May 19, 2026 · Budget Subcommittee No 3 Education Finance · 49,608 words · 9 speakers · 554 segments
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Good morning everyone. Good morning and welcome to the assembly budget subcommittee number three on education finance. I am chair member David Alvarez and I welcome you all to today's agenda. First, some housekeeping. We have noticed, as you all know, on the agenda, part one and a part two. We, depending on how part one goes, we may be able to get to part two this afternoon. That will determine, and we can certainly, it'll be informed by the discussion, by the questions, by the comments. and we'll make a determination at some point, maybe right after the noontime break. We'll have a very short break during the noon hour, and we'll reconvene for certain at 1 o'clock in this room, and then we'll know probably by then when we reconvene whether we be able to get through the items that are noticed for tomorrow hearing and so we will make sure to keep you informed And thank you all for your participation today on these issues So we're going to get started. Obviously, this hearing is related to the May revision of the governor's January proposal in the state budget for both K-12 and for higher education. And so we are going to start first with the Proposition 98 update with the revision proposals by the Department of Finance. So if I can have the folks who are here for this panel, which is Department of Finance and LAO, please come forward. We're going to hear the assumptions impacting Prop 98 guarantee and the rainy day fund for Prop 98.
We'll start with the Department of Finance. Welcome. Thank you, Mr. Chair. Members, Alex Shope, the Department of Finance. So within the three-year budget window, the May revision projects the calculated minimum guarantee to increase by about $28 billion relative to the 2025 Budget Act and $6.4 billion relative to Governor's budget. So just to go year by year, discuss some of those changes. In 24-25, the guarantee increases by $1.1 billion relative to the governor's budget for a total minimum guarantee of $124.9 billion. The May revision also maintains that full $1.9 billion payment on the outstanding settle-up obligation. Increases in the SAL General Fund also increased the existing maintenance factor payment in 24-25 to approximately $8.3 billion, and that fully pays off the outstanding maintenance factor obligation. In 2526, the guarantee increases by about $3.7 billion relative to Governor's budget for a new calculated guarantee level of $125.1 billion. Due to the improved revenue outlook in 2526, the May revision also reduces the proposed settle-up from $5.6 billion to $3.9 billion. So that means that the increase in the funded guarantee from Governor's budget to Mary Vision is $5.4 billion. And that reduction in settle-up is used to increase the discretionary deposit into the Rainy Day Fund. Of course, the remaining settle-up obligation reflects a level of continued uncertainty, continues to serve as a proactive measure to manage the budget and avoid the over-appropriation of Prop 98 when 2526 becomes the past year, right, at which point statute prevents the reduction of existing appropriations should the guarantee decrease. Then finally, in 2627, the guarantee increases by $1.6 billion relative to Governor's budget for a total minimum guarantee of $127 billion. $27.1 billion. All three years on the budget window remain in test one. The May revision also maintains that same 24-25 split calculation as governor's budget, so community colleges are still funded about $391 million above the split in that year. Moving to average attendance due primarily to enrollment decreases across most grade spans. We are seeing in a relatively significant drop in ADA when compared to the governor's budget projections. So that includes a decrease of 64,000 in 25-26 and a decrease of 81,000 in 26-27. And again, those decreases are relative to what we were projecting at the governor's budget. So moving to the public school system stabilization account, the state's rainy day fund for schools, The May revision includes true ups to the rainy day fund deposits and the withdrawal from governor's budget. So again, I'll go year by year. I'll provide that governor's budget transfer amount, then the updated amount at the May revision. So in 2425, there was a mandatory deposit of $3.8 billion at the governor's budget. At the May revision, that mandatory deposit is revised up to about $5.3 billion. In 2526, there was a total deposit of $664.3 million at the governor's budget. So that was comprised of a $424.3 million mandatory deposit and a $240 million discretionary deposit. At the May revision, that mandatory deposit is revised up to $3.4 billion. and the discretionary deposit, as I noted earlier, is also increased to about $1.6 billion for a total deposit in 25-26 of $5 billion. Then finally, in 26-27, there was a mandatory withdrawal of $407.1 million at Governor's budget. At the May revision, that mandatory withdrawal is removed, so now there's no withdrawal and there's no deposit in 26-27. And then with those revised transfer amounts, the ending balance in the reserve is about $10.3 billion, and local school district reserve caps remain triggered in 26-27. And that concludes my remarks, and happy to take any questions.
Thank you. We'll hear from the Legislative Analyst's Office.
Thank you, Chair and members. Ken Kapan with the Analyst's Office will be speaking from our publication this morning. And I'll focus by remarks on the Proposition 98 guarantee and the architecture of the governor's plan. So turning right to page one, the starting point for this May revision is the $6.4 billion increase in the guarantee relative to January. It's obviously across the three-year budget window, but most of that is reflecting the spike the state is experiencing in 25-26. And these higher general fund revenue estimates somewhat offset by lower local property tax estimates. Turning to page two, another significant adjustment here. The revision has a reduction of about $3.8 billion in cost estimates for the local control funding formula. That's generally reflecting the Department of Finance truing up to data, more recent data from the Department of Education. That doesn't increase the Proposition 98 guarantee, but it has much of the same effect because it gives you more funding to spend on other school priorities. Earlier this year, I think we had this question in this committee about where are all these savings from statewide attendance, and when does the state get to reallocate that to other things? And the answer essentially is right now is when that's happening. Scaling back the Settle Up proposal also means that there's $1.6 billion more available over the School and Community College programs compared with the governor's January budget. Turning to page three, the estimates of the Proposition 98 guarantee and the LCFF savings both seem reasonable to us. The state has had surprisingly strong revenue performance the past few months, driven by gains in artificial intelligence a booming stock market large growth in investment income And the mayor vision builds is consistent with those trends although we still concerned about some of the stock market risks and these indicators that suggest the stock market could be overvalued For schools, there continues to be this direct link between state revenues and the Proposition 98 guarantee with about 40% of any change in state revenue falling on the school side of the budget. Regarding that settle-up proposal, we have the same basic assessment in January, which is that the governor has a reasonable concern about revenue forecasting risk, but delaying the payment is setting up the state for larger deficits and more difficult decisions for the budget overall moving forward. We think the smaller amount in the mayor vision is an improvement. It lessens the impact of that somewhat, but we'd still recommend an alternative in which the state sets aside enough funding to fully cover its estimate of the Proposition 98 guarantee, makes non-Proposition 98 spending reductions as part of a broader plan to get the budget in balance, and then uses the additional Proposition 98 funding to protect school programs in other ways. So turning to page five and the spending overview, the plan before you has $17.8 billion in new spending proposals. So there's $10.9 billion from the governor's budget and another $6.9 billion that's new in the May revision. Bulk of that new spending is one time, $10.3 billion, but the other $7.5 billion is for increases to ongoing programs. You'll cover the specific proposals a little later, but really there's three, just three areas that account for about two-thirds of that new spending. That's a discretionary block grant, cost of living adjustment, and additional base increases beyond the statutory COLA, and $2.4 billion for this very large special education increase. Turning to page six, the other big-ticket items here are many of the same proposals from January, eliminating payment deferrals, new funding for community schools, and the full restoration of the Learning Recovery Block Grant. Those amounts unchanged from January. There are two new proposals that I think later in this hearing you want to focus on. Those are the additional one-time funding for community schools and the extension or expansion of the literacy coaches proposal that are new in the mayor vision. So turning to page 9, skipping ahead of page here and our assessment. I think thematically this mayor vision is really revolving around three ideas, discretionary funding, support for district cost pressures, and then increases to existing programs. So about 70% of the new spending would go towards grants and other increases that generally benefit all districts and can be used in very flexible ways. School districts have received some very large increases in funding since 2019-20, but they still face some challenges related to inflationary pressure, managing the end of one-time federal and state grants, rising special education costs, and some large increases in non-personnel costs, insurance and utilities, and discretionary funding, like the governor's proposing, could help districts address those issues, as well as their other costs and priorities. And then about 30% of what's before you consists of targeted grants that come with specific requirements, As with the January proposal, there's not a lot here that's really new, but instead most of these proposals are building or expanding existing categorical programs. There are some advantages to that approach of funding this higher COLA and special education base increases. They get funding to districts quickly. They're efficient to administer, easy for districts to incorporate into their budgets. Mayor Vision has some reasonable numbers here, but certainly other amounts could be reasonable as well. So turning to page 11 one question that is important to ask for any budget plan is how well it would set you up to address a potential downturn And one positive feature of this proposal is that it contains a cushion, what we call a one-time cushion, about $4.5 billion in ongoing funds that are set aside for one-time activities. And that creates a buffer that helps protect ongoing programs if the Proposition 98 guarantee drops. It's not huge in the context of your total Proposition 98 package, but it is a powerful way to hedge against future drops and avoid backpedaling on ongoing programs. Important distinction here is that almost all of that cushion, in fact, 4.5.4 out of the 4.5, is within the portion of Proposition 98 set aside for schools. For the community colleges, almost all of the ongoing funding is dedicated to ongoing programs. The cushion is only about $127 million, and so they're a little bit more exposed to risks than schools are. We think the Proposition 98 reserve is prudent. The $10.3 billion deposit is equivalent to about 10.3% of the total Proposition 98 guarantee. That's not huge, but it's indispensable if revenue drops and the state needs to stabilize programs very quickly. So we'd recommend you deposit at least as much into the reserve as the governor proposes. Turning to page 12, the plan before you wouldn't fully insulate schools and colleges from a severe drop, but it would probably allow the state to weather a few years of a mild revenue slowdown or perhaps the first year of something more severe. The last time the state faced a really difficult tilt revenue drop was three years ago, and the fact that the previous budget had included a cushion and a buildup of the reserve balance meant that schools and community colleges came through that drop better than most other parts of the state budget. Given some of the risks, we think you might wanna consider building even more budget resiliency, and we think you have at least two promising options to do that besides reserves. One could be giving districts an advance payment toward their 27-28 allotments at the end of the coming fiscal year. This is essentially flipping the script on deferrals by giving districts their payments a month early, and the next time the state needs savings, it could reverse that advance payment rather than delaying cash payments from the current schedule. Another option could be to focus on pension costs. That could mean setting aside funding to reduce pension liabilities and district contribution rates over time, or to offset increases the next time the systems need to raise the contribution rates. To the extent that you reject any of the governor's proposals or you take our alternative approach to the settle up, you'd have one-time funding available, and both of those options would use funds in ways that protect ongoing programs and make the budget more resilient. So turning to page 13, I think our bottom line is that the mayor vision is a reasonable starting point for your Proposition 98 plan. There are many ways you can adjust and refine the exact amounts for most of these proposals, but the estimates of the guarantee seem reasonable, and there are some prudent features to build on that would protect your core programs and priorities. One final postscript, turning to page 14. There are some notable differences between schools and community colleges in this budget. One we already mentioned, state has a much larger cushion for schools than the colleges, but another one is that just in general, the state has more new spending proposals for schools and community colleges, and not just in absolute dollars, but in proportion to existing spending as well. And that distinction really affects a couple issues. The mayor vision is setting aside a percentage for each segment in 25, 26, and 26, 27, based on these historical percentages And the pie Proposition 98 is growing so both segments are receiving more funding but for the community colleges a much larger share of that increase is absorbed by baseline costs and enrollment growth, leaving you less for new programs. And that's really the opposite situation for schools where enrollment is falling and that's reducing costs and that's freeing up existing funding. So this is not a bad budget for the colleges, but compared to schools, they are in a little bit of a tighter position and they're more exposed to risk. That concludes our comments. Thank you.
Thank you.
Thank you both. So obviously this is at the top of the agenda because it has an impact on all of the proposals and everything we'll be discussing over the next day, perhaps day and a half, depending again on the hearing today. So there's going to be probably a lot of interaction with specifics on proposals, but I think it's an appropriate time for colleagues to make questions about all of those things. Let me start with the question that was posed in the agenda, assuming you all have had a chance to think about this. The $3.9 billion in settle-up, which is lower than the $5.6 billion settle-up in the governor's proposal, What was the reasoning for that number? What methodology was used by the administration to propose that number?
I don't, you know, I think similar to governor's budget, you know, there's no kind of single like formula we can point to regarding the new sell-up amount. But, you know, again, I think also similar to the governor's budget after updating revenues, recalculating the guarantee. You know, I think we we see that new number as sort of a good updated estimate, you know, of the continued revenue volatility. Of course, reflecting the improved outlook, but also kind of still serving as that proactive measure against potential changes in the guarantee. Of course, we've seen kind of big increases in the budget window, understanding that kind of volatility and the risk still exists. I think this is kind of the new number that we are comfortable with. to sort of reflect that uncertainty.
What is the 3.9 billion as a percentage of the, I'm trying to compare to past practice on Settle Up. How much 3.9 out of 120, now an updated number of 127 billion in Prop 98 guarantee, How does that compare to the 25-26 settle-up amount?
Do you mean like the amount from the governor's budget?
In the current year, the adopted budget assumed, well, the governor's budget actually in January assumed $121 billion. What was he assumed in the budget? Do you recall? Do either of you recall?
In the current year?
In last year's budget, there was a $1.9 billion settle up created, and that is still being paid off or paid back as part of this year's budget. 1.9 billion, but in our budget we assumed a Prop 98 guarantee of how much for the current year?
In last year's budget?
Yeah. For 24-25?
We had assumed for last year, the 25-26, that was 121.4 billion.
So it's the governor's budget number 121. I'm sorry, 114.6 billion in June 2025. Okay. $114.6 billion. And now we're at an assumed $127.1 or $0.2 billion for the budget year. And a three point, so this is a doubling of the settlements amount. I really am trying to figure out the thinking. Is it we think that it's that much more uncertain that our outlook would be doubling the amount of anticipated settlement, settle-up funds?
I mean, I think it does, you know, reflect, I think, that continued uncertainty. I think understanding sort of the significant changes that we've seen just within This budget window right it's a 28 billion dollar Increase from just the the budget act last year right percent that represents an increase, but I think it also points To just kind of a higher level of volatility Then we were Dealing with last year so I think that that's all I'll probably reflects that okay
Okay. And the second question to me is related, although I understand why it's not. But the administration is proposing $10.3 billion in a rainy day fund for 98, of which only 8.0 of it is required. And there's an additional discretionary put in there. And so I'm trying to understand why the amount of discretionary was what it is and how all of this fits together to the uncertainty of potential future outlook for Prop 98. And so why the additional 1.6 and not an additional 3 or not adding the 1.6? What's the reason behind that?
Well, that 1.6, I think more or less corresponds with a decrease in the settle up amount. You know, I think obviously the improved revenue outlook, it allowed us to reduce the settle up, but we're still looking at that uncertainty. So I think we see the increased discretionary deposit rate using that settle up to put and to bolster the reserve further. It is a measure that we can take to kind of sort of enhance the budget resilience that, you know, it's kind of been the theme rebuilding that from governor's budget, you know.
Okay. To the LAO do you have thoughts on that approach of making that number that determination in that way What are your thoughts on the required versus the additional deposit there Yeah there nothing intrinsically special
about $10.3 billion or an 83% reserve, but we think that's a very good starting point, really managing the kind of volatility that the state might experience next year. Probably it would need more than that. I mean, a $10.3 billion, that could be gone in a single bad year. But we would urge you to think about the budget more of as a package than focusing on just one number. So you have all these tools that you can deploy for resiliency. You have the reserve, you have cushions, you have advanced payments, you have things you can do to help districts, discretionary grants, more or less cautious or optimistic assumptions that you can adopt. And the important feature would be that across all of those things, you've got something that you feel comfortable with could address some of the downturn that's happening. So the more that the more ongoing spending you commit to in this package, the more important it is to have a larger reserve that can protect that ongoing spending level.
This this may be an unfair question to recall information from over 15 years ago now, almost 20 now. What was the Prop 98 decline in the in the Great Recession? What was that number?
It was a close to 20% decline.
So it was well over $15 billion at the time?
That's right. To give you the more recent example would be what happened in 22-23. The state had also close to a $10 billion reserve deposit at that time, and in a single bad year, all of that was taken out with a discretionary or a required withdrawal, and the state still had to make some reductions to some one-time grants. Right. Let me move to the LAOs. Thank you for today's report, which you just presented. Obviously, there's much more to it. But in your final page 13, sort of a couple bullets here, you're suggesting that we could consider adjustments to the May revision, ranging in the size of the ongoing base increase.
let me start with that are you identifying what I think I'm identifying and it's not you know anything unique to me I know others have talked about this the proposition 98 with declining enrollment and the LCFF that decline is is allowing for 98 to be used a lot more in non, I'll say base LCFF funding, but for other purposes of 98. Is that what you're referring to? Let's talk about that first. Are you seeing that as a, is that now a real, we can identify that as a trend and as an ongoing trend?
This has been, I think this is reflecting the trend, the underlying trend is the decline in attendance. And that started really probably five or six years ago with all of the adjustments and some of the whole harmless mechanisms. State continued to fund districts at their pre-pandemic attendance levels for a while. And then I think more recently, it's been more about, well, how quickly are we going to update our LCFF estimates? And we have TK expansion and so a lot of moving pieces. But I think what's happened now is that the states, with the latest data, are now finally able to close the books on some of that uncertainty, and we have a much better sense of what the ongoing cost of the LCFF is. I think we would expect to see additional savings over time looking at some of the attendance numbers and the birth numbers recently we have a better sense of who coming into the system PK has been fully expanded We're in the midst of implementing the attendance recovery programs. We wouldn't expect to see additional savings of the kind that we're seeing right now on an ongoing basis, but the savings that are in the May revision seem like they're permanent, and there will be at least some additional savings over time from that declining enrollment.
So do you feel that the May revised proposal is more accurately reflecting what will be used on, based on better data that's coming in, what ADA will actually be for next year?
We do feel like that's the case. We've had some discussions. I think sometimes you ask, well, did the LAO and Department of Finance talk to each other, and can they get on the same page? And we've had a lot of discussions, I think, over the past year or so trying to make that happen. I think we feel like we've reached a place now where there's pretty broad agreement on what the numbers are and what they're going to look like. Of course, there'll be a year from now, we'll be talking about more adjustments, but I think they're going to be a lot smaller moving forward than they were this year.
So then we will like, while the data is more accurate and there's agreement and likely, again, less savings, doesn't that still create a delta in 98 for what LCFF is, given the current LCFF requirements in statute, including COLA and other things, and available in 98 for other programs?
Yes, absolutely. If school attendants, say, for example, were following the same trajectory as the community college enrollment, which is growing, you wouldn't have the same capacity to adopt this much higher COLA and this big special education increase, a lot of that is possible because of what's happening with attendance and these savings from lower costs over time.
Okay. We'll be talking a lot about declining enrollment and the impacts probably in the fall with some hearings, but this is important information. So when you, to the LAO now getting to the specific bullet point of the ongoing base increase, Are you suggesting that we could, given this dynamic that's occurring, we could be looking at a base increase that is larger? Or are you asking us to perhaps be more conservative?
Again, I think that was maybe more a comment about you have this tradeoff between what you want to do in special education and the LCFF. And there's no one right mix of that. I think districts would tell you that both of those increases are helpful. Both of them provide broad increases across the board. Obviously, the LCFF is a little bit more weighted towards low-income students and English learners. But you have those kinds of choices to make, and then obviously you have some other ongoing choices. The big one is what you do with the Governor's Community Schools proposal, that $1 billion ongoing. If you don't adopt that proposal, and we'd recommend it against that, then you have additional ongoing decisions to make about how you're going to use that funding as well.
In your opinion, I don't get a very clear direction. Is your sense that the ongoing Prop 98 is appropriate? Is it conservative? Where does it fall on the spectrum?
I think we would say that the cushion really the question is how much of the sort of ongoing proposition I need in 26 is committed to ongoing purposes versus one time And that cushion that difference is about billion And we would say on balance that seems like a reasonable starting point Obviously you could do a little bit more a little bit less We wouldn recommend shrinking that cushion too much though because if you don't have a couple billion in a cushion like that, then you're at much more risk for the possibility that things aren't quite as good as what the state is anticipating. So the overall mix of one time and ongoing, we think, is generally reasonable. And we'll talk about the specifics of those one-time ongoing. It's its own little category here in the policy proposals. But, you know, we hear often from school districts, you give us resources to do programs, we start up programs and the money goes away.
Overall, is there an assessment on what is being funded with those one-time ongoing and where that places districts to then if the money for some reason isn't there or there's a change in priorities within the administration, what that does to those programs?
Yeah, we hear a lot of those same things from districts as well. And I think districts will find, I think what we've been hearing is that districts will find this very helpful for their budgets because the money is very focused on it's going to them in flexible ways, and it goes into areas that directly address their cost pressure. The LCFF is how districts cover most of their pressures. Special education is the other big pot. And so even though these increases aren't as large as, say, what the state was providing in the 21-22 budget, they are very focused on the areas where districts are feeling the most pressure in their budgets.
So just to clarify, you're considering one-time ongoing things like the discretionary block grant?
Well, the discretionary block grant is another. Obviously, that's just one time, and the district could use that for any of their priorities. I think we've also heard some districts have some ideas about how they would use that, things from updating curriculum, maybe addressing some infrastructure challenges. training. In many cases, the governor has some very specific proposals for things that we think, well, maybe we should let districts use their one-time grants for those things if they're a priority. The $5 billion is very large for a one-time grant. It wouldn't have to be that large necessarily, but we think it does make sense to at least include a discretionary block grant so that the state doesn't have to try to address all of the concerns that districts have. They can use that money to fill in where they think it's most needed and helpful in their local budgets.
One last on TK-12, and then I want to ask a couple on community college. Not the policy discussion, we'll have that later, but on the paid family leave, what are the projections in terms of amounts that now are going to be a requirement of locals to provide this leave? And at least in budget, I may revise presentation documents. It was mentioned that the COLA, the larger COLA now, will cover that new requirement. What is the cost estimate from finance on what that is to, first, to TK-12 to LEAs, and then second, to community colleges?
I'll defer to one of my colleagues to help with that.
And this is just the numbers. We'll talk about the policy.
later. Hi there, Liz, mine with the Department of Finance. When the administration did our own estimates across TK-12 and community colleges, it was a total of around $218 million.
Obviously, there's a split. I don't have the exact split in front of me. Is it roughly 11 To 89 percent?
Yeah. Yes.
Okay. Okay. And let me ask about now quickly on a community college front. Community college also had a block grant proposed in the January budget, and there was no adjustments to that in the May revise. Is that correct?
I believe there were some adjustments, but I'll defer to my colleagues.
who covers colleges. On page 16 of our handout, we have a comparison chart
that walks through the community college differences. Oh, very helpful. So the major differences for the colleges, and again, my colleagues will cover this later, but the major differences from January are really in what's going on with apportionments and the higher base increase for the student-centered funding formula. The other proposals haven't changed very much. I think the Department of Finance could comment on that as well, though.
Yes, the loss-borne Department of Finance. The change to the student block grant in the May revision is an upward revision of only about $607,000.
So now the total is 100.6. And so why was the focus, is it just a matter of a function of total dollars? Why was the focus on the COLA as opposed to other programs?
So, I'm talking points here. If I may, Mr. Chair, just share an observation. I think this gets back to the earlier point about the state just not having as much funding available for the community college is as compared with schools. Simply aligning the community college increase with the school increase essentially absorbed all of the funding that was available. And so there just wasn't, if you want colleges and schools to have the same increase, the same 4.31%, there just wasn't really much left over after that for other augmentations.
And because of the split, the 89-11 split?
because of the split and because of the enrollment growth and the other higher SCFF costs as they're coming in. Can you remind me if, I think it was before my time,
so maybe 22-23 or 21-22, there was a super COLA at that time for 98. Was it a different COLA amount for TK-12 than it was for community colleges? Has there ever been a different COLA?
Yes, that certainly happens sometimes. A state often would say it's more common than not for the state to align the rates, but certainly there have been years where they've been different or they've been given out in different ways.
Okay, appreciate all that. I'll turn it over now to my colleagues. I'll start with Dr. Patel.
Thank you for your presentations today and our ability to do a little bit of a deep dive on Prop 98. I do have a couple questions. One is based on conversations here. I just want to go back, sorry, to last, the previous cycle's $1.9 billion withholding. All of that ended up coming due and is now being settled up. Is that correct?
That's correct.
I trying to understand the uncertainty landscape And I think I asked these kinds of questions before in the previous budget cycle versus the current budget cycle which prompted the increase in withholding proposed for this year, still substantially larger in the May revise.
Yeah, I think I'd go back to kind of one of my previous answers, kind of looking at the large increases that we're seeing right it's so right that same uncertainty that we've been dealing with but now you know we've seen pretty significant increases in the guarantee right understanding that fluctuation right could have a downside as well so I think that maybe speaks a little to some of the increase from last year to this year in terms of the settle-up okay so when we think about
that landscape, there is a likelihood that all of that will come due the $3.9 billion now that's proposed in the May revised withholding may also come due in the following budget cycle. So if we're, I'm just trying to put my head around this, so sorry as you hear me think out loud my thought process. We are putting more into the rainy day fund because we're predicting a lot more uncertainty in out years. And so we want to make sure we have that cushion. And yet we're also having a substantial withholding. How are we going to make good on that deposit or that allocation if it does come due, if we don't have that money?
Well, I mean, not to sort of sidestep the question, but I do think there is a little bit of an unknown to that. It sort of depends on what kind of the outlook is next year. Right. There's could it could be right, of course, that, you know, the revenues increase, you know, the state, the legislature feels able to pay off that full amount, whether it's three point nine billion, whether it's less more. Right. The revenues could go down. The settle up amount could decrease with that. if the guarantee goes down. I think ultimately that's to say it sort of depends on, I think, what the outlook is next year. It will come from the general fund side of the budget, but ultimately I think the main intent is to work within those restrictions on Prop 98. where we can't lower the appropriations.
Yeah, I'm just trying to understand what would be the prudent approach. Yeah, go ahead.
