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Guide to School Funding and the State Budget Process

December 2022 | By Jonathan Kaplan and Scott Graves

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California’s State Budget & Why It Matters for K-12 School Funding

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The Constitutional Framework

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What Do the Governor and the Legislature Do?

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What Happens When?

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Key Takeaways

the bottom line

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Terms and Definitions

Additional Resources

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Original Content from Resource

Every year, California’s governor and Legislature adopt a state budget that provides a framework and funding for critical public services and systems — from child care and health care to housing and transportation to colleges and K-12 schools.

But the state budget is about more than dollars and cents.

The budget expresses our values as well as our priorities for Californians and as a state. At its best, the budget should reflect our collective efforts to expand economic opportunities, promote well-being, and improve the lives of Californians who are denied the chance to share in our state’s wealth and who deserve the dignity and support to lead thriving lives.

A multi ethnic group of teenagers hanging outdoors together. The focus of the photo is on an African American teenage girl who is smiling and happy to be with her friends.

“State budget choices have an impact on all Californians and these decisions are particularly important for the nearly 6 million students in California’s K-12 public schools.”

State budget choices have an impact on all Californians and these decisions are particularly important for the nearly 6 million students in California’s K-12 public schools. Because the state budget provides the majority of funding that K-12 public schools receive each year, it is critical for Californians to understand and participate in the annual budget process to ensure that state leaders are making the strategic choices needed to allow every K-12 student — from different races, backgrounds, and places — to thrive and share in our state’s economic and social life.

This guide sheds light on the state budget, the budget process, and why they matter for K-12 students and schools with the goal of giving Californians the tools needed to effectively engage decision makers and advocate for fair and just policy choices.

Support for this report was provided by the Sobrato Family Foundation and the Stuart Foundation.

California Budget
Education

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Having a safe, stable place to live is crucial for student development and educational success. But more than 220,000 of California’s public K-12 students experienced homelessness in 2020-21. This includes children temporarily staying with other families due to economic hardship, and children living in motels, shelters, vehicles, public spaces, or substandard housing.

“More support is needed for California’s Latinx, Black, Indigenous, and Pacific Islander K-12 students who disproportionately experience homelessness.”

Latinx, Black, American Indian, Alaska Native, and Pacific Islander students were disproportionately likely to experience homelessness. These students also experience high rates of chronic absenteeism causing them to lose critical access to curriculum and social structures that schools, educators, and peers offer.

A bar chart showing the percentage of public K-12 students considered homeless during the 2020-21 school year where California's Latinx, Black, Indigenous, and Pacific Islander students disproportionately experience homelessness.

Students’ housing situations shouldn’t block them from learning opportunities. Policymakers should boost investments in safe, affordable housing and target additional funding and resources for students who experience homelessness to ensure every California K-12 student can thrive in school and life.

California Budget
Education

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California is home to the California State University (CSU) and the University of California (UC), which educate thousands of students every year and help them build strong futures for themselves and their communities. CSU and UC require that high school students complete certain courses, known as A-G courses, to be eligible for admission.

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Policymakers can improve CSU and UC access by reforming course requirements so that all students have an equitable chance to pursue higher education.
”

However, California high school students do not have an equal opportunity to successfully fulfill this requirement on their pathways to higher education. In 2020-21, many student groups graduated high school without completing the A-G pathway at rates that were higher than the state average of 48%. These groups include students with disabilities, English language learners, students experiencing homelessness, and students of color.

Policymakers can improve CSU and UC access by reforming course requirements so that all students have an equitable chance to pursue higher education, irrespective of their socioeconomic backgrounds.

California Budget
Education

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All California students pursuing higher education and career pathways should have access to an affordable education and the ability to achieve economic security. And California offers many postsecondary institutions for students to pursue their goals, including colleges, universities, community colleges, and trade schools. Yet, high costs of higher education and career training programs, along with economic hardship exacerbated by the COVID-19 pandemic has caused many students to cancel their education and career training plans. This is hitting students from households with low incomes the hardest. 1“Households with low incomes” are defined as households with annual income of less than $50,000. State policymakers can support students in building their education and careers by making education affordable and addressing costs of basic needs so California’s communities are home to thriving students, families, and workforces. 

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The high costs of postsecondary education are a major barrier for students with low incomes to stay enrolled and complete their coursework.
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Since the beginning of the 2021-22 academic year, more than 1 in 5 households with low incomes included at least one prospective student who canceled all plans to take classes from a postsecondary institution due to impacts of the pandemic (23%).2The US Census Bureau, Household Pulse Survey defines postsecondary institutions as colleges, universities, community colleges, trade schools, or other occupational schools. Students living in households with low incomes were more likely to cancel their education plans than California households overall (18%) and compared to households with higher incomes (14%). Students in Black and Latinx households also canceled education plans at higher proportions than all households (24% and 19%, respectively).

Bar chart: More Than 1 in 5 Households with Low Incomes Included a Student Who Canceled Postsecondary Education Plans. California Households with at Least One Adult Who Canceled All Plans to Take Classes in 2021-22.

There are various reasons why students canceled their postsecondary education plans, but financial stress is a key factor. Of those California households where at least one member canceled all plans for postsecondary education, 41% did so because they were unable to pay for educational expenses due to pandemic-related changes to income and 45% of households with low incomes canceled for the same reason.3Survey respondents were able to select various reasons why plans to take classes were canceled, including being unable to pay for educational expenses, having COVID-19 or having concerns about the virus, uncertainty about how classes or programs would change, among others. Respondents could choose more than one reason for canceling plans.

The high costs of postsecondary education are a major barrier for students with low incomes to stay enrolled and complete their coursework. At a time when California households with low incomes are much more likely to be struggling to meet basic needs, policymakers should ensure that Californians with low incomes seeking postsecondary degrees and certificates have the financial support necessary to complete their programs, provide for themselves and their households, and build their lives across the state’s diverse communities.

Support for this report was provided by the Conrad N. Hilton Foundation.

California Budget
Education
  • 1
    “Households with low incomes” are defined as households with annual income of less than $50,000.
  • 2
    The US Census Bureau, Household Pulse Survey defines postsecondary institutions as colleges, universities, community colleges, trade schools, or other occupational schools.
  • 3
    Survey respondents were able to select various reasons why plans to take classes were canceled, including being unable to pay for educational expenses, having COVID-19 or having concerns about the virus, uncertainty about how classes or programs would change, among others. Respondents could choose more than one reason for canceling plans.

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