Transcript Highlights:

• and ELOP, maybe we need to have a better look at what is the actual cost of funding public education
• The actual cost of funding public education at the level that our students need that help.
• We need at least 105 to be funded under our program.
• After three years, they received 45% of the funds needed to rebuild from insurance.
• Districts are seeing increased identifications, and there needs to be aligned funding to help provide

Summary: The committee heard opening public comment and then took up several K-12 budget items in the Governor’s January proposal. On LCFF and necessary small schools, the Department of Finance described a 2.41% COLA, a roughly $2.2 billion increase for districts and charters, and a $30.7 million ongoing augmentation to raise necessary small schools funding by 20%. The LAO supported funding the COLA and said the small schools proposal had merit, but questioned the 20% figure and warned about a sharp funding cliff around the enrollment thresholds. Members and witnesses repeatedly raised declining enrollment, attendance, and the need to align funding with outcomes and local cost pressures. The chair and several members also asked whether consolidation, shared administration, or alternative formulas could better address small district costs, and the issue was left open for further discussion. The panel then discussed special education equalization. Finance proposed $509 million ongoing Proposition 98 funding to raise the statewide special education base rate to $999 per ADA, which would fully equalize SELPA base rates; the LAO said the same target could likely be reached with less money under current assumptions. CDE strongly supported equalization as an equity issue and said about 15% of students are identified with disabilities, with identification rising by roughly 20,000 to 25,000 students per year. Members raised concerns about staffing shortages, high caseloads, and the need to use any additional funds for inclusive practices, alternative diploma pathways, and the extraordinary cost pool. The committee also discussed whether the budget language should reflect the $509 million amount or the $999 rate, and the item was held open. For the Learning Recovery Emergency Block Grant, Finance proposed restoring $757.3 million one-time to complete the program, while the LAO recommended approval because learning loss remains unresolved and districts have generally used the funds for tutoring, supplemental instruction, and other academic supports. CDE explained that LEAs must revisit their needs assessments and that many districts are using the funds alongside other support systems, but members pressed for clearer accountability and better data on how much money actually goes to tutoring or other direct services. The committee then reviewed the Student Support and Professional Development Discretionary Block Grant, with Finance proposing $2.8 billion one-time and the LAO saying discretionary funding can help districts address local priorities but should be paired with fiscal oversight and possibly more targeted priorities. Members split between supporting flexibility for local needs and worrying that the grant could be used to cover ongoing structural deficits without clear evidence of student-outcome gains; the issue was also held open. Finally, the committee heard a high-level overview of school facilities funding under Proposition 2, with Finance proposing to continue $1.5 billion in bond spending in 2026-27. OPSC said that at the current pace all Prop 2 K-12 funds would likely be exhausted around 2029-30, and that demand is shifting toward modernization as enrollment declines in many areas. Members asked about school closures, reuse of unused sites, and the new small school district facilities program, which OPSC said is moving toward proposed regulations and would begin accepting modernization applications in November 2026 and new construction applications in January 2027. The committee also briefly noted community college facilities funding and asked for more information later in the process.

Transcript Highlights:

• The terms of repayment are that if either the ADAP rebate fund is in need of increased funding, then
• The DIS workforce is really needed. They do STIs, HIV, and mpox, so having more funding...
• There are 69 programs in 29 counties that need stable funding to continue to distribute naloxone and
• There are 69 programs in 29 counties that need stable funding to continue to distribute naloxone and
• train people on how to need stable funding to continue to distribute naloxone and train people on how

Transcript Highlights:

• actually getting funded, so I think they pulled the funds out of one fund then funded with ARPA, if
• is constantly decreasing, and so we eventually see those funds leaving, so we need to fill that niche
• constantly decreasing, and so we eventually see those funds leaving, so we need to fill that niche.
• So we desperately need to fill in those funds so that we can focus on our children.
• And if we didn't have that, we wouldn't have the extra funds that we need to help.

