California lawmakers pass budget with billions more for education as Newsom negotiations begin

California lawmakers passed a 2026-27 state budget allocating billions more for K-12 and community colleges, including $2 billion extra for schools under Proposition 98, while negotiating with Governor Gavin Newsom over a $3.9 billion funding withhold tied to AI stock tax revenue. The budget includes $700 million for school kitchen upgrades, $300 million for career/technical education, and $800 million less for the rainy day fund, but education groups threaten legal action over the delayed funding." "article": "California lawmakers approved a state budget on June 15, exceeding Governor Gavin Newsom’s May proposal by $5 billion in revenue, with $2 billion more directed to K-12 and community colleges under Proposition 98. The budget allocates $127 billion for schools and community colleges, including a $2.4 billion boost to special education, $1 billion more for community schools, and a $5 billion one-time grant for districts to use flexibly. Legislators also added $700 million for school kitchen upgrades and $300 million for career/technical education, while increasing stipends for student teachers in priority areas by $450 million. A key dispute remains over Newsom’s plan to withhold $3.9 billion in education funding until tax receipts from AI stock investments materialize. Lawmakers agreed to a repayment schedule but warned the delay risks violating Proposition 98’s minimum funding guarantee. Education groups, including the California Teachers Association, oppose the withholding, calling it a manipulation of funding priorities. The Legislature’s budget reduces contributions to the rainy day fund by $800 million, freeing up funds for immediate spending. Additional allocations include $350 million more for the California newcomer’s program and $300 million for homeless student assistance through 2032. Assemblywoman Laurie Davis, R-Laguna Niguel, criticized the budget for shortchanging districts by $3.9 billion. Negotiations with Newsom will continue over the next two weeks before the July 1 fiscal year start. The budget can still be amended based on agreements reached during this period. Meanwhile, education advocates argue the withholding tactic sets a harmful precedent, potentially diverting funds from schools to other budget areas affected by federal cuts, such as Medi-Cal.