Governor Newsom’s proposed budget provides increases in education funding due to a better-than-expected economic outlook, with Proposition 98 guaranteed education funding projected at $125.5 billion — though it withholds $5.6 billion in Prop. 98 funds in what amounts to a dangerous shell game for funding for our public schools. This means that while there is more money for education in the proposed budget this year, our schools may not get all the funds we are owed.

The budget proposes a 2.41% Cost of Living Adjustment (COLA) for the Local Control Funding Formula for school districts, county offices of education and charter schools in 2026–27. Similarly, a 2.41% COLA is proposed for California community colleges.

The proposal includes $1 billion in ongoing Prop. 98 funding to expand community schools across the state, as well as an additional $2.8 billion in one-time funding to help fund statewide priorities, like educator recruitment and the Literacy Roadmap, and address rising costs.

Regarding the $5.6 billion in withheld funds, our union has successfully fought to defend Prop. 98 funds in the past and will continue to do whatever it takes to ensure that public education receives every dollar guaranteed by law.

“We call on the governor to stand with educators and communities and protect funding promised by Prop. 98,” CTA President David Goldberg said. “It’s time for lawmakers to stop protecting corporations and the wealthy and do the necessary work of raising the revenue needed to fully fund schools, health care and all public services.”

California voters passed Prop. 98 nearly four decades ago to enshrine funding for public education into our constitution and ensure our schools would have a guaranteed level of resources. The governor’s budget proposal violates this promise once again — last year, $1.9 billion in Prop. 98 funds were withheld, balancing the state’s budget on the backs of California students. The $1.9 billion is budgeted to finally be dispersed to districts this year. It is separate from the $5.6 billion proposed to be withheld this year.

Stay up to date on the state budget as legislators and the governor negotiate a path forward over the coming months at CTA School Funding page. Gov. Newsom will release an updated budget by May 14. The California Legislature must pass the budget bill by June 15.

“While this proposal is merely the first step in the budget process, we know that school districts often weaponize these announcements to issue unnecessary layoff notices, justify cutting programs and the closure of beloved neighborhood schools and refuse to make investments to recruit and retain educators,” Goldberg said. “Educators and our communities deserve better. We demand that school districts hold steady and commit to providing stable learning environments to students.”

Community College Budget Proposal Highlights

Student-Centered Funding Formula (SCFF): 2.41% COLA for the SCFF.

Enrollment Growth: $31.9 million ongoing Prop. 98 funding to support a 0.5% enrollment growth, and an additional $55.3 million ongoing Prop. 98 funding to further support a 1% enrollment growth in 2025–26.

Categorical Programs: $30.6 million ongoing Prop. 98 funding to support a 2.41% COLA for select categorical programs.

Payment Deferral: Fully repays deferrals for the SCFF in 2026–27.

Student Support Block Grant: Provides $100 million one-time augmentation for the Student Support Block Grant.