Summary: A joint Senate Finance and House Appropriations committee heard presentations on the Idaho judicial branch budget, beginning with court operations. Legislative staff reviewed the branch’s structure, staffing, recent technology upgrades funded with ARPA dollars, and prior budget enhancements, including support for court technology, judicial compensation, and additional judges in several districts. Court officials explained a late budget request for an additional $800,700 from a dedicated magistrate retirement fund to cover unexpected retirement bonuses and purchase-of-service costs for seven magistrates, as well as the impact of a governor holdback and reduced federal support for some treatment and domestic violence court-related services. Committee members asked about the timing of the revised retirement request, the purpose and success of the magistrate retirement bonus program, the court’s technology modernization, and the effect of losing federal and other outside funding. Court officials said the retirement timing could not be known earlier because magistrates had until January to notify the court, and they described the bonus as helping judges complete their terms. They also said the court had moved case management and recording systems to the cloud and built a statewide network, and that cuts to treatment court and peer support funding would likely force reductions in non-constitutional services. The committee then heard the Guardian ad litem division request, including a $77,900 general fund enhancement for the Second Judicial District CASA program. The CASA director said the money would support a recruiter/trainer/data supervisor position and required compliance costs such as financial review, office space, and liability insurance. She described volunteer shortages across a large rural district, declining VOCA and grant funding, and the need to spend more time fundraising instead of serving children. Members asked about the decline in VOCA funds, the share of funding coming from donations and fundraising, the number of children served, and the role of CASA for older youth. The director said about 30% of the program’s funding comes from fundraising, that the district serves children over age 12 and some older youth, and she gave an example of a case where CASA helped stabilize a family and reunify children with their parents. No votes were taken, and the committee adjourned until the next day.

Transcript Highlights:

• Anderson, welcome back to the Legacy Fund Committee. Do we need to consider the minutes first?
• that we need to deploy and the number of fund managers that we need to manage in the background to appropriately
• And so we know, previous to that date, we need to transition funds over.
• So if you think about leaving $686 million within the Legacy Fund until you needed those funds, what
• But we need to be able to manage the Legacy Earnings Fund, and then we can manage that internally.

Summary: The Legacy Fund Committee received updates from the North Dakota Retirement Investment Office (RIO) on fund performance, liquidity, in-state investments, and internal management. Scott Anderson reported strong returns for the Legacy Fund across multiple time periods, with performance exceeding the policy benchmark and expectations, driven largely by strong equity markets and effective implementation. He also reviewed private market pacing, noting commitments were on plan but that unfunded obligations and distributions were lower than expected, and presented a new liquidity analysis showing the fund had substantial capacity to meet obligations even under stressed market scenarios. The committee also discussed RIO’s internal investment program and cost savings. Anderson explained how internal management of fixed income, equity, and cash overlay strategies has reduced fees and transaction costs, while improving flexibility and portfolio construction. Members asked about staffing needs, and RIO leadership said asset growth has outpaced current staffing, with a request for additional FTEs likely coming to support investment, operations, risk, and legal functions. The committee also reviewed the Legacy Fund’s in-state investment program, including 50 South Capital and infrastructure lending, and heard that one manager’s buildout is progressing more slowly because many opportunities are still early-stage. Adam Odison presented a preliminary estimate of the 2026 Legacy Fund earnings distribution, projecting about $894.8 million under current law, with roughly $237 million to the Highway Fund and $554 million to the Property Tax Relief Fund after the sinking and interest fund allocation. Jody Smith then gave a project update on a new standalone Legacy Fund website required by statute, intended to consolidate performance, holdings, governance, fees, and use-of-funds information for the public, with a planned launch around the October State Investment Board meeting. She also raised a possible future proposal to place the Legacy Earnings Fund back under State Investment Board management so the cash could remain invested longer before being transferred out, though members noted liquidity, accounting, and bank-deposit implications would need further review. Finally, Kelvin Holden of the Bank of North Dakota reviewed the match loan program, explaining how it supports large economic development projects by pairing Bank of North Dakota loans with State Investment Board CDs. He said the program currently has about $272 million outstanding and has supported projects such as Coal Creek Station and the MDU gas line to Gwinner. Members discussed whether the program’s return is appropriate and noted a prior moratorium on new investments so the committee can revisit the policy next session. The committee then elected Senator Klein as chair and Representative Hogan as vice chair, and the meeting ended with members thanking staff and partners for the fund’s progress.