Yeah, so this will answer, we'll lean in a little bit into the question you probably have more in the full budget committee, but across the budget overall, the mayor vision does make some important progress on addressing the state's structural deficit. I think in January, we've been talking about deficits, exceed structural deficits of more than 20 billion. I think the mayor vision now, we're looking at more than 10 billion. So that's notable progress, But one of our concerns is exactly to your point, Dr. Patel, that next year we have this $10 billion structural deficit and the state very likely will owe some or maybe all or more than the $3.9 billion that's set aside. To give you some sense of just the range of uncertainty, I think we've looked at past experience. And typically, for the current year revenue estimates, there's really the range of about, if we throw out the very extreme cases, that typically falls within a range of about 4% of the state estimate that it has in May So a 4 swing in revenue would translate into about a billion up or down swing compared with the Proposition 98 estimates that are before you right now for 25 So the $3.9 billion is still a larger amount than what you would need if you just wanted to manage that uncertainty with this tool, but it is moving a lot closer. And I appreciate that we are moving closer, but I am concerned that we're creating future obligations.
And, you know, in the science world, two dots makes a line. And now we're creating a trend on using this as a budget maneuver instead of working to tighten our accounting practices a little bit better, which I would prefer us do. And certainly I would lean towards supporting the LAO's recommendation of getting tighter on those calculations and perhaps putting more in the rainy day fund, or at least allocating it on the Prop 98 side so that we can make good on those promises to our LEAs. And just, you know, I'm just thinking out loud here, trying to get my head wrapped around these financing budgeting issues. I'm concerned that we don't have a better way of mitigating against this uncertainty. And I feel as though that the better way to do that for now, until we can get a better handle on what those uncertainties are and what's going to drive them to actually allocate it on the Prop 98 side so we have it there ready to go. Because in the last cycle, we thought there was all this uncertainty of $1.9 billion, and we ended up needing to allocate it. So, and then putting that aside for now, another question is the discretionary block grant, if we take a look at that specifically, that is allocated based on just per pupil. It's a straight per pupil allocation. That's right.
One-time money.
Have there been any thoughts around using the LCFF formula for allocating that?
So I guess what I would say for this specific block grant, right, the intent, you know, it's fully discretionary. The intent is to help LEAs to address rising costs. And I think that the administration really views that as, you know, truly a problem that is affecting all LEAs statewide, you know, whether they have a high unduplicated count or low. And so I think given that intent, we see the per ADA as the kind of the proportionally best way to allocate this.
Okay. Thank you for that clarification. I can certainly attest to all districts are facing some genuine challenges across the board, and some of them in very unpredictable ways as we try to implement some of the policies that have come across these desks over the last several years. Another question I have is looking at the special education dollars that have been allocated. I want to commend the governor's office for taking a serious look at the rising costs of delivering special education and making sure that our students have the resources that they need. I do want to voice a concern that that money, unless more specifically targeted, could easily just be distributed across the board to address other costs as well. As we know, coming from school board world, that money will end up just offsetting costs across the board. Has there been any thought in looking at specific allocations such as funding the Extraordinary Cost Pool the Low Incidence Fund supporting some of the special education programs that have been rolled out over the past few years like the alternative pathway to graduation Hi there Liz Mai with the Department of Finance I do want to note that the increase in special
education can only go towards special education costs. I think the main feedback we've been hearing over the years from the field has been just rising costs broadly in special education, especially with the increase in identification paired with the decline in enrollment. And so I think that's why you see kind of this broader approach still targeted towards special education specifically, but for usage across the board.
Okay, thank you. I understand that that's how it works technically, but having seen how budgets work on this LEA side, sometimes different things happen. So is there any interest in putting more money towards extraordinary cost bills specifically for the low incidence fund?
Definitely can't say anything right now, but happy to continue these conversations.
Thank you. Yeah. Thank you. Those are all my questions for now.
Thank you, Dr. Patel. Mr. Fong.
Thank you so much, Mr. Chair, and good morning to all our panelists. Thank you so much. And I appreciate the context and efforts around the Settle Up, and I know it's a 3.9 billion now, but anything we continue to reduce the revenue settle up as something that I want to continue to uplift here. In terms of our community colleges, and the chair touched upon a number of this earlier, we know that the portion of the funding has gone up and there's a robust call of 4.3%. I appreciate the student support block grant at $101 million. In terms of the apprenticeship costs, I know this is an increase in $3 million. Was there a thought on that? The apprenticeship costs.
Can you, excuse me, can you repeat that? I couldn't. Oh, yeah, absolutely. Thank you so much. In terms of the one-time activities, this is an increase of $3 million in apprenticeships.
Or with that, can you explain a little more of that detailed line, Adam?
Oh, sure. So a portion of the additional $2.63 million in the May revision is needed to backfill monies redirected in the 2024 Budget Act, where we specified a portion of the RSI would be redirected to the 21-22 and 22-23 budgets. So that kind of created a need to backfill that now. The rest is to cover a shortfall in the current year, first proposed in the governor's budget. The additional amount is the result of updated numbers since the release of the governor's budget. We got updated figures of about an additional 778,000 additional apprenticeship hours. Okay. And at the current rate of $10.32, we came up with that amount.
Great. Thank you so much for that context. Appreciate that. In terms of the credit for prior learning, appreciate the amounts there as well. And then in terms of the enrollment growth, I know we've had robust discussions around enrollment growth and a lot of community colleges are seeing a significant growth in terms of enrollment. Some of our campuses are seeing double digit growth there. And to our chair's point, I know that there's a number of funds have been allocated, but I just wanted to get some additional thoughts on what we can do around enrollment.
growth. So we'd be happy to continue to talk with the legislature regarding growth, and we've heard from various stakeholders as well of the importance. We chose an approach to fund the additional amount with a COLA because we wanted to provide a more flexible, discretionary pot of money that would help all of the community college districts and not just those experiencing growth. So that was, that's kind of the thought process why we didn't, we held the growth to the same amount that was proposed in the governor's budget.
Appreciate the context there. Thank you. And then the final question I had on the community college space is strong workforce funds. Is there any potential augmentation there and really see it in the budget proposal, so I wanted to check in on the strong workforce funds, or is that another item?
No, there's no proposal at this time to increase the strong workforce funds. Beyond, there's the proposal for $9.7 million over three years for the specific adult learner demonstration project, which is part of the strong workforce schedule in that item.
Yes. Thank you for that context. LAO, do you have any thoughts on the strong workforce funds?
Nothing to add, but I think one of my colleagues can add any comments we have at the later panel.
Okay. Thank you so much, Mr. Chair.
Thank you. One clarifying question on the COLA for community colleges. It was stated here that it's for all districts. Someone from the LAO's office had, and I'll ask you all to confirm. I thought it was only applying to districts where there was growth identified. Can you clarify that?
Lisa King with the Legislative Analyst's Office. To confirm, the question is which districts the Super COLA applies to?
Right.
So the COLA, including the additional amount above the statutory percentage, would apply to any districts that are receiving their student-centered funding formula generated amount, as well as districts that are on stability. There is a separate set of districts that are receiving hold harmless funding. They do not have a COLA applied to their funding level. Under their projections from the mayor vision, there are seven districts in that category. So only seven that are largely are all declining in enrollment.
Is that dynamic here?
Yeah. So these hold harmless districts are largely districts that currently have enrollment that has not yet recovered from pre-pandemic levels. And so they are still funded based on a different approach. Historically, they've been largely concentrated in the Bay Area. I will also mention that there is a separate group of districts that are basic aid districts. So their apportionment level is driven by their local property tax rather than any COLA that's applied.
What are the, I think you said stable districts?
Stability, yes. Stability, yeah.
What classifies the district as that?
So district would be instability if it's typically driven by a decrease in their enrollment from the previous year. And so their funding is based on their previous year's student-centered funding formula calculated amount adjusted for COLA. COLA. THERE ARE I BLEED EIGHT DISTRICTS IN THIS CATEGORY PROJECTED FOR 26 THEY WOULD RECEIVE ANY COLA THAT THE STATE provides But they be using the prior year before the decline occurred That right Their funding would be based on
And what happens going forward? Those districts then, if the decline continues, how are they classified?
In any given year, a district's funding method is calculated as the highest of three options. Sure. Their student-centered funding formula amount, their stability amount, or their hold harmless amount. And so if a district starts to experience a recovery in enrollment, they could move out of those stability or hold harmless categories onto the student-centered funding formula.
Okay. All right. Thank you for clarifying that. Appreciate it. Do you have any other questions on this panel? Okay. Thank you. We are going to get into the specifics of all these proposals, and I'm sure there will be more, and we'll be seeing all of you at some point. So let's move on to transitioning well here to the California Community College's proposal in the May revise. We've talked a little bit about the supercola, which is where you see the bulk of the changes in the revision. But we will have Department of Finance first prepare, present their proposal. Then the California Community Colleges will provide their feedback. and then we'll hear from the legislative analyst office. Welcome to all three of you. We'll start with the Department of Finance.
Phil Osborne, Department of Finance. This is a start off with a few higher-level talking points about the mayor's vision changes and proposals for the community colleges. To start off, as mentioned earlier, the Education Rainy Day Fund has been withdrawn, and the community college amount of that withdrawal is $44.5 million. The mayor revision provides an ongoing increase of $197.7 million of Prop 98 general fund to reflect a change in the SCFF cost of living adjustment from 2.1% to 4.31%. Of this amount, 1.44% is discretionary and 2.87% is mandatory. This increases the total proposed cost of living SCFF adjustment in 2627 to 438.3 million. The May revision also requires community colleges to offer employees up to 14 weeks of paid pregnancy disability leave. A portion of the discretionary cost of living increase of 146.4 million is intended to be used to reimburse new community college costs related to this new requirement. The May revision includes an ongoing increase of $122.8 million Prop 98 general fund as a result of decreased offsetting local property tax revenues. And the May revision provides a one-time increase of $9.7 million of Prop 98 general fund available for use over three years to support the adult learner demonstration project. This program provides comprehensive services to assist low-income adult workers to help move them into stable and higher-paying jobs. The program is operated by the nonprofit United Resources Center in partnership with the community colleges. And I had mentioned this earlier, it's part of the Strong Workforce program. The 2024 Budget Act provided $5 million for this one time, and this would continue that. To reflect a change in the cost of living from 2 to 2 the May revision includes an ongoing increase of million Prop 98 general fund for select categorical programs in the and the adult education program this increases the total cost of living adjustment provided in 2026 27 to 36.7 million dollars the specific categorical programs include adult education extended opportunity programs and services the disabled student programs and services, the apprenticeship programs, CalWORKs student services, mandates block grant and campus childcare support. The mayor revision includes an ongoing increase of two million dollars of Prop 98 general fund to maintain the governor's budget proposal to fund 0.5% enrollment growth in 2627. This increases the total amount provided to support the 0.5% enrollment growth to $33.9 million. The May revision also maintains the governor's budget addition of 1% ongoing growth beginning in 25-26 that then cascades into 26-27. The 1% ongoing growth equates to 55.3 million. The May revision includes a one-time increase of $607,000 in Prop 98 general fund to increase the student support Block Grant, which is a flexible block grant community colleges can use for various purposes, such as supporting students' basic needs and counseling services. This increases the total amount in 2627 to $100.6 million. As a side note, $60 million of one-time Prop 98 was previously provided in last year's budget. The May revision maintains the governor's proposals for one-time and ongoing Prop 98 for various programs and purposes. This includes $120.7 million one-time deferred maintenance grant, a $41 million of which $5 million is ongoing for the Common Cloud data platform, $38.1 million ongoing for Calbright College, $37 million of which $2 million is ongoing for continued support of the Credit for Prior Learning Initiative. The May revision also maintains the governor's proposal to provide a one-time increase of $736.9 million Proposition 2 bonds to finance 10 new projects and 29 continuing projects at the community colleges. The May revision adds some reappropriations for certain design phases of some of these projects. And that's what I have, and I'm happy to answer any questions.
Thank you. We will hear next from the community college.
Good morning. Imran Majid, Director of Fiscal Advocacy for the California Community College's Chancellor's Office. I want to first begin by thanking the Governor's Administration for maintaining the core investments included in the January proposal that will advance our Vision 2030 priorities. This includes credit for prior learning, common cloud, deferred maintenance, dual enrollment, and the student support block grant. We view these proposals as essential for expanding career and workforce opportunities for our working learners and adult students. In terms of the specific May revised investments, we certainly appreciate the administration's proposal on paid pregnancy disability leave by providing flexible resource tied to the implementation of this policy. For context, about 55% of our faculty and classified staff identified as women. So this really is not just a gender equity issue but a workforce recruitment and retention strategy especially in light of declining birth rates across the state We also appreciate the May revised proposal on the adult learners demonstration project Just taking a quick moment of personal privilege, you know, when I think about this program and this pilot, I do think about people like my mom, who has been an in-home supportive services worker for most of her adult life, but yet to this day still cannot read or write in English. And so this pilot is really about ensuring our home care and child care workers, who are predominantly women of color and low income, understand that, yes, college is for them through the flexible scheduling, stackable pathways, work-based learning, and wraparound supports that this pilot provides. As was discussed earlier in the spring and has already been discussed, our community colleges continue to face significant needs around enrollment growth. our college CEOs never want to be in the position where they have to ration access. So while we originally requested funding to support 3% enrollment growth across 2526 and 2627, with 2.5% attributable to 2526 and 0.5% attributable to 2627, our latest data and enrollment projections show that the system does have a need of 3.5% enrollment growth, across both years with 3% attributed to 25-26 and a half percent attributable to 26-27. So we would ask you consider funding for 3.5% instead of 3%, and we can provide some updated numbers on what that would look like. But essentially, the 3% enrollment growth in 25-26 and a half percent in 26-27, we estimate would cost the state about $221 million. The May revise for context provides about $89.2 million. So this would mean investing approximately $132.1 million across both years. Again, as was discussed earlier in the spring, we also have an outstanding request to fund two policy proposals, one of which is to allow credit FDES to be calculated using the higher of the three-year average or the amount in the current year starting in 25-26. We estimate that proposal will now cost about $97.1 million over three years. We would also ask the legislator and the administration to consider eliminating the 10% cap on funded FDES growth starting in 2526. This would carry a cost of about $38 million. So altogether, between the two policy changes, as well as the increase in enrollment growth, would cost about $357.2 million. Of that, $89.2 million was provided at May revise. So essentially we are asking for about $268 million more to fund all three components. And I'm happy to repeat those numbers again once we get to Q&A. I know that was a lot. Lastly, we also just continue to elevate the need for a cost of living adjustment for the student equity and achievement program. Again, this supports high impact but labor intensive student services, whether that be counseling, tutoring, basic needs supports and targeted outreach. specifically, again, targeted towards the students who have not had equitable access to higher education. And so we would ask for an aggregate cost of living adjustment of about 11.6%, which goes back to the last funding increase, and that would cost the state about $62.3 million. And with that, we are happy to answer any questions. Thank you.
Thank you. We'll hear from the Legislative Analyst Office next.
Good morning again. Lisa King with the LAO. If you turn to page 6 of your agenda, you'll see a chart that compares the governor's spending proposals for the community colleges at the May revision versus the governor's budget in January. The last column of this chart shows the additional spending that's added in May. Of the $218 million in additional spending added in May, the vast majority of it, $205 million, is on the ongoing side, so the top half of the table. So I'll begin my comments there. Among the ongoing proposals, we recommend prioritizing first funding the increase in the statutory COLA from 2.41% in January to 2.87% in May. This additional $51 million would help districts keep up with increases in their core operating costs while providing them with some flexibility to address local conditions. Beyond funding the increase in the statutory COLA, we think the legislature has several reasonable options for additional ongoing funding at the community colleges. One of those options is to provide an increase above the statutory COLA, as the mayor of Jitin does. Another option is to redirect a portion of those funds to support additional enrollment growth, as the chancellor's office is requesting. There is a case for supporting additional enrollment growth beginning in 2026-27 because we are seeing that more than half of districts are already above their current year enrollment growth targets. And as we discussed in an earlier hearing this spring, there are a number of factors that could contribute to additional enrollment pressure beginning in 2026-27. You could also consider using some ongoing funding to provide a COLA for additional categorical programs, such as the Student Equity and Achievement Program. And finally, you could consider using some ongoing funding for one-time purposes, such as the student support block grant mentioned in the previous item. If you were to do this, it would increase the size of the one-time cushion that my colleague Ken Kampon was discussing, which is somewhat smaller in the community college budget than in the K-12 budget for 2026-27. Regarding one-time spending proposals in the May revision, there is just one major new proposal, and that is the proposed $9.7 million for the adult learner demonstration project. We recommend rejecting these funds simply because districts, in our view, already have a number of incentives and funding sources to support the types of activities that would be provided under this pilot. Finally, I'll conclude with just a quick note on apportionment costs. We are seeing that at the May revision, the estimate of just baseline apportionment costs is up $52 million relative to the January budget. The mayor vision does not include an adjustment for this higher cost and so we would recommend including that 52 million one time for 2025 26 To cover current year portion its costs coming in higher than projected in January Looking ahead to 2026 27 We do also think that there is a chance that Apportionment costs for the budget gear could come in somewhat higher than projected under the mayor vision Thank you and I'd be happy to take any questions
Thank you. Let me start with that last point, which I have not been as focused on, that the LAO just made the apportionment costs. You calculated as $52 million if we were accurately reflecting data from new data. What is this information, this number based off of which information? Yes, so the $52 million I cited is related to current year apportionment costs for 2025-26.
Under the May revision the administration working with the Chancellor Office has developed an updated estimate of current year apportionment costs reflecting the most recent data they received from districts And that estimate is million higher than it was at the governor budget And so we are recommending building an additional million for that increase in current year costs Is that a—how does that work on an ongoing basis?
I mean, obviously, would future enrollment change that number? So the way that the backup for the May revision works,
any adjustments, any new data that is feeding into the current year estimates is the new baseline for budget year estimates. And so the budget year estimates under the May revision actually already reflect the data update. It's just that the May revision doesn't include the one-time adjustment in the current year for that additional cost.
Why was that not included in the May revise? Yeah.
As noted by the LAO, there is that $52 million push-print shortfall. We became aware of this late in the process, and we're not able to incorporate it into the May revision. We're looking at options right now to close the gap, including looking at additional unspent funding in the current year. We're happy to work with the legislature to address it as we move forward to finalizing the budget.
Okay. Appreciate that clarification. Does the community chancellor's office have any other comments on that?
Executive Vice Chancellor of Finance and Strategic Initiatives, Chris Ferguson. No, we would agree with the $52 million. That is based on our estimate and our model. We would also agree that that is built into the budget year and funded in the budget year moving forward. The net result, if that isn't funded, is a deficit factor on our entitlements, our SCFF entitlements to districts, so student-centered funding formula. And what that means is the funds that they thought they would receive, they'll receive slightly less. And that deficit factor applies across the board. So even, you know, a hold harmless district would see slightly less as a result.
Okay. This certainly sounds something we should address before finalizing this. Let me ask about the adult learner demonstration project. This sounds a lot like what I thought was a previous pilot program, The most description I've received of it is just now, where it would be focused among, it sounds like, in-home supportive services workers. Wasn't there another program happening just a couple years ago in this space? Yes. So for context, the 24-25 Budget Act included $5 million for this initial pilot.
I believe the current pilot that was funded is scheduled to run out in November of 2026. And so the funding provided by the administration is intended to ensure that it continues while also scaling it up across the state. And so as I sort of mentioned in my comments, this pilot is really about addressing some of the persistent, you know, higher education and workforce equity gaps that exist among low-income working adults who have been traditionally underserved. And so this is really about a partnership that we have with the United Domestic Workers to create that pathway to an accessible pathway to higher education, where they are receiving targeted services such as, you know, child care, staff, recipients, transportation, food assistance, technology support on a case management basis. And so, you know, this investment that's being proposed by the administration, as I sort of mentioned, is intended to scale it up. Right now it is only limited to about 20 community colleges across five counties and those counties are predominantly located in Southern California And so this is really about bringing it more to the central and northern parts of the state There are some outcomes that I can report on in the sense that as of right now about 1 students are enrolled in the pilot And about 66 students have completed some of the initial programming and earned certificates. But happy to speak more to that if you have any additional questions.
I'd be interested in the ongoing data Analysis on this is now being called a demonstration project. So I'm assuming it's still Previous one was a pilot. This is a demonstration love to better understand how we're Identifying the outcomes of students that are participating in this more more robustly if that's not the case already in final budget
So we can we can talk about that at that time
to the Chancellor's office on the proposals for growth over two years the 10% cap I captured those two specifically I got the total that you mentioned just curious how you and then so then there's this new mandate that is the paid family leave which doing rough math from the earlier response we're We're talking somewhere in the magnitude of like $25 million is your anticipated cost to this. Is that what your number you're working with?
Yeah, we don't have a specific number in our office, but that's consistent with the general range that we think this would be in, which is in the tens of millions in terms of cost. And the reason that we won't have and don't have a specific estimate is it varies depending upon who would qualify in districts. So each district will be in a slightly different position. It will vary depending upon where districts are starting today in terms of what they provide their staff, as well as do they participate in state disability insurance or other alternatives.
Yeah, and I think we'll talk about the policy, and I just caught myself also thinking about asking the follow-up questions. But numbers-wise, I think it's $25 million cost is an assumed number from finance. Is that correct?
Anita Lee with the Department of Finance. Yeah, our estimates are between $20 to $25 million.
Okay. So you're getting an additional COLA. The COLA required is now $2.87. You're getting 1.44 additional percent, which totals about $146 million. And so 146, 25 of that will be obviously pertaining to the paid family leave, roughly, leaving you with an additional about 120 there. What is the thinking behind this additional COLA and utilizing it for any of these needs that still exist, whether it's growth, the cap?
And then there was a third item you mentioned that I did not notate that you're also seeking additional support for. What was the third item?
Yeah, it's removing the 10% cap as well as the greater of the three-year average. Three-year average. Okay, thank you.
And we would just note on the greater of the three-year or current year, if you were to start that in the budget year instead of the current year, the cost would be around $38 million instead of, you know, $90-plus million. With that, I think from our perspective, you know, flexible resources to our colleges are always a positive because it enables them to, you know, determine how to best allocate those resources. That said when it is provided as a cost of living adjustment that is a negotiated issue with their local labor unions in terms of how that is deployed Some districts will use a bucket system where they predetermine how it will be allocated. Others use traditional splits in discussions with their staff. But at the end of the day, you know, it becomes a question of do you increase or increase the per unit cost using a COLA or does it spread to having additional staff? And that would be a local decision if it's flexible. They might be able to do that. They might choose to do something different. But at the end of the day, you know, certainly we're supportive of flexible resources. We're supportive of additional funding for growth. And I think on the growth side, we would just advise the legislature to really focus on what happens when growth is not funded, but shows up on campuses, which is districts begin to right-size their programming in terms of the number of course sections that are offered, which really gets back to what we saw in the Great Recession, which was a restriction of access, right? Students aren't able to get all of the course sections They need to complete timely. Some students may stop out. That's the net net if there's unfunded growth in our system. Districts can't afford to sustain long term. So there's that tradeoff. Maybe someone would use the flexible resources of the 1.44% to sustain, but that would be subject to a local discussion, whereas if it were in growth, the choice at the district level is very clear. It's course sections and staffing to support.
Thank you. I'll turn it over now to Mr. Fung.
Thank you so much, Mr. Chair. Thank you to all our panelists here. To follow up on the Chair's comments and questions around enrollment growth, you might have said this earlier as well, but to the Chancellor's Office, what is that number then that we're looking at in terms of making sure that we continue to incentivize and point of growth? I know the prior meetings you had discussed upon that as well, but just really want to get a much clearer understanding as to what that is. I know that community colleges in my area, around East LA College, Pasadena City College, Rio Hondo, Mount San Antonio College, a lot of them have experienced significant growth, and we hear that across the state as well through the numbers. But I wanted to get the chancellor's office thoughts on what those are.
Yeah, I think overall we are definitely seeing, you know, even compared to where we were in February and March, you know, based just on the latest projections that we have with colleges are beginning to report their enrollment information, you know, starting this month. And so essentially, you know, we had originally asked the legislator and administration to consider funding two and a half percent enrollment growth in the current year. And now we are asking for 3%, so essentially going up by another half percent. And so that would essentially cost about $221.3 million ongoing. And so for context, $89.2 million was provided at the May revise for the 1% enrollment growth. It was funded originally at $87.2 million in governor's budget. That increased $89.2 million based on updated COLA information. And so if you take the difference, essentially, we are asking for about $132.1 million for the 3.5% total.
And thank you for that context. So the $132 million for the 3.5% overall growth would effectively help our community college campuses. I know the vice chancellor mentioned as well, we want to continue to try to expand access versus restrict any types of programming on our campuses. So I really appreciate it. I appreciate the context of the in-room growth numbers and really getting the specific numbers there. So thank you for that context. And then secondly, on the adult learner demonstration project, I know you mentioned 1,100 students are going through the program now. Appreciate the $10 million that's been looked at to support this program. In terms of the scalability, what would the additional $10 million, how many more community colleges can be served with this program?
Yeah, that's a great question. I think we are looking for, I'm trying to find the data point, but essentially looking to see if we can scale it up to about an additional 12,000 students. And so this would, again, as I sort of mentioned, expand the program throughout the state with the goal of ensuring that there's more representation from Central California, Northern California. and we think again it's really consistent with the state's goals to ensure that we are reaching out to that population who may have not considered college in the past, who may have some college but no degree, really ensuring that we're bringing college directly to them.
Absolutely. I know you mentioned it earlier with EDW, I think it was a $5 million program that was funded a couple years ago and to really see the growth of that and IHS support services and everything is so critical And so I think it's a really good value proposition for our state and really providing these opportunities for our adult learners. And thank you for the context that will help provide additional opportunities for 12,000 additional students across the state, especially in Central and Northern California. So definitely throughout the state. Appreciate the context on the enrollment growth numbers and appreciate all the updates there.
Thank you so much, Mr. Chair. Thank you. We'll go on with Dr. Patel.
So I'm hearing loud and clear that there are concerns around funding growth and we want to make sure that we fund growth. My experience at the school board level taught me that there are multiple funding options for our LEAs, right? We have the rolling three-year average, we have the current ADA, or we have our growth opportunity. Has there been any conversation around having something similar for our community colleges through the SCFF? So that there's a hold harmless for those that are declining, but that for those that are experiencing growth, that just gets baked into the formula. Yeah, historically, the colleges have thought about this, and our office has thought about this as well.
