California’s next governor to face tough choices for education as state budget tightens

Whoever is elected this fall as governor and state superintendent of public instruction will face a new reality for California education.

The changing of the guard after the eight-year term limits for Gov. Gavin Newsom and State Superintendent of Public Instruction Tony Thurmond will likely coincide with a belt-tightening period for the state budget, forcing tough choices for the next governor.

A consolation prize, however, could be more authority over the California Department of Education. Newsom is proposing to shift control of the department’s operations to a new education commissioner appointed by the next governor — an arrangement common among states. The shift would diminish the power of the state superintendent, who’d be relieved of managing the education bureaucracy while remaining the state’s elected advocate-in-chief of education.

Over the past six years, amid a burst of state revenue, Newsom and the Legislature enacted multibillion-dollar programs that redefined TK-12. They expanded TK-12 with transitional kindergarten for 4-year-olds and lengthened the school day through expanded learning. Money for apprenticeships and career pathways created post-high school opportunities, and community schools broadened connections with parents and neighborhood health services.

But the era of large-scale programs will be Newsom’s legacy, not his successor’s. Circumstances beyond the next governor’s control — continuing declines in enrollment and revenues, probably retreating to historical levels, forcing additional school closures, with a recession looming — will temper ambitions of what more can be done for California’s students.

And then there are sounds of frustration, growing louder from the picket line to the school boardroom to the hallways of Sacramento. Districts are complaining that the rollout of ambitious programs, with accompanying reporting requirements and regulations, has diverted their attention and strained their budgets.

David Roth, superintendent of Buckeye Union School District, which serves 4,200 TK-8 students in El Dorado County, was emphatic. “We don’t need new programs,” he said. Adding more, he said, would result in continued labor strife over pay raises that many districts argue they can’t afford, and “an inability to maintain the programs we have.”

Roth’s message, reiterated by others, is that schools should get back to basics, as in base funding — the portion of the state’s funding formula intended to cover general operating expenses. They want the Legislature and the next governor to make raising base funding the number one priority.

Roth established Raise the Base Coalition, a website that lays out the challenge of rising costs. Forty districts have signed up so far; they are primarily suburban districts with fewer-than-average high-needs students, and therefore receive less “supplemental” and “concentration” funding under the state’s Local Control Funding Formula and other programs with similar distributions.

Opposition to equity is not the issue, Roth said. “Even districts with above-median funding are struggling to keep pace with rising costs.” When there is more money to cover basic expenses, he added, all districts benefit.

Last month, school board presidents and members from 10 districts, mainly in the San Francisco Bay Area, made the same point while calling for, among other things, adjustments to the funding formula to reflect regional costs.

“As those entrusted with ensuring the long-term financial viability and educational success of our public schools, we write to sound the alarm about the profound, widespread fiscal challenges districts across the state are facing,” they wrote.

At first glance, their complaints may invoke little sympathy. From 2018-19, the year preceding Covid-19, through 2024-25, funding rose 53% through Proposition 98, the formula that sets the minimum share of state revenue for TK-12 and community colleges. Per student funding from the state will rise to more than $20,000, a record.

But several factors squeezing districts’ spending will likely escalate in the coming years, demanding the next governor’s attention.

Declining enrollment

The California Department of Finance projects the nearly decade-long statewide decline in enrollment to accelerate, with an additional 10% drop by 2033-34, bringing the total to 5.2 million students. Most districts will feel it, with enrollment losses of up to 20% in some Los Angeles County districts.

Districts receive funding based on the average number of students who attend school daily over the course of a year. Adding transitional kindergarten has propped up attendance, but now that TK is fully phased in, the average daily attendance decline will bite harder in many districts.

Special education

The percentage of students with disabilities has risen from 13% in 2018-19 to 15% in 2023-24, even as overall enrollment has declined. Newsom is proposing to add $500 million next year to equalize state special education funding among districts, but the overall trend has not favored districts. The federal share of total special education funding in California, never close to the 40% share that Congress envisioned 50 years ago when passing the federal special education mandate, has fallen steadily over the past decade, as has the state’s share of dedicated funding.

Districts will continue to be responsible for the shortfall. Districts’ share of special education costs has risen from 51% in 2014 to 63% last year, according to School Services of California, a statewide consulting company, and higher in some small districts.