Transcript Highlights:

• These programs are funded through member contributions and do not result in the need for contributions
• So, we've been on that trajectory, and we don't anticipate needing additional funds.
• No, 10% is what we would need. 18% is what we would need if we didn't get funding.
• have the resources they need. funds available to increase compensation for other valued professionals
• , both that we... need to have a program of programmatic funding, but we also have to have a balance

Bills: SB1 , SB 1

Committee: Senate Finance

Transcript Highlights:

• If they accept these funds from the These funds.
• It is to say we agree that we need to have the requisite resources to safeguard those funds and to ensure
• those funds.
• those funds.
• This is specific to a new grant opportunity that we need authority for to really bolster our funding

Summary: The Joint Finance-Appropriations Committee heard budget presentations from Legislative Services analyst Morgan Poloni and Department of Health and Welfare Director Juliet Sharon on the Division of Early Learning and Development, the Division of Public Health Services, and Family and Community Partnerships. Major topics included the Idaho Child Care Program (ICCP), the Idaho Home Visiting Program, the Idaho Immunization Assessment Fund, HIV and hepatitis prevention, ARPA-funded public health projects, kinship navigation services, and proposed agency reorganizations and transfer authority changes. Poloni explained that several divisions were recently reorganized, making year-to-year comparisons difficult, and outlined the governor’s and agency’s FY 2027 requests, including additional federal and dedicated funds for child care capacity, public health programs, and prevention services.

Transcript Highlights:

• , also the expenditure of our greenhouse gas funds, and that is we need to find ways in California to
• There's funding in here for flood protection, something that we very much care about and need to look
• To assess need or identify projects that should be funded.
• well needed because through this needs assessment, we've really identified that we have a funding gap
• Given the number of pressing projects and needs we've heard about today, is the state's general fund

Summary: The Assembly Budget Subcommittee on water and coastal resilience heard an overview of the governor’s Proposition 4 spending plan, with presentations from the Department of Finance, the State Water Resources Control Board, the Department of Water Resources, the Legislative Analyst’s Office, and later coastal agencies. Members discussed the water chapter’s major allocations for drinking water and wastewater, recycled water, tribal water infrastructure, groundwater recharge and SGMA implementation, dam safety, flood protection, integrated regional water management, Salton Sea projects, and water data/stream gauges. The LAO noted that many programs are established and have clear funding processes, but some newer or less-defined programs may warrant more detailed future budget requests and reporting. No votes were taken on the agenda items. Members raised concerns about groundwater subsidence, water deliveries from the Delta, the pace of water storage investments, instream flows, and whether bond dollars were being used to backfill General Fund reductions. Administration witnesses said groundwater recharge spending is being paced because prior years already funded substantial SGMA work, that Delta operations are governed by water quality, salinity, and species requirements, and that Proposition 1 storage projects have moved slowly because they are locally led and require permitting and financing. The Water Board and DWR said they use public needs assessments, annual plans, and existing grant processes to prioritize projects, and Finance said some General Fund programs were shifted to Proposition 4 to help balance the budget. Members also asked for clearer public tracking of bond spending and more concise future reporting. In the coastal resilience portion, the Ocean Protection Council and Coastal Conservancy described Proposition 4 funding for sea level rise adaptation, coastal flood management, habitat restoration, public access, and San Francisco Bay projects, with a multi-year rollout based on project readiness and recent large state investments. The Conservancy said it would use its existing rolling grant process, while OPC said its sea level rise grants would build on existing programs and new technical assistance. The Department of Fish and Wildlife explained its proposed use of bond funds for climate-ready fisheries, hatchery modernization, salmon monitoring, whale- and turtle-safe fishing gear, and a specific hatchery operations request tied to the Friant settlement. The LAO said the coastal chapter’s proposed first-year spending is relatively modest but generally reasonable given staffing and project readiness, while members emphasized oversight, transparency, and coordination across agencies and jurisdictions.

Transcript Highlights:

• There are some proposals here we think you probably will need to spend even new General Fund.
• So I can say candidly that future funding is needed in future years.
• This funding is really important, and if we... Future funding is needed in future years.
• So there have been sort of some mixed messages about the funding and what will be needed to meet the
• the negotiation to say GGRF funding is going to look different than it did last year, and we need to

