Table of Contents
- Introduction
- Key Takeaways
- Understanding the California State Budget
- Understanding TK-12 Education Funding
- State Budget Process: Terms Every TK-12 Advocate Should Know
- State Budget Process: Three Key Deadlines
- State Budget Process: What Do the Governor and the Legislature Do?
- State Budget Process: What Happens When?
- How Can TK-12 Advocates Participate in the State Budget Process?
- Advocacy Opportunities During Each Phase of the State Budget Process
- State Budget Resources
Introduction
Every year, California’s governor and Legislature adopt a state budget that provides a framework and funding for vital public services and systems — from child care and health care to housing and the safety net to colleges and TK-12 schools (transitional kindergarten through 12th grade).
But the state budget is about more than dollars and cents.
The budget expresses our values as Californians and as a state. At its best, the budget should reflect our collective efforts to expand economic opportunities, promote well-being, and improve the lives of Californians who are denied the chance to share in our state’s wealth and who deserve the dignity and support to lead thriving lives.
State budget choices impact all Californians, including the 5.7 million students in California’s TK-12 public schools. The state budget provides most of the funding for TK-12 education, which includes more than 1,000 school districts, county offices of education, and charter schools.
While the total size of the state budget helps to determine the amount of annual funding TK-12 schools receive, the Legislature and governor decide how these state funds are allocated across the state. Therefore, it’s important for Californians to participate in the annual budget process to ensure that state leaders are making the strategic choices needed to allow every TK-12 student — from different races, backgrounds, and places — to thrive and share in our state’s economic and social life.
Understanding the financial resources available to TK-12 schools requires familiarity with the state budget, school funding, and the state budget process. To this end, this guide:
- Highlights key school funding sources,
- Puts school funding into the larger state budget context,
- Describes key components of the state budget process, and
- Shows how Californians can work to shape the state’s TK-12 funding decisions.
The goal is to provide Californians with the tools they need to effectively engage decision makers and advocate for fair and just TK-12 funding and policy choices.
Key Takeaways
The state spending plan is about more than dollars and cents.
- The state budget process allows Californians to express our values and priorities for our state as well as for California’s TK-12 system, which educates well over 5 million students from transitional kindergarten through 12th grade.
State dollars are the primary source of funding for California’s TK-12 schools.
- TK-12 education receives the second-largest share of General Fund dollars, after health and human services.
- The state distributes school funding in multiple ways, including through a formula as well as through additional programs targeting students’ specific needs.
The governor has the lead role in the budget process.
- Proposing a state budget for the upcoming fiscal year gives the governor the first word in each year’s budget deliberations.
- The May Revision gives the governor another opportunity to set the budget and policy agenda for the state.
- Veto power generally gives the governor the last word in budget decisions.
The Legislature reviews and revises the governor’s proposals.
- Lawmakers both build on and revise the governor’s proposals as they craft their version of the state budget prior to negotiating an agreement with the governor.
Budget decisions are made throughout the year, and TK-12 education advocates have many ways and opportunities to make their voices heard.
- Every year, advocates have multiple opportunities to build relationships with policymakers and staffers and work to influence budget decisions.
- This includes submitting letters to policymakers outlining key budget priorities, providing public comment at budget committee hearings, and meeting with committee staffers, legislators, and officials in the governor’s administration.
- In short, TK-12 advocates have ample opportunity to stay engaged and involved in the budget process year-round.
Understanding the California State Budget
California’s state budget funds a wide range of public services, from schools to health care to higher education. Understanding where the dollars come from and how they are allocated is essential context for understanding how schools are funded.
the state budget consists of three types of state funds
Three kinds of state funds account for almost two-thirds (65.3%) of California’s $538.9 billion budget for 2026-27, the fiscal year that began on July 1, 2026. Specifically:
- General Fund — The state General Fund accounts for revenues that are not designated for a specific purpose. Most state support for education, health and human services, and state prisons comes from the General Fund.
