Foreshadowing the May Revise: Higher COLA, Sluggish Tax Receipts

The statutory cost-of living adjustment (COLA) for California’s K-12 education funding formulas for the 2024-25 fiscal year locked in today at 1.07%. The figure represents a modest increase from the 0.76% estimate in the governor’s January budget proposal and is very close to CSDC’s prior estimates. With this month’s key tax revenues—personal income and corporate tax—trending below the levels estimated in the governor’s January budget (though above the grim levels estimated by the Legislative Analyst’s Office (LAO)), it remains to be seen whether the state will be able to afford to fund even this modest COLA.   

The governor and legislature took early action in March to implement over $17 billion of budget fixes. Only two of these fixes affected K-12 education, including cutting $500 million from the state’s School Facilities Program and delaying $550 million of kindergarten facilities funding—neither of which should directly affect charter schools given they were not eligible for funding from them in the first instance. While legislative budget subcommittees have held several hearings to discuss the education budget, they have taken no key votes beyond the early action items, opting instead to kick the proverbial budget “tires.”

CSDC anticipates that the Newsom Administration will release its May Revision to the proposed 2024-25 state budget in two weeks. Several factors will make this year’s May Revision unusually volatile, including the unsettled economic and tax revenue picture and the governor’s proposal to shield K-14 education from cuts with an unusual $8 billion internal loan. 

On May 16, CSDC will resume its 2024 Budget, Policy, and Leadership Update Webinar Series with its annual May Revise Webinar. Building upon the Governor's Proposed Budget Webinar in January (and a subsequent State Budget & Policy Mini-Update in February), the May Revise Webinar will offer important updates on legislation, accountability, and the May Budget Revision. It will also include CSDC’s suggestions on finalizing key budget and strategic decisions for the upcoming school year. Registration is free of charge to CSDC Member Schools and Authorizers and we recommend it highly for school executive and instructional leads, business officials, and governing board members.