Summary: The subcommittee heard an overview of the May Revision from the Department of Finance and the Legislative Analyst’s Office, focused on resources, environmental protection, energy, and related budget issues. Finance said the May Revision keeps the budget balanced in 2026-27 and 2027-28, narrows the structural deficit, and proposes major investments in natural resources, including Proposition 4 bond funding for the Golden Gate Fields acquisition, wildlife refuge and wetland projects, Fort Ord Dunes campground operations, Healthy Rivers and Landscapes, wildfire-human coexistence, and beverage container recycling. The LAO praised stronger-than-expected revenues but argued the state still has a structural deficit and is relying too heavily on reserves, recommending more reserve deposits and fewer new discretionary expenditures. Members questioned several proposals, especially the Golden Gate Fields purchase and the Healthy Rivers and Landscapes Program. Agency officials said the Golden Gate Fields site is a time-limited opportunity, would be remediated by the current owner, transferred to East Bay Regional Park District after closing, and restricted to park/open-space uses rather than commercial development. On Healthy Rivers and Landscapes, Finance and the Natural Resources Agency said the $25 million request would help launch year one of the program, support scientific monitoring, and maintain commitments to environmental flows and habitat restoration; the LAO said the request was premature because the Bay-Delta plan has not yet been formally adopted and the state’s total funding commitment remains unclear. Officials also discussed water storage, subsidence, and the need for ongoing investments in aquifer recharge, aqueduct repairs, and recycling. The committee also reviewed a proposed $1 million shift for the Coexisting with Wildlife Initiative. Fish and Wildlife and the Cattlemen’s Association said the money would support limited-term staffing, deterrence tools, and livestock-loss compensation, while acknowledging the amount is modest compared with the need. Members emphasized the growing human-wildlife conflict problem and the importance of nonlethal deterrence and public education. The discussion then turned to greenhouse gas reduction fund revenues and transit; members warned that lower auction revenues and possible CARB rule changes could leave little or nothing for Tier 3 programs such as transit, clean water, and air-quality programs. Finance and the LAO said the Legislature should plan for multiple revenue scenarios and consider whether the existing cap-and-invest spending framework still matches current revenue expectations and priorities.

Transcript Highlights:

• fund, not to mention the water needs that are out there, excuse me, that this is going to be—we need
• HB 16 would allow immediate needs to be met and fund critical shovel-ready projects.
• HB 16 would allow immediate needs to be met and fund critical shovel-ready projects while preserving
• We have immediate needs for wastewater infrastructure funding that I'm incredibly pleased to say are
• We need to fund the state water plan strategies for the Rio Grande Valley.

Bills: HB16 , HB1618 , HB2692 , HB2712 , HB2970 , HB3609 , HB3628 , HB16

Committee: House Natural Resources

Keywords: water infrastructure, Texas Water Development Board, financial assistance, water supply projects, rural municipalities, water access assessment, aquifer storage, Edwards Aquifer, water injection, environmental regulations, groundwater management, San Antonio River, pollution control, flood management, water quality, conservation district, bonds, utility rates, ratemaking, water services

Transcript Highlights:

• Kuchel mentioned again, we do need for those funds to be stable.
• But do we need to risk penalizing the individuals in a community who desperately need those funds if
• But we need your continued support to fund the needed services and really the permanent housing that
• But we need your continued support to fund the needed services and really the permanent housing that
• All of these things need ongoing funding.

Summary: The Assembly Budget Subcommittee on Accountability and Oversight held a hearing on the Homeless Housing, Assistance and Prevention (HAP) program, focusing on how state homelessness dollars are spent, what accountability measures are in place, and whether those measures are helping or hindering results. The chair framed the discussion around the state’s large homelessness population, the roughly $5 billion invested in HAP since 2018, and the need to balance transparency, performance, and administrative burden as the Legislature considers future funding and possible trailer bill changes for Round 7. Testimony from the Legislative Analyst’s Office and the Department of Housing and Community Development described HAP’s evolving accountability structure, including regional planning, system performance measures, housing element and pro-housing requirements, encampment policies, and public dashboards. LAO noted that added requirements have lengthened the application and award timeline, while HCD emphasized that the program is increasingly directing funds toward evidence-based housing solutions and that public reporting has improved transparency. HCD also said HAP has helped move more than 90,000 people into permanent housing statewide and that the department is working to reduce duplicative reporting and improve speed. Local officials from Oakland, Alameda County, and Riverside County largely supported HAP but urged the Legislature not to overcorrect with punitive or overly burdensome accountability rules. They argued that homelessness is driven by broader housing shortages and outside factors, that one-time funding should be stable and predictable, and that metrics should focus on program-level outcomes rather than system-wide homelessness counts alone. Several witnesses described HAP as essential to keeping shelter, interim housing, and permanent housing programs operating, with Riverside citing a 19% reduction in unsheltered homelessness and Alameda citing over 6,000 people moved into permanent housing through HAP-funded programs. Members asked about point-in-time count reporting, fraud safeguards, federal funding threats, and whether accountability requirements should be streamlined. Some members emphasized the need for faster disbursement and stable metrics, while others raised concerns about data consistency across counties and the impact of federal cuts to vouchers and supportive housing. No formal vote was taken; the hearing was informational, with members indicating follow-up discussions and future budget negotiations on HAP accountability and funding.

