Gov. Newsom proposes stable California school funding in 2025-26 with an ominous warning

The article was updated on Jan, 10 to include more reactions to the budget proposal and note that Newsom did not include funding for ethnic studies.

California school districts would receive $2.5 billion through a small cost-of-living increase, plus additional funding to train math and reading coaches, expand summer and after-school programs, and help launch the state’s Master Plan for Career Education in the proposed 2025-26 state budget that Gov. Gavin Newsom released Friday.

But countering a stable funding forecast for schools and community colleges, Newsom said both the University of California and California State University should expect as deep as an 8% cut in ongoing state money.

Newsom’s budget included a strong caution. He warned that revenues could change between now and May, when he revises his budget proposal, because of potential global financial instability, volatility in stock market prices, and likely conflicts with President Donald Trump that could jeopardize federal funding.

“California is facing a new federal administration that has expressed unalloyed and uninformed hostility toward the state, threatening the funding of essential services for political stunts,” Newsom stated in the introduction to the 2025-26 budget. The governor, who previewed the budget Monday, was in Los Angeles responding to the wildfires and not at a news conferenceFriday by the Department of Finance.

Christopher J. Nellum,  executive director of the advocacy no-profit Education Trust-West, urged Newsom and the Legislature to stand firm on behalf of “many students of color and multilingual learners (who) are feeling uncertain and concerned.”

“We’re glad to see Gov. Newsom affirming that California is a state that believes in and invests in educational equity,” he said. “If the incoming federal administration does what it says it will, state policymakers will find themselves standing between harm and the people of California”.

The bulk of state funding for the state’s nearly 1,000 school districts, 1,300 charter schools and community colleges is through Proposition 98, a 1988 voter-approved formula. The budget projected that Proposition 98 funding will be flat in 2025-26 at $118.9 billion, $300 million less than $119.2 billion in 2024-25. To avoid overfunding, the state, for now, will assume 2024-25 funding will end up $1.6 billion less, according to the budget.

Per-pupil funding from Proposition 98 would rise to $18,918 and to $24,764 per pupil, including federal funding and other state money, such as pension contributions for teachers and other school employees.

Bad news for UC and CSU

Both the University of California and California State University should expect as deep as an 8% decrease in ongoing general fund dollars under Newsom’s proposed budget for 2025-26. That’s a decline of $396.6 million at UC and $375.2 million at CSU, which officials say would affect academics and student services.

UC President Michael Drake said he’s concerned about the impact that the cuts would have “on our students and campus services.”

CSU Chancellor Mildred García expressed disappointment that the governor’s budget maintains plans for a 7.95% cut in light of a rosier state budget outlook than previously projected — and said she hopes that ongoing funding will be restored if state revenues improve.

“The impact of such deep funding cuts will have significant real-world consequences, both in and out of the classroom,” García said in a statement. “Larger class sizes, fewer course offerings and a reduced workforce will hinder students’ ability to graduate on time and weaken California’s ability to meet its increasing demands for a diverse and highly educated workforce.”

The two four-year systems were each due to receive a 5% base increase in 2025-26, but the state would also defer that commitment until 2027-28, a move that was telegraphed in the 2024 budget agreement. UC additionally would have to wait until 2027-28 for a $31 million commitment offsetting revenue it lost by enrolling fewer out-of-state undergraduates and more in-state students.

New programs for schools

The expiration of about $3 billion for spending in 2024-25, will free up money for one-time funding beyond the 2.4% cost of living increase for transitional kindergarten through grade 12.

These include:

Transitional kindergarten (TK): The budget completes the four-year phase-in for the new program, which serves as a bridge between preschool and kindergarten for all 4-year-olds. In fulfilling a commitment, Newsom is also providing $1.5 billion to lower the student-to-teacher ratio from 12:1 to 10:1 in every transitional kindergarten classroom. This is key to maintaining quality because younger children need more personal attention, experts say.