But I think the core distinction there is a continuous appropriation versus not.
So the LCFF on the K-12 side is continuously appropriated. So their entitlement program is designed for whatever caseload comes in. That's ultimately what the formula would say would need to be funded and is funded. Ours is subject to the Budget Act, and it has constrained growth levels. So effectively, without a continuous appropriation, it's whatever the state has funded for growth is the maximum level, and that's where it effectively gets capped. There are relatively minor exceptions in that we have some ability to grow back if you decline. You have three years to get back to where you were at. It's called restoration. And then, you know, we do have in our formula a protection that's a little greater than what's in the LCFF and that is that absolute hold harmless level where districts have absolute certainty from one year to the next. Those districts will tell you that it not optimal to be at that hold harmless level because you know prices and challenges fiscally increase every year But the LCFF does not have that same level of protection. Their hold harmless is on a per-unit basis, so it still adjusts with caseload and effectively has no impact at this point. But certainly, we appreciate the caseload, we appreciate the understanding, but from our perspective, it's about serving students, empowering the economy, seeing that economic mobility. The hope being that long-term, the better we can do by our students, the better higher education can do by our students, the more economic vitality we see in California and the more revenues we see as a response. So we'll do the best that we can with the resources that are available, but the funding structure, the entitlement structure is a bit different. And the $52 million is an example of that. Because we're at a fixed budget level, a fixed appropriation level, if there is an increase, it does take an action of the state or the legislature in conjunction with the governor to fund it.
Okay, thank you for that detailed explanation. Appreciate it. That's all I have. Thank you, Dr. Martella. Great, I mean, it's a great question. And as we maybe will table it for our enrollment conversation overall, but this dynamic that's happening with our TK through 12 school districts and with community college districts in terms of where there's growth, where there's decline, and how we respond to those two very specific needs, which are, it's not based on the realities that they're living and that we are facing with our budget decisions. So I think that's, thank you for asking that, because we need to, we probably need to visit that in depth. Okay, any questions? The only question I have is Calbright College remains at the same amount. One of the questions we asked, I asked specifically, was about how many students are you enrolling. They had a very difficult time, if you all recall, answering that very basic question, how many students are being served. Do we now have a number for that?
Yeah, they're currently serving roughly 7,000 students, and the projection that they estimated for next year would be 8,500.
Okay, 8,500 with an appropriations of 30. Is that an FTE calculation or is that a student body?
I believe that's a head count.
Head count. What's the FTE equivalent?
Because of their program structure, that's a difficult question to respond to because they don't have the traditional hour base in the same way that our other programs do.
How many students in the community college system?
There are roughly 2.2 million headcount, over 2.2 million headcount, and that results in roughly 1.1 to 1.2 million FTES. It's about 50% on average.
I'm doing the rough calculation. 2 million headcount with a total community college budget of 1.4 billion.
So in terms of budget, sorry.
So the conversion was $2.2 million headcount to $1.1 million FTES.
We have a generally, our headcount is about 50% of FTES.
Right.
And then you know just in terms of total SCFF resources that flow to the colleges today it about to billion projected
So on average, that would be on a per FTS basis,
you're looking at probably $9,000 to $10,000 across all sources.
Okay. All right. Thank you. Appreciate all of you on this. Obviously, some questions still there. I'd love to hear more as we go forward on the questions that we all share. Let's now move on to issue number three, which is the Student Aid Commission. I'll ask the panel to please come forward, the Department of Finance, who will present the May revision proposal, and specifically on implementing the workforce Pell provisions of H.R. 1, which we have discussed quite at length and the impacts that it's having on all sorts of things in California, and I'm assuming in other states. Then we'll hear from Dr. Daisy Gonzalez from the commission and then Natalie Gonzalez from the legislative analyst office. Let's kick it off with the Department of Finance. Good morning, Chair Alvarez and members.
Jennifer Louie with the Department of Finance. I will be providing an overview of the May revision proposal on California's implementation of the federal workforce program. The May revision provides $664,000 one-time general fund in 2627 to support the California Student Aid Commission for state activities to implement and participate in the federal workforce Pell program, such as determining program eligibility for workforce Pell. Accompanying this appropriation is a $1.3 million one-time general fund in 2627 for the Government Operations Agency Office of Cradle to Career Data System to establish new workforce and earnings data linkages to implement the workforce federal workforce program. The funding for both CSAC and Cradle to Career is contingent upon the Department of Finance's review and approval of an expenditure plan, specifying how they plan to use the funding. This provides them with flexibility to adapt as additional federal and other guidance subsequently become available. They may revision also request statutory changes to support the state's implementation of the federal workforce as part of the workforce program as outlined in HR 1 and this will make Pell Grant funds available to eligible students specifically for short-term workforce training programs. This concludes my presentation. I'm available to answer your questions along with my colleague, Anita Lee. Thank you.
Thank you. Dr. Gonzalez.
Good morning, Chair Alvarez. Good morning, committee members and distinguished staff. Dr. Gonzalez, California Student Aid Commission. We are extremely optimistic about the implementation of workforce Pell because of California students. It represents 10 years of advocacy at the federal level to ensure that students, like the proposal that you just heard about with UDW for adult learners, could actually qualify for financial aid in the state of California. However, it is an extremely complex program. It has not existed before anywhere else. It seeks to serve short-term programs that are 8 to 15 weeks maximum. Our state currently does not have an infrastructure like this. It's also very important that acquiring the data that it would take to implement requires extreme partnerships with local institutions, particularly for those really small programs, and more importantly, for rural communities that may not have that infrastructure as well. So while it is a historic opportunity for California and we need extreme partnerships I also here to tell you that because federal regulations just were released yesterday there a lot of opportunity for growth As currently proposed, the trailer bill language has not really addressed what it would need for the California Student Aid Commission to fully implement. Despite that, we're extremely optimistic because we need to create both the federal audit processes, all of the investigation guardrails, the regulations to help a program and each student go through the entire process and then build the guardrails to ensure that students don't face disruption or any loss of aid. Workforce Pell will operate as a last dollar in program. That means all other aid has to be calculated before you can be eligible for Workforce Pell. So both our institutions and the California Student Aid Commission will have to be extremely vigilant to prevent additional federal audits or appeals and even litigation. I'm also really excited about AB 1543 Irwin. It gives us the runway that we need to be able to address some of the implementation challenges that may come our way. And lastly, while it is an extremely complex program, we're very optimistic about the barriers, the resource deficiencies, and centering our students as a part of this solution for California in the coming days. And so I ask you as a committee to consider how we might get there. And lastly, I'll just close up by saying you're asking the commission to do 11 brand new tasks. An IPA alone for the middle class scholarship took nine months to negotiate across all segments in the state of California. Workforce Pell will need to align to new federal regulations, which requires every institution, regardless of whether it's private or public, to be able to be eligible. and it has to follow federal regulations. And we simply cannot do that with one-time funding. We're excited to be of service. We're excited to build a transparent system, build on the on-ramps, the accountability, the regional equity, and so I thank you for your time today.
Thank you. We'll hear from the LAO next.
Good morning, Chair Alvarez and members. Natalie Gonzalez with the LAO. As mentioned, Workforce Pell Grants are federal grants that will offer financial aid to students in short-term career-focused training programs. This program expands upon the current Pell Grant program, but has some key differences. The most notable difference is that the federal government has made it the responsibility of states to approve if a program is eligible for workforce Pell Grants. As a result, states must establish processes for approving programs based on the federal requirements. The Trailer Bill language sets forth these processes. CSAC, in consultation with other departments, will be the authorized state entity to approve programs. Given the state has not implemented this type of program before, many state entities are involved, and as mentioned, federal rules are now just being finalized. We encourage that the legislature be careful in developing the associated trailer bill language to ensure that the processes set in place are efficient, reasonable, and clear for all the involved parties. We'd be glad to work with legislative and department staff over the next few weeks or months as they finalize this language. Additionally, the administration provides CSAC with $664,000 in one-time funding in 26-27 to implement the Workforce Pell Grant Program, and the administration also provides Cradle to Career with $1.3 million in one-time funding to implement the program. Though some one-time funding will be needed for initial implementation costs, the amounts remain uncertain. Ideally, the legislature would have this information available before it was asked to appropriate associated funding. Finally, We wanted to note that there will be ongoing costs to administer this program. The administration has not provided ongoing funding for those costs, nor has the federal government yet clarified whether federal funding will be forthcoming to states for administering this new federal program. Thank you and happy to take any questions at the appropriate time.
Thank you all. Let's start with the questions that were posed here. for the Department of Finance, and then if CSAC would like to add anything, welcome to do so. What is the latest on the implementation of Workforce Pell, generally speaking? Anita Lee with the Department of Finance.
As I think you heard the LAO and also CSAC reference, we had final rules get issued yesterday, which is a little bit earlier than expected. We had originally been told sort of more towards the end of the summer. It's a pretty hefty kind of rules package, and so I think the administration, as well as others that are involved, are still in the process of reviewing what those final rules will look like and determining to what extent the trailer bill language, for example, will need to be adjusted to account for that. The program itself technically goes into effect in early July at sort of the federal level. And so that's just kind of an overview, and hopefully that addresses your question.
So then your hope is that we implement this through trailer bills so that it could be up and running by July 1st.
So, yeah, so the administration's proposal has two components. There's one-time funding as well as the trailer bill. The unifying theme under both of those is that we're really focused on those key activities that are necessary in the short run to get the program up and running. So we have that ability to sort of move forward. That there is a recognition that there is additional federal guidance. The state has to figure out additional processes, et cetera. And so we're providing one-time funding to basically get things going. I just want to be very clear from the administration's perspective. We do acknowledge that some level of ongoing funding is likely going to be needed. We just don't know what that looks like at this moment. And so we do think that our approach is kind of a prudent approach where we're providing some money. There is budget bill language that provides both CSAC and C2C with a little bit of flexibility. They do have to provide the Department of Finance with a spending plan, so we will know what they plan to do with it. But it gives them a little bit of flexibility so they can adapt as these new guidelines come down.
Okay, and to CSAC, what are you hoping that this one-time $664,000, hearing that there's an acknowledgement that they'll be ongoing, but that this $664,000 will do to get this up and running? What is the plan?
First, let me just say we will not be up and running on July 1. We will not. And that is simply because the regulations just came out yesterday, and the existing data infrastructure does not exist in the state of California. We also need to align any program eligibility to California's short-term workforce needs. And that is already a partnership with institutions, with every single segment, hopefully workforce boards. However, the $664,000 could prepare CSAC to create for example emergency regulations The commission is not a state agency It is a nonpartisan commission created to administer aid in the state of California and it needs Authority for example to do hiring so the 664 would likely be all contractors it's also really important that I acknowledge that emergency regulations take roughly 90 days and that is because when the Commission begins its work it must then go through a robust process a public process we've not been exempted from that. It's a 45-day window just to be able to disclose what those regulations would be. We also know that in partnership with C2C and Segments, we will need to create the external facing and the internal facing web grant changes. So these are IT changes. When a student logs in and they say, I'm enrolled here, and especially because it's a last dollar in program, the institution will need outward facing information and then the student will need to disclose. Right Right now in regulations, every single dollar, for example, last year this body, the legislature, adopted a recalculation amount of $300. So if a student, for example, gets a basic needs scholarship, an emergency grant just to not sleep in the street, we wouldn't need to recalculate their middle class scholarship. But in this case, for Workforce Pell, you would. And that creates a lot of complexities. Our website system will have to take that into account for students and for the institutions as well.
Okay. I'm assuming finance has heard this feedback since you have been talking to stakeholders?
We have heard feedback from the impacted departments. The impacted departments have been having conversations with stakeholders. So that's certainly something that we've considered. We acknowledge that ongoing work is still required, especially, for example, with the release of the roles. The administration's proposal focuses on, in those initial steps, building on the existing data infrastructure that we have and kind of focusing on that, getting it kind of right, kind of lessons learned on that side, and then leaving room for conversations where we need to fill in potentially the details in terms of how to handle other, for example, the private institutions, et cetera. And so I think that is where, as laid out in your agenda and then also as brought up in comments, there is AB 1534, the policy bill that kind of complements. It's there as an option to the extent that we need additional changes, et cetera. So that's kind of how the trailer bill also kind of fits in. But just to make sure we are all with set expectations that are appropriate, you've heard from who we expect to implement this, which is CSAC, that this is not an endeavor that's going to happen on July 1st. And it sounds like with the existing process and the proposed process of public review of regulations and all that, we're talking about months at best, potentially longer.
Yes. So those are some of the uncertainties that we're thinking of.
So when I referenced the program being available in July, it's available at the federal level. It's absolutely fair that at the state level, it may not be available.
Okay. As part of the proposed trailer bill language in terms of hearing the concerns, there is provisions in the proposed trailer bill related to emergency regulations, how long those can stay into effect, et cetera.
And so we are listening and we are hearing and we are incorporating them into the language And we look forward to having continued conversations as we move towards finalizing the budget What are other states doing in this regard to try to be ready to go July 1st We haven't done a comprehensive review of all states. I would say that our understanding is that a number of states are also in a similar situation where they are trying to figure out how exactly to implement the program in their states. I think it looks a little bit different, just as a very key example, California doesn't look like Iowa. There are just some key differences related to that. We are aware of, for example, Iowa having launched their workforce Pell or starting their workforce Pell process this month. We don't have a lot of details, but we're just aware that that has rolled out. We're certainly paying attention to what other states are doing to see if there are lessons learned that we can use in our process.
Do we have feedback on this question?
Yeah, I would just add there are three other states that have taken action. In fact, Georgia, Kansas, and Oregon have already passed legislation to build their systems, and they did that several months ago. There are six other states who are also in the process of their own legislation currently as we speak, and now that the regulations have been published. And a part of their two things that really, that we have noticed that really stand out, especially for the last six who have not adopted any legislation. One, they are requiring a report to their legislature as a part of the first year of implementation because every single state expects some level of challenge as they're implementing. And two, as they are doing this, while a governor in a state has been provided the authority to really micro-target workforce needs to a program. It cannot exclude institutions by institution type. And so that is currently one of the things and challenges for California. However, the six states have been incredibly unique in their solutions. While not excluding institutions, they have publicly in their legislation said, these are the five basic needs for this state, And therefore, we're going to prioritize in our phased in approach these types of workforce areas.
I wanted to just bring up, so what does this actually look like on the ground for a student?
What you're really talking about is energizing the community at the lowest denominator for some of the biggest workforce gaps in California. You're talking about a 15-week course for basic firefighters. That's the entry point. That is a short-term program here in the state of California. and eight-week fundamentals of dental assisting. You also have a 13-week automotive engineer repair. Those are short-term programs in our state. And one more example for you, a 9.5-week certified nurse's assistant course. They're all courses in California, and they're similar phased in approaches that other states have also taken into consideration.
Is any of that included, the reporting mechanisms to the legislature? and don't want to discuss a bill, but 1534, that's just a yes or no.
I think 1534 has a lot of the guardrails that you would need to protect students and to be able to get what you need from institutions.
I would just make a comment before I go on to the next question. I'd love to, at the minimum, be included in communications with stakeholders on this as a chair of an appropriate committee related to this matter. I don know if Mr Fong is included or not as a policy chair but I think it be appropriate that at the minimum the two of us be informed of what happening and get updated So I just make that comment now Is the Cradle to Career are they here Is anyone here from Cradle to Career? If you can come forward, please, because you are a recipient of some funds. I'm trying to understand your role in this endeavor. if you could please provide testimony as to what you see your role in this very important process.
Thank you. Marianne Bates, Executive Director of Cradle to Career Data System. As I shared a couple of weeks ago in the same committee, Cradle to Career brings together and links data from a lot of the state-level data partners who could be involved in this effort as well. So the Student Aid Commission has been one of our partners from the start, as well as the segment-level higher education entities. And as of the spring, all four departments under Labor and Workforce Development Agency, as well as AICCU and the Bureau for Private Post-Secondary Education more recently. So what we can offer is to work collaboratively with CSAC and with the other partners on exploring opportunities to leverage some of the existing legal agreements, data sharing infrastructure, and data linkages that we provide, crucially for some of the verification of employment and earnings for the value-added earnings calculation for Workforce Pell. Now, as has been highlighted, there are a lot of details to still work through on how that can be done and whether the kinds of information that currently flows from these institutions to C2C would need to be updated with additional data elements to enable those calculations. So that's the high level.
What would you fund with your allocation? What types of activities would be funded?
Yeah, so there are a couple of new work streams. And again, we would work with the initial funds, and then there would likely be ongoing requirements for being able to link the state in perpetuity. But high-level, comprehensively connecting the state's official earnings data to that program participation data, preparing data reports by program that would detail whether the program participants met the job placement and value-added earnings requirements of Workforce Pell, applying state-of-the-art privacy protocols that protect student personal information while still ensuring the program is implemented. And as I mentioned, this work may also include updating data submissions we receive from existing data providers if they do not already submit data on their short-term programs that may wish to petition for Workforce Pell eligibility.
Do you already have agreements with each other with CSAC in terms of sharing data and there is a system that's already operating?
That is correct. So we have one common participation agreement that all 16 of the currently data-submitting data partners of C2C have signed. The Student Aid Commission is one of those. The three public education segments are participating in that. All four of the labor and workforce development agencies departments as well. That's an umbrella overarching agreement. And then the specific data elements that are shared each year are defined in file upload specifications that we develop with our data partners. So we've received data from the Student Aid Commission each year already and from the higher education entities. A crucial thing I want to lift up that CSAC mentioned is that the current data that flows to C2C may not include all of the local program level information for the short-term programs that will be necessary. So it would require work collaboratively with our data providers on that.
I'm glad you're raising that because I'm trying to understand what the funding that's being requested by, the administration would actually deliver for us I want to be very clear so that we we have clear expectations you've got a data system at the credits of career which is operating they've got certainly the support system the technology to update data it sounds like once a year this program is going to require regular data exchange on a regular basis and it would seem to me that we'd want to find the technological support systems and that's a little bit more of the next issue so I won't get too much into it but with a student aid Commission who can then deliver that data on a regular basis I'm trying to really understand again what the expectations are and and how these allocations get us to those expectations it just sounds really really really unreasonable that $600,000 will get a system up and running given what other systems have cost in the state including cradle to career over the year so can you help me better put me at ease that this is the right amount at at this moment and that this is not, that the expectations should be,
literally we just get this off the ground, there will be no data sharing, there will be no information sharing, that's gonna be at another time. Yes, so we did, in arriving at these numbers, we did have conversations with both CSAC staff and C2C staff to kind of better understand how they might be using these monies. To the chair's point, it is one of the reasons why the administration's trailer bill language focuses on our existing data structures that currently exist. We want to leverage that. We already know that there are going to be some changes that need to be happening. So, for example, as C2C mentioned, there are some data elements that are missing. One key partner in this is actually the California community colleges. They do have a data sharing agreement with C2C. But we're acknowledging that as we get further federal and other guidance, they're going to have to have conversations about what needs to change, how the information needs to flow, et cetera. And so that's why we're providing some amount of funding to kind of get that work going and then opening the door, leaving the door open for as part of the next budget cycle in terms of what those ongoing needs might look like. So to the chair's point, we're trying to be very deliberative and prudent in terms of what level of funding and how that funding is provided. The administration is also similarly thinking about accountability. I mean, it is one of the reasons why we're asking for a spending plan, one, before we release the funds, so that we have an idea of how the money would be used. As part of the trailer bill language, we built in kind of reporting requirements that are separate from whatever might be included in AB 1534. happy to have a conversation about whether that's sufficient, whether, you know, the legislative members and staff would be interested in more. You know, we're happy to have that conversation. I think the key thing that we just want to highlight is there are a lot of unknowns. Like, so for example, we're actually not quite clear the total number of programs that would be eligible. That's going to be part of the work. Once you kind of figure out the number of programs that are eligible you don even know if all those programs will want to participate right It going to be a choice that they going to make And so I think from the administration perspective we hoping that a lot of as more information comes there are more conversations that take place, we'll have a little bit more information to shape and inform sort of what future funding levels look like down the line.
Okay. Does that have one final? I'm not going to ask you more questions. Just on this issue, just one final item.
For the California Student Aid Commission and to limit liabilities and risk and lawsuits, it doesn't matter whether you're building a system for two programs or a thousand programs, you still have to build the system. So I would just add, this is about protecting California, our institutions from being federally investigated. I know you're all seeing the newspapers and more importantly, for loss of funding for students. The last thing I would just ask and what is in front of you is our advocacy letter. I would just ask for the opportunity to have placeholder language to at least come back with an official plan to actually implement and to leave the door open because we are financial aid experts at the California Student Aid Commission, and what we are seeing is there is immense need in California, particularly as Californians are trying to re-engage and re-enter the workforce. That means that programs like CalGrants C have the opportunity to be modernized. What do I mean by that? That means students who are adult learners who are in short-term programs could leverage both state and federal aid as an on-ramp to continue. Because what we actually want is not just someone to complete an eight-week program in California. We want them to enter the workforce, come back to education, so that they can get living wages in every single zip code in this state.
Thank you. I'll turn it over to Mr. Fong next.
Thank you so much, Mr. Chair, and thank you for the robust questions as well. A number of questions were asked, and I just wanted to follow up on the conversation we're having on implementation to make sure this succeeds. It sounds like there's a lot of unknown stills in terms of programs, the stackable credentials, the curriculum, where the programs opt in. But this question is more for CSAC. Going forward, there's a proposal for $664,000 now, but going forward, for successful implementation of this type of program, and it's very hard to have all the details and numbers now, but going forward with the allocation, what would it take to really make sure that we're running a robust, successful program on workforce power? Yeah, we did submit a BCP,
and so the $664,000 is adequate right now to on-ramp the program. Of course, that is one-time funding. We also requested funding to be able to propose and serve every single program and every single segment of education that actually seeks to participate. As you know, when you're ramping up a program statewide, you need professional development, technical assistance, and that means financial aid offices, our call center, they're all going to start calling, and we also proposed as a part of that to meet that entire workload, a $4.5 million outreach and statewide support portfolio. It was not included in the May revision. We understand why. We understand that as we're on ramping, it may take time,
but we do see that as a really big gap area as institutions and segments and students are reaching out, seeking to participate. It could be a future consideration for the legislature.
And thank you for that context. So in terms of the technical assistance, the rules and regulations that we promulgated, the best practices, just to really scale up this program at the various segments, it's going to take, as you said, a due amount of resources and time. and for CSAC to really develop all these different procedures. And so I think going forward anything that we can do to continue to uplift the work there to make sure that it is a successful robust program to make sure that everyone on the same page across our state in terms of all the different segments I think that would be very critical. So thank you for that context. And in terms of the programs and the stackable credentials, I know there was mentioned dental assistant, auto repair programs, CNA programs. What would be the procedure for these folks, these programs to opt in? I know you mentioned that they would have to opt in.
So currently the way the trailer bill language is laid out is CSAC is going to be certifying eligibility. There are currently, we have been aware that there might be some differences of interpretation in some of the federal requirements. And so from the administration's perspective, we chose to basically put the onus, the burden of justifying that an institution's programs that are seeking eligibility meet all of the federal requirements. And so they can make the case using the data that they have, et cetera, in terms of how they meet the federal requirements. And that's currently what's laid out in our trailer bill language. in CSAC's role in terms of developing eligibility, they would be receiving the information. They would be able to assess what they've gotten. There's an appeals process that is built in. For example, there is a denial or sort of disagreement. And so that's just kind of a high-level envisioning of the flow of information.
And thank you for that context. And how would the labor and workforce agency and some of the short-term career programs that they have there and the partnerships they have with our community colleges, how would that intersect? with the work that's happening here.
Do you, sorry, could I clarify the question in terms of are you asking what role labor workforce and development agency would have in the process?
And the workforce development boards. I know they have a number of short-term career pathway programs as well. And so we don't have to recreate the wheel. We don't have to, right?
Absolutely. I'm going to turn it over to my colleague, Allison Hewitt, who has labor in her portfolio. Thank you.
Allison Hewitt, Department of Finance. So there's a couple of ways that the labor and workforce development agency and the departments under the labor agency are incorporated into the trailer bill language, again, building on that kind of existing state structure, but also conforming, at least with what we understand, was in the proposed regulations in H.R. 1. So first is the California Workforce Development Board has a key consultative role in terms of developing the process, as well as the programs that will be approved. So the California Workforce Development Board has that expertise that they'll be lending as CSAC is looking at eligibility. There's also a process whereby the Employment Development Department will develop a list of these categories of high skill, high wage, and in-demand sectors and occupations. And that will be presented on the same timeline as the state's existing Workforce Investment and Opportunity Act plan. And so both the federal framework and then the trailer bill language in front of you conform in terms of utilizing existing structures that exist for the workforce development, specifically within the two examples that I mentioned.
Appreciate that context. So thank you for uplifting that. And lastly, as the chair mentioned, we'd love to be included along with the chair on any developments going forward. This is a lot of good work ahead on the workforce PEL programs. is very excited about the opportunity ahead. So thank you so much, Mr. Chair. Thank you.
Dr. Patel. I have a basic question as I'm trying to understand the implementation of Workforce Pal Do we have a general idea with the understanding that this is kind of like the last line of financial aid that a student might get in a short certificate program Do we have an idea of how much our students collectively would have the potential to bring in? I'm just trying to compare in my head how much we're potentially going to expend in budget to try to set up and establish this program, and then how much benefit our students will actually receive?
From the administration's perspective, we did ask that question. And I think that the stakeholders who are much smarter than us and have spent more time in this have differing opinions. I think your concern is one that the administration shares in terms of, you know, balancing the benefit that comes that that California can benefit from and students and the amount of money that we put in. And risk. And that is why that is why you see the approach that we take in terms of taking a limited amount of money, what we think is like a prudent amount of money to start that investment. Figure out some of those details, have a better sense of what that could look like and then adapt moving forward. That is a key question that we have not from the administration perspective have not gotten a clear answer on.