Transcript Highlights:

• And we need to do a better job in funding that, Mr. Chair. That's just my 2 cents.
• priorities or address significant local needs at higher levels of funding than the current system is
• Only fund projects needing additional funds for completion if they did not receive the CDPF, and also
• not need more than 4 years to expend the funds.
• we need to have funded, and many times I was caught up in that so that I funded projects that they didn't

Transcript Highlights:

• He said many communities, including Lawrence, need additional funding and asked what the better process
• We want to see it through, but we also need to be balancing our ability to take on and fund new projects
• Demand for MVP grants far outweighs existing funding, and that need will increase as climate change becomes
• So it's in there, but we think that it needs to be its own dedicated line item in order to really fund
• But this bill as written will not provide the funding that we need for these critical projects that have

Committee: Joint Joint Committee on Bonding, Capital Expenditures and State Assets

Summary: The Joint Committee on Bonding, Capital Expenditures and State Assets held a hearing on S. 2542, the Mass Ready Act, the Healey-Driscoll administration’s environmental bond bill. Secretary of Energy and Environmental Affairs Rebecca Tepper and Undersecretary Jen Sullivan described the bill as a $3 billion resilience package to protect drinking water, farms, fisheries, roads, bridges, parks, and communities from flooding, heat, drought, wildfires, and other climate impacts. They highlighted major authorizations for flood and coastal resilience, DCR infrastructure, drinking water and wastewater upgrades, PFAS remediation, open space and land protection, food security infrastructure, and a new Resilience Revolving Fund for low-cost loans to municipalities, tribes, and water districts. Committee members asked about project lifespans, flood and salt marsh permitting, wastewater and combined sewer overflow funding, parkway maintenance, land acquisition priorities, Quabbin stewardship, and how the revolving fund would be capitalized and administered. The administration said the fund would be modeled on the Clean Water Trust, use existing trust resources rather than new fees, and could later support special obligation bonds; they also said the bill would streamline certain permitting and improve flood-risk disclosure and climate-related building standards. Many witnesses urged the committee to strengthen the bill’s funding levels or add related policy provisions. Labor, contractor, and plumbing groups supported creating a water reuse and graywater recycling commission, saying it could conserve water, reduce stormwater and sewer burdens, and create skilled jobs. Boston Harbor Now asked for higher authorizations for the Municipal Vulnerability Preparedness program and resilient coast work, plus permitting reforms for nature-based and waterfront projects. The Massachusetts Rivers Alliance backed the bill but also urged inclusion of drought-management legislation, a water reuse commission, a statewide flood buyout program, and more support for community resiliency. Environmental justice advocates from Green Roots called for dedicated funding for outdoor and indoor air quality monitoring and indoor air quality improvements in schools and public housing, while conservation and tree advocates sought larger investments in urban forestry, local nurseries, and workforce training, along with clearer language to ensure municipal reforestation funds go to cities and towns. Agricultural and food system witnesses emphasized the importance of the bill’s food security and farmland provisions. The Southeastern Massachusetts Agricultural Partnership and the Mass Food System Collaborative supported the $125 million food security infrastructure grant program, saying it has funded critical facilities and equipment for farmers, fishers, processors, and food access organizations, but warned that without the bill there could be a funding gap in fiscal year 2027. They also supported farmland protection and asked for more funding for agricultural capital programs, used-equipment eligibility in grant programs, and a next-generation farmer fund. Water utility representatives said the bill still falls short of the state’s long-term drinking water, wastewater, and stormwater needs, citing EPA estimates of nearly $37 billion in needed investments over 20 years and urging dedicated recurring funding and broader eligibility for climate resilience grants. No votes were taken at the hearing.

