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LESC staff propose $5.02 billion FY27 public‑school support; staff warn insurance costs drive growth
Summary
LESC/LAFC staff presented a FY27 public‑school support recommendation totaling $5.02 billion (5.1% over FY26), led by insurance cost increases and a recommended 3% pay raise for educators; staff also proposed $52.2 million to the Public Education Reform Fund for multiyear projects including high‑impact tutoring and community schools.
LESC staff presented a draft FY27 public‑school support recommendation that would total $5,020,000,000, an increase of $252,000,000 from FY26. Daniel, LAFC’s public school finance analyst, told the committee the package balances recurring priorities with one‑time investments and aims to protect local capacity while recognizing competing state budget needs.
The proposal would add a 3% compensation increase to the School Funding Formula with an appropriation of $108,100,000. "We are recommending a 3% increase in compensation and an appropriation of $108,100,000 to the SCG," Daniel said. The staff recommendation for the SCG itself is $4,733,000,000 in FY27; the public‑school support total reaches $5.02 billion when categorical and below‑the‑line appropriations are included.
Staff highlighted that insurance costs account for a large share of the requested increase. The presentation set out related line items: an 80/20 insurance premium‑share proposal (discussed separately in the meeting) and additional employer‑share funding to cover expected premium increases in state insurance pools.
Beyond recurring funding, staff proposed transferring $52,200,000 from the general fund into the Public Education Reform Fund (PERF) to support three years of multiyear projects. Recommended PERF projects include a $30,600,000 allocation for high‑impact tutoring (about $10,200,000 per year) and $21,600,000 for community schools (about $7,200,000 per year), along with smaller allocations for learning management systems and targeted cultural/act‑related grants.
The draft also lists categorical increases (transportation $148.4M, Indian Education Fund $20M) and recurring below‑the‑line items such as universal school meals and investments in statewide student information systems. Staff noted the statewide student information system is an ongoing recurring cost and recommended moving it into the recurring appropriation base.
Committee members pressed staff on the revenue estimate, transportation shortfalls, and unanticipated growth tied to virtual‑school enrollments. Daniel said current consensus revenue estimates include roughly $484,000,000 in new money and that LFC will publish revised estimates at its December meeting. On transportation, staff agreed to a deeper analysis of distribution methodology and whether a modest contingency appropriation should be included to help districts with verified shortfalls.
Next steps: staff will refine the recommendation based on members’ feedback and return in December and January for possible committee endorsements and further drafting of house bill language.
