Local Impact of the $5.6B Proposition 98 Withholding

Overview of the Governor's Proposal

The Governor’s January budget proposal would withhold $5.6 billion from the 2025–26 Proposition 98 minimum guarantee, equivalent to approximately $909 per ADA statewide. By withholding these one-time funds, the proposal sets funding below the constitutional minimum guarantee.

Undermining Proposition 98 Stability

The Governor’s proposal to withhold $5.6 billion from the Proposition 98 guarantee intentionally funds schools below the constitutional minimum. Rather than relying on the mechanisms already established in existing law to address revenue fluctuations, the proposal instead uses the settle-up process to delay funding owed to schools. This approach risks misusing a tool intended for technical adjustments to defer the state’s obligation to meet the guarantee while avoiding a defined repayment schedule and inflationary payments.

Protect Proposition 98

California’s leaders should fully fund Proposition 98 and provide ongoing funding to the LCFF base. California’s school districts rely on this constitutional framework to support responsible fiscal planning, maintain staffing, and sustain programs and services for students. Preserving the full guarantee is essential to maintaining the stability and predictability that Proposition 98 was designed to provide.

Current Fiscal Pressures Facing Our District

 While per-pupil spending has increased in recent years, it does not reflect the fiscal realities districts are facing. Rising cost, particularly in special education, employee compensation, pensions, and day-to-day operations, continue to outpace funding growth, creating persistent structural deficits. Coupled with declining enrollment and the expiration of temporary state and federal funding has intensified these challenges, leaving districts to absorb ongoing obligations without sufficient ongoing resources. These factors are contributing to a growing number of districts facing deeper fiscal stress and difficult budget decisions.

How These Funds Would Support Students

If the state withholds approximately $909 per ADA, how would this funding shortfall affect your district’s ability to support students? 

Please describe the specific programs, services, or staffing that could be impacted and, if possible, estimate the number of positions, programs, or dollar amounts that may be affected.