So, yeah, it does seem like it's a very complex landscape ahead of us, one with many unknown unknowns, so to speak. And I do have concerns that we're not going to be able to, maybe I'm being a pessimist on this, but I'm worried that we're not going to be able to do everything necessary to make sure that we're implementing this program in a meaningfully successful way with limited liability and risk to this non-state agency, non-profit that's going to have to oversee all of this implementation. So just putting that out there that I want to make sure that if we're going to go in it is adequately resourced and the investment is worthwhile to our students because if we're going to spend all this money and We don't have the capacity wouldn't it be better for us to just budget that directly to our students? Instead of setting up a whole new program. I
I would say from the administration's perspective, you know, these are questions that we have asked ourselves as well. And we do find that those are questions that we will continue to ask as part of the deliberative process. With the final rules being finalized, experiences in other states, that is sort of what we're saying where we're hoping to get better information on. And so there is a little bit of a balance that we're striking in terms of identifying kind of that base level of resource that we think could be appropriate, again, to get the ground, to get the program up and running, to get started. But we also similarly have that thought in terms of we do want to have a better understanding of what the entire program could look like, what those could look like.
And so I think that, I know I'm reiterating. No, I think I hear you. I think we're thinking the thing. Yeah, we're focusing on, okay, let's use our existing structures first. Those are areas where, so for example, C2C knows what that data flow looks like. We already know we have to make changes in those areas. And so that gives us a little bit of a foundation to work off of. And from those lessons learned, it clears the path for further discussions on other areas where it's maybe less established.
and we have to have more work, more conversations. Obviously, from those discussions that can both have budgetary as well as a policy impact but those are things from the administration's perspective we're just thinking those can trail you know you can take it in a phased in approach we can take it in steps in increments and so that from the administration's perspective is our approach for why we presented the one-time funding that you have before you as well as the trailer
bill language yeah thank you for that detailed explanation and with that in mind I do think it's prudent for us to make sure we have a pathway if this does seem to pencil out that we have some kind of guarantee that we're going to be able to deliver on the resources that are necessary to put it forward so is there a set aside for any certain amount to make sure that the Commission has the resources necessary to start rolling this program out so for the budget year
For 26-27, the $664,000 for CSAC and the $1.3 million for C2C has actually been built into their budget. So it is available.
But they have to start on July 1st. No, no, no.
So what we did is basically we've built in the budget. We've built in the money as part of their budget, so it's available to them. They will then provide a spending plan.
Okay.
And that's when we'll disperse the money. And so that ensures that they, one, have the flexibility to adapt to whatever information is coming forward and kind of an acknowledgement that what you've heard today in terms of how the money is potentially going to be spent might need to change and adapt slightly.
But balancing it with accountability, right? We'll get a spending plan so that when we come before the committee and you ask us that question, how was the money used?
We have that information in terms of how this is how the funding was used in the budget year.
And what if the needs are greater than that budgeted amount?
So I think, you know, from the conversations is there is quite a bit of work that still has to go on. It's unclear, actually, if this pot of money will be fully utilized. That's kind of one of the comments that you heard from the Legislative Analyst's Office. But to the extent that additional funds are available, there are other budget tools that we have that potentially could make resources. available and so that is a potential option.
Okay, thank you. Thank you.
Thank you to all the members. Thank you to the panelists. We'll hold this issue open, but very related to this is the next one, Student Aid Operations Funding and Cybersecurity, where the Commission will provide an overview of their operational requests. We will hear from the same three panelists, Finance, Commission, and LAO.
Hello Jennifer Louie with Department of Finance to Alvarez members. I will be providing an overview of the May revision for the California Student Aid Commission overall budget request. The May revision request includes several one-time and ongoing adjustments for student financial aid which includes 4.8 million one-time general fund increase in 2526 and a decrease of 31.5 million ongoing general fund in 2627 for the Cal Grant program the next financial aid adjustment is the 95.5 million one-time general fund total programmatic reduction to trip the 2526 middle-class scholarship program in the 2627 year thus a net decrease of 90.5 million one-time general fund accompanied by a technical correction of a five million one-time general fund increase Additionally the 27 28 appropriation increases by 10 million ongoing general fund the trip the 2627 middle class scholarship board these amounts cover the 35 unmet need level for the total cost of attendance for eligible resident undergraduate students for the 2526 awards and the 17.5% unmet D level for 2627 awards as proposed in governor's budget in addition provisional language is also included in the mayor revision for the middle class scholarship to specify that funding is provided to the California Student Aid Commission in arrears with accompanying appropriation provided in the year succeeding the award year For example and that for the 2627 middle class scholarship awards those awards are supported by an appropriation occurring in 2728 in addition they may revision includes a technical the withdrawal of the governor's put governor's budget proposal for the Golden State teacher program which provides 14.4 million general fund reappropriation that withdrawal is a result of revised projections identifying the 21 22 appropriation as being fully expended they may revision also includes a statutory language to authorize issuance of new Golden State teacher grant awards on any unexpended general fund from the 2025 budget act until June 30 2027 the May revision also continues the Golden State teacher grant with a request of 1.6 million one-time federal title 2 part a reimbursement funds these one-time federal funds support the Golden State teacher grant program for the 2627 academic year with statutory language to request the award amounts remain at $10,000 in addition The May revision also includes 16.2 million ongoing federal individuals with disabilities Education Act reimbursement funds to extend the Golden State Teacher Grant Program on an ongoing basis beginning in the 26-27 academic year. The May revision also requests statutory language to accompany this increase in IDEA federal reimbursement with a target towards students seeking special education teaching credentials with an accompanying statutory language change to increase those award amounts to $20,000. This concludes my presentation, and I am available to answer any questions.
Thank you. Thank you. We'll hear from the Sudanese Commission next.
Thank you, Chair Alvarez. We're extremely grateful for the administration's proposal on the middle-class scholarship, as well as the Golden State Teacher Grant Program, which are both a part of the governor's proposals. With respect to the Golden State Teacher Grant Program, we're excited to see a special focus on special education. This is a program that has trained 28,000 teachers statewide. 91% of those teachers seek to stay at that priority school. So in terms of an outcome for California, this is a program that is not just a grant, but is actually changing California's schools by bringing in diverse teachers. As it relates to our operational budget, I'll just add we did request an IT redundancy server. The California Student Aid Commission receives 1.2 million applications every single year. That means in total we roughly have 2.2 million data sets. Those are just students, not even their parents and their contributors who are also a part of our data sets. We receive data from the California Department of Education, Military Department, Department of Social Services, CalKids, all of our higher ed and K through 12 institutions utilize our system. And as a part of this, we requested a redundancy server. We are a small commission with only one server I know you all have cell phones and many of you have their your own backup servers to protect your photos The California Student Aid Commission has one server We did discover this as a part of an analysis that we voluntarily received from the California Department of Technology We received 33 recommendations. We have moved forward with 15 of the recommendations. One of those recommendations is the server. We also were then proactive and we were grateful to the California Department of Technology who gave us $91,098 in February to be able to move a server into cloud-based. That is more economical than a brick-and-mortar server, which would be roughly over $800,000. We did resubmit a BCP for consideration, but I just want to share what this would mean for California. If CSAC had a compromised server for the state of California, we would not be able to administer aid. That means our entire web grant system would go down weeks, if not months, of any data coming in or coming out. We would then have to quickly buy a server, reconfigure it, get it up and running, use last month's data from CDT, upload it to be able to restart financial aid in the state of California. This would, of course, disproportionately impact low-income students who rely on financial aid to meet their basic needs, which creates equity issues for our state. Lastly, I'll just add, we have looked internally. We have done everything that we can proactively, but it is the state's experts who are saying that we need this. We agree. We're trying to do something about it. As a part of this, I can confidently tell you we do not have the technical expertise to take this to a cloud-based server. I just want to leave you with this example. Several months ago, we had a sewage problem in our agency, and I want to invite all of you to come and tour the California Student Aid Commission in the fall. The sewage system backed up into the kitchen. The kitchen then started to spill out water. And the only thing protecting our single server between that kitchen and the water were towels. And my staff up until 10 p.m. at nighttime changing the towels, making sure that the water didn't get into our server room. And those are the stories from my IT team. I can tell you that I am more than happy to do what I can with the resources given. but I do not have the resources to configure a new server, get it up and running, maintain it. But we do have the $91,098 from CDT, and we are hopeful that we can move forward in current year. But this is not a one-time cost. This is an ongoing cost to protect California's students, families, and their data.
Thank you. We'll hear from the LAO next.
Thank you. Natalie Gonzalez with the LAO. We reviewed CSAC's May revision proposals and have some issues for consideration that we'd like to share. As noted in the agenda, there's a proposal to provide $16.2 million in ongoing funding for Golden State Teacher Grant Awards for special education teacher candidates who commit to working in a priority school. The identified fund source is Federal Individuals with Disabilities Education Act funds, or IDEA funds. We wanted to note that existing IDEA funded programs are being shifted into prop 98 to make room for this additional spending Also though this program is more targeted than the current program if the legislature adopts the proposal It could further narrow the definition of priority schools to those with the highest share of low-income students and English learners The current definition applies to schools that enroll over two of the total student population The proposal also increases the award amount from to and the service requirement from two to four years This has some trade-offs. On the one hand, the higher award amount will help grant recipients cover a larger share of their college costs, and the longer service requirement will help keep special education teachers in these high-priority schools for additional years. On the other hand, with a larger grant amount, fewer students are served, and there's also no clear indicator that a larger award amount is needed to attract more students. Additionally, the proposal includes no funding for ongoing administrative costs that CSAC will incur. Finally, if the legislature rejects this proposal, it would free up funding for any Prop 98 priority. The May revision also includes 1.6 million in one-time funding in 26-27 to extend the current Golden State Teacher Grant program for an additional year. Though the identified fund source is federal two part A funds, funding is fungible with Prop 98 general fund because the May revision funds one program with both sources. Consistent with prior recommendations, we recommend rejecting additional funding for the existing program, particularly because it is not as targeted. If the legislature rejects this proposal, it would also free up funding for any Prop 98 priority. Lastly, we wanted to share that the May revision includes additional budget bill language relating to funding the middle class scholarship program one year in arrears. If the state does continue to fund this program in this way, we think that the language is reasonable. We do recommend, however, not funding the program one year and arrears and instead returning to paying for middle class scholarship awards in the year in which costs are generated. This avoids creating an out-year debt obligation to the state. Thank you.
All right, thank you. Let me try to start with the issue of this important cybersecurity issue. So the Department of Technology did an assessment, and this request is based on their recommendation for cybersecurity?
That is correct. Okay.
And it's a $92,000 initial with an ongoing cost. Is there an estimate for the ongoing cost, annual ongoing cost?
Yeah. The server has been estimated at $92,000 ongoing. We are also requesting the technical expertise to actually do this. It's called an ITS-2 in state service. Just one position, one position that can maintain and configure this server. It's our understanding that there are only three other agencies in the state that have a cloud-based server as a part of this assessment. We only have four personnel at this time, and none of them know how to do this.
Okay. Okay. All right. To finance the support system from technology, according to our agenda, ends in September. So what is the expectation for these security needs post-September?
So the administration when the May revision budget change proposal request came in from the Student Aid Commission the request was for a budget year plus one for the 27-28 fiscal year. And so we acknowledged the Department of Technology appropriation for $92,000 and reviewed their interagency agreement which indicated that the $92,000 was available for the budget year in 26 and 26. And so we encourage the California Student Aid Commission to resubmit the budget change proposal for the fiscal year of 27-28 and onward to continue supporting the cloud server.
And what about the actual technological expertise for the specialist?
So as for the specialists, the administration also is aware of a vacancy, substantial vacancy issue currently at the Student Aid Commission. And so we provided a position authority associated with that position so that they may use their current vacancy savings to support that position authority. And so as such, they could use their current savings as a result. toward supporting for that specialist.
Okay, and there are, I understand, four individuals who do IT specialty work?
Yes, they run our entire system.
And you have one vacancy at the moment?
No, we run seven to eight different vacancies to be able to balance our books on a regular year. I arrived a year and a half ago. It will almost be two years at the end of July. And I did an analysis of every single unit, every single division. It's also the reason why I brought in the California Department of Technology, really grateful to the administration and the legislature who last year right-sized the agency, meaning, as you saw from examples even from today, the commission for years prior to my arrival has gotten workload and no staffing capacity or a way to sustain the workload ongoing. So right-sizing the organization last year was really critical to really understand what is it that the commission is being asked to do. So right now, we are operating on seven to eight positions just to balance our books. All of the funding reverts back to the state legislature. Right now, we are estimated that $100,000 will revert back to the state as a part of this year's spending. Yeah.
And I assume to the previous issue, you probably want to have some sort of system, backup system with this information on implementation of HR1 and workforce.
That's correct.
So clearly, some need there exists. So I want to further discuss that. Let me now ask about the Golden State Teacher Grant Program. And there's like, please be patient here because there's a lot of things moving. And so I'm trying to keep track. And I understand that, as was mentioned right now, primarily the conversation is around the special education educator pipeline, which is critically important and certainly needs exist. But my understanding is that there's also other federal funding that will support teacher-educator pipeline issues through Golden State Teacher Grants. Can the LAO clarify that for me?
Yes. So there are two separate proposals. The first is, as you mentioned, the $16.2 million ongoing IDA funding, which would just be for special education teacher candidates Those would be $20,000 awards with a four-year service requirement, and that is an ongoing program. The second proposal is $1.6 million one-time funding in 2627, and those are federal Title II Part A funds, and that would extend the current Golden State Teacher Grant program, which is set to end in 2526 for one additional year using these federal funds. Okay, I see now.
And so remind me of what the program funds now in terms of high need schools and and high teacher shortage areas by subject What are the requirements on the program So right now the Golden State Teacher Grant Program it focuses on teachers in high schools
but there is no specific subject area targeting. And then their $10,000 awards with a two-year service requirement is the current awards that are being issued. And that would continue that?
For an additional year, yes.
For those in that program, but for those in the special ed program, it would be four years, $20,000. Correct. And that would be an ongoing program.
Okay. And we did discuss a little bit in terms of areas of need, schools of need, but also subject matters of need, which sometimes gets left out of the conversation, such as bilingual educators and science and math, which are not required in the current program. Is that correct?
Correct.
Okay. Can I ask finance about that conversation, which we did have previously, about focusing this in on those high need areas, high need subject areas, I should say.
Let me defer to my K-12 colleague, Liz Mai.
Hi there, Liz Mai with the Department of Finance. So I know that we have had this conversation many times before. I think the administration still sees that there are shortage areas in a number of places, just kind of depending on region. So we want to still keep it open-ended while still, you know, prioritizing like priority schools that do have the most acute teacher shortages.
Okay. Well, sounds like our conversation last time didn't get any feedback in that direction. Dr. Patel, you're next.
Thank you for your presentations. I have a couple questions regarding specifically that server that somehow captivated me because I find that very shocking. We have very sensitive student data and financial data in those servers. In the plan that the IT department came and spoke to you about, was there any conversation around server redundancy to protect against cybersecurity threats?
Yes, and that is exactly what the recommendation is. we need a secondary redundancy server. The proposal went from an 800,000 brick and mortar on site. Then Department of Finance worked with this commission, and they said there has to be a more economical version. The cloud-based was then recommended. Okay, so the cloud-based version of that recommendation is to protect that with a redundant server to protect against cybersecurity threats.
Thank you. And then I'm looking at the agenda with the LAO's assessment in it. I specifically want to look at public interest attorney loan repayment program, and there is a decrease in that program. That's page 11 of our agenda. And I'm just trying to square that with the likely increasing need in financial aid for these kinds of professional degree pursuits for our Californians. as we know that the one big beautiful bill federal policy now caps higher education borrowing. So at this time, it would seem that we shouldn't be decreasing any
loan opportunities for professional degrees Law Hi Jennifer Louie with Department of Finance This is actually an adjustment from the governor budget and so it it reflecting actual participation Okay so if if for the next governor budget development if it increases then we increase accordingly So we treat it like a standard student financial aid adjustments between governor budget and me
Excellent. Thank you. Thank you for that clarification. Appreciate it. That's all I have.
Mr. Fong.
Thank you so much, Mr. Chair, and thank you so much to all the panelists. I just wanted to ask CSAC, just want to follow up on the line of questions earlier in terms of density server and then the cloud base, but also how we can continue to uplift and support the work and efforts of the Student Aid Commission. You're doing tremendous work there in terms of obviously providing opportunities for hundreds of thousands of students in California, if not millions. and for the server and for the IT team, it sounds like you said you have seven to eight vacancies. Is that correct? And so the seven to eight vacancies, if the positions have to be filled, what additional capacity would that bring for your organization? Sorry, I know it's not giving the agenda here, but I didn't get the context of your statement earlier. Got it.
I heard two main questions. The first one is what can we do to better support California students, particularly those that need financial aid? Very happy to share that the class of 2026 just broke a brand new record. They have now set the record for the highest number of students who have applied for financial aid. That means 68% of the class of 2026 of the high school class has applied for financial aid. We, of course, have until June 30th. That, of course, means more grants, more awards, and all of those are really good news. Hopefully, they end up in enrollment and, of course, very soon, graduation for higher education. How can we better support students? Of course, I am not here to talk to you about Cal Grant reform, but I'm sure that many today will bring up Cal Grant reform. I also know that I put out there an invitation. Please, please do consider coming to tour the California Student Aid Commission so that you can see what it looks like on the ground. I have 153 positions that are authorized. They are incredibly hardworking public servants, and they really believe in the mission. The other thing that you can do is we have until June 30th, as I mentioned, and so even a video from you to your own constituents and their families letting them know that California has options for them. There's the FAFSA and the California Dream Act application. If you're a mixed status family, California has a solution for you, and it's called the California Dream Act application. In terms of the vacancies, Assemblymember Fong, we carry those vacancies, and our accuracy has gotten a lot better. But there, for example, the Student Aid Commission right now has one and a half attorneys. We have one of those vacancies has been reclassified with CalHR. We go through a substantial process. We went out three times to fill the position. It got denied. We then were able to reclassify it. As of two months ago, we finally were approved to fill one of those positions as the highest attorneys for the state of California. It's called the CEA. That CEA will hopefully open up next month, which is in June, and it will allow us to have two and a half attorneys at the state agency. That time lag and the lag in terms of that specific position, Assemblymember Fong, is CalHR requires a 30-day window. You must publicly notice that you are headed in this way when you're reclassifying a position. But even then, I expect that we will carry the seven vacancies
to be able to balance our books.
Please thank you for the context Just to follow up on background Jennifer with Department of Finance again So the administration continues to monitor the Student Aid Commission vacancy rate And so, for example, as part of the review for all BCP proposals, which is standard for all BCP requests from state agencies, the Student Aid Commission is currently running at a vacancy rate of 22%. And so we are deeply concerned by that vacancy rate that's continuing in the fiscal year of 2026. So that was part of our consideration for the BCP review. We continue to partner with the Student Aid Commission to ensure that their state operations and local assistant programming remains operational. But that is a consideration for the point in time and part of the May revision review.
Appreciate the context as well.