- Special Funds — Over 500 state special funds account for taxes, fees, and licenses that are designated for a specific purpose.
- Bond Funds — State bond funds account for the receipt and disbursement of general obligation (GO) bond proceeds.
Federal funds comprise the rest (34.7%) of the state’s 2026-27 budget.
Most General Fund Revenue Comes from Three State Taxes
Under the enacted 2026-27 state budget, General Fund revenue is estimated to total $230.3 billion, with more than 98% expected to come from California’s “Big Three” taxes:
- Personal income tax (63.2%) — This is a tax on the income of California residents as well as the income of nonresidents derived from California sources.
- Corporation tax (19.6%) — This is a tax imposed on corporations that do business in or derive income from California, with the exception of insurance companies, which instead pay the insurance tax.
- Sales & use tax (15.5%) — This is a tax on the purchase of tangible goods in California (the sales tax) or on the use of tangible goods in California that were purchased elsewhere (the use tax).
Other state revenue is estimated to make up about 2% of total projected General Fund revenue in 2026-27. This revenue comes from a broad range of sources, including taxes, fees, and fines.
More Than a Third of State General Fund Spending Supports TK-12 Education
Under the enacted 2026-27 state budget:
- TK-12 education accounts for more than a third (36.2%) of General Fund spending.
- The largest share (37.1%) of General Fund spending supports health and human services.
- About 1 out of every 10 General Fund dollars (10.6%) funds higher education, which includes the California Community Colleges, the California State University, and the University of California.
Understanding TK-12 Education Funding
California’s TK-12 schools are funded primarily through Proposition 98 (see box below), a constitutional funding guarantee that sets a minimum funding level for the state’s public schools and community colleges each year. This section explains where funding for TK-12 education comes from and how it is distributed to schools across the state.
what is proposition 98?
Prop. 98 is a constitutional amendment adopted by California voters in 1988 that establishes an annual minimum funding level for schools each fiscal year, commonly referred to as the minimum guarantee. Prop. 98 funding comes from a combination of state General Fund revenue and local property taxes. Prop. 98 spending supports TK-12 schools, community colleges, county offices of education, the state preschool program, and state agencies that provide direct TK-14 instructional programs. While Prop. 98 establishes a required minimum funding level for programs falling under the guarantee as a whole, it does not protect individual programs from spending cuts or elimination.
The Majority of TK-12 Education Funding Comes from the State
In the 2024-25 fiscal year, TK-12 school districts (excluding charter schools) and county offices of education received funding from a broad range of sources, with state funds making up the largest share. Specifically:
- Almost 60% ($63.8 billion) came from the state.
- Over a third came from local sources, including 25.6% ($27.9 billion) from local property taxes and 10.2% ($11.1 billion) from other local revenues such as parcel taxes and fees for the use of school buildings.
- Nearly 6% ($6.4 billion) came from the federal government through a number of federal programs.
Most TK-12 Education Funding Is Allocated Through the Local Control Funding Formula
In the 2024-25 fiscal year, schools received $72.3 billion through the Local Control Funding Formula (LCFF), the primary funding mechanism for TK-12 school districts, charter schools, and county offices of education. This formula:
- Is funded through a combination of General Fund and local property taxes.
- Primarily uses an attendance measure, average daily attendance (ADA), to calculate a funding allocation for each district, charter school, or county office of education.
- Sets a per-ADA base grant, which is adjusted by grade level spans (TK-3, 4-6, 7-8, 9-12). The base grants are also annually adjusted for increases in the cost of living.
- Includes additional grants to more equitably distribute LCFF dollars across schools. These grants are based on a school district’s enrollment of students in the foster system, students identified as English learners, students from families with low incomes, or students experiencing homelessness.
- Mechanically generates funding amounts, but the governor and the Legislature ultimately determine LCFF allocations in the annual state budget by approving any growth in cost of living or other changes that impact funding.
