremendously transformative.”

“We think this is a great way to create parity between employees, both male and female,” he said. “We recognize that this is a great tool for recruitment and retention. We were fortunate to work with the Governor’s Office and administration to make this a good proposal moving forward.”

ACSA members played key roles in making funding for new and ongoing programs a reality, Hampton said, including the Expanded Learning Opportunities Program, which will receive $64 million in ongoing Prop. 98 funding to establish a stable funding rate of $1,800 per unduplicated pupil for LEAs with an unduplicated pupil percentage below 55 percent.

“There’s been years of advocacy heading into that; years of collecting data and information from our small schools, years of looking at districts and hearing from them choosing not to opt into offering before- and after-school programs just because of the cost,” he said. “This is a great instance of our members being engaged and why they continue to be engaged. We need to elevate those stories here in Sacramento.”