So thank you for the updates there. And you mentioned Cal Grant reform earlier in your comments, and we know that members champions up here that continue to push and advocate for the implementation of Cal Grant reform. So this conversation we're going to continue to have going forward. Thank you, Mr. Chair. Thank you. Without risking getting into the weeds, vacancy factors, though, are for the different departments, they are expected in order to achieve savings. Is that correct? From finance perspective? Can you repeat the question? Finance expects there to be a vacancy factor that is maintained by departments to achieve savings. There generally is vacancy savings as a result of, for example, retirements in any given state agency. So we do take into account for it, especially during a governor's budget development during the fall review for the Schedule 7-8 for salaries and wages. However, if there is a systemic issue of a high vacancy rate, that is also a consideration for every PCP that is submitted during governor's budget in May revision. And so when it occurs systemically, that is a pause for consideration, because if a department cannot fulfill their current positions, then appropriating for additional positions in a year where there is a structural general fund challenges, then that is a consideration that the administration needs to. So you maintain a vacancy factor of the commission of seven positions? Yeah, and I can provide that information. Isn't that done as a budgetary tool to create savings for your department? It is, so that we can stay solvent, and that is something that the commission has carried over. So you can stay within your approved budget? Yes, correct. So while it's not a policy, it's clearly what happens if you overspend on your budget? We would be back here in a hearing saying that we ran out of money. Happy to provide additional context on those positions that we are holding open. I don't know our vacancy rate, but the last time that I checked, it was not that high. And so I'm happy to also provide information on what positions have been posted. Where are they in the process? Obviously we'll hold the issue open, but if you could, and maybe one of those vacancies that has remained open should be, should be reclassified as what you need. And if you could get that information to us, that'd be helpful. Okay. Thank you. Oh, let me ask one further question on the HBCU savings. What is the total allocation to that transfer grant program currently? There's a 200,000 ongoing savings, which reflects, I assume, the numbers of students transferring here. The adjustment for May revision is similar to the adjustments for the public interest attorney program, so it's based on actuals, and so we will just adjust accordingly at governor's budget. So it's a decrease of $200,000 ongoing, right? Is that not? It would be, yes, but then if it increases, we would increase it back up at governor's budget. My question is, what is the budgeted amount? Total. May we follow up with your staff with the exact number? Thank you. All right. Thank you very much to this panel. Again, we'll hold this open. Just a programming note so that everybody, I think we will be able to get through all of the items that were noticed as part one. We'll get into the lunch hour just a bit. So if you are here for part two, just know we will not get to you until 1 p.m. So thank you for your patience, but we will get to you. It will be at 1 p.m. when we reconvene, and I think we'll be able to hear all those items today, which means likely we will not be having you tomorrow. And then for public comment, we will take public comment for all of the Part 1 as agendas, which is issues 1 through 6 before we break here at lunch. So you're obviously welcome to stay. And then if you're here for public comment for the other parts, it will happen after that item. So I'll ask the next panel to please come forward as we move on with this. With the University of California presentation on the in-state enrollment buyout and enrollment targets, we'll have the Department of Finance present the May revision proposal. We'll have the University of California and the Legislative Analyst Office. We'll start with finance first. Hello again Jennifer with Department of Finance. I will be providing an overview of the May revision proposals for the University of California as it relates to the requested provisional language. The May revision maintains the 2025 Budget Act with no changes to the 2026 Governor's Budget to the $31 million one-time general fund deferral associated with backfill support for the replacement of non-resident full-time equivalent students. The May revision also maintains the $153 million ongoing increase in general fund for the replacement of non-resident FTE students approved in the 2022 Budget Act. Provisional language for both appropriations was inadvertently removed due to a drafting error at Governor's budget. They may revision seeks to restore the historical provisional language which specifies the purpose and multi-year nature consistent with the 2022 and the 2025 budget acts respectively Also included is language to reflect legislative intent that the UC shall meet its target of reducing non-resident FTE students in 26 to 27 which was a part of the 2025 budget act the proposed amended language shall also authorize the director of the Department of Finance to reduce the University of California's appropriation for specified purposes in the provision, also consistent with since its inception of this appropriation of the 2022 Budget Act. This concludes my presentation. I'm available for any questions. Thank you. Thank you. We'll turn over to the UC. Thank you, Chair Alvarez and members of the committee. I'm Sayover Tannen for the University of California. The university is grateful to Governor Newsom for his sustained support of the University of California over the years Even in challenging fiscal years the governor and the legislature have recognized the value of higher education and have invested in the university The May revision proposes the same level of ongoing support as the University received in the January budget introduction The proposed 7 based budget increase covers most of the compact funding The May revision includes budget bill language specifying that UC campuses grow by 2,968 FTE California undergraduates in 2026-27. We welcome this language as it increases clarity on expectations related to undergraduate enrollment and the university fully expects to meet this enrollment goal. Due to our growing enrollment and core funds expenditure growth, the university continues to request the legislature approve the full compact funding. I want to thank Assemblymembers Fong, Patel and Hadwick for supporting the compact and elevating higher education funding needs to their legislative colleagues in the current year the University took many steps to contain costs campuses are implementing aggressive cost containment measures including a hiring freeze a permanent elimination of positions administrative cuts operational consolidation reduced travel and operating expenses expenses and efficiencies if the compact funding is not received these cost containment measures must go even further including academic impacts such as fewer course offerings, larger class sizes, reduced discussion sections and teaching support and ultimately slower time to degree and constraints on faculty hiring and retention. In addition student support services would be reduced including advising, tutoring, financial aid services, library support and other student facing programs. The Legislative Analyst Office report on UC non-resident supplemental tuition mentioned in your agenda was released on May 12th, which was just a week ago. We are still examining the report and considering its recommendations, and we look forward to a conversation with Chair Alvarez when our leadership has had the opportunity to fully consider the report. The university remains concerned about federal actions that could cut research funding, healthcare funding impacting our academic health centers, and student services and financial aid. This volatility makes it difficult for the university to cover unexpected expenses should enrollment and revenue collection turn out differently from assumptions. Thank you for your time today and I'm available to answer questions. Thank you very much. We'll turn to the LAO. Good morning Florence Bouvet with the LAO. Issue 5 covers three May revision proposals along with the report that as you see just mentioned we released on on the non-resident tuition rates. So the first proposal is the language allowing finance to reduce UC funding to the extent it's missing its non-resident reduction targets. We continue to recommend the legislature hold non-resident enrollment levels flat at the three affected campuses, in which case this language would not be needed. If the legislature adopt the non-resident reduction plan, then there are a few issues to consider regarding the proposed language. On one hand, the proposed language is intended to strengthen accountability and transparency. On the other hand, the budget included similar language last year when UC missed the target and finance is not proposing to enforce any funding reduction, including an accountability provision but not enforcing it sets poor precedent. We also note that because UC missed its target in 25-26, it would need to reduce non-resident enrollment by over 1,400 students in 26-27 rather than the originally planned 902 students in order to meet the overall five target reduction of forty four thousand five hundred and 4 students And achieving this larger reduction may prove difficult given that the 26-27 admissions cycle is already well underway. The second proposal is adding in language to make the one-time back payment in 27-28 for the non-resident reduction plan. We recommend rejecting this proposal. And our recommendation is based on few considerations. First, the proposed 27-28 back payment reflects the administration expectations that UC would reduce non-resident enrollment at the three high demand campuses in 25-26. As we already alluded to, UC did not meet that expectation and instead of reducing non-resident enrollment by 902 full-time equivalent students in 25-26, UC reports that non-resident enrollment actually increased by 14 students. Therefore, we recommend not compensating UC for an enrollment reduction target it did not achieve. The third proposal is the language specifying the resident undergraduate enrollment target for 26-27, and we recommend approving this language. This language was inadvertently omitted from the governor's budget and the May revision proposal corrects that omission. The language ensures that there is clear resident enrollment target for UC in the budget. And finally, in addition to these three proposals, today's agenda covers the brief on non-residentrition rates at UC that we prepared in response to a recent request from this committee. In this report, we make two main recommendations. First, that UC pilot to higher non-resident rates at the three highest demand campuses, and that UC collect and report data on the impacts that those higher non-resident rates at the three campuses might have, especially on the composition of the undergraduate non-resident student body. I'm happy to answer any questions the committee may have about this report. Thank you. Thank you. Thank you to all three of you. Let me first ask on the, in the agenda, page 15, the LAO report graph here on the number of percentage of students at the three campuses that are highest demand. I thought we were supposed to get these campuses to 18%. Was that not the expectation with the non-resident tuition program? That was the expectation with the non-resident replacement program for the end of 26-27. The percentages in your agenda reflect the 24-25 fiscal year, I believe, which was the last funded year. You're now debating the funding for the next two years. Are you expecting 26-27 to be at 18% at each one of the three campuses? I think it's a little too early to say that, but it would be a stretch. highly unlikely perhaps is okay you're making admissions decisions now or have made up most of them we have already made admissions and based on that it's it's unlikely that that will be the case and which means it's also is it also unlikely that you'll hit the the 902 full-time equivalent non-residents student numbers where is that going to land this year? For the current year it looks like when we're accounting for the over replacement from the prior years will be at over 300 students replaced but that only looks at the fall head count that doesn That doesn look at the actual graduation rates force and other patterns that could impact the FTE number So it could be higher. I guess maybe a simpler question would be, the LAO mentioned how the numbers weren't met last year. Are the 4,500 and 10 non-resident undergraduate full-time equivalent students going to be, is that number going to be met? That remains to be seen. Campuses have made admissions decisions with the intent to continue reduction of non-residents. However, because it looks like the target may not be met for 25-26, it's unlikely that we'll get all the way there. Okay. Oh, the language on the – thank you for the language on the full-time equivalent undergraduate expected enrollment growth. I don't know how that was worked out, but I know that was something the LAO had raised in our higher ed hearings for each of the segments. And do you believe you see that the growth will, I think you said in your comments you will reach that growth number? Yes, we believe we will reach the growth number as identified in the Department of Finance budget bill language, and we may even exceed it by about 2,000 students. Okay. And this language is consistent with, to the LAO, in your comments related to growth, or funding, I should say, for UC and CSU. Is this language consistent with previous practice on identifying growth numbers? Yes, those numbers reflect what the legislature believed last year was, you know, enrollment that could be sustained with, you know, with the current budget situation. So that's why we recommended that the targets that was set last year for 26-27 be maintained in the current budget. What are the targets for 26-27 from last year that you're referring to? Oh, so the last year budget that already had the 2,968 FTE target for 26-27. Okay. And it was just omitted in the governor's proposal. So it's just consistent with what was planned last year. I'm interested in, it'll be hard to have this conversation because the UC has not seen, but this is, so I'll just mention it. We'll talk about it some more probably offline. the pilot program that the LAO has recommended that we propose on the issue of non-resident state tuition, especially at, well, specifically at the three campuses, and as a potential pilot program to identify some revenue that would not be general fund revenue to support operations that you see, and with the data and reporting requirements as is recommended in the LAO. So I'll just state that. I'm sure we'll be following up on that conversation. Turn it over to my colleagues. Mr. Fong. Thank you so much, Mr. Chair, and thank you to our panelists. To follow up on the Chair's question on the chart on page 15, I know you said that was for 24, 25, this is the UC system. Okay. To the 18% number that has been referenced, I see UCLA is at 18.9, UC San Diego is at 20.3, and Berkeley is at 19.5. What would be the additional number of in-state students that have to be admitted and accept admittance to have that 18% target? That's been a priority of our legislature for a number of years now, so I wanted to get your thoughts on it. Thank you, Mr. Fong. From the numbers shown in the chart, the reduction would be the 1,800 FTE reduction that was mentioned earlier that the governor has proposed to fund in his budget proposal. The University of California is going to exceed the California undergraduate resident enrollment growth by about 2,000 students. So for 2026-27. So while we didn't complete necessarily a replacement, we have exceeded the undergraduate enrollment growth to the point where if you wanted to admit another 1,800 California undergraduates, we'll meet that just because we ended up admitting so many, but we didn't necessarily manage to decrease our non-residents at the same rate. At the three primary campuses or is it system wide? Most of that growth is at the three primary campuses for the 2000 California residents, not all of it. Okay. Thank you for that context and appreciate that. But anything, we can continue to move the needle on these three campuses, the most impacted campuses. I know I speak for my colleagues up here, but we always hear a number of issues about in-state residents accessing the most in-demand campuses across our state. When we have town hall meetings, when we're out in the community, everywhere. So I just want to continue to uplift that point. And then secondly, in terms of the piloting the non-resident state tuition program, thank you to our chair for his leadership and efforts on this. This is something I'm very keen on as well, and we look forward to future robust conversations around that. Thank you, Mr. Chair. Thank you. Dr. Patel. Yeah, I want to echo concerns around the LAO's proposal, just not echo concerns, but uplift the proposal for the non-resident tuition rate changes for the three most impacted campuses. I'm intrigued by that and have a lot of thoughts on that. One of them is in your proposal, is there some thought or guidance around what happens if the UCs are unable to fill those slots at that higher rate, whether that's for non-resident international students or non-California resident? Is there a mechanism to backfill if circumstances change and they are not able to fill those? So that's why we recommend running a pilot over four years just to see and assess what the overall response of non-resistance would be. Based on prior data that we have access to at the aggregate level, our analysis of the UC enrollment data, as well as prior literature on how price sensitive non-resistance tend to be seems to indicate that our students are not price sensitive so we're not at that point really concerned that at the aggregate level there would be necessarily an issue about filling the slot the main concern that could arise would be who those non students are And that why we would like to recommend UC to collect data on the composition of the non-resident students who end up enrolling, just to make sure that the pilot program does not necessarily discourage, for example, lower income students from enrolling at the UC. But at the aggregate level, if you're concerned, it's about the total number of non-resident students who might decide to enroll at the UC. For now, the data we have looked into seems to indicate that that won't be an issue. Okay, but I do want to put into context that the data that we have currently is based on a different federal borrowing cap landscape than what we're going to be facing going forward. So the price sensitivity for those that don't qualify for financial aid, many of them borrow money to send their kids to college. And there are now caps on how much they can borrow to send their kids to college. On another line of thought for the UC, do you have an assessment on how many of the non-resident students you have that are actually technically resident students, but they have aged out of their parents' H-1B visas and have switched over to J-1 and are now considered non-resident? I don't have that information in front of me. My understanding is one of my colleagues visited you and provided some of that information. We never got the information. I'm so sorry. We were just acknowledged that that does exist and there should be a number, but we don't know the number. I will make certain you get that. I'm so sorry you have not already received it. because I think we do need to account for those students a little differently because they are actually residents, and they should be counted as resident students. And I would love to know what that number is and how much that would offset your non-resident numbers. Right. I will get that for you. Thank you. All right. So for those questions and others, we will hold the issue open. Thank you to the panelists on this. We now have issue six, and just for order, again, for program, This is non-presentation items. So I have one question on one item, but not for you guys for the next the next set of items And then if there are any other questions we'll take questions from members And then we will have public comments on all the issues leading up to issue number six And then we will break for lunch after that. So I have one question for the CSU Item 6610 so we can have CSU come forward and LAO. Thank you for staying there Only one question, and it's on the issue of what was missing from the governor's proposal and is still missing, which is the enrollment, full-time student enrollment. Do you know why that information is missing or what we should expect in terms of growth for enrollment for CSU? I'm sorry. So the LAO in our hearings prior with the segments both of you raised the issue of we usually identify the growth that's going to occur with a budget that's being allocated. That was not done in the January proposal. UC now has identified almost 3 FTES as their enrollment increase year over year And so I just curious on where we are with CSU expectations And again probably numbers are still being finalized So where will we be falling ballpark? Yeah, I think the board's plan, assuming the governor's budget funding level or thereabouts, would be to grow by the kind of 1%, 3,500 FTE in 26-27. that would be paired with the reallocation that's going on among some of the campuses as well. So 3,500 is the number of that. Okay, that's all I have. Thank you. Appreciate that. Are there any questions for any of the other items on this issue for colleagues? Okay. Thank you. Thank you all. We will now take public comment. We would ask that you come forward, identify yourself, Give you 30 seconds to share your comments on any of the issues we've presented up until now. Again, for those for part two, we will begin at one o'clock. Hopefully, quickly thereafter, given that it's now 1210 and this line is very long and we're going to break for a restroom break and a quick bite. But we'll be back one right after one to hear part two. And we'll take testimony for that at the end of the hearing there. We'll go ahead and get started. Thank you, Mr. Chair. and members. Brendan Tug, on behalf of Ed Voice, we appreciate the $17.8 million for the Golden State Teacher Grant Program. You know, that program is successfully addressing one of the biggest problems in our high-need schools, which is staffing shortages. And that's why we're urging you to continue funding at $100 million. We understand that if there's general fund constraints making that too difficult, then we would suggest that you look at funding the program with Proposition $98. We actually think you could adjust the program pretty easily to allow for that. And with revenue up in Prop 98 significantly, this program is just too important not to provide the increased funding. Thank you. Michelle Warshaw on behalf of the California Teachers Association, and I'll keep my comments limited to the topics in Part 1. CTA opposes the $3.9 billion underfunding of the Prop 98 minimum guarantee, and we acknowledge and appreciate the assembly budget framework to reject the governor's proposal, and we urge that you fully fund the guarantee. We'd also like to note our support for the 4.31% super COLA and the ongoing funding for the Golden State Teacher Grant. Thank you. Thank you. Good afternoon. Sam saying NextGen California and a member of the Financial Aid Big Table. We ask the legislature to support and build upon the implementation funding for Workforce Pell, proposed when the governors may revise. We support the administration of the program under CSAC and have other recommendations that we'll be sending along to the Budget Committee, including guardrails towards high-quality and affordable programs, and to fully leverage these new federal dollars, aligned CalGrants C to workforce programs. So thank you, and we look forward to continue working on this. Thank you. Good afternoon, Mr. Chairman. and members will upload on behalf of United Domestic Workers. We want to thank the governor for the $9.7 million for the adult demonstration project and as the legislature for their strong support moving forward. Thank you so very much. Thank you. Thank you, Chair and members. Mark McDonald on behalf of a number of local community college districts, including Southwestern San Diego and Los Angeles. Appreciate the COLA, especially in light of the proposed added workload, but would echo the comments of the Chancellor Office that we need to find some growth money somewhere in order to support the more than 50 unfunded students that we currently serving Thank you Thank you Good afternoon. Anna Matthews on behalf of the California Community College Independence Union. We appreciate all the increased investments in the community colleges from the May revise and especially grateful for the paid pregnancy leave provision. But in a year where the SCIF is receiving the super COLA, if old harmless districts don't receive the COLA, it'll become and unfunded mandate, and the status of a college on this gift should not be a barrier for faculty to receive these benefits. We also share concerns about the 38 million ongoing, appropriated for Calbright and believe that it could be better served for different purposes. Thank you. Good afternoon, Mellie Guchuku on behalf of the Association of Independent California Colleges and Universities. We are here to also uplift the Golden State Teacher Grant Program and encourage continued and increase funding for the program. Thank you. Chair and members, Austin Webster with W Strategies on behalf of the Academic Senate for California Community Colleges, the Student Senate for California Community Colleges, the CCC Association for Occupational Education, EOPS and MESA in support of the COLA provided in the May revise. Also wanna align our comments with the Chancellor's Office and one of the previous speakers regarding the need for growth within our system. And then also just highlight some of our trailer bill requests, thank you so much. Thank you. Good afternoon. I am Tara George, representing you at Spire. We ask the legislature to support and build upon the implementation funding for workforce Pell, proposing that governors may revise. Sorry, my voice today. We support the administration of the program under CSAC and support leveraging new federal dollars to align CalGrancy to workforce Pell. Thank you. Thank you. Good afternoon, Chair members. Cadelle-Hampton with the Association of Conference School Administrators. While there are portions of the governor's budget, or governor's may be like, like the increased budget education and discretionary block grant, we remain strongly opposed to the governor's proposal to withhold $3.9 billion in Proposition 98 funds and request that those funds be fully appropriated. Thank you. Thank you. Good morning. On IOC, on behalf of Los Angeles Unified School District in strong opposition to the governor's proposed $3.9 billion withholding and urging the full funding of Proposition 98. Thank you. Thank you. Good afternoon, Chair and members. Jason Henderson on behalf of the Faculty Association for California Community Colleges. FACC appreciates the 4.31% super COLA. Importantly, this administration ties part of this COLA to supporting the proposed requirement to provide 14 weeks of paid pregnancy disability leave for California Community College employees. FACC strongly supports this proposal because it creates a more equitable workplace for women and working families today. Thank you. Thank you. Good afternoon. Sarah Petrowski on behalf of the California Association of School Business Officials in opposition to the governor's proposal to continue withholding now $3.9 billion in Proposition 98. Thank you. Thank you. Good morning, Mr. Chairman and members. Christina DeCaro, representing the California Library Association, commenting on the state library. We're disappointed that the May revision does not include any funding for the California Library Services Act, which is the major loaning and lending program of the state, nor any funding for the English as a second language literacy program run by the public libraries. The California Library Services Act has been running on fumes, and jobs have been cut over the last two years. In the case of the ESL literacy program, state funding will completely run out June 30th. This will collapse the entire program. Asking for your help, we're trying to find some bridge funding for the Library Services Act and would like some one-time funds for the literacy program. Thank you. Good afternoon, Danmo. On behalf of the California School Boards Association, I'd like to align my comments with CTA, AXA, CASBO, and I'm sure others in calling for the full rejection of any withholding. One dollar is still a short change to our students today. Thank you.
Thank you.
Good afternoon, Sadovich. I'm just with children now. Overall, extremely appreciative that education is mostly spared from difficult decisions, minus the continued maneuver of the $3.9 billion, which is deeply problematic. On the discretionary grant, we continue to recommend that it be funded via the LCFF formula so it's targeted to our most vulnerable students. Thank you.
Thank you.
Hi, Deanna Latour-Kean on behalf of Rebuild Local News. We asked the legislature to add $15 million to the budget to support the California Local News Fellowship housed at UC Berkeley School of Journalism. This ask is a part of an ask supported by 23 news or news-adjacent organizations. These reporters are producing roughly 100 stories every week focused on issues Californians care about most, like health care, public safety, immigration, and local accountability. An integral part of the proposal, the Propel Initiative, led by the Robert C. Maynard Institute of Journalism Education, strengthens multilingual and community-centered journalism by helping local outlets improve digital reach, audience, engagement, and local and long-term financial stability. I'm also an author to put support for the Latino Media Collaborative.
Thank you.
Thank you. Hi, Regina Brown-Wilson. Don't worry, you won't have to cut me off. But I'm just in support of the Propel Initiative and are asking and hoping you will support it.
Thank you.
Hi, I'm Julian Doe with American Community Media. We represent more than 300 ethnic medias around the state, and we're here to support the initiative of supporting $35 million, which is a tremendous fund to help us sustain and provide news information to the underserved community in the New Desert area.
Thank you.
Thank you. Hello, Tiffany Mock on behalf of CFD, a union of educators and classified professionals. On behalf of our TK-12 folks and our community college folks, we urge you to reject the $3.9 billion. Additionally, Mark McDonald's clients and also Austin from the Academic Senate concur with these comments that they didn't mention earlier. On behalf of the community college folks, we also oppose no additional funding to the whole harmless districts who will not be subject to the COLA. We want funding for the growth formula. and our private school educators would also like to thank you for the funding of the middle class scholarship. Thank you so much.
Thank you.
Good afternoon. I'm Valerie Johnson with the California Edge Coalition. We appreciate the inclusion of Workforce Pell implementation funding in the governor's budget, but we are concerned that a one-time allocation is not going to be enough for timely implementation, and we urge the legislature to provide some ongoing support. Any trailer bill language related to Workforce Pell implementation should include guardrails like tuition controls, screening for predatory lending, and maximize access for apprenticeship learners. We also encourage the legislature to strengthen both Cal Grant B and Cal Grant C to better meet learners' needs, with Cal Grant B supporting broader college affordability and Cal Grant C aligning with Workforce Pell to modernize financial aid for short-term career-connected and apprenticeship pathways. Thank you very much.
Thank you.
Chair and members, my name is Addison Peterson with the California Alliance of Child and Family Services. We represent over 200 nonprofit community-based organizations serving children, youth, and families across all 58 counties. We stand in strong support of the increase in funding for the short-term Pell Grant for Workforce Training, as well as the Shaffee Grant for Foster Youth.
Thank you.
Thank you. Raquel Morales on behalf of EdTrust West we want to express our support for the Governor May revision proposal to add million to the Golden State Teacher Grant Program and respectfully request the legislature to bring this up to million as close as possible We also support the May revised proposal on the COLA for SCFF. In regards to the Workforce Pell, as the state develops its Workforce Pell approval framework, we recommend the legislature establishes a robust approval process that not only meets the federal requirements, but also includes guardrails to ensure students are enrolling in high quality.
Thank you very much.
Thank you. Good afternoon. Good afternoon, Diana Scamia with the Central American Research Center, Karrison, here to speak on a budget item by Senator Wahab for legal services for K-12. I'm here with the delegation all the way from Los Angeles, and I will be introducing Dania. I'm translating for her as well.
Thank you.
Hola, buenas tardes a todos. Mi nombre es Dania Hernández. Hi, good afternoon. My name is Dania Hernández. Mi hijo cursa el sexto grado y está por pasar al séptimo. Soy un miembro activo de la comunidad escolar. So my son is in sixth grade and he's moving over to seventh grade. I'm an active member in the elementary school system. He conocido otras madres que me han contado cómo fueron estafadas y perdiendo su dinero al contratar abogados privados para gestionar sus trámites de migración. Through my activism, I've learned about many mothers that have gone through private attorneys and have been a case of fraud. ¿Sé lo difícil que ganar dinero siendo inmigrante y me rompe el corazón saber que existen abogados inescrupulosos? I know how hard it is to earn money as an immigrant, and it breaks my heart to know that there's immigrants that are out to get us. Which is why I'm here to support the budget item for $1.5 million investment in legal services. Thank you very much. Gracias. Julie Mitchell, co-legal director at Careson in Los Angeles, and I'm also here in support of the 4.5 million ask for immigration legal services in the TK through 12 system. Since 2019, the state has invested in immigration legal services at the community colleges and CSUs. These programs have been extremely successful, and this budget ask would bring those services to the TK through 12 system earlier before students age out and also getting families to help when and where they need it. I get messages every week from schools that they are needing help for detained parents and children that are unrepresented in their immigration. Thank you very much. Thank you. Good afternoon. I'm Ana Raygozai, staff attorney with Cadesen College Legal Services, servicing student staff and faculty at East Los Angeles College and Rio Hondo College. families in our communities are living in constant fear and uncertainty. The system they must navigate is extremely complex and difficult to access, leaving many vulnerable to exploitation and misinformation, especially the young youth and K-12 system. It is because of this that today I urge you to pass the $4.5 million funding to expand legal services to these vulnerable youth and prevent them from being exploited or miss out on opportunities for relief. Thank you. Hello, my name is Esmeralda Leal. I am a current DACA recipient through my university's Dreamer Center. I found Caresen, who for the past eight years have been advocating and orienting my immigration legal needs and keeping my dreams alive. Thanks to that, I am now a grade school teacher in a Southeast LA low-income community that equally desperately need and deserve affordable legal services My community and my students are hurting due to current ICE rates more than ever before we need legal support now not until they are of age in college or can afford it Schools are a safe heaven that work hard to help community Thank you very much. This is why I fully support.
Thank you.
Hi, my name is Kenny, and I work at the Pasadena City College Dream Resource Center, and I want people to understand that immigration legal services are life-changing and necessary, especially for TK to 12 students and families. By the time I meet many of our students, they're already in the middle of legal processes that started when they were in high school and in many cases they're already working with private immigration attorneys who often charge thousands of dollars, which can be a huge burden for families. We currently have a student who began her immigration case when she was still in high school and later decided to continue her support through the Central American Resource Center. However, her private attorney did not want to transfer her case file over and it delayed access to support and our legal team had to formally request the records in order to move her case forward.
Thank you.
Hi, my name is Gabby. I'm a full-time engineer. I connected with Carese through my university's resource center. At Carese, they were able to help me get my green card and soon I'll be able to apply for my citizenship. Unfortunately, my brother did not qualify for the same immigration relief I did only because he had H out of it. This is why it's wrong if we believe the state needs to continue to invest dollars in immigration and legal services. And those services should start early on in elementary all the way through high school.
Thank you.
Hi, my name is Joseline Espinosa. I was 16. I first got immigration legal service from Cadecen. The lawyer that took my case supported me since the beginning because of then I'm on the pathway to become a citizen. Getting legal service was very encouraged to me. I feel motivated to not give up in school. I turned my F into an A and I'm the first one to graduate with honors in my family. This is why I strongly support the 4.5 million investment in the legal service. I'm in evidence that the legal service at the joint age are large changes. Thank you.
Thank you.
Hi, my name is Joshua. I'm a proud son of immigrants and an organizer at Kydison LA. I've unfortunately been witness to about five raids at our daily labor center, including the infamous Operation Trojan Horse or the Penske truck. Our communities are constantly being targeted by immigration enforcement, which puts them at a higher risk of being detained and at the same time facing food and housing insecurity. That's why we support this budget to ask a $4.5 million for legal services at the K-12 grades because we believe this will help
prevent that and help people have access to legal services before it's too late. Thank you.
Jackie Gonzalez, immigrant defense advocate. Since about 2019, the state has funded legal services at the CSU and California community colleges through a combination of Prop 98 and General Fund dollars. They have not done so at the TK-12 level, though we know that is where so much immigration enforcement is happening in our communities. In these times, investing on the front lines is where we see a change. And so we ask for support for Senator Wahab's proposal. Thank you. Thank you. Hi, Eleni from Immigrant Legal Defense and here in support of Senator Wahab's proposal for funding for legal services in the TK through 12 systems, unified school systems in California. Our organization is the largest provider of immigration legal services under the CSU and community college project, and we see every day how families get to stay together because of that project. So we urge you to make it available to our youngest students and families as well. Thank you. Hello. Thank you. Siobhan from Immigrant Legal Defense. I'm an immigration attorney, and I ask that you support Senator Wahab's proposal to fund legal services at the TK to 12th grade levels. I personally represent the detained parents of TK through 12 age students and even high school students and we immediately see the impact it has in not only the family but the community to provide stability and keep students in school Thank you Good afternoon My name is Laura I with Immigrant Legal Defense and I urge you to support Senator Wahab proposal to fund immigration legal services at the TK through 12 level. In addition to being an immigration attorney, I'm a mom in the Oakland public school system. Our school has been heavily impacted by ICE raids, kidnappings. Parents are coming together to do what they can, what we can to support our community, but more solidified formal services are needed.
Thank you.
Thank you. Hi, my name is Griselda Gonzalez. I'm an immigration attorney and a former undocumented student in K-12. And we know that the heart is the school of the immigrant communities, and it just makes too much sense to, you know, fund these programs.
So thank you.
Thank you. Hi, I'm Tanya with Immigrant Legal Defense. and I'm here to support the proposal for legal services for immigrants TK through 12. As an attorney working in the TAM removal defense, I get to see families already in crisis. And it would be so important and so helpful for the immigrant families, for mixed status families in their communities that we can reach them before families are scrambling to find legal services, as one of their members is already detained.
Thank you.
Thank you. Good afternoon, Mr. Chairman, members. Christopher Sanchez with the Mesa Verde Group, here representing Gavillon Community College in the Central Coast. We appreciate the flexible dollars that we're in the May revise. I would encourage the legislature to find opportunities to fund student transportation, basic needs, enrollment growth, and student housing.
Thank you, Mr. Chair.
Thank you. Afternoon. My name is Martin Bork. I'm with the Ecology Center and representing the Save Market Match Coalition. I want to thank the committee for its support for the California Nutrition Incentive Program. This critical program funds CalFresh benefits being matched at farmers markets across the state. We're here to support the budget proposal by Assemblymember Connolly, Rogers, and Gallagher for $100 million multi-year funding to expand the program to every market that needs it.
Thank you.
Thank you. Afternoon. I'm Josh Osink with Urban Village Farmers Market Association. I'm also here to speak in support of CNIP, the California Nutrition Center Program. I'd like to express my extreme thanks to members of the committee who have shown their support. Gallagher and his leadership adding his signature to Connelly's budget request letter, also to Bennett and his remarks. This program is about 10 years old. It is 10 years old, and in that time, an incredible infrastructure has been built out across the state to serve 40% of farmers' markets. So we're really at risk of losing that investment if we don't.
Thank you.
Thanks. Good afternoon. Andrew Martinez, Community College League of California. We are appreciative of the COLA. We have questions about the paid pregnancy leave and implementation. We are deeply appreciative of the conversation about enrollment growth and student equity achievement as well.
Thank you so much.
Thank you. Good afternoon, Chair and members. Eric Paredes with the California Faculty Association, representing 29,000 members who work in the CSU system. Grateful for the governor's commitment to fund higher education at the levels that he listed in the May revise. Also grateful for your leadership as well. Just, you know, we really want to ensure that we continue to prioritize student instruction and enact accountability measures. So CFA, we urge you to support Assemblymember Mike Fong's proposal to fully fund the compact for 2526 and 2526. 627 and also really just want to urge you to not expedite budget reallocation as well.
