Governor’s 2026 budget presentation flags $5.5B Prop 98 ‘settle up’ and new investments affecting El Rancho Unified

Megan Bear, director of government relations at School Services of California, briefed the El Rancho Unified board on the governor's Jan. 2026 budget proposal and its potential implications for local districts.

Bear said the governor proposed underfunding Proposition 98 by $5.5 billion in what he terms a "settle-up" rather than the customary maintenance-factor approach; that choice alters repayment certainty and inflation adjustments for education funding and drew concern from the audience. "When Prop 98 is underfunded…the settlement proposal is not as favorable to school districts," Bear told trustees, noting repayment under a settlement is not on a set schedule and is not inflation adjusted.

The presentation also noted the governor's proposal to increase core funding via a 2.41% cost-of-living adjustment (COLA) and to fund a discretionary block grant and a restored learning-recovery block grant. Bear called special-education funding a “bright spot,” citing a proposed AB 602 increase that would move per‑ADA special-ed funding toward $999—an advocacy objective districts have sought for years.

Board members asked questions about reserve caps, student pathways and the timing of trailer bills and the May revision. Bear advised that the governor's numbers are a starting point for six months of legislative negotiation and that the May revision will update revenue estimates; she recommended district advocacy, especially around protecting Prop 98 guarantees.

Trustees said they would continue district-level and regional advocacy to push for protections on Prop 98 funding and to monitor how state proposals may translate into local allocations.