The formula also provides a greater level of local autonomy in TK-12 spending decisions compared to the previous school finance system, which the LCFF replaced in 2013-14. However, TK-12 districts must demonstrate how spending decisions increase or improve services to students with the highest needs.
Schools Also Receive Funding Through Categorical Programs
In addition to LCFF dollars, schools also receive funding through a growing number of categorical programs. Unlike discretionary funding provided through the LCFF, categorical programs fund specific purposes. Each program has its own allocation formulas that differ from the LCFF; therefore, the amounts schools receive vary by program.
As of the 2025-26 state budget, the largest categorical programs were Special Education, the Expanded Learning Opportunities Program, Child Nutrition, State Preschool, and Arts and Music funding (Proposition 28 of 2022).
As with the LCFF, the governor and the Legislature decide each year whether to create categorical programs and increase or decrease funding for existing ones. In recent years, programs such as the Expanded Learning Opportunities Program have been created, directing Prop. 98 dollars to schools earmarked for that specific purpose. Creating new categorical programs comes with a trade-off: more money directed to categoricals means less is available to expand LCFF funding, which gives districts more spending flexibility.
State Budget Process: Terms Every TK-12 Advocate Should Know
Understanding key budget-related terms will help advocates more effectively navigate the state budget process. This section features a dozen definitions drawn from the Budget Center’s glossary of state budget terms, which includes around 100 budget-related words and phrases.
- Assembly Budget Committee + Senate Budget and Fiscal Review Committee
- Budget Act
- Budget Bill Jr.
- Department of Finance (DOF)
- Governor’s Budget Summary
- Governor’s Proposed Budget
- Legislative Analyst’s Office (LAO)
- Line-Item Veto
- May Revision
- Proposition 98 (1988)
- Public School System Stabilization Account (PSSSA)
- Trailer Bill
State Budget Process: Three Key Deadlines
There are three key budget-related deadlines. Two of these deadlines are included in the state Constitution, and the third is outlined in state law.
- January 10: The constitutional deadline for the governor to propose a state budget for the upcoming fiscal year.
- May 14: The statutory deadline for the governor to release a revised budget, known as the “May Revision” or “May Revise.” The revised budget updates the governor’s January revenue estimates and spending proposals.
- June 15: The constitutional deadline for the Legislature to pass the initial budget bill for the upcoming fiscal year. This is the bill that becomes the Budget Act once the governor signs it into law.
Three Key Budget Deadlines
Two in the State Constitution (January 10 and June 15), One in State Law (May 14)
State Budget Process: What Do the Governor and the Legislature Do?
The governor and state legislators play key roles in the state budget process.
The Governor’s Role
California has long had an executive-centered budget process that gives significant authority and power to the governor and the Department of Finance, which leads the development of the governor’s budget proposals. The governor:
- Approves, modifies, or rejects spending proposals prepared by state departments and agencies through an internal process coordinated by the Department of Finance.
- Proposes a spending plan for the state each January, which is introduced as the budget bill in the Legislature.
- Updates and revises the proposed budget each May (the “May Revision”).
- Signs or vetoes the bills included in the budget package.
- Can veto all or part of individual appropriations (line items), but cannot increase any appropriations above the level approved by the Legislature.
The Legislature’s Role
Legislators also play a key role in the budget process by reviewing, revising, and adding to the governor’s proposals, with help from the Legislative Analyst’s Office, commonly known as the LAO. The Legislature:
- Approves, modifies, or rejects the governor’s budget proposals.
- Can add new spending or make other changes that substantially revise the governor’s proposals.
- Needs a simple majority vote of each house to pass budget bills and most trailer bills.
- Needs a two-thirds vote to pass certain other bills that may be part of the budget package, including bills that increase taxes or that propose constitutional amendments.
- Needs a two-thirds vote of each house to override the governor’s veto of a bill or an appropriation.
What Is the Role of the Legislature’s Budget Subcommittees in the State Budget Process?
