$38 Billion State Budget Shortfall Will Adversely Impact Public Education

California has a budget problem. When the legislature approved the 2023/24 budget, it didn’t have a true picture of its revenue due to the extension in the tax filing deadline. When the 2022 taxes were paid in November, collections were significantly below forecasted estimates. As a result, the state has a revenue shortfall of nearly $38 billion. This presents a big challenge for public education because the state funded schools with money it didn’t really have to spend. 

On January 10, the Governor released his proposed budget for 2024/25 which includes a plan to fix the massive hole in the state budget. On the surface, the plan looks good because he proposes to use “rainy-day” reserves to avoid mid-year cuts. However, moving forward he plans to take back money from schools by reducing Prop 98, which constitutionally guarantees a minimum level of funding for K-12 public education in California. 

Making matters even worse, the Governor also proposes to reduce the estimated cost of living adjustment (COLA) for 2024/25 and 2025/26. This creates a tough situation for school districts because we’ve developed a three-year balanced budget, as required, based the state’s estimated COLA for the two out years. COLA reductions will make it difficult to keep up with rising costs and adequately fund student programs, which negatively impacts schools.

The table below illustrates the effect of the proposed COLA reductions on the funding we expect to receive in the Cypress School District.  

In the coming months, the state legislature will present its own 2024/25 budget proposal. Both sides will have until June 15 to hammer out a compromise. In the meantime, our district is proactively working to reduce expenditures and maximize resources to minimize any impact on our students. We pledge to keep you informed every step of the way, valuing transparency and our partnership with our school community. If you want to help, we encourage you to reach out to your elected state representatives to advocate for public education.

2023/24 Comparison Report 

Percentage of unduplicated English learners, low-income students,

and foster youth in surrounding elementary school districts 

Districts with an unduplicated student count greater than 55 percent receive additional state money in the form of Concentration Grant funds. Cypress School District is one of only three elementary school districts in Orange County that does not qualify for these funds.