Placer County Office of Education Superintendent Gayle Garbolino-Mojica said that unexpected special education costs have forced three of her districts onto the state’s financial watch list. Preschoolers are coming to school with serious special needs — autism, multiple disabilities, behavioral problems — “in numbers not seen before,” she said.

Inadequate cost-of-living adjustments

A 3% decline in a district’s attendance may not appear dramatic, but losing 3% of funding will be larger than the 2.41% cost-of-living adjustment that districts are projected to receive in 2026-27. And it’s larger than the 2.30% COLA they got this year and the 1.07% COLA in 2024-25. The state’s COLA is tied to a national formula of a basket of goods that doesn’t reflect the sharp rise in health insurance and the need to raise staff pay to retain teachers.

The state cushions the impact of a steadily declining enrollment by allowing districts to claim attendance over a three-year period. Without it, “we would be toast,” said Roth. But that’s not a long-term answer, he said. “We cannot adjust costs as quickly as we will lose revenue.”

‘Declining enrollment dividend’

Because of Proposition 98’s funding guarantee, TK-12 and community colleges will continue to receive 40% of the state’s general revenue, yet districts collectively will receive fewer dollars as their enrollments drop. The unallotted difference, euphemistically called a “declining enrollment dividend,” could grow to $7.5 billion annually, providing a pot of discretionary funding for the Legislature and governor. How to spend it could prove one of the more contentious decisions in the coming years. Among the options:

• Switching from funding by attendance to funding by annual enrollment, a method favored especially by districts hardest hit by chronic absences.
• Adding a regional cost factor to the Local Control Funding Formula — a much-discussed idea over the years, but never adopted;
• Increasing the state’s share of special education expenses, benefiting all districts;
• Building in a permanent 4% annual COLA;
• Making permanent what has been sporadic among districts: funding professional development, starting with evidence-based instruction in early literacy and the new math framework.

Other issues

Plenty of important decisions won’t require more money. While it’s a fool’s errand to predict what future events will determine, what could crowd its way to the top of the list includes:

Restructuring the California Department of Education 

If the Legislature approves Newsom’s plan as part of the next state budget, the department will fall under the authority of Newsom’s successor. That will be only the first step to untangling the current fractured system of school improvement and accountability. Like it or not, the next governor will take credit or blame for implementing programs the state superintendent of instruction had managed.

Resolving Miliani Rodriguez v. State of California 

That’s the lawsuit the public interest law firm Public Advocates filed on behalf of 14 students, parents, and teachers in six school districts, challenging the first-come, first-served state formula for distributing billions of dollars to repair school facilities. If Newsom doesn’t settle what he has acknowledged favors wealthy districts, then the decision to defend or negotiate an end to an inequitable system falls to his successor.

Taking the lead on artificial intelligence 

AI is a big, amorphous subject, enticing and forbidding, that has been left to districts to decipher and deal with vendors. The next California governor can call for all students to be AI literate, said Chris Agnew, director of Generative AI for Education Hub at Stanford University, and ask fundamental questions like, “What are the core capacities we want to build in California students, and what are the research-backed learning experiences that build these capacities?”

Redesigning high schools

High schools face a challenge. Only 55% of California students report feeling connected to high school. In 2025, the Legislature budgeted $10 million for a Secondary School Redesign Pilot Program to establish 14 networks for high schools and middle schools in 57 districts. Some have been experimenting for years, while others are launching different models with team teaching, small-group learning to strengthen student relationships, and nontraditional scheduling to accommodate apprenticeships.

A seven-period day, driven by college course requirements and seat time regulations, is hard to change. But if, as State Board President Linda Darling-Hammond hopes, the results show “what it takes for students to be engaged and purposeful in a rapidly changing world,” the next governor should scale up the project, she said.

Getting serious about the achievement gap

Newsom’s big bets on improving students’ well-being and academic progress may bear fruit long term. But the California School Boards Association is demanding full attention now to narrowing persistent disparities in achievement between low-income and well-off students, and among racial and ethnic groups.

CSBA is pushing bills that would hold state agencies accountable for providing the annual metrics that they use to track how they are closing the achievement gap. A separate commission would weed out regulations and duplicate programs, and give a thumbs-down on new programs that would divert resources and energy from addressing the achievement gap.

The bills may not pass, at least as written, but the message is clear: A governor with a different agenda may be out of sync with the times.