California Black Media Network
The California Legislative Analyst’s Office (LAO) recently published its fiscal outlook for the 2025-26 budget, forecasting a $1.5 billion increase in the minimum guarantee for funding public schools and community colleges.
This raises the total budget to $116.8 billion, a 1.3% increase over last year’s budget. While the additional funding offers opportunities to address educational inequities, challenges such as declining enrollment and the expiration of pandemic-era funding create uncertainty for schools, particularly those serving Black and other underserved communities.
The projected budget includes a 2.46% cost-of-living adjustment (COLA), totaling $2.4 billion, to help schools manage operational costs.
The Local Control Funding Formula (LCFF), which prioritizes resources for schools with high populations of low-income and English learner students, will benefit from these adjustments. Funding also supports the expansion of transitional kindergarten, a program designed to increase access to early education for all four-year-olds. This initiative receives an $800 million adjustment as part of the state’s ongoing investment.
Despite these funding increases, systemic challenges remain. Enrollment has declined due to lower birth rates and increased migration out of the state, directly affecting funding levels. While the transitional kindergarten expansion may offer a short-term enrollment boost, the long-term trend of declining student populations threatens financial stability for many districts. Additionally, the expiration of $4.1 billion in one-time pandemic funding after 2025-26 could further strain resources.
For Black students, who are disproportionately represented in low-income school districts, the fiscal outlook provides potential for targeted improvements. Programs like the Learning Recovery Emergency Block Grant, aimed at mitigating pandemic-related learning losses, remain critical in addressing achievement gaps. However, recent assessments highlight the urgency of these efforts. Only 17.8% of Black students met or exceeded state math standards, compared to a statewide average of 35.5%. Similarly, just 30.3% of Black students achieved proficiency in English, compared to 47% overall.
The report identifies $2.8 billion available for new commitments, presenting options such as strengthening reserves, eliminating deferrals, or funding programs to address inequities. The LAO emphasizes the importance of fiscal planning and the strategic use of funds to ensure that these efforts will be impactful.