Thank you so much. Thank you. Any other members of the public wishing to speak on those items? Okay, seeing none, we will recess. We reconvene in about 30 to 40 minutes right after the 1 o'clock hour. Thank you. . Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Okay. Okay. Good afternoon, everyone. We're back for part two of our May revision budget oversight or hearing, I should say, for subcommittee number three. We were able to complete with part one during the morning, and we had public testimony for that. Thank you for all of those who participated in that. We are now moving on to part two, and once again, we will hear public testimony on part two upon completion of the panel's questions and presentations. So let me ask the issue seven panel to please make their way to the front. I know there will be several folks speaking from the Department of Finance, and then we'll hear from the Legislative Analyst Office. we will hear the proposals in the May revision, the changes from the governor's budget proposal from January, and also trailer bill proposals that have been presented with this budget. This one and the next issue, there may be a little bit of crossover. So just to note, I know we've, in the agenda, that called out for a few items to be more specific in the next item, but we might get into some of those with issue seven, just for noticing purposes. So let's kick it off with the Department of Finance. Good afternoon, Chairs and Members.
Melody Jimenez with the Department of Finance. I will be giving a brief overview of the proposals included in the May revision letter, starting with resources provided for the Department of Education, and then we'll move on to highlighting some of the proposed trailer bill included in the May revision. The May revision provides three positions and 36.7 million in state operations for the Department of Education. This is in addition to six positions and 6.2 million in state operations for the department and governor's budget for a total increase of nine positions and 42.9 million for 2627. With the addition of these positions and funding, a total of approximately 2,700 positions and 556.8 million is proposed for the Department of Education in 2627. Of this amount 407 million and 1 positions are for city headquarters and 148 million and 970 positions are to support the three state special schools and the three diagnostic centers To highlight a few of the May revision state operations proposals, there are 9.9 million general funds to support various purposes, including resources for legal costs related to federal litigation for the Department of Education and State Board of Education, a deferred maintenance augmentation for state special schools, auditing support and rate reform implementation related to California State Preschool Programs, and employee compensation support for federally funded Title I Part A staff. Additionally, there are three positions and $25.4 million in federal funds to support various programs including the Golden State Teacher Grant Program, the Special Office of Administrative Hearing Contract, and Out-of-State and Religious Non-Public Schools Monitoring, among other things. And finally, there are 1.5 million special funds to support technical adjustments related to the Proposition for Climate Bond, Tobacco Use Prevention Education Program, and the Proposition 47 Truancy and Dropout Prevention Program. The May revision also includes various changes to governor's budget, trailable proposals including the following, a California Community Schools Apportionments Program, a California State Preschool Program, curriculum embedded performance tasks for science, oversight of single district counties, screening pupils for risks of reading difficulties, special education funding formula statewide base rate equalization, student support and professional development discretionary block grant, subject matter requirements to establish competency, and universal and targeted assistance. Additionally, the mayor revision includes new proposals for technical cleanup and implementing language for new proposals such as 21st century school leadership academy, Holocaust and Education Grant Program, Literacy Coaches and Reading Specialist Grant Program, Mathematics Professional Learning Program, National Board for Professional Teaching Standards Grant, Inclusive College Programs, Multi-Tiered Systems of Support Framework, Subject Matter Transcript Review Service for Teacher Candidates, a Teacher Supply Report and teacher data sharing, a teacher residency grant program and National Board for Professional Teaching Standards grant program, use of LCFF discretionary and Coca-Cola increase, and other technical and clarifying amendments. Finally, I'd like to note that there are five trailer bill issues that we will be discussing later during issue 8 on the agenda. These are charter school accountability, paid pregnancy disability leave, California Educators Together, support for students experiencing homelessness, and cradle-to-career data system. Happy to answer any questions. I also have my finance colleagues available in the room to answer any questions on specific proposals included in the May revision letter.
Thank you. Okay, we'll hear from the LAO. Good afternoon.
Edgar Cabral with the Legislative Analyst's Office. So I'm going to highlight a few, kind of based on our initial review of the May revision, a few comments that we have on a few proposals. we're continuing to review some of the details in the May revision and if we have any additional comments we will share those with you at a later time and then I'll keep my comments related to the items on the next item on item 8 separate. But in terms of, so I wanted to talk just briefly in terms of LCFF and special education. This came up earlier in the Prop 98 discussion but I think overall we think that you know we think the governor's overall structure for spending 98 for k-12 is a good starting point and we think there are advantages to allocating increases to existing programs like LCFF and special ed these are programs where we can provide a lot of funding immediately and efficiently and it allows districts to address their cost pressures and then it provides flexibility to use those augmentations. The legislature could choose to provide a different mix of increases between the two, but we think starting with those two makes sense. In terms of special education, we estimate right now that local funds cover about 60%, of special education costs and that state and federal categorical programs cover about the other 40 percent. Based on our estimate, then we think that this proposal would reduce that share down by 12 percentage points, so potentially going from about 60 percent of costs covered locally to less than half. So that would be a significant reduction. The legislature could provide a different amount. It could provide a lower amount of funding if it wanted to redirect some funding for other ongoing purposes, and it still likely would be a very substantial reduction in local costs. For LCFF, we would just note that we do think that the $927 million in the May revision, we think that's beyond the statutory COLA. We don't think it's actually sufficient to get to the 4.3% increase. We estimate it would be enough to about a 4.04% increase, and to get to that 4.3% increase would require another $211 million. Then touching on a few others where I just wanted to provide some comments on the community. There's community schools funding $485 million for reappropriating funding that is set aside in the current one-time grant program. We think that there is a rationale. There's a case to be able to provide additional one-time funding to help build capacity to support implementation of the model. And in terms of the specific things that are in the administration's revised, we think there's $34 million that specifically we think makes a lot of sense. $28 million that's for a study of how the program should be designed moving forward. Temporary increases for technical assistance. And then the development of a certification process. We think those are all reasonable uses of one-time funding. And then $6 million for better integration of behavioral health services. The bulk of the funds are being used for one-time funding that goes directly to grantees and for secondary school redesign. We don't see as clear of a rationale for those increases. Effectively, under the community schools program, the first three years are essentially startup. They have no program requirements, and so we don't see a rationale why additional one-time funding would be necessary. In terms of a few others, there's several that I would say is these are programs that the state has funded in the past, and the May revision is proposing to provide additional funding where we don't see a clear justification for those additional appropriations. That applies to the literacy coaches program, the math professional development, and the residency technical assistance center. These are all programs where the state has provided funding in the past. Those programs are in the process of operating, and we don't see a clear justification why additional funding would be necessary. When it comes to the residency, I would point out some of the funding is to increase the scope of what the center would do. So if that is something that the legislature is interested in doing, we think a more targeted increase in funding could make sense. But right now, this would be the proposal is $30 million to extend activities until 2034. But the current funding we're providing is expected to go through 2029. So we don't see any urgency for making those appropriations at this time. And just a couple of other words that I want to highlight. There's $5 million ongoing for a. The reading difficult for the multitudes reading difficulty screener that would be provided to the UCSF Dyssey Center on the condition that that remains available free of charge. We do recommend rejecting this proposal. We think the ongoing costs for maintaining are unclear. And additionally, this is not the only free screener that's available. There are two others. And so why we would be providing funding for one program on an ongoing basis to us is unclear. And then finally, there's $25 million one time for inclusive college programs. That's for maintaining or expanding the existing programs.
We would recommend rejecting this proposal as the proposed trailer bill defers the major decisions to the future. It is contingent on there being a plan that's provided to the Department of Finance, but that doesn't provide the legislature with any opportunity to review or have any input. But if the legislature is interested in providing funding, it could, in language, provide a little bit more specificity in terms of what exactly the goal of these grants would be. So, for example, if the goal is to expand programs, then maybe planning grants, for example, would be an appropriate use of funds. So I will stop there, but I'm happy to answer any questions at the appropriate time. Thank you.
Okay. All right. Thank you both. Let me ask, let me start with, let's follow the questions that are in the agenda just for, and I'm sure I'll have some offshoots from that. The student support discretionary block grant. This sort of was asked earlier, but we have a separate and now similar folks at the table. You have another opportunity to answer the question on the coherence and equity approach of funding the block grant utilizing the LCFF process. Thank you, Al Chope, Department of Finance.
I think I'll probably give the same answer that I did this morning. The intent of the block grant is to address rising costs, and the administration sees that as an issue that's really affecting LEAs statewide. and as such I think we view the the per ADA allocation methodology as the the best way to proportionally allocate those funds. Since that same response earlier we have folks from finance talk about other proposals like high needs schools being the focus of those proposals so clearly there's an acknowledgement of high needs schools versus non high needs schools and in
some of the proposals. Why is this different?
I, you know, again, I think it goes back to, you know, this really is a statewide issue. You know, I can't necessarily speak to, you know, in depth to any of the other proposals. I think maybe, you know, There is also kind of a balance there, but again, I think that we see this, the per ADA methodology as something that can help any LA address those rising costs What is the majority of the rising costs that you would say are similar across and that there isn a difference between schools
where students who have clearly much bigger needs than other students and
other other schools? I don't know how kind of in-depth I could speak to here. I think that's really something that could look different, kind of depending on the school and the unique local situation.
Okay, we're going to have our resident school board member ask this question a different way. Could some of the universal cost increases that we're seeing at all of our LEAs be related to health and welfare increases, increasing identification of students with disabilities and higher needs within those disabilities, perhaps utilities and other fixed costs yeah yeah I mean I don't want to you
know I guess necessarily put you know a sort of any kind of limit or anything on what could be the the cost drivers you know again I think it's why are fully discretionary you know whatever whatever combination of issues are affecting a local school district you know we we want them you know to have the flexibility to be able to use these funds to kind of address those issues. Thank you.
I think the locals, Dr. Pachal knows as well, appreciate the flexibility, but I also know this is now the second year with this proposal, substantial discretionary block grant, and there's, I think, zero, there's no reporting requirements as part of the use of these funds, is there, in this proposal? There's kind of broad expenditure reporting that's due from locals at the end of the... What kind of information would we get from that?
I believe that would basically just give kind of like the categories of sort of what things are being spent on. I do believe that I think the department is still developing like the final kind of reporting tool that they're going to use.
Okay, so I don't believe the current year budget discretionary block grant had any of those requirements. Is that correct?
The one that was enacted as part of the budget last year, it did have those requirements, but it did also require that the department kind of basically come up with what that sort of final report would look like.
Okay, so you're still developing that for the budget year, the current year?
Right, yeah, and I think the idea would basically be that the same report could be used for both.
Let's ask the LAO, on a discretionary fund of this magnitude, are there any thoughts you've given to what type of basic requirement we should be seeking in terms of what the expenditures are being used for to help us inform on future decisions?
Yeah, I think it's difficult with this because it's so fungible with everything else. I mean, to be quite frank, even if you've got a detailed expenditure report, these are so fungible with LCFF.
How would you know that these are costs that would have otherwise been funded there?
So I think there can be value in having a little bit more detail. but I think the kind of how that interacts with other funds, I think can make it challenging to have a strong assessment of what is actually going on with the funds.
Are we at least tracking where, I mean, wouldn it be helpful to track whether these were one expenditures and not ongoing expenditures being funded with this I think that could yeah I think that could be a value I don think there a in our current accounting system a flag for one time versus ongoing
So that would need to be something that districts themselves would sort of determine themselves and they have to find a different way to report that. So I think that's, that's one of the challenges. I think the, the, you could get more information in terms of how it's spread out.
I do think part of why we don't have, I mean, this was just last year, right?
So I think there are reporting requirements, but I don't think we have any preliminary information yet in terms of what's going on because it's still in the middle of the – we still haven't finished the fiscal year.
Will we have finances recommendations on what the reporting requirements should be before this budget is finalized?
I mean, I think we wanted to give discretion to some extent to the department. I also think that, you know, one thing to keep in mind is just some of the, one of the intent, I think, with kind of creating those sort of broader reporting requirements is that, you know, we did hear from the field that, you know, locals, you know, especially maybe smaller LEAs do face some issues when there's kind of, you know, too many reporting requirements or, you know, too many programs are administering. So I think we wanted to kind of strike that balance. I mean, I think we're happy to sort of have that conversation with the legislature. If there's sort of anything specific.
Are either of you at all concerned that these funds get misinterpreted by locals and they get utilized for ongoing expenses for things that maybe should not, should be addressed more near-term rather than long-term, and they're just essentially delaying the unavoidable. Is there any concern on that from finance on that?
I mean, I think we've been trying to consistently message that these are one-time funds. I know even on the department's FAQs page, they kind of tried to make it clear that these are one-time funds. I think ultimately the decisions on how these are made do kind of come down to the local level. I guess basically say there is some need for those decisions, I think, to kind of be responsible and to keep in mind that this is not an ongoing source of funding that can necessarily be relied on year to year.
Are you at all concerned, the LAO, on this?
Yeah, I think it's challenging to say how, because it can play out so differently in different districts. But I think when used well, these can be a way to address and sort of help districts get back on the right track. If you have, for example, let's say much higher insurance costs that you have not been anticipating, funding these initial increases with this one-time funding can give the district more time to then build that into their ongoing budget and make adjustments as necessary. So I think that's where these kinds of augmentations can be valuable. I think, but to your point, I do think there is, it can be challenging when you have a lot of one-time funding and there always is that risk that potentially it's, you know, helping mask structural imbalances that maybe are not being addressed. And once those funds expire, if the district has not taken those necessary actions to be back in balance. There can be I don know necessarily that it worse but that those issues are not addressed in the meantime And so I think that is definitely always a challenge in terms of trying to figure out where the
This is a substantial amount of one-time funding, I think, to your point. And if there were... We've seen just over the last several years with the significant amount of federal funding as that's expired, that we have now districts having to realign their budgets to be able to fund their core program without those federal funds. And so if some of those funds, discretionary funds are used for ongoing purposes, there could be a similar thing if it's not used well. Okay, let's jump to number five, the estimates for the universal and targeted assistance rates lower at May revision. Can someone walk me through how that calculation ended up being what it is.
George Harris with the Department of Finance. The $2.4 million decrease that you see for universal and targeted assistance at the May revision, this was essentially a true up in costs. When you look at the trailer bill language in comparison to the number that was presented at the governor's budget, That number was, as we were finalizing trailer bill language, we were going through different types of different data runs to find that final number of what we were going to land at. And when you compare the governor's budget trailer bill language to and actually run the calculations, that's where we landed at that $129.5 million. So there was this decrease that we see at May revision was a true up to the actual formula that was presented at governor's budget or trailer bill, governor's budget trailer bill, I should say.
Okay. I'm going to park that for a second. Let me ask about the Community Schools Partnership Program augmentation in this revise. When we had this item heard at this committee, the governor's January proposal, there was certainly a lot of question whether the $1 billion was one necessary to reach all the schools we want to reach. But now there's an additional over $400 million beyond the $1 billion to do more community schools. Can you share why this additional amount is being sought for this purpose?
Yes, Chaudh-Neret, Department of Finance. To clarify, the $485 million is reappropriated from extension grants and was included in the initial governor's budget trailer bill language. And the overall purpose of the $485 million is to provide additional support and capacity building for school sites that will be implementing the program.
I thought the $1 billion was going to be utilized to do that for the new schools that will be implementing the program. Am I misunderstanding? Is it not $1 billion plus another $485 million?
Paula finished here with the Department of Finance. So at the governor's budget, we did propose $1 billion for the apportionments program. So that's the funding going out to school sites. But we also reappropriated, we also intended to reappropriate $485 million that was part of the existing community schools program that was intended for the extension grants. So The existing community schools program, if you recall, there was supposed to be an end after seven years. And $485 million was to help schools plan to, was to help plan, create a sustainability plan. And so now that we're continuing the apportionment program ongoing, we decided at Governor's Budget to reappropriate that $485 million and to support in general the implementation of new community schools. and the plan was to come back at the May revision with a plan for how to use those funds.
So I guess the distinction would be there still is a $1 billion that's apportioned to school sites based on school enrollment,
but now we have a plan on how to use these one-time funds that were initially intended for extension grants. And we're happy to go into detail about what the one-time funds could be used for if that's helpful.
Yeah, let's do that now, and then I'm going to go back to the overall goal of the entire program will be, because I think we had questions about that at the previous hearing, whether, you know, it's literally hundreds of new schools and whether that's actually implementable. So let's go over the details of this, as you just stated.
Yes.
So to clarify, would you like me to go into specifically for the $485 million?
So the one-time $485 million appropriate funds will be broken down for the following purposes. So $13 million for the S-TAC to develop and implement the long-term process to ensure that community schools are implemented with fidelity. And the long-term accountability and technical assistance structure. This includes funding for a study to develop the seven-year certification process, formerly referred to as the accreditation process. and funding to pilot and implement this program. Next is 50 million to expand on the state's recent work of middle and high school redesign to better serve the needs of all students and increase student outcomes. And 401 million in addition, an additional one-time resources to support planning, infrastructure, building, and implementation of whole child supports of community schools. And I can provide a breakdown of the 401 million, 401 million.
Let's take this step by step. Thank you. I would appreciate that. For the S-TAC, you said 13 million to develop the accreditation.
Is that what?
Sorry. Are we calling it accreditation or we're calling it certification?
What is the phrase? So, yeah, formally the accreditation process, but going forward, it will be named a certification process.
So $13 million to develop that, to support and to develop the process. That's not just to develop the process.
Yes, and if I may, so of that $13 million, up to $3 million is to conduct a study on the features associated with the community school's progress and success to inform the long-term technical assistance. and what we're now calling a certification because it's certified by school site, not necessarily by LEA. And so given the conversations that happened in the spring and acknowledging that we may not know what the long-term apportionments program, a successful long-term apportionments program might look like, what the technical assistance structure might look like, what the certification process, I guess I should say, should look like. We acknowledge that, or we recognize that perhaps a study would be helpful to provide valuable recommendations which could then be presented to the State Board of Education for adoption And then after the million for the study there million to pilot and implement the school site certification process And so that was also presented to the State Transformational Assistance Center, but they may also select an entity to assist with the development and implementation of the certification process.
So in total, there's $13 million to have the study to develop what this long-term accountability structure should look like in certification process, and $10 million to pilot and implement the certification process. Okay. And then that's $13 million. Then there was $50 million for middle and high school redesign.
Correct.
And how is that broken down into? What would be funded with that?
yeah i'm happy to share uh so 50 million is for um to provide grants to implement models of secondary community school redesign with the purposes online with the secondary school redesign pilot program that was included in the 2025 budget act so um those 50 million is intended to be provided as grants um to support secondary community schools which are defined as schools serving grade six or higher, so typically a middle or high school. And funding shall be used to support relational learning environments, small learning communities, implementation of social, emotional learning, and restorative practices. So everything aligned with the intention of secondary school redesign, but specifically at community schools. So is this for new schools
or existing community schools?
It will be for new schools, I believe.
Okay, and I'm jumping a little bit ahead, but is the $400 million for planning grants? Because we won't get into the details, but what I've learned from the multiple hearings we've had on this is planning is very critical to community schools, And so you can't just go and implement the things you mentioned, which are all great for middle and high school redesign and expect it to work. It's a process that's a very community involved process. So is the middle and high school redesign money going to fund planning process for middle schools or is the planning money going to fund planning for middle and high schools?
Um, so I think with the, the, the 15 million allocation, it's to the California collaborative for educational excellence. So they are the entity that is also implementing the secondary school redesign pilot program. So I think the intention is that CCEE, the California collaborative for educational excellence will expand on their existing pilot program, um, to support community schools. So the planning, I guess, in a sense, comes from them to provide the additional supports and technical assistance. The 401 million that you had mentioned, Chair Alvarez, is to support, is actually going to existing community school grantees as well as new community schools that opt into the program. And the funds are used as additional resources to support community school sites with the planning, infrastructure, building, and implementation of whole child supports. So that includes professional development, strengthening behavioral healthcare supports implementation of the CYBHI leveraging partnerships So the 401 million is more of a broad use of funds that schools can use for general planning purposes
Okay, I'm going to go back to the middle and high school redesign because I might have misheard. I thought I heard 15 million for CCEE and other middle and high school redesign efforts, or is it the full 50 million, 5-0?
It is the full 50 million, And the trailer bill also specifies that up to $3.5 million may be retained by the CCEE to administer the model. And of that $3.5 million for the CCEE, $1.5 million shall be made available to the Marin County Office of Education. They are the administrative agent of the California Collaborative for Educational Excellence.
Okay, just to be clear, I'm actually unclear on what the middle and high school redesign funding would help do for community schools. And maybe I'm just missing something. I was assuming that the middle and high school redesign process came with community school process, but I think you're not saying that that's the case. It may or it may not come with community schools.
So the $50 million is specifically to provide grants to implement models of secondary community school redesign. So it's for secondary school redesign at community school sites. and if it's helpful the initial pilot program was my understanding is that it was just for high schools and my colleague can come up here and correct me if I'm wrong but that this given the conversations that were had in the in one of the previous hearings where Dr. Linda Darling-Hammond presented we recognized that there was importance in helping to support middle schools as well and So that's the reason why this program is included. And I'll defer to my colleague here at the table to provide more information about-
Yeah, that'd be helpful. It is identified as a middle and high school redesign proposal. So I'd like to understand that better.
George Harris of the Department of Finance. As my colleague mentioned, this redesign process is slightly different from the redesign that went through the 2025 Budget Act. The secondary school redesign appropriated last year was $10 million for high schools to work with their local communities to find ways to redesign schooling to better help serve the students in those respective school sites. And it was a pilot because the $10 million could only go to so many school sites. And I think because of how well that momentum is moving forward with that pilot program alongside this additional need to serve middle schools and address the needs of middle schools while also addressing the needs of community schools and seeing that there is so much overlap between what the secondary school redesign proposes and what community schools can propose to help school sites, bridging the two programs together will help plan and propose a strong community schools model at the different newly eligible school sites and LEAs as the community schools program rolls out.
Okay. Thank you. I think I'm starting to understand what the purpose is here. it sounds reflective of the conversation we had here with Dr. Hammond, as was mentioned. And specifically, I know that Ed Trust West presented a memorandum to this committee as a result of that hearing with the importance of ensuring that for secondary schools that are community schools that things like linked learning are incorporated I am assuming that that all being contemplated in what the work that CCEE does and the focus of this. But I will probably look forward to hearing more on that specific from your team and from folks like Dr. Hammond. And I think now I understand where this is headed. Appreciate the planning grants for, what is the makeup of new versus the ongoing for the 400 million in planning grants effort?
So as proposed, the funds shall be allocated to each LEA based on the number of pupils in that LEA that are enrolled in eligible school sites. So depending on how that breakdown is, that will result in the amount of allocation. And I do also want to add that each LEA will receive a minimum allocation of $50,000. So anything on top of that will be based on a per pupil calculation.
And you're saying that is for this planning grants proposal of the budget? or is this for the ongoing support in the $1 billion?
It's part of the 401 million one time, excuse me.
And I think while new community schools could certainly use it as planning, we wanted to make this allocation broad
for existing community schools as well to support these various initiatives that I mentioned prior. So they could be used for planning. They could also be used to implement the CYBHIV schedule or leverage partnerships to facilitate the whole child inventory. So it's just additional one-time grants to support community schools that are currently receiving grants as well as community schools that are new to the program.
And are these only the ones that are in year six or seven at this point, or is it all the schools that are currently community schools? It would be all the schools.
And so they all should expect, whether you're in year one or year seven, we're not in year seven yet, I don't think. We're only at year six this next school year. Anyway, whichever year you're in, everyone will get a $50,000 grant and then some amount based on the year ADA.
Okay. I think I'm starting to understand this proposal. Does the LAO have any comments on those questions or anything I might have missed?
I mean, I think that was kind of in our comments early, why we have some concerns about that, 401,000 or 401 million and the 50 million. The others that we think are very well aligned with the program. We want to study what the program requirements should be. We want to build the system of certification. We want to make sure there's more technical assistance in the first few years when there's a lot of new folks coming on. The 401 million, it's essentially whether you're an existing program that's funded on the one-time program, or you're going to be a new district, you're already going to have this baseline amount that's in the ongoing program that you're going to get every year. And then on top of that, there's this additional grant. But for those who are starting off, you're already in planning. You already have this essentially first three years of funding that you can use for planning purposes. So we don't see why there's an additional one-time funding needed. I think on the secondary school, I think it's just sort of a separate program. It's not tied to community schools. And the program that we just funded last year was so much smaller. This is a large expansion. of something that we're just in the middle of doing. So we didn't see a clear reason for why the state needed to do so at this time.
Okay, I'll turn it over to Dr. Patel. So staying on this path of looking at the community schools model, I do have some questions on those allocations. One of them specifically is on the CYBHI allocation for community schools. Is it that the non-community schools are not having issues with putting their implementation together on reimbursements? Is there something different, special about the way community schools are having to build their processes that's different from a non-community school where they would need extra support compared to a regular non-community school LEA?
Yeah, I don't think we can speak to the non-community schools, but I think since the initial community schools one-time program, it has always been the intention that schools braid and blend different state initiatives, including the implementation of the CYBHIFE schedule. And so that's why you see this come up again in this program is that we really wanna make it intentional that as part of community schools, we really see it as two programs
that should be working hand in hand. Yeah, I totally understand that. but I think from what I have heard from local schools in various districts and communities, they have, regardless of whether they're a community school or not, have had trouble implementing and seeking reimbursement through the fee schedule. Is there a plan to allow learning from the community schools to percolate out to other LEAs? I know that there are several working groups that involve community schools and the CYBHI individuals and groups that work on both. Since the Children Youth Behavioral Health Initiative is under the Department of Health Co-Services, we'd be happy to take back that question to our colleagues
to see if they understand if there's more connection going on between the two. But my understanding is that there are continued conversations and ongoing working groups between the two programs. I would love to see some of the resources
be universalized to all LEAs rather than just to community schools specifically for this program because it is for all schools who have students that are seeking behavioral health intervention. It wasn't intended just for community schools. So that support should be for all LEAs. And then I want to share that happy to see extra support for home-to-school transportation, just to call that out, rising fuel costs. And I know many school districts do have electronic buses, e-bus, EVs, but many of them also are dealing with increasing fuel costs in the moment and trying to actually get to the cost basis of what it takes to do home-to-school transportation. I want to call that out as a positive. Also want to call out as a positive, I know this is kind of a small thing, but it's also
very important, brings back memories from when I was on the school board, an increase of a block grant for the menstrual products of 1.7 million. That program is doing extremely well, and making sure that it is funded is great to see called out here. Going on to the dyslexia screening tool. Thank you We heard from Mr Cabral from the LAO office that there are other screeners out there that are also free. Has there been any comparison of those three screeners in their utilization at various LEAs and which ones seem to be more effective?
