Legislative Update

View the legislative bills report here. (updated June 15, 2026)

June 19, 2026

Legislative Update

2026-27 State Budget Update

Last Thursday, June 11, 2026, legislative leaders announced that they had reached an agreement on a 2026-27 State Budget package. Below we summarize the significant proposals of the 2026-
27 Governor’s Budget proposal versus the Legislature’s version.

Proposition 98 and CCC Budget Proposals: Governor vs. Legislature

Non-LEA Preschool Shift
o Governor: No proposal
o Legislature: Shifts non-local educational agency (LEA) State Preschool programs into Proposition 98 and rebenches the minimum guarantee to account for the added costs

Transitional Kindergarten (TK) Rebench
o Governor: No proposal
o Legislature: Beginning in 2026-27, restores $241 million ongoing to California
Community Colleges (CCC) by restoring TK costs within the TK-12/CCC funding split

2025–26 Proposition 98 Minimum Guarantee (Settle-Up Proposal)
o Governor: Appropriates $3.9 billion less than the calculated funding level
o Legislature: Adopts the Governor’s proposal and adds a “reliable schedule to pay districts”

Public School System Stabilization Account (End of 2026-27)
o Governor: $10.3 billion
o Legislature: $9.5 billion

Deferrals
o Governor: Retires the deferrals included in the 2025-26 Budget Act
o Legislature: Adopts the Governor’s proposal

Statutory Cost-of-Living Adjustment (COLA)
o Governor: 2.87%
o Legislature: Adopts the Governor’s proposal

Additional Student Centered Funding Formula (SCFF) Investment
o Governor: 1.44%
o Legislature: Adopts the Governor’s proposal

Paid Pregnancy Disability Leave
o Governor: Mandates leave with funding provided through an additional SCFF
investment
o Legislature: Adopts the Governor’s proposal

Enrollment Funding
o Governor: Additional 1.0% enrollment growth funding in 2025-26 and 0.5% in
2026-27
o Legislature: Additional 1.0% enrollment growth funding in 2025-26 and 2.5% in
2026-27

Enrollment Growth Statutory Changes
o Governor: No proposal
o Legislature: Uses a three-year average for enrollment calculations

Calbright College
o Governor: Increase of $38.1 million
o Legislature: Adopts the Governor’s proposal

Common Cloud Data System
o Governor: $41 million, including $5 million ongoing
o Legislature: Adopts the Governor’s proposal

Facilities
o Governor: $739.9 million in one-time Proposition 2 bond funds to support 10
new and 29 continuing facilities projects
o Legislature: Adopts the Governor’s proposal

Deferred Maintenance
o Governor: $120.7 million one-time
o Legislature: Adopts the Governor’s proposal

Credit for Prior Learning
o Governor: $37 million, including $2 million ongoing
o Legislature: Adopts the Governor’s proposal

Healthy School Foods Pathway Program
o Governor: $14.3 million
o Legislature: Adopts the Governor’s proposal

Categorical Program COLA
o Governor: $30.6 million to provide a 2.87% COLA for select categorical
programs
o Legislature: Adopts the Governor’s proposal

Apprenticeship Related and Supplemental Instruction Costs Backfill
o Governor: $13.4 million
o Legislature: Adopts the Governor’s proposal

Adult Learner Demonstration Project
o Governor: $9.7 million one-time
o Legislature: Adopts the Governor’s proposal

Student Support Block Grant
o Governor: $100.6 million one-time
o Legislature: $274.9 million one-time

LGBTQ Resource Centers
o Governor: No proposal
o Legislature: $30 million one-time

Future of Creative Industries Pilot Project
o Governor: No proposal
o Legislature: $15 million one-time

California Indian Nations College
o Governor: No proposal

o Legislature: $14.2 million ongoing

Dreamer Resource Centers
o Governor: No proposal
o Legislature: $101.6 million one-time and $15 million ongoing

Student Equity and Achievement Program
o Governor: No proposal
o Legislature: $30.1 million to provide a 5.74% COLA

Financial Aid Administration Offices
o Governor: No proposal
o Legislature: $10 million ongoing

Next Steps
On Monday, June 15, 2026, the Assembly and Senate approved Assembly Bill (AB) 109
(Gabriel, D-Encino) and sent the measure to Governor Gavin Newsom shortly before 11:00 p.m., officially beginning the 12-day period during which the Governor may sign or veto the bill. This period is generally viewed as the final phase of negotiations between the Governor and legislative leadership to reach agreement on the State Budget package.

While AB 109 reflects the Legislature’s proposal, it does not yet represent a final agreement between the Legislature and Governor Newsom. Recent history suggests that the parties will
reach a three-party agreement in the coming days to finalize the 2026-27 spending plan.

Once an agreement is reached, the Legislature is expected to approve another budget bill that
will revise AB 109 to reflect the final agreement, along with approximately a dozen trailer bills containing the implementing details of the State Budget package. Following the Governor’s signature, these measures will collectively constitute the 2026-27 Enacted Budget.