“This is great news,” said Scott Moore, head of Kidango, a nonprofit that runs many Bay Area child care centers. “With this move to a smaller class size, TK takes an important step to becoming the high quality pre-k experience all children deserve.”

Literacy instruction: The budget would double the $500 million for literacy coaches appropriated in two recent budgets and enable the funding to include math coaches. It also includes:

•  $40 million for training and materials to inaugurate annual universal screening of kindergartners through second-graders for potential learning challenges, including dyslexia.      
• $5 million to launch Literacy Network, a clearinghouse for state-developed literacy resources and support to districts with persistent performance challenges.

Summer and after-school programs: The state will extend the Expanded Learning Opportunities Program for grades TK-6 for districts in which 55% of students are low-income students, English learners, or students in foster care. That will require an additional $435 million. Until now, funding was for only districts with 75% or more of qualifying students.

Teacher recruitment: The budget proposal includes $300 million for teacher recruitment, including $150 million in financial assistance to teacher candidates. With $50 million, it would revive dwindling funding in the Golden State Teacher Grant program, which awards up to $20,000 to students enrolled in teacher preparation programs who commit to work in priority schools or in the California State Preschool Program.

A $1.8 billion discretionary funding: Districts will have discretion over a new Student Support and Discretionary Block Grant, but will be encouraged to spend it on professional development for teachers in reading instruction, especially for English learners; teacher training in the new math standards; and additional efforts to address the teacher shortage.

Career education: In multiple ways, the budget supports Newsom’s proposed Master Plan for Career Education, whose goal is to make it easier for Californians of all ages and backgrounds to find jobs in high-wage, high-growth fields.

• $100 million to support community colleges in validating the experience students bring from their jobs, the military, internships or even volunteering.
• $5 million in ongoing funding to establish a planning agency to put the master plan into practice and $4 million to support regional coordination for career education and training.

The budget would also allow districts to use funding from the $1.8 billion discretionary block grant to expand career pathways and dual enrollment. 

Funding for career education comes through many different programs, which school leaders describe as both a blessing and a curse. The budget directs the Department of Education to examine how it could consolidate applications for all these different grants into one single application process.

Barring a big drop in revenue, the 2025-26 proposal would mark a return to normal following the current year’s jury-rigged budget. To avoid education cuts and deal with the hangover from pandemic revenue complications, in the past two budgets, Newsom and the Legislature drained the $8.4 billion Proposition 98 rainy day fund and withheld hundreds of millions of dollars, called deferrals, from districts. The proposed budget would eliminate the deferrals and rebuild the rainy day fund to $1.5 billion.

No money for ethnic studies

One much anticipated question was whether Newsom would include funding to implement a high school ethnic studies course. He did not. A spokesperson from the Department of Finance said that there were many demands for spending with limited resources. Ethnic studies was not among the priorities.

A lack of funding to pay for teachers’ time and materials would delay the Legislature’s 2021 mandate for all high schools to offer a semester course in ethnic studies, starting in 2025-26 and to require that all students take it in order to graduate from high school, starting in 2029-30.

After multiple drafts and thousands of public comments, the State Board of Education adopted a voluntary framework for teaching ethnic studies in 2021. Since then, there have been conflicts and lawsuits over districts that have adoped curriculums promoted by the Liberated Ethnic Studies Model Curriculum Consortium. Without naming the Liberated version, the ethnic studies law said that districts should not adopt elements of it “due to concerns related to bias, bigotry, and discrimination.” Without funding, that warning also would not take effect.

A lack of funding also might short-circuit a proposal pushed by UC ethnic studies faculty to require a high school ethnic studies course as an admission requirement with course criteria that UC would create. In December, the UC Academic Senate postponed a vote on the proposal until April; one reason was the uncertain status of California’s ethnic studies mandate.

More budget reactions

Other responses to the budget proposal were mixed.

