California Senate Bill SCA5

California 2025-2026 Regular Session

• Introduced: 5/26/26
• Introduced: 5/7/26
• Refer: 5/20/26
• Refer: 5/26/26
• Refer: 6/4/26

Caption

A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by adding Section 16 to Article XIII B thereof, and by amending Section 8 of, and adding Section 8.7 to, Article XVI thereof, relating to education finance.

Summary

SCA 5, the Education Equalization Act, is a proposed constitutional amendment that would create a new Equalization Reserve Account in the General Fund to support school funding equalization. The measure is aimed at narrowing per-pupil spending gaps between basic aid school districts and non-basic aid school districts. It would do this by directing the Controller to transfer money into the new account in years when the state’s Proposition 98 minimum funding obligation increases, using a formula tied to the amount transferred to the existing Public School System Stabilization Account. Only the interest earned on the new account could be spent, and at least 80% of that interest would have to be allocated each year to increase per-pupil funding in non-basic aid school districts. The principal transferred into the account could not be used for any purpose, and the Legislature would be allowed to suspend the transfer requirement if average per-pupil funding in non-basic aid districts reaches or exceeds that of basic aid districts. The measure also excludes these transfers and allocations from Proposition 98 calculations and from the state appropriations limit, and it would amend the constitutional rules governing school funding to treat the account separately from the minimum funding guarantee.

Impact

If adopted, SCA 5 would amend the California Constitution by adding a new appropriations-limit exclusion and by revising Article XVI’s school finance provisions. It would create a dedicated reserve mechanism for education equalization, alter how Proposition 98-related funding is calculated by excluding Equalization Reserve Account transfers and allocations, and require annual legislative allocation of interest earnings to non-basic aid school districts. The measure would primarily affect state budgeting, the Controller’s transfer duties, and the distribution of state school aid under the LCFF framework, while leaving basic aid districts’ direct funding intact.

Sentiment

The bill’s stated purpose is strongly pro-education and pro-equalization, with the text emphasizing that it is intended to close per-pupil spending gaps without reducing funding for any district. Based on the available record, there were no committee transcripts or recorded votes provided showing organized opposition or support, and the bill had advanced to second reading and was ordered to third reading. The overall framing suggests a policy goal of fairness and stabilization in school finance rather than a controversial program expansion.

Contention

The main points of potential contention are fiscal and structural. Supporters would likely focus on equity between basic aid and non-basic aid districts and the use of interest earnings to boost lower-funded districts, while critics may question whether the reserve-account structure meaningfully increases funding or simply shifts money within the constitutional school-funding system. Another likely issue is the interaction with Proposition 98 and the state appropriations limit, since the measure creates exclusions from both, and the Legislature’s ability to suspend transfers only when funding parity is reached could also be debated. The distinction between basic aid and non-basic aid districts, and whether the formula fairly targets districts with the greatest need, is another likely area of dispute.