Liz, my Department of Finance. Honestly, I'm looking... Actually move the base of the mic, so yeah. Honestly, I'm looking towards my Department of Education colleagues to see if, I think that they would probably have that data, but.
And just to help guide our conversation, I'm trying to determine how it was decided to choose one over the others. So I can at least touch on that,
which is that Multitudes has been a state-sponsored screener since its inception, beginning with the one-time funding and the 2020 Budget Act. Its intent was to expand the state's dyslexia and specific learning disabilities early identification. The multitude screener, including the training as well, are both available at no cost to LEAs, meaning that UCSF in general does not have a mechanism to self-fund the screener in any capacity. So the funding is provided to UCSF so that they can continue providing it to schools at no cost ongoing.
So this has been funded for many years in the past?
Through one-time funding measures, correct. One-time funding year over year. Yes. Yes.
Okay. And then in committee's staff suggested questions, there's question number seven. Why is the reading screener trailer bill restricting screen timelines in first grade? Can you please talk to me a little bit about that?
Yeah. So first, we would just like to note that the language changes are not going to restrict any screening timelines and would not apply to standard screenings at all. These would solely apply to the screenings used to determine the at-risk status of students. So screenings can occur before and after this point. It would just be solely the screener that's intended to label them as at-risk. Second, we do actually have some data from panel-approved screening instruments pulled from California students that supports that a later date for at-risk identification for first graders does drop significantly for that at-risk marking at the 45-day mark for first graders in comparison to the slightly later mark for kindergartners so there is some data that shows that waiting that period of time does produce a significant drop in students identified as at-risk yeah children do have different learning curves correct so in this kind of meets us where where they're at helps us get them where they're
Do we screen, and this may be off topic, but do we screen students as they come in from other states?
I believe that if they are coming in from other states in the K through, like during kindergarten, first or second grade, they are getting screened. I believe that there are timelines also where if they come in say the middle of the year that say that the LEA needs to screen them within a specific amount, but it is if they come in during kindergarten, first or second grade. But if they come in later and from a state that doesn't have a screener, then maybe they fall through the cracks? Yeah.
Thank you.
We're at the Department of Education. Slightly off topic, I apologize. I think you kind of alluded to before, there's not like some requirement when they come into the school to do a mandatory screener in order for admins, but there usually is flexibility on it So teachers when they doing regular interaction if they seeing anything that may indicate it they encouraged to do early screening or make referrals but there no direct mandate or requirement for a student if they come in later in the year to have a screener before they
move forward into a California school. Thank you. Thank you. Let me ask about the teacher residency technical assistance center. The funding is being requested till 2030. This was raised by the LAO. Are we funding the teacher to residency program through 2034?
So the funding that was proposed at GB, the 250 million, so it's available to be granted out through 2030, but those funds are available for five years after that they're granted for the LEAs to spend. So I think that's why you're seeing the SRTAC funding for the technical assistance go through 2034 to kind of align with when we expect LEAs to be spending those dollars, even if they're not necessarily submitting their RFA to get new funds after the 2030 date.
So I had a misunderstanding then of what the teacher residency technical assistance centers were. I thought it was to assist the LEAs to identify participants in the program and to select them and fund them.
I think that that's part of it. They definitely help facilitate relationships with the institutions of higher education and other preparation programs. I think another big part of it is that they kind of help with scaling up and how schools can develop mentorship structures to make their programs more successful. And then even going on afterwards, how LEAs can better sustain their programs even after state funding expires.
Welcome. Is this part of what the TACs are doing? Is this part of the requirement of the funding that you do that beyond the 2030 currently funded program that you, for the next five years, continue to engage in the type of activities that were just described? Is that what your charges for the next four years beyond the teacher residency program at this point not being funded beyond 2030?
So just to clarify, Aaron Sullivan from the Commission on Teacher Credentialing. I wanted to respond to the understanding of what SRTAC does. So they are not the organization that is reading the RFAs and approving the teacher residency programs that get funded. The commission staff does that. The SRTAC was subsequently funded to provide kind of that outreach that Department of Finance was discussing. And they've created five regional hubs across the state where they're able to provide targeted support, especially around scaling up, trying to help ensure that these programs can continue and persist after funding may or may not go away, although the legislature has been very generous in funding these residency programs for many years now. But, yeah, there is an expectation that the SRTAC, as we call it, will continue to be able to exist and persist, as I said, and focus on these. In addition, I believe part of this is also to task the SRTAC with some additional support services. The commission is bringing National Board for Professional Teaching Certification Incentive Program on from CDE in a year. And I think there's some hope that the success of SRTAC can be then also applied and focused in with National Board. In addition to any apprenticeship programs, we continue to be kind of hopeful that 1904 will be a successful bill And if so we have an uptick in apprenticeship programs for teachers as well and SRTAC is really well positioned to support them You know one of the things that we are being cautioned about is commitments beyond the next year or two
given the state of our budget. And so I'm just curious as to, you know, what that role, what real commitment we can make to what this is funding for that role that you just described, which is important and significant, but whether or not that's sustainable long-term is something that is of concern with everything that's funded beyond the next year or two. So what is the annual cost to provide the type of support that you just described to me that you think is necessary to accomplish that on an annual basis?
I do not have that information off the top of my head, though I was recently reviewing an expenditure sheet for them. The original $20 million has been encumbered, and I do have expenditure information on how that that's playing out over the next few years, so that's certainly information that we can provide to you.
Okay. Yeah. That would be helpful, providing it to the LAL as well.
Absolutely.
Obviously, they're suggesting to move that timeline and not to make that commitment long-term, and it would be interesting seeing how that aligns with what the program is doing. And to the issue of teacher pipeline, I know that the governor, when the May revise was presented, talked about utilization of the block grant as a way to boost teacher pipeline. What exactly is the expectation for the use of the block grant for teacher pipeline and teacher preparation? because obviously we're assuming that the requirement of paid family leave or paid pregnancy disability leave is what it is. We'll talk about that next item. That's a new requirement that the COLA will fund without calling it out. But I'm just curious what kinds of expenditures you're anticipating in the teacher pipeline space as it relates to the one-time block grant.
Yeah, and so I can kind of start and if you have anything else to add on. Of course, right, the block grant is 100% discretionary and kind of dependent on what each LEA kind of sees as their need and focus. I think that if an LEA were to choose to kind of bolster their pipeline, we would see kind of solutions that we saw with the state local solutions grants of the 2018 budget act, where a lot of them helped their current teachers go back to school to get another credential if they had a special education credential and got their multiple subject credential or vice versa. I think some of them used them as bonuses for their instructors.
Do you recall any? But there's no expectation that the block grant gets used for specifically teacher pipeline?
No, it's still discretionary, so kind of up to the school district to make that decision themselves.
The last question which was posed, and it'll be my last question, why is Save the Children proposed to receive general funds for after-school programs, especially in light of the ELOP funding that's, increasing, including the Tier 2 rate, which is now increasing. It appears to be the same services being provided. What is unique and different about this one?
Italy Spedis with the Department of Finance. So Save the Children helps support existing before, after, and summer school services while also providing additional student support services that are unique to rural communities with high-need students. For instance, funding can continue to support home visiting and kindergarten readiness supports for children of ages zero to five. It can also support family engagement programs that equip parents and caregivers to support learning at home. Those are just a few examples in which Save the Children are able to support different kinds of learning for children in that age range. We also want to note that this one-time funding was also provided in the 2025 Budget Act in $25.26 of $5 million of non-Proposition 98 general fund. So the May revision proposal is proposing the same amount, but just for $26.27. We're happy to have further conversations with the legislature on this as well as we work to reach a final budget agreement.
Was last year the first year that this was funded? Does the LAO know?
I can't. It was definitely funded more than last year. I can't recall whether it was, it's been, this would be like the third or the fourth year. In each case, it was $5 million, and it was stated as one time, but then it was funded in future years.
Yeah, after more than one year, one time, probably not the right term to describe programs such as this. What are the measurements? What is the data we're collecting on this program? What are the requirements in the proposed budget in terms of data collection and data analysis on the outcomes?
It was the Department of Finance. The funding does not have, the May revision doesn't include any specific requirements or data requirement collection provisions related to the allocation of this. we want to note that this was also consistent with how it was proposed last year in the 2025 budget act as well.
Sure. But last year was one time and now this is the second year. So it's now an ongoing request, at least for this year. We'll leave that at that. Leave this issue open. Again, I would just say for that last issue, the last item, we're hearing loud and clear that we need to have concerns about the out years in terms of making expenditures, being intentional and careful, signaling that this is a program that is going to be ongoing, should definitely not be the signals received by anyone who is a recipient of these funds. And so I think we need to be mindful of that. One last question, LAO, I think you stated, Mr. Camarillo, that LCFF is a couple hundred million dollars short of some calculation. Can you clarify what that statement was, please?
So the May revision includes $927 million for LCFF above the statutory cost of living adjustment. So the administration has indicated that that million is intended to get to a 4 LCFF increase Based on our calculations that amount is not sufficient to get to the 4 It would be 4.04%. So I think under the budget structure, if you were to prove this, the actual increase would be about 4.04%. So if you wanted to fund a 4.31%, our estimate is that you would need another $211 million to do so.
Okay. And I see someone from finance came up. Can you talk to me about your calculation to the number?
Yeah, absolutely. Patrick Rochelle, Department of Finance. We would just, the administration would just concur with LAO's analysis as well in landing on the $211 million additional to reach the 4.31%. Not to get too far into the weeds, but essentially when we're calculating the, you know, quote-unquote super COLA, We included a base grant adjustment. However, in recent conversations in the last week or so, LAO and others have suggested that perhaps you also include supplemental and concentration grants on top of the base grant, which in our estimate and LAO's estimate would get you to that full 4.31%. our intention from the beginning has been to calculate supercola in the way it's been in previous years. And I think there was just at this point we were open to revising the estimate.
Okay, so just to make sure I understand, you've reached the calculation in slightly different ways. you would agree that if you use the way historically, correct me if I'm wrong, that we've done COLA, it actually, to reach the 4.31, it would require another $211 million if we did it that way.
Yes, sir.
Appreciate that. Okay. Oh, yeah, we have an additional question. One last set of questions as I'm processing the information shared with me.
Can probably a different group of Department of Finance, warning. So for the community schools model for the while you're coming up, we had allocated a certain amount of money to help set for setup costs, planning costs, implementation costs. Can you remind me what those were? It's like three million. Is that is that correct?
I'm not sure I quite, CCEE was going to be allocated a certain amount of money for setup, and then the county authority was going to be given 1.5.
Yes, let me pull up my, yes.
Just confirm those numbers for me.
Yes, yes. Yes, those numbers are confirmed. So of the $50 million allocation for a secondary school, secondary community school redesign, the collaborative may retain up to $3.5 million of that amount. And of the $3.5 million, $1.5 million shall be made available to reimburse the Marin County Office of Education.
Okay, thank you for that. I'm using that number to reflect back on the conversations we had with CSAC, about how much they were getting allocated to set up a whole new system, and wondering if we are scaling our planning purposes appropriately. So I'm just going to put that out there.
Thank you, Dr. Patel. Thank you to all on this panel. We will hold this open, and then we'll move on to the next one, which will have some interaction with what we just discussed, but we're trying to keep things on track here. So Department of Finance, please come forward. We'll have a presentation from them and then the Legislative Analyst Office. All right Okay So just to reiterate, Ms. Gable, our consultant, I think communicated this to you all. We want to go item by item as identified on the agenda. So we'll take the charter school accountability item first, then questions, and then we'll move on and proceed that way. So let's hear the presentation on the charter school accountability proposal, please.
Italy Sped us with the Department of Finance. So the charter school accountability trailer bill proposal is mainly based on the negotiated language from SB 414, Ashby and AB 84 Marisucci, and it includes some changes that remove costs to keep the proposal cost neutral within state costs. More specifically, the proposal overall aims to create parity in auditing processes and requirements among the various forms of local educational agencies, LEAs, including districts, educational joint power agencies, charter schools, and county offices. Also, it identifies new and improved audit requirements to increase transparency and avoid and or detect fraud. And finally, it enhances charter authorizer oversight responsibilities and duties, as well as updates several miscellaneous subjects, including protecting the integrity of student assessments in high schools. Now, specifically, the May revision includes some amendments from the proposal at the governor's budget, which includes one, amendments to auditing and charter authorizer oversight requirements for charter schools, two, addition of LEA contracting requirements that derive from SB 414, and three, clarification of the charter renewal process and revocation appeal timeline, as well as among other requirements. So I'm available as well as my colleague from SBE to take any specific questions on the proposal.
Thank you. Thank you. Does the LAO or anyone else want to comment on this?
We're still reviewing this language. We don't have any specific comments for you at this time, but we'll let you know if we have any particular concerns.
Thank you. No comments?
CDE Alliance with LAO. Okay.
So reviewing the proposal. Okay. We'll turn to Dr. Patel. it's more of a policy proposal, so as a policy chair. Thank you for bringing this forward, and for, yeah, as Chair Alvarez said, this was more of a policy proposal that was in the budget, and want to make sure we're capturing all the necessary elements in the May revise as compared to the January budget proposal. So the first question is looking at the notification of charter schools for material concerns by the authorizer. So currently what we're reading is that there's a 60-day requiring authorizers to notify charter schools within 60 days. Could that nullify school districts liability protections under Section 47604? And could it lead to more appeals to the State Board under the abuse of discretion clause?
Lindsay Valley, State Board of Education. The 60 notice of material concerns is very specific about requiring the oversight entity to issue the notice Satisfying that requirement I not sure why the other items would be of risk to the authorizer
Okay, I just want to make sure that we're not introducing any new risks as we try to close up this proposal and be aligned with what the legislative intent was.
So we don't think there's going to be an issue. We are not aware of why that would be an issue.
Okay. And then my second question is, the May revise deletes the requirement of funding determination calculations for audit. What is the rationale for this being deleted?
So the portion that was removed at May revision that required certain elements to be disclosed in the audit, there was no audit penalty associated with that. It was a disclosure requirement that was related to the other provisions that were also not included in the original trailer bill proposal. We removed them because there were some issues with inconsistency of dates and timing. and on its own wasn't achieving the objective, I think, that it was originally included in SB 414.
So because some other items were removed, this is no longer—
It was a companion item. It was a dangling sort of cleanup that was necessary. And we included it at the governor's budget proposal, thinking it could work, but upon further reflection, reviewing the language more carefully, we determined it could not stay.
And there's no other scenario where we would need anything like this?
Right now, the CDE reviews funding determinations and obtains the data. I think that the issue of funding determination still warrants further review and probably a broader proposal than just that item.
Okay, I think I'm reading between your lines. Thank you. Okay, thank you for those questions. Let's take now the paid pregnancy disability leave item, please. Presentation first.
Good afternoon. Audrey Bezos with the Department of Finance. The May revision proposes statutory amendments to require public school employers and community college districts to provide up to 14 weeks of paid pregnancy disability leave to their employees. The LCFF and the SCFF include cost of living adjustments beyond what is statutorily required for LEAs and community colleges to provide this benefit. Finance estimated ongoing costs of $218 million annually to cover the costs of substitute teachers. $195 million of this is for K-12, $123 million for community colleges. This estimate is based on an annual 2% utilization rate amongst female K-12 and community college classified and certificated staff. We know that the pregnancy disability utilization rate for schools participating in the state's state disability insurance program and paid family leave program is 1.6% of female enrollees for maternity disability leave. The change is intended to resolve an inequity in the amount of sick leave female teachers are able to convert to additional service credit at retirement. According to CalSTRS, female members have 0.28 years of converted sick leave. at retirement, while male members have 0.41 years. A significant contributing factor to this inequity is that female members must use their sick leave for pregnancy leave. It is also believed that this new benefit will be a significant recruitment and retention mechanism for teachers, as currently 70% of K-12 teachers identify as female. Next, I'm gonna provide just kind of an overview of the landscape of what the current benefit looks like in this space. So compensation during disability, family leave, and or parental leave is subject to collective bargaining at each district. Some districts elect with the agreement of their staff, their collective bargaining units, to opt into the state's state disability insurance and paid family leave program. Other districts do actually provide some form of paid parental and or disability leave. And then others, a fair number of districts will actually have like an optional disability insurance plan that employees can opt into. But typically it's the sort of employee that's paying a premium for that benefit. So and then specifically for schools and community colleges, education code provides K through 12 community colleges and staff up to 12 weeks for parental leave. So that's parental leave. It applies to both men and women. To receive compensation during this leave, employees must first exhaust all of their sick leave balances. And after that point, the employees are compensated with differential pay, which is essentially the difference between their salary and the salary of the employee hired to replace them. But it must be at least 50 percent of their salary. And differential pay will go all the way up until that 12-week mark. Statewide, there is the California's Pregnancy Disability Law, and that entitles employees to 16 weeks of disability leave per pregnancy, but that applies to leave, right? It doesn't speak to compensation at all. That disability leave has to be sort of authorized by a physician, and employers are also required to continue contributing to health insurance during that time. So, and then sort of the statewide program is run by the Employment Development Department. That is the State Disability Insurance and Paid Family Leave Program that provides 52 weeks up to 52 weeks of disability leave at a compensation rate of 70%. And then it's actually 90% for low-wage workers. And then paid family leave will actually provide an additional eight weeks of leave, same compensation rates of 70 and 90 for employees needing to care for a family member. This program is funded through a 1.3% payroll deduction from employees' salaries, so the employees pay for that statewide benefit. I think it's important to note the disability must be determined by a physician. The typical disability leave for a woman after childbirth is six weeks for a normal birth. It's eight weeks for typically eight weeks for a more complicated birth. Disability leave is also typically provided for the four weeks prior to your due date. So generally, disability leave for pregnancy does not exceed 10 weeks and 12 weeks for a birth with complications. So under our proposal, it is estimated that employees will have between 10 to 12 weeks of paid maternity disability leave. Because this benefit provides full compensation during this disability leave, we're anticipating that many employees will choose to sort of go out for that four weeks prior to their due date and then either have six to eight weeks after they deliver the child I would also note that it does not affect the provisions of existing law that allow for the 12 weeks of parental leave through the use of sick leave and differential pay. We note that this has been proposed in legislation for several years, and we know that a lot of the opposition to prior legislation was concerned about the cost of this benefit on school districts. So the May revision proposes to fully fund the cost of this new benefit, providing a total of 218. Actually, we provide more than that through the LCFF, but we estimate the cost to be 218 million annually. And this is based on a 2% utilization rate among female employees. And we assume the full, they use the full 14 weeks of leave, which equates to 70 school days. And that is then multiplied by the average substitute teacher daily rate. And then we believe that the funds provided the May Revis are more than sufficient to cover the increased cost to schools and community colleges.
Thank you. Does the LAO have a comment on this?
Yes, sure. We don't have a specific recommendation, but we did have a few issues for you to consider as you're thinking about this proposal. So, you know, most salary and benefits are determined at the local level. So, adopting this proposal essentially means the state is removing this from the local collective bargaining process. That would be a departure from the way that the state has done kind of most of the other benefits that are developed locally. The Department of Finance talked about some of the cost estimate. We would just note that there is a lot of uncertainty in terms of what the cost would be for each individual district. It depends on how many specific employees might use the benefit, and each district might have a different kind of demographic of their employees. There's also interactions, as was discussed, with leave policies that already exist at the local level, but then also how that might affect retirement in terms of service credits when that could have cost as well. So there's a lot of complex moving pieces, but recognizing all that uncertainty, the amount of funding that's proposed to increase the LCFF above the COLA is likely sufficient to cover those costs. There are some downsides to funding this new benefit and tying it to this quote-unquote super COLA approach. And I think particularly we would know for the community colleges where there's a specific COLA referenced in the budget, we know that providing a higher state COLA can lead to higher salary pressures for districts. It's an expectation that salaries may increase at the same level, but if that funding is also being expected to cover the cost of this program, then there might not be enough funding to both do that, 4.3% increase, and cover costs from this new requirement. We have less concerns about this on the K-12 side because on the K-12 side, there isn't a specific COLA listed. The LCFF amount, the exact increase will adjust, and it's not explicitly referenced. We would also just note that the state could fund this new requirement in other ways. So, for example, it could create a new categorical program, which could increase, could have more transparency around the cost and utilization of the benefit. But that does require creating a new program, specific rules associated with it, so that can become more administratively burdensome for districts in the state. Again, we'd note that implementing this policy is likely to be complex, particularly given the interaction with existing federal and state laws and local bargaining agreements. So you know we would point out most trailer bills do go into effect like July 1st after the budget is passed and these bills are signed And so setting a later implementation date for this one may give districts more time to work through some of those implementation details And then finally, we would just note that this would contribute to differences in paid leave available to school and community college employees compared to other workers in the state where other employees may not have access to these types of benefits. Those are all of our comments. Happy to answer any questions.
Okay, does the Department of Education have any comments?
On behalf of the State Superintendent of Public Instruction, who is a sponsor on AB 65, we were excited to see it in the budget. We do have some additional points of clarity and technical questions as we work through the language, but we look forward to working with the legislature and administration on solving those.
Okay, thank you. Let me start with a question from a comment that was made by Financet. I thought I had understood this, but then it threw me off a little bit. Paid pregnancy disability leave, well, first it's going to apply to all employees at community college and all employees at any public school. Is that correct?
Does that include charter schools? Yes.
Okay. And I was under the understanding that teachers may still be required to cover the cost of substitutes. But you just mentioned something. You mentioned the phrase. I'm not saying you mentioned you answered this question of you calculated this based on some substitute.
Yeah. cost and so I'm just trying to understand exactly what this proposal
actually does and it does not do and it still would require from people who take
leave for pregnancy if you're a teacher. Yeah so this this applies to the disability pregnancy disability leave to be determined by the physician so while a teacher is on disability leave for pregnancy it would be fully paid 100% paid by the district. And after that point, they could choose to use what's called parental leave in existing education code. The parental leave benefit allows them to be out up to 12 weeks. They have to first exhaust all of their sick leave balance, and then they are entitled to what's called differential pay. So that differential pay is like the difference between sort of what the district has to pay a substitute and what the teacher's normal salary would be. And that's kind of where the paying for the substitute kind of idea comes from. However, the floor is 50%, right? So the district can't pay that person on leave less than 50% of their salary.
Okay. So I'm trying to remember from when my wife went on disability because she had no other benefit after the birth of our two kids. and it was a, the benefit was some amount, I think it was roughly $400 a week, might have increased since then a bit. And it was limited to, I'm trying to remember accurately, I think it was six weeks. You walked us through, depending on the level of need to take leave, that obviously will be different. But is it the typical most common scenario that if you have a normal pregnancy that the leave is six weeks Is that the current law Yes six weeks after the birth of the child After the birth Yes And, excuse me, under some circumstances, it may be up to 14 weeks or maybe beyond 14?
Typically, you can go out in disability the four weeks prior to your due date, right? So a teacher might choose to do that just because they're on their feet all day, right? And then so eight weeks. So like if you have a cesarean section, well, not you, but if one has a cesarean section, it would be eight weeks. So the four weeks prior to birth and then the eight weeks after would be like 12 weeks would be like the max for a normal disability leave. OK. Yeah. And still, though, the benefit is a portion of your salary. It's not the full salary. For our proposal, it is the full salary, 100% compensation while you're on disability leave.
Okay. Yeah. Okay, that creates some clarity for me on that issue. All school employees, not just teachers, but all school employees. Okay. And so the calculation of the cost of the $220-something million, that includes the cost of the full compensation, and it includes the cost of an LEA of having a substitute.
It's actually just the cost of the substitute, because we are basically assuming that the school already has the budgeted funds to pay that student for the—sorry, that teacher or that employee for the entire school year, right? So that's already a budgeted cost for them, the full salary of that employee. And so really the increased cost we're talking about is the cost of the substitute teacher or the employee that has to backfill.
Okay. Do school districts ever calculate a savings from leave as a result of pregnancy, though? Is there a pregnancy factor? Now, would a school have savings from pregnancy leave?
I guess, I don't know that they would because they have to pay. So the teacher has to exhaust sick leave. So sick leave is going to be their normal salary rate, right? And then after sick leave is exhausted, they have to pay differential pay, which is at least 50% plus the cost of the substitute. So they actually probably see an increase in cost currently once differential pay kicks in.
Got it. Okay. That's, those are, I think, all my questions on, on that. Dr. Patel. As I'm trying to remember our own bargaining agreements, do classified employees pay differential pay in any kind of way?
Classified employees, my understanding, has also received differential pay, yes.
And what about ACSA administrators?
Oh, gosh.
Because this would also apply to them.
I think yes, just because they're provincial. Oh, because they're credentialed teachers? Yeah, potentially. Yes. I would assume, yeah, at a minimum, they would also have that benefit. Although a school could choose to provide sort of a different disability benefit for administrators than they provide for, you know, teachers. So it probably varies from district to district.
Okay, but under this proposal, all employees get the same benefit regardless of level or?
Yes, and the law does allow for them to negotiate for a better benefit if they want to.
Okay. And then the budgeted amount for this, you're including in the various increases to LCFF through Prop 98, although the cost pressures could fall differently.
on different LEAs, depending on where they are in their bubble of retirement, where they've been on golden handshakes or whatever we wanna call them, et cetera, et cetera. Yes.
But we're giving the same amount ongoing.
Yeah, it's the same total amount.
Yeah.
Yeah, it's the same percentage increase across the board, correct.
