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State budget brings one‑time windfalls and longer-term uncertainty, consultants tell EGUSD board
Summary
School Services of California told the board the enacted 2026–27 state budget raises Proposition 98 funding to about $128 billion, includes a statutory COLA plus a 1.44% augmentation tied to paid pregnancy disability leave, provides a historic boost to special education, and leaves districts exposed to volatility and a $3.9 billion 'settle-up' withholding.
Patty Herrera and John Gray of School Services of California presented a detailed briefing on the recently enacted state budget and what it means for Elk Grove Unified.
Herrera told trustees that California’s education funding reached about $128,000,000,000 under the enacted budget and emphasized the state’s reliance on volatile, stock-market-driven revenues. She noted a $3.9 billion “settle-up” — money the state owed districts for 2025–26 that has not yet been paid — and said the enacted budget provides only limited guarantees for when those funds will be disbursed. “When those revenues exceed estimates, the state gives districts about 33¢ of every surplus dollar to begin to pay down that deficit,” Herrera said.
Both presenters highlighted that ongoing investments included a statutory COLA of 2.87% plus an additional 1.44% intended, in part, to fund paid pregnancy disability leave (up to 14 weeks). Herrera described a historic 43% increase to special-education base grants statewide (about $2.5 billion). John Gray reviewed local implications, telling the board that EGUSD’s adopted multiyear projections show an operating surplus and healthy fund balance through 2028–29 and that one-time discretionary block grants equal roughly $930 per student (estimated at a little over $56 million districtwide) that must be spent by 2032.
Trustees asked detailed follow-up questions about SDI (State Disability Insurance) participation, substitute coverage, reserve policy and how one‑time funds should be used. Herrera and Gray cautioned that while EGUSD projects fiscal health, the state’s reliance on concentrated revenue sources makes future years uncertain and recommended careful reserve planning.
