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Committee hears concerns over $3.94 billion Prop 98 withholding and AB 181 education governance changes
Summary
Members asked how the budget treats Proposition 98 settle‑up and AB 181 governance changes; LAO and DOF explained the settle‑up calculation and timeline, and members highlighted paid pregnancy leave and higher per‑pupil funding.
Assemblymember Patel, as education chair, asked the Department of Finance to explain the Prop 98 withholding and the settle‑up mechanism. Jessica Holmes said the current settle‑up amount is $3,940,000,000 and described the statutory certification process that will finalize the prior‑year calculation next spring; statute requires any unpaid settle‑up then be repaid or placed on a statutory payment plan.
Members praised the budget's investments in schools while warning about the withholding. Patel noted the budget still provides the state’s highest per‑pupil funding, citing an estimate of $28,207 per pupil on average, and highlighted an ongoing $1.8 billion increase for special education base rates.
The proposed education governance change in AB 181 — shifting some authority and creating a new appointed education leadership structure — drew concern from unions and associations during public comment. The California Teachers Association and others urged caution and more hearings before moving governance responsibilities, saying the change “strips the authority of the state superintendent” and is ill timed.
Committee members also highlighted the budget’s paid pregnancy leave for K–12 staff and a super COLA for schools. Committee staff and speakers said trailer language and one‑time and ongoing Prop 98 allocations are intended to protect districts while the settle‑up process is finalized.
