Educating California’s nearly 6 million public school students is the state’s second-largest budget expense, and has increased significantly during Gavin Newsom’s administration.
The 2026-27 budget Newsom proposed last month would spend $88.7 billion on students, from transfer juniors to high school seniors. When local property taxes and federal aid are included, the total would be about $150 billion, which is an average of $27,418 per student.
That’s a 61% increase from the $17,014 they earned when Newsom became governor, but adjusting for inflation of 29% over that period would cut the real benefit in half.
Comparing California school support to other states is difficult because there is always a bias in data collection. However, the Public Policy Institute of California, using data a few years old, reports that the state is no longer at the bottom in per-pupil spending but in the middle, perhaps a few thousand dollars above average.
Education officials are constantly pushing for more federal funding, governed by complex formulas in the 1988 ballot measure, Proposition 98. Newsom’s budget calculates that the minimum guarantee of Prop. 98 in state and local funds would be $125.5 billion, but it wants to delay $5.6 billion in payments to reduce the budget deficit from many state loans, especially for many school loans. The legislature used it to close the gap between revenue and expenditure.
“This delay shifts costs into the future when the state must ‘fix’ and meet this obligation,” said the Legislature’s financial analyst, Gabe Petek, in his analysis of the school budget, adding, “In the state budget, the repair proposal is similar to other types of borrowing and spending delays – it provides temporary savings for now.”
Calculating what the state is legally obligated to spend on schools, deciding what to spend, crunching the numbers and creating a political framework is an underrated aspect of the annual budget process because it is a big part of the puzzle.
Right now, however, school districts across the state are having incredible difficulty balancing their budgets this year. They are facing declining enrollment due to demographic reasons such as declining birth rates, reduced immigration, reduced interstate migration, local resistance to school closures and pressure from unions to raise salaries for teachers and support staff, to meet their inflationary pressures.
The financial crisis is most evident in urban school districts, where enrollment declines are worst and where unions are strongest, often spending heavily to elect friendly school board members.
The San Francisco school system recently entered a teacher strike over a deal that would raise costs by an estimated $180 million-plus, leaving much uncertainty about how it will get the money.
Sacramento schools have been struggling for years with expenses far outpacing revenue. It could be forced to accept a financial guarantor if it needs a national bailout.
Los Angeles Unified, the nation’s second-largest school system, is facing a $191 million deficit, the latest in a series of budget gaps.
Teachers and their unions say their problems can be solved if they get more government help. But raising per-pupil spending by $1,000 would cost about $6 billion a year, and raising it to $30,000—even to match the top tier of states, like New York—would cost at least $30 billion.
With a state budget already plagued by chronic deficits in the $20 billion range, giving schools their constitutional funding level would decrease by $5.6 billion under Newsom’s budget.
Dan Walters is a writer for CalMatters.