Transcript Highlights:

• So even that would reflect part of our need for funding.
• So even that would reflect part of our need for funding.
• But at the same time, we need to be fully funding. So it was mentioned...
• But at the same time, we need to be fully funding.
• Funding is needed to address the needs of tribal communities and support long-term programming, including

Transcript Highlights:

• We will be funding it more and more every year, so we need to fix our funding formula.
• So we need to fix our funding formula. We need to define who needs the special ed monies.
• But it needs to be done and it needs to be done for the students of this state so that the funds follow
• next year when driver's ed, you know, they need more funds for driver's ed.
• Year when driver's ed, you know, they need more funds for driver's ed.

Transcript Highlights:

• Rather big increases that you've frankly funded during the special session, and we'll need to make a
• We got non-recurring money that needs to be pocketed to offset the general fund recurring costs.
• If you need it. But this shows the share of general fund revenue by revenue type.
• Chair, I just feel the need to talk a little bit about the permanent fund.
• Funds, other asset funds, or the underlying portfolio companies that they need to use any particular

Transcript Highlights:

• The second infrastructure fund is much needed.
• They identify a need, and there's just not enough funding to meet those needs.
• So, you know, it's an ongoing problem and it needs ongoing infrastructure funding.
• So the fund is versatile. It's relatively small, but the $2.5 million does not meet the need.
• We need your support with the general fund.

Committee: House House Rural Development, Land Grants And Cultural Affairs

Transcript Highlights:

• Are we going to be adding more money into that, or is that a fully funded program that does not need
• What kind of programs exist under this funding? And if they wish to continue, they need to reapply.
• needs while keeping the fund solvent.
• We're here today to discuss the urgent need to fund the California Nurse Midwifery Education Fund as
• It's just that we need more funding. It's not enough funding.

Transcript Highlights:

• Other funds means any funds other than foundation funding.
• Over half of superintendents reported being extensively in need of additional funding for special education
• Being extensively in need of additional funding.
• funding, yes, that percentage... ...the breakdown of the other funding versus the foundation funding
• It's just interesting that they wouldn't recognize it as needing funding when, in fact, they're getting

Summary: The House/Joint Education committee continued its adequacy study with a Bureau of Legislative Research presentation on resource allocation, focusing first on matrix spending and then non-matrix spending. Staff explained the methodology for mapping APSCN expenditure data to matrix lines, reviewed district and school categories used in the analysis, and highlighted key findings: foundation funding covered a large share of matrix costs but total spending on matrix items exceeded foundation funding, with classroom teachers making up the largest share. Members asked for additional breakdowns on waivers, superintendent survey responses, trend data, and spending by district type, size, and rural/urban status. Staff also noted limitations in tracking two matrix lines—salary enhancement for other employees and all personnel health insurance—because of coding and definition issues. The committee then reviewed non-matrix expenditures, including instructional aides, facilities, school safety, mental health, dyslexia services, gifted and talented, and career and technical education. Staff reported that non-matrix spending remained above $2 billion over the last three years, with most of it coming from other funds rather than foundation funding. Members raised concerns about dyslexia identification and funding, mental health needs, school safety, food service, athletic transportation, and whether some items should be added to the matrix. The Department of Education clarified that the building fund reflects district-held funds for construction and maintenance projects, while the facilities partnership program is a separate state process for approved projects. In the final discussion, staff summarized total spending as more than $15,800 per student in 2025, with about 69% going to matrix resources and 31% to non-matrix resources. The chair explained the adequacy process and the committee’s role in setting future funding recommendations, and members discussed the recommendations worksheet included in the binder. The chair then proposed postponing the remainder of Part Two of the presentation until a May meeting after the fiscal session, along with inviting the Department of Education back for more detailed questions; with no objections, the committee adjourned.

