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May Revision rebenching shifts TK costs into K–12; community colleges and LAO warn of deferred costs and larger deferrals

3415207 · May 20, 2025
AI-Generated Content: All content on this page was generated by AI to highlight key points from the meeting. For complete details and context, we recommend watching the full video. so we can fix them.

Summary

The California Department of Finance told the Assembly Budget Subcommittee No. 3 on Education Finance that the May Revision reduces the Proposition 98 guarantee for 2025–26 and rebenches universal transitional kindergarten costs onto the K–12 side, shifting roughly $492 million away from community colleges; the Legislative Analyst’s Office and community college representatives warned the package relies on deferrals and one‑time fixes that could create budget pressure in future years.

The California Department of Finance told the Assembly Budget Subcommittee No. 3 on Education Finance that the May Revision forecasts the Proposition 98 guarantee for 2025–26 at $114.6 billion, about $4.3 billion lower than the governor’s January forecast, and proposes rebenching certain program costs — including universal transitional kindergarten (TK) — onto the K–12 side of the Proposition 98 split.

The rebenching proposal removes TK funding from the K–12/community college split calculation and shifts $492 million from community colleges to K–12 going forward, according to Alex Schopf of the Department of Finance. The administration said the move is intended to align program funding with where the costs are realized and to address multi‑year TK expansion that has increased K–12 costs.

Why it matters: the LAO and community college leaders warned the committee the May Revision relies heavily on payment deferrals, one‑time monies and reduced reserves to preserve…

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