Vernon Billy, CEO of the California School Boards Association, said the proposed budget appears to avoid direct cuts, while spending more for transitional kindergarten. “But before we offer unqualified praise, we’ll need to evaluate the actual language in the education budget trailer bill to be released in February — especially since the budget summary contains provisions that seem to open the door for shortchanging Proposition 98 under certain conditions.”

Lance Izumi, senior director of education studies at the conservative Pacific Research Institute, said, “Governor Newsom said that education is ‘all about human capital.’  It is revealing, then, that the governor discussed his proposed 2025-25 education budget only in terms of inputs — the increase in Prop. 98 and total education funding, the increase in per-pupil funding, and the increase in spending directed at particular education programs such as before/after-school and summer school.”

“Human capital,” he added, ”is about improving the knowledge and skills of students. The fact that he did not include any evidence that the increased education spending during his administration has raised student achievement and therefore increased their human capital is a glaring omission.” 

Ted Lempert, president of the nonprofit advocacy organization Children Now, said, “We applaud the governor’s focus on continued support for kids in his proposed budget, including TK, community schools, after-school, and career education.  But much more is needed.” Noting that California ranks at the bottom of states in terms of the ratio of teachers, counselors and nurses to students, he added, “We look forward to working on increasing support for child care, education, mental health, youth homelessness and youth in foster care.”

Jessie Ryan, the president of the Campaign for College Opportunity, said it’s likely that K-12 school districts in the Los Angeles area will decide to dedicate new block grant funding to wildfire recovery, rather than investments in services for undocumented students or other vulnerable populations. 

“That is a very real possibility,” she said. “We’re moving towards financial stability, but we’re not at restoration, and we’re going to have to continue to do everything in our power to protect our most vulnerable students, recognizing that we still have limited resources to do just that.”

David Goldberg, president of the California Teachers Association, said he also is concerned that the state might not fund its full obligation to Proposition 98. “We are excited to see so many transformative education initiatives supported by CTA members come to fruition in this state budget, including investments in transitional kindergarten, school nutrition and professional development. However, we are concerned that the proposed budget does not allocate the full funding guaranteed by Proposition 98. In the coming months, our union will carefully monitor the required funding levels for schools and community colleges to ensure full funding is provided to our students in a timely manner, without unnecessary delay.”

Mary Vixie Sandy, executive director of the California Commission on Teacher Credentialing, said the commission is grateful for continued investments in addressing the teacher shortage. “Funding for teacher recruitment helps to improve affordability and access to teacher preparation programs and helps to ensure that students receive the high-quality education they deserve,” she said. 

Martha Hernandez, executive director of Californians Together, which advocates for English learners, said, “We are encouraged to see the governor prioritizing key areas of importance, including a $10 million one-time allocation for statewide English language proficiency screeners to support multilingual learners in transitional kindergarten. Additionally, we applaud the emphasis on the English Language Arts/English Language Development Framework as the foundational guide for literacy instruction—an essential focus that we strongly support.”

Max Arias, chief spokesperson and chair of Child Care Providers United, a union that is negotiating with the state to increase reimbursements for its 40,000 child care workers, said the union is disappointed with Newsom’s proposed budget for child care.

“Continuing on the path proposed in this budget — poverty wages with untimely payments — doesn’t just hurt providers and their families, it hurts the parents with essential jobs like grocery clerks, janitors and delivery drivers who can’t go to work without quality, affordable child care,” he said.

Emmanuel Rodriguez, the senior director of policy and advocacy for California at The Institute for College Access & Success (TICAS), called on the state to use programs like the Cal Grant and Middle Class Scholarship to help students from mixed-status families, who may decide not to apply for federal financial aid. Rodriguez said the state must also ensure the Bureau for Private Postsecondary Education has an adequate budget framework “to shield Californians from anticipated federal regulatory changes that will leave students more vulnerable than ever to predatory, low-quality colleges.”