The work of the Assembly Budget Committee and the Senate Budget and Fiscal Review Committee largely happens through subcommittees. Each subcommittee — seven in the Assembly and five in the Senate — focuses on a specific policy area or set of policy areas, like health, housing, or education.
The education-related budget is overseen by these two subcommittees:
- Senate Budget Subcommittee 1 on Education (known as “Sub 1”), and
- Assembly Budget Subcommittee 3 on Education Finance (known as “Sub 3”).
Budget subcommittees have a number of roles in the state budget process. For example, they:
- Hold dozens of hearings from February to May to review the governor’s proposals, which they can approve, modify, or reject.
- Meet with policy advocates to understand their priorities and gather intel on what’s happening in a specific policy space.
- Evaluate budget requests (or “asks”) submitted by advocates and legislators and decide which to include in their own budget plans that they work on throughout the spring.
- Finalize the Assembly and Senate versions of the budget, which are later combined into a unified legislative budget plan that is typically unveiled in late May or early June.
State Budget Process: What Happens When?
The state budget process is cyclical, with no clear stop and start dates. State leaders develop and revise the budget during three distinct periods: July to December, January to mid-May, and mid-May to June. The following sections highlight major budget-related events and activities during each of these periods.
July to December
Work on the state budget during July to December is focused on two areas: 1) revising the June budget package (that is, the budget-related bills signed into law by the governor early in the summer), and 2) preparing for the next state fiscal year.
January to Mid-May
Mid-May to June
How Can TK-12 Advocates Participate in the State Budget Process?
TK-12 advocates can inform and influence budget choices by engaging with legislators and their staff as well as with executive branch officials.
Building Relationships Is Key to Effective Advocacy
Building relationships with policymakers and staffers in the Legislature and in the governor’s administration is the foundation of effective budget advocacy.
The Capitol runs on relationships: Who you know is critical to advancing your budget priorities, so it’s important to lay the groundwork for influence by building familiarity and trust with key players in the process by reaching out and scheduling a time to meet in person or virtually. Autumn can be the best time to reach out because workloads tend to be lighter, but it’s never too late to start.
Because turnover can be high in the Legislature and in the governor’s administration, it’s important to pay constant attention to relationship-building. There are always new faces to become acquainted with, so the work of relationship-building never ends.
Advocates Have Many Ways to Make Their Voices Heard
With relationships as a foundation, there are a range of tactics that advocates can use to ensure that their voices are heard in the state budget process. For example, you can:
Submit “budget letters” to policymakers outlining your budget priorities.
- The public’s role includes writing letters that highlight your budget priorities and providing them to legislators and the governor’s administration.
- Budget letters and other comments should be submitted to the Assembly Budget Committee and the Senate Budget and Fiscal Review Committee using the dedicated email addresses shown at the top of each committee’s home page.
- While it’s acceptable to send information directly to budget committee consultants’ work emails, advocates should use this option prudently given the high volume of emails that committee consultants receive.
- However, advocates should never send “spam” emails directly to budget committee consultants. These are email templates that hundreds or thousands of people can use to send the same message to policymakers and staff. Those kinds of emails should go to the dedicated budget committee email addresses instead.
Schedule meetings with key policymakers and staff in the Legislature and in the governor’s administration.
- Building relationships is crucial to effective advocacy, so it’s important to lay the groundwork for influence by reaching out and scheduling times to meet with key legislators and their staff — particularly on the budget committees and in leadership positions — as well as with key contacts in the governor’s administration.
Provide public comments and — if invited — testify as part of a panel at budget subcommittee hearings.
- You can share your views during public comment periods at budget subcommittee hearings on education funding and policy (the education subcommittees are “Sub 1” in the Senate and “Sub 3” in the Assembly).
- Committee chairs set time limits for each public comment. Sometimes the limit is 1 minute, but it’s often shorter and may only include enough time for you to deliver a “me too” comment — name, organization, and position on the issue.