Thank you. Okay. We're good. All right. Thank you.
We have received a request to take cradle to career data next, just for trying to ensure that folks make it to other hearings. So if we can have those individuals associated with this item to come forward now. We're almost there, everyone. Just a couple more items. So let's hear the presentation, the proposal from the administration for cradle-to-career data.
All right. Good afternoon, Chair and members. Kayla Lamb and Department of Finance. Passed by legislation in 2019, the California Cradle-to-Career Data System is a statewide longitudinal data system that provides tools to help students reach their goals and delivers information on education and workforce outcomes. The May revision includes trailer bill language that requests the UC and requires other C2C data providers to sign the participation agreement for the purpose of data sharing with the C2C data system. We wanted to note that this language reinstates repealed language from the former Education Code Section 10858 and clarifies that this is not a new requirement and does not pose a new requirement on providers. Thank you, and available for any questions.
Thank you. We'll hear from the Legislative Analyst Office next.
Edgar Cabral with DLA. We don't have any concerns with this proposal.
Thank you. And the department?
No.
Okay. Dr. Patel, any questions? Okay, thank you. We will now hear from the California Educators Together proposal. It's a 600,000 ongoing Prop 98 general to support the California Educators Together platform. We'll have Department of Finance present the proposal and then continue with the others.
George Harris of the Department of Finance. The May revision appropriates 600,000 ongoing Proposition 98 general fund for the department to contract with the County Office of Education to maintain and curate the California Educators Together online repository of high-quality, open educational resources for use by LEAs. This appropriation is a partial approval of a BCP submitted by the California Department of Education that was deferred this past fall. The May revision includes uncodified TBL that, among other things, requires the online repository to include professional learning opportunities and online resources that strengthen educators' instructional practice and expand access to effective teaching tools. TBL also requires the repository to include guidance and resources for educators and students dedicated towards protecting students online, cultivating media and digital literacy, and establishing safeguards for the use of new and emerging technology in schools, including artificial intelligence or AI. The guidance and resources developed for these purposes are required to be curated in collaboration with the State Board of Education the California Department of Technology and the California Innovation Council And from there I happy to take any questions Thank you the LAO We don't have any specific comments on this one at this time, we're still reviewing the proposal, but we will lay in if we have any specific concerns.
Thank you, California Department of Education.
Yes, we're greatly appreciative for the inclusion of this funding. This is solving the issue of our concern that significant philanthropic dollars and state dollars would be abandoned. The California Educators Together platform has no permanent funding and was started through COVID investments. It created a singular point of entry for educators to find all the different curriculum resources that have been developed. Previously, it was housed in different county offices of ed, and it wasn't consistent across the board. So this continues to maintain the investment. This is not a new request. It's not expanding on a request. It's stabilizing and making sure that there's access for the investments and maintaining a program that we have found to be very successful.
Okay. So I had to Google California educators together. I think I found the right website. it seems to have a collection of information that could be used. And so I am assuming this is to finance or CDE. This will now, this platform, this existing platform will now hold information related to AI. That's what's being added to this platform. Is that the proposal?
Yeah. George Harris of the Department of Finance. Yes, I would note that we approved everything that the department was requesting related to the educators, California educators together, which my colleague from the department just noted that is maintaining the original purposes of the online repository. The only addition that's being proposed at May revision is this new hub for protecting educators and students alike for media, media, digital literacy and including the harms from artificial intelligence.
So it's to add this AI stuff, but also to continue the existing information on here?
Right, which aren't mutually exclusive. This has been in the ether. And again, like the intent of the California educators together is to have this inventory housed in one place. And so this is something that we will ensure is included in the repository, but it's also consistent with what we've been trying to build on since its creation in 2020, which is to ensure that we have all of that curriculum available for educators, and it's consistent across the board for one entry. So the AI is something that's requested but consistent with what we are doing and maintaining.
And the cost to maintain this platform is $600,000 a year?
Roughly so. When we did our internal analysis, the exact contract amount is about $500,000, But when you also consider the indirect rate of working with the county office of education, that could vary depending on the county selected. So it could be anywhere. But the maximum cost is $600,000. We wanted to have that buffer to ensure that any county office selected would be able to fulfill the needs maintaining the repository.
Correct me if I'm wrong as I'm trying to understand this. One, this is a separate nonprofit organization that hosts this or houses all this information? Is that correct? This is not the department?
It currently housed under Kern County Office of Education Yeah Okay And the funding would be to continue a contract with the County Office of Ed African application process. So it is one that we we run and maintain and we see over 200,000 educators and 180,000 resources. But it is partnered with community nonprofits, etc. to build the library. But it's not, is it its own entity? It's got a .org website, so. I believe that's correct, but I mean, no, I don't think it's a standalone entity. It's supported by CDE, but I will confirm
and get back to it. Okay. And you have the unfortunate circumstance that you're coming on a day where we just heard about the IT needs and cybersecurity issues and information supports that are needed by another department. I was asking for a lot, lot less to do some pretty mission-critical work, and I'm having a hard time identifying $600,000 worth of worth to this, and I think I need to probably hear more about what this exactly does and how it serves students.
We'd be happy to provide that additional information in partnership with DOF. I do think the emphasis is on ensuring the protection since we have 5,000 plus monthly active users, a large scale of people that are accessing this website that we do need a lot of platform access and help desk support and that's largely where the funds go. It has been funded over the years through a combination of philanthropic dollars and state dollars, and that's kind of how we came to the estimate, consistent with the ongoing costs that CDE has borne for it. Okay.
I've made, asked my questions, made my comments. Dr. Patel, do you have any?
Having recently attended a couple of tech caucus meetings, I know that there is growing agreement within the tech space, including AI owners, CEOs, that there needs to be third-party sort of collective community oversight over the deployment of AI tools in society and community. And I think this is heading in the right direction, but I am concerned about the dollar amount being allocated. Does this, for the county office that oversees this, is that also including personnel? Yes, up to $100,000 is for staff and administrative costs. So $100,000 is staff administrative, and then maybe up to $500,000 is for hosting and then technical support of the host agency? Yes. And is this done in collaboration with the CDE Foundation? Is that our tie-in to CDE, or is it CDE directly? I don't have that in front of me, but I can get clarity on that question.
Yeah. Please do get back to staff. I think.
Absolutely.
And I'm sure we'll all get the information that way. Thank you. Okay. Thank you. We will call this issue open as well and move on to our final item for the day. This is the students experiencing homelessness proposal in the May revision. It a million one Prop 98 grant program for LEAs So we will hear the proposal details from the Department of Finance Welcome
Chaudenari's Department of Finance. So the May revision includes $30 million one-time Proposition 98 general fund to provide three-year grants to local educational agencies to increase identification of and improve educational outcomes for students experiencing homelessness. California has nearly 300,000 K-12 students experiencing homelessness, and data indicates that students experiencing homelessness face higher rates of chronic absenteeism, suspension, and significantly lower academic achievement and are more likely to experience chronic homelessness as an adult. According to data from the Department of Education, the percentage of students who are homeless in California increased from 3.1% in 2021-22 to 5% in 2023-24. However, because youth experiencing homelessness must self-identify as homeless to their schools, in reality, these numbers could be much higher if students do not report their housing situation accurately. Consequently, this population of students could be missing critical supports and intervention to help them succeed. To support the needs for this vulnerable population of students, the administration has proposed one-time funds intended to supplement the existing federal McKinney-Vento children and youth funding, which only reaches 97 of California's 1,000 districts to expand access to the program. The $30 million will be allocated through a competitive process that is open to all LEAs and matches to the extent practicable the Federal Education for Homeless Children and Youth Program application process. The proposal requires CDE to consider an LEA's demonstrated need when developing the grant criteria, including considering prioritizing regions with larger concentration of homeless children, youth, and LEAs that do not currently receive a Federal Education for Homeless Youth and Children Program award. These one-time funds are intended to provide LEAs with resources to build infrastructure and implement strategies to support identification outreach and engagement with students experiencing homelessness with the ultimate goal of sustaining efforts by more intentionally integrating supports for homeless use into other existing state initiatives such as the California Community Schools Apportionment Program expanded learning opportunities children youth and behavioral health initiative be scheduled program universal school meals and universal transitional kindergarten that includes my remarks I'm joined by my colleague Paul Tain we're having to answer questions
Thank you. Does the LAO have comments on this?
Yes, Edgar Corral with the LAO. We don't have a specific recommendation, but just some issues for you to consider. We do think that the proposal has merit in that providing funding would help schools identify and better support students experiencing homelessness. And I think one particular aspect of the proposal that we think would help it be more effective is the fact that it's prioritizing those districts that have high concentrations that have not had access to federal funding. So we think that's a, essentially that means that there could be more benefits to it. I think on the other hand, our main concern is just that this is temporary funding and it can help build up capacity. But for these activities to have long-term benefits, districts would need to sustain them on an ongoing basis. And that's not something that the proposal would assure. So those are comments.
Happy to answer any questions. Thank you.
CDE. Yeah, we are supportive of this proposal and appreciative to see it included. we do have legislation we're sponsoring AB 673, which comes with a companion budget request for additional support through McKinney Vento. So we'd like to see some alignment, especially when it comes to the transitional housing since 16, 17 year olds that find themselves without homeless but potentially still dependent on their families are at the greatest risk of dropping out. And so those early interventions are tethered to McKinney-Vento in a way that we think could be further expanded on. Okay.
Thank you. Well, question on this. So we're getting a few more details today. This is a grant program with a three-year.
the awards will be for three years for those who receive these grants correct
okay and there's a lot of emphasis on the identification which obviously is is important as a former person I was homeless in high school I was never identified as one and actually didn't really realize that I was and in the sense of being classified as one until much later in life thanks to family friends who took me in but so I appreciate the identification what what else does this program allow in terms of supports what what what are the what are these funds going to be used for once they are identified I heard you mention obviously linking them to some of the other services that come along with things like community schools, behavioral health, those things that are really important, food and nutrition programs, but are there any, are the resources going to be used in any way to support directly either the students or support
personnel on campus to support these students? Yes, so as mentioned, the intention of this proposal was to align with the federal education for homeless youth and children and youth programs so under those allowable specifically speaking to serving students or staff that could be such as provisions of including tutoring services referrals services for homeless children and youth there's professional development for educators that are designed to heighten their understanding and sensitivity to students experiencing homelessness and a variety of other provisions but the intention is to align with what is existing for federal law. And just to chime in under McKinney-Vento, schools are required to have a homeless coordinator whether it's a standalone personnel or if it's someone that wears many hats. This would build off of that funding and resources and to the point of my colleague, there's a large variability on on what the allowable uses are to ensure that schools can kind of meet the students where they're at. But the main point is to ensure that they're addressing the highest risk in providing those resources and services. A lot of times it also encourages partnering with CBOs or nonprofits that provide resources so that there's a pipeline for students to get that assistance outside of the school hours.
Would something like any type of housing assistance be an allowable use?
So yes, under there's other emergency assistance necessary to help homeless students attend and participate in school and again we do have a budget letter that I'd be happy to recirculate that speaks specifically to that because the experience you described doesn't necessarily capture homeless students that you went through but that is we have about 9,000 students between 16 to 17 year olds that identify or in a similar position as you are and so they not going through the system normally where there be early intervention for foster youth but they are finding themselves on the streets or at a family couch and this would allow dollars to go towards programs like that for transitional housing, for short-term leasing. There are some technical...
This would allow or the budget request that you're referring to?
The McKinney-Vento allows, and this augments it. There are some discrepancies when they're under 18 for getting them into housing outside of those temporary placements. Yeah.
Okay. How many students do you, does the proposal hope to serve or intend to serve? What are the outcomes that you're looking in terms of students served?
Paula Tang with the Department of Finance. We'll have to get back to you about the number of students served, but the intent behind the $10 million per year for three years is to be aligned with the existing McKinney-Vento allocations, which is around $15 million. So we're hoping to reach the same amount of students, but hoping to prioritize schools that may not be receiving the current McKinney-Vento funds.
Okay. I'd like to hear what our goals are going to be with this investment. I think we need to identify that so that we can hold ourselves accountable once this is implemented. Dr. Patel.
Yeah, a couple follow-up questions. Do we have an understanding, and I know the number fluctuates, the specific number fluctuates, but do we have an understanding of what percentage of students are not in districts or LEAs that are covered by McKinney-Vento? So what's the need? Yeah, I can speak to that. I don't know a number, but what we've been hearing feedback from the field is that there's certain regions such as Monterey and, yeah, Central Coast, Santa Barbara, that have the higher percentages than the state average of homeless youth that don't currently receive McKinney and Minto funds. So we understand that there are regions that are not receiving McKinney-Vento funds but still have a need because they have a high proportion of these students. Yeah, and yet there is this high need. And we see often students that get masked and buried under supportive adjacent communities or extended networks of community that can take them in. And so we don't always see that covered by McKinney-Vento.
Another question is, there's a thought that this could be connected or tied in with the community schools model. Again, I want to ask, of the community schools, how many of them do we know are also identified as McKinney-Vento schools? Do we have an idea of that, like what that overlap is?
That's also something that we'll have to get back to your staff on. Thank you. That's all I have.
Okay, thank you. Thank you. I'll hold the issue open as well. Thank you, and looking forward to the follow-ups on the requests. With that, that brings us to the end of the panels. We will now open it up for public comment. I'd ask you to please line up and just state your name, affiliation, if any. I'll give you the 30 second note. Everyone's been doing quite well. I've been getting in all your points within the time allotted. So I hope that continues. And thank you all for your patience today. We will get started.
Is it 30 seconds or a minute?
If you need a minute, we'll give you a minute. But I think you can do it in 30.
I want to stay within your time All right Derek Lennox with the California County Superintendents On balance we think this is a very good mayor revision for schools There a lot that we going to support in our letter coming up including universal and targeted assistance and the homelessness proposal One thing I want to flag here is that we're very supportive of the concept of the paid disability leave. And I think for many districts, the proposed COLA may cover those costs for county offices of education. A relatively smaller portion of our overall programs are funded by the LCFF. So many of our child care and preschool and other programs will not be covered by that, even though they may have disproportionately higher number of employees who would utilize that program. So we look forward to working with you on making sure the reimbursement occurs.
Thank you. Thank you.
Good afternoon. I'm Patrick McGrew. I'm representing the SELP administrators of California. We are in full support of the proposed historic increase of special education base rates to $1,340 per student, which will support students with disabilities. In the face of declining enrollment and with the increase in students with disabilities and increased needs per student, this money will be essential to provide students the services they need and deserve. Thank you.
Thank you.
Brendan Tuig on behalf of Ed Voice. We applaud the additional $428.8 million for the Literacy Coaches and Reading Specialist grant program. We also appreciate the May revision trailer bill amendments related to the literacy screening timelines and understand the rationale for delaying screening in kindergarten to best support students who enter the classroom with different levels of foundational skills. However, we do remain concerned about the proposed restrictions on screening timelines, particularly for first and second grade, which will delay identifying struggling readers early and providing intervention when it matters most. There simply isn't a strong evidence base to support delaying screening in the early grades.
Thank you. Thank you.
Good afternoon, Chair and members. with the Association of California School Administrators. Related to the Governor's May Revision Act that supports the $5 billion discretionary block grant as well as the increased funding for special education. With respect to the Pregnancy Disability Leave proposal, we recognize the importance of this policy and appreciate the intent behind the proposal. At the same time, we have important questions regarding how the program will be funded. We look forward to working with you to ensure all schools have access to funding that sufficiently cover the cost of the needs. We also look forward to following up with you guys on our May Revision letter that will outline some of our positions and recommendations as well.
Thank you. Thank you.
Michelle Warshaw on behalf of the California Teachers Association, we strongly support the paid pregnancy leave providing staff up to 14 weeks of paid pregnancy disability leave. We also support the 2.4 billion for special education funding and the funding for community schools. We also want to note the strength and trailable language around community schools for embedded shared governance. But we do have concerns with the expansion of eligibility for non-classroom based charter schools. Additionally, we oppose the CDE governance proposal and believe that this shifts attention away from classrooms and creates confusion instead of solving real problems. Thank you.
Thank you.
Deborah Baltiza Zaval on behalf of the California Super Bowl Districts Association. I'll make three points as you continue crafting your budget. First, close the remaining $3.9 billion, Prop 98, settle up. Don't defer it into future deficit years. Second, on AB 218, the higher COLA provides short-term breathing room, but COLA does not substantially sustain as a solution. Third the community schools we support the billion ongoing investment but urge two principals equity across all schools sites within the district since non school sites also serve the same population Thank you Thank you Sarabach is with children now in opposition to the reduced COLA for the state preschool program We are continuing to support the education governance reform as well as the investments in paid pregnancy leave, teacher residency program, and community schools. We also urge you to allocate funding for the UPK coordinators and CalMU to continue those efforts for these critical needs of our youngest learners as well as our English learners. Thank you. Thank you. Good afternoon. Cassie Mancini on behalf of the California School Employees Association here on the charter accountability issue. We're deeply concerned that the proposal would inadvertently limit authorizers' ability to raise material concerns about a charter school during the renewal hearing if those concerns were not already raised during the 60-day notification period created by the proposal. This could lead to costly litigation and an increase in abuse of discretion appeals. We're also believe that the proposal to audit funding determination calculation should be reinstated to prevent fraud. And finally, we'll echo CTA's comments urging you to reject extending community schools eligibility to non-classroom-based charter schools. Thank you.
Thank you.
Good afternoon, Chair and members. Christina Salazar with the Riverside County Office of Education. We're still analyzing some of the governor's new proposals from the May revision, but we continue to support the clarifying language around the reading screener, the increased funding in special education, as well as the discretionary block grant and the proposed ADA allocation so that all students can benefit. Thank you.
Thank you.
Good afternoon, Chair, Committee Member. Ryan Miramontes, the California Teachers Association. First start by saying we are aligning our comments with CSCA related to the charter school accountability provisions in the TBL, but also want to express disappointment that the moratorium on NCBs was not included, given that many of these provisions wouldn't be implemented fully in effect until 2028. It's really critical to reinstate this until it is in full effect, and we urge you to do so. Thank you. Hi, Tiffany Mock with CFT, a union of educators and classified professionals. We oppose the SBI proposal to move the SBI into somewhere else. We align our comments with CSEA regarding the charter school, the renewal period, and audit funding. We oppose on community schools, we support the funding, but we oppose expansion to non-classroom-based charters. On state preschool, we would like a higher COLA than 2% since this does not provide our educators serving our youngest, most vulnerable students in our state adequate funding. We are in support of paid pregnancy leave. We support the special education proposal, and thank you so much for your time.
Good afternoon.
Ana, Ioka Meadies, on behalf of Los Angeles Unified School District, very much appreciating the 4.31 super COLA. However, echoing the previous comments that we do strongly believe that that needs to extend to CSPP as well. Not only does that equitably serve our youngest learners, but as an LEA employer, we would also be required to pay family leave to our CSPP employees, but would not be getting the COLA bump for them. So very much hoping for that extra COLA for our CSPP programs. We support the $5 billion discretionary block grant, but believe it should be allocated based on the LCFF principles. And we very much support the increases for special education and the $1 billion ongoing for community schools. Thank you. Good afternoon. Michelle Underwood on behalf of the Coalition for adequate funding for special education. I hear very much in support of the increase for special education, out fresh off the press, all the statewide associations and large LEAs that support that as well. On behalf of the California School Funding Coalition, I want to talk about issue eight and paid pregnancy disability leave. No qualms with the proposal, just encouraging the committee to think about a more precise method of funding, perhaps a 100% reimbursement pool. There are lots of different types of LEAs that are not funded based on LCFF growth, both in K-12 and community colleges. Community supported, hold harmless, lots of folks that the super cola would not help with this new mandate. So you heard some ideas from the LAO also suggest considering a reimbursement pool for 100% cost. Thank you. Good afternoon, Sarah Petrowski on behalf of the California Association of School Business Officials. I wanted to speak in support of the discretionary block grant. The discretion, fully discretionary nature of it and the allocation based on ADA are particularly important as cost pressures are impacting LEAs in many ways, insurance, liability, utility rates, regardless of the specific student population that they serve. One other thing is that in many cases, the discretionary block grant has allowed LEAs to continue some of the key positions that were funded with one-time funds from COVID to support student recovery for student needs. And so it has given a little cushion to be able to continue to support those needs for LEAs. Thank you. Lucy Salcedo-Carter with the Alameda County Office of Education. We support the $30 million in one-time funds for services for students experiencing homelessness, a particularly vulnerable population. As authorizers, we're deeply concerned by the 60-day notification requirements, which we believe will hamper authorizers' ability to hold charters accountable and increase authorizer liability. Finally, we believe the reading difficulty screener timelines are aligned with child development needs, and we support them. Thank you. Good afternoon. Stephanie Farlin representing the San Diego County Office of Education and other authorizers, charter authorizers in the state. I want to speak to just one concern with the trailer bill language around charter school oversight and accountability, and that is, as you've heard from other speakers, the 60-day notification. We had asked as a group of folks representing authorizers to remove the 60 language because it really is problematic and we feel like it takes away the ability of the authorizer to make non decisions if necessary for schools that either are not serving kids well or for the variety of reasons that you allowed to non That language was not agreed to in negotiations last year, the 60-day piece. I was in those negotiations. And so under the principle of including language that was agreed to in negotiations, this is one piece that wasn't. Thank you.
So I appreciate it. Thank you.
Chair and members, my name is Addison Peterson with the California Alliance of Child and Family Services. And we represent over 200 nonprofit community-based organizations. serving children, youth, and families across all 58 counties. We strongly support the ongoing investment in the California Community Schools Partnership Program. Community schools are most effective when they reflect true cross-system partnership between schools, behavioral health providers, child welfare agencies, and trusted community-based organizations. Our members serve foster youth, youth experiencing homelessness, and all young people with complex behavioral health needs across all 58 counties. We respectfully urge the legislature to ensure community-based organizations are formally included as critical partners in implementation planning and funding structures. Thank you. Good afternoon, Dan Morin on behalf of the California School Boards Association. We support the higher COLA. It's nice seeing that treated as a floor instead of a ceiling. We also support the discretionary block grant because there are cases where the COLA, even at a higher rate, still isn't sufficient. Dr. Patel citing fuel costs, definitely higher than 4%. We also support the increased funding for special education. Moving back to the COLA, similar to what other folks in front of me outlined, we're a little concerned about holding that kind of as a set aside. Want to make sure we can have maybe a more effective way to get that funding for pregnancy and disability leave to every program. programs that are categoricals that don't receive a COLA or a lower COLA, how would they handle that? And then finally, for the governance proposal, we remain in support of the proposal, even with the changes around qualifications, but we'd prefer that moves through the policy process through AB 2117, and we can talk about how to incorporate some of those changes in there. Thank you.
And make sure it's still focused on the state-level governance. Thank you.
Good afternoon. Laura Beebe on behalf of the California Afterschool Advocacy Alliance, a coalition of more than 40 expanded learning programs from across California We support and appreciate the 62 to increase the Tier 2 rate to We also support and appreciate the May revision trailer bill language that increases the collaboration between community schools and expanded learning, recognizing that expanded learning is a pillar of community schools. Finally, we continue to lift up the gap in expanded learning opportunities for older youth, noting that California invests billions into expanded learning, but less than 2% of that funding goes to high schools and middle schools are not far behind. Adolescence is a critical time period, and we urge the legislature to consider how existing funds could be used to begin closing that gap for middle and high school students. Thank you.
Thank you.
Good afternoon, Chair and members. Ben Murphy with Public Advocates on behalf of the California Partnership for the Future of Learning. We support the $1 billion ongoing for community schools and appreciate several updates to the May revision's trailer bill language that align with our previous recommendations. We also urge the following recommendations to further strengthen the language. require annual planning and reporting at the school site, LEA, and state levels to begin at the conclusion of the 26-27 fiscal year. Reporting requirements for the first year or two do not need to be as comprehensive as later years, but we cannot wait for three years to begin to have any reporting. Restore the cap on the maximum level of funding that is retained by an LEA, but increase it to a more sufficient level. This will provide LEAs the funding to administer and support networks of established community schools while also ensuring that eligible schools have sufficient funds for planning and implementation to support continuous improvement at the school site and LEA levels. Thank you.
Thank you, Mr. Chair and members.
Andrea Ball here today on behalf of the Orange County Department of Education to express our appreciation for the May revision proposal for $50 million in language to support multi-tiered systems of support. MTSS is about ensuring every student gets the right support at the right time, academically, behaviorally, and social and emotionally. The trailer bill lays out the connection and deep foundational relationship with the community schools program. We want to thank the administration and we want to thank the legislature and the assembly and members of this subcommittee who signed on to a budget letter coalition of support for this allocation. Thank you. Mr. Chair and members, John Winger here on behalf of the California Charter School Association. just speaking to the community schools trailer bill language it is not an expansion to non-classroom based schools non-classroom based schools are currently allowed community school grants so this is just a reversion back to current law uh would just remind the committee that non-classroom based means 80 percent or below in a classroom so they're not just uh they have classrooms they have community centers they meet the four pillars uh and are eligible and so we happy to see that that deletion which was a new exclusion that we objected to So happy to see that On the charter school accountability proposal, we would just say that we think timely notice to charter schools about problems identified by their authorizer should be disclosed in a transparent way ahead of time. It could resolve issues on the front end, and it can also avoid some of these got you denials that we see at the very last minute. And so we're fine with those provisions and appreciate those being included. Thank you.
Good afternoon.
Raquel Morales on behalf of Ed Trust West. We want to express our support for the increased COLA and also strongly support the ongoing investments for community schools. Lastly, we want to express our support for the paid pregnancy leave. Thank you.
Thank you.
And Mr. Chair, with your indulgence, Brendan Tuig on behalf of Ed Voice. I did want to clarify in my comments when I was referring to the evidence base on the literacy screener that I was referring to grades one and two. So I just wanted to put that in the record. Thank you.
Okay. Seeing no other comments. We are at the end and we will not be having a meeting tomorrow. We were able to get all the items in. Appreciate everybody's support and their work put in today to get this done. and all the public testimony. And with that, we're adjourned.
Thank you. Thank you.