Educating California’s nearly 6 million public school students is the state budget’s second largest expenditure, and one that has increased sharply during Gavin Newsom’s governorship.
The 2026-27 budget that Newsom proposed last month would spend $88.7 billion on students, ranging from transitional kindergartners to high school seniors. When local property taxes and federal aid are included, the total would be nearly $150 billion, an average of $27,418 per pupil.
That’s a 61% increase from the $17,014 they were getting when Newsom became governor, but adjusting for 29% inflation during that period would cut the real gain in half.
Comparing California’s school support to that of other states is difficult because there’s always a lag in data collection. However, the Public Policy Institute of California, using data that are a few years old, reports that the state is no longer in the lower ranks in per pupil spending but is somewhere in the middle, perhaps a few thousand dollars above average.
Education officials constantly press for more state spending, which is governed by complicated formulas in a 1988 ballot measure, Proposition 98. Newsom’s budget calculates that the minimum Prop. 98 guarantee in state and local funds would be $125.5 billion, but he wants to delay $5.6 billion in payments to reduce the budget’s deficit — essentially a loan from the schools to the state, one of many maneuvers he and the Legislature have used to close the gap between revenue and spending.
“This delay shifts costs to the future when the state must ‘settle up’ and meet this obligation,” the Legislature’s fiscal analyst, Gabe Petek, says in his overview of the schools budget, adding, “For the state budget, the settle-up proposal is similar to other forms of borrowing and spending delays — it provides temporary savings in the current year but increases costs in the future.”
Calculating what the state is legally obligated to spend on schools, deciding what it will spend, massaging the numbers and framing the political optics is a time-dishonored feature of the annual budget process because it’s such a big piece of the puzzle.
Meanwhile, however, school districts throughout the state are having remarkable difficulty in balancing their own budgets this year. They face declining enrollments due to demographic factors such as falling birth rates, lower immigration, population losses to other states, local resistance to school closures and pressure from unions for salary increases for teachers and support staff, to cope with their own inflationary pressures.
The fiscal angst is most obvious in urban school districts, where enrollment declines are most severe and where unions are the strongest, often spending heavily to elect friendly school board members.
San Francisco’s school system just underwent a teacher strike that was settled with an agreement that will raise costs by an estimated $180 million-plus, leaving great uncertainty over how it will find the money.
Sacramento’s schools have been teetering on the edge of insolvency for years due to outlays that are markedly greater than income. It could be compelled to accept a fiscal overseer if it needs a state bailout.
Los Angeles Unified, the nation’s second largest school system, is facing a $191 million deficit, the latest in a string of budget gaps.
Educators and their unions say their problems could be solved if only they had more state aid. But raising per pupil spending by $1,000 would cost nearly $6 billion a year, and increasing it to $30,000-plus to match the top tier of states, such as New York, would cost at least $30 billion.
With the state budget already plagued by chronic deficits in the $20 billion range, just giving schools their constitutional level of financing will fall $5.6 billion short under Newsom’s budget.
Dan Walters is a CalMatters columnist.
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