- In addition, when invited by committee staff, you can provide testimony at a budget subcommittee hearing, which provides more time to share expertise on an issue as well as personal stories, which can be very impactful.
Participate in “lobby days” at the Capitol, joining forces with a broad range of TK-12 advocates.
- Lobby days can be impactful — these events bring together hundreds or even thousands of advocates who join forces to focus media and policymakers’ attention on key policy issues, including those affecting TK-12 education.
Advocacy Opportunities During Each Phase of the State Budget Process
TK-12 advocates can press for their budget priorities throughout the year. This section outlines what you can do during each phase of the state budget process: July to December, January to mid-May, and mid-May to June.
Advocacy Opportunities: July to December
Watch for budget developments in August that affect the issues you work on and be prepared to weigh in on any new proposals affecting TK-12 education.
Schedule introductory meetings with staffers in the Legislature and in the governor’s administration who will be helpful to know for your advocacy.
- For the Legislature, check the Assembly and Senate websites to see which budget committee consultants focus on TK-12 education and get their email addresses.
- For the governor’s administration, start with organizational charts that show who works in the Governor’s Office (the governor’s “inner circle” of advisers) and in key positions in the state departments and agencies. For contacts in the Department of Finance, see this chart of responsibilities.
quick take: quietest period of the state budget process
Much happens behind the scenes from July to December, particularly in the governor’s administration, but advocates still have opportunities to make their voices heard.
Share your budget priorities with:
- Key contacts in the Governor’s Office and in state departments, asking for your priorities to be included in the governor’s January 10 budget proposal.
- Budget committee consultants as well as staff who work for legislative leadership (Assembly Speaker and the Senate President pro Tem).
Advocacy Opportunities: January to Mid-May
Write letters outlining your priorities, including weighing in on the governor’s January proposed budget. Deliver budget letters to the Assembly and Senate budget committee members and staff, legislative leadership, and the Governor’s Office.
Meet with contacts in the Governor’s Office and state departments to discuss the January proposed budget’s approach to education funding and policy and share your ideas for how to improve the governor’s proposals in the May Revision.
quick take: heart of the budget process
January to mid-May is the period with the most consistent and transparent opportunities for public engagement.
Look for opportunities to meet with key contacts in the Legislature to share your priorities and perspectives, including key staff and the chairs of the budget subcommittees, especially the education subcommittees: “Sub 1” in the Senate and “Sub 3” in the Assembly.
Draw attention to your issues by:
- Taking advantage of public comment periods during budget hearings,
- Focusing on storytelling (including highlighting real-world impacts of policy actions/inaction), and
- Organizing public actions to raise awareness and garner local and statewide media coverage.
Advocacy Opportunities: Mid-May to June
Share your views on the May Revision (the governor’s revised budget) during the public comment periods at budget subcommittee hearings.
Urge key legislative staff and members to include your budget priorities in the joint Assembly-Senate budget plan — assuming your idea hasn’t already been embraced by either house or by the governor.
If the Legislature adopts your idea but the governor’s position is questionable or negative, look for ways to move the governor to yes. This could include bringing grassroots pressure to bear, publishing op-eds in key media outlets, and garnering favorable media attention for your cause.
quick take: fastest-moving period of the budget process
The quick pace during the mid-May to June period can make advocacy challenging as policymakers make major decisions in a short period of time.
State Budget Resources
- Department of Finance: The governor’s budget proposals and related documents.
- Legislative Analyst’s Office: Budget and policy analyses, budget recommendations, and historical budget data.
- Legislative Counsel: Bills and bill analyses, a free bill-tracking service, the state codes, and the state Constitution.
- State Assembly and Senate: Committee agendas and other publications, floor session and committee schedules, the annual legislative calendar, and live and archived video streaming of legislative proceedings.
- Budget Academy: The Budget Center’s essential resources for understanding and navigating the California state budget.