Transcript Highlights:

• fund staff and other needs at a school district.
• students of greatest need, to better target those funds.
• We do Also need, at moments in time, sort of grant funds that get people to start to do new things.
• We agree with previous comments that have been made regarding the need to stabilize the Tier 2 funding
• We agree with previous comments that have been made regarding the need to stabilize the Tier 2 funding

Summary: The committee heard presentations on the Governor’s education budget proposals for the Local Control Funding Formula (LCFF), Learning Recovery Block Grant, and Expanded Learning Opportunities Program (ELOP), followed by testimony from State Board of Education President Linda Darling-Hammond. On LCFF, Finance outlined the proposed 2.43% COLA, repayment of prior deferrals, and a trailer bill penalty for LEAs that fail to adopt Local Control Accountability Plans on time. The LAO said its COLA estimate was slightly lower and raised concerns that the Governor’s proposed TK staffing ratio increase may be more costly than estimated. Members also discussed whether the current COLA formula should better reflect California-specific or district staffing costs, and whether TK should be more clearly separated from the K-3 grade span adjustment to avoid larger K-3 class sizes. The chair asked staff to work with the LAO on both the TK/K-3 issue and alternative COLA calculations. For the Learning Recovery Block Grant, Finance proposed restoring the first of three delayed payments, $378.6 million one-time Proposition 98 General Fund, while the LAO recommended adopting the proposal but extending the expenditure deadline by at least a year. The LAO reported that districts had spent $1.6 billion of the $6.8 billion received through 2023-24 and said most districts were only now shifting from federal COVID relief to block grant spending. Members questioned whether the large state and federal investments were improving outcomes, citing declining reading and math trends, while Finance and the State Board president pointed to some signs of improvement, especially in math, attendance, and gains for some student groups. Darling-Hammond emphasized that student needs have grown, that recovery spending has gone to devices, ventilation, staffing, tutoring, summer school, and community schools, and that targeted interventions appear to be helping some districts recover faster than others. On ELOP, Finance proposed adding $435 million to expand universal access by lowering the Tier 1 threshold from 75% to 55% unduplicated pupils, bringing ongoing funding to $4.4 billion. The LAO said the estimate was reasonable but recommended delaying implementation for a year, aligning ELOP with ASES to reduce overlap, moving toward funding based on participation rather than enrollment, and considering a fixed Tier 2 rate. Members and witnesses discussed staffing challenges, the use of funds for students with disabilities, and uncertainty in Tier 2 funding caused by unspent dollars and opt-outs. Darling-Hammond supported ELOP as part of California’s broader after-school and summer learning strategy, said most districts are now offering full-day TK and expanded learning, and urged the state to reduce fragmentation across categorical programs and build more unified systems for funding, reporting, and support.

Transcript Highlights:

• There's also a need for ongoing funding at the systems level for professional development.
• We need funding to be based on enrollment.
• We need to fund care that's full-time, year-round, and meets the needs of real people, not just a school
• In thinking about system needs, while California has invested millions of state and federal funds into
• In thinking about system needs, while California has invested millions of state and federal funds into

Summary: The hearing focused on California’s early learning and care system, including the Master Plan for Early Learning and Care, universal preschool access, and the state’s transitional kindergarten (TK) expansion. Administration officials said California has made progress toward universal TK for all four-year-olds and expanded access for low-income three-year-olds, children with disabilities, and some two-year-olds in state preschool. The Department of Social Services highlighted ongoing work on quality improvement and a single rate structure, while the Department of Education emphasized continued investments in UPK infrastructure, inclusion, and teacher development. Testimony from advocacy groups stressed that access remains uneven, especially for infants, toddlers, and three-year-olds, and that federal threats to Head Start could significantly disrupt services in California. Witnesses and committee members discussed several policy recommendations for preschool and state preschool programs, including consolidating part-day and full-day contracts, simplifying eligibility priorities, eliminating some family and licensing fees, allowing self-attestation of income, making the two-year-old preschool option permanent, and basing funding on enrollment and the true cost of care. A parent from Contra Costa described losing child care after moving counties for safety reasons, illustrating delays and fragmentation in the system. Providers in public comment argued that reimbursement rates are too low and that better pay and retirement and health benefits are needed to stabilize the workforce. The second panel addressed the governor’s January budget proposal to fully implement universal TK and reduce TK class ratios from 12:1 to 10:1. The Department of Finance said the budget would add about $2.4 billion to serve all eligible four-year-olds and $1.5 billion for the lower ratio. The Legislative Analyst’s Office said its enrollment and cost estimates were lower than the administration’s and projected the ratio change would cost less than proposed. The Department of Education and the Learning Policy Institute reported that TK enrollment and staffing have grown, most districts now offer TK, and many are on track to meet new teacher requirements, but facilities, staffing, and expanded learning remain challenges. Committee members raised concerns about access at all school sites, the need for more full-day options, and the risk that TK expansion could crowd out CSPP and Head Start space.