May Revision Released: Schools Get More — With One Catch (EdSource)
Gov. Newsom released the 2026-27 May Revision on May 14, 2026. School districts can check off most items on their wish list — a significantly higher COLA, the largest special education investment in state history, and a doubled discretionary block grant. But a major controversy remains: Newsom is still withholding $3.9 billion in Proposition 98 funding that school organizations say belongs in classrooms now, not next year.
- COLA raised to 4.31% — up from the statutory 2.87%, adding ~$900M more than January to LCFF; becomes the new base for future years
- Special Ed: $2.4B total increase — "the largest investment in special education in California history"; $1.8B added on top of January's $509M proposal (+43% over last year)
- Block Grant: $5B — more than doubled from January's $2.8B; districts have wide latitude to spend
- Prop 98 Guarantee: record $127.1B — per-pupil funding reaches a record $21,013
- $3.9B still withheld — Newsom released $1.7B of the $5.6B held back in January, but deferred $3.9B to next year; school groups threatening to sue
- Community Schools: +$1B — added to $4.1B already invested; +~$500M in repurposed extension grants
- Rainy Day Fund: $10.3B — Prop 98 reserve raised to near statutory maximum as recession cushion
- Preschool COLA cut to 2.01% — reduced from the January proposal of 2.41%, drawing criticism from early education advocates
What Is the May Revision?
Every January, the Governor releases a proposed state budget. That proposal is based on estimates of how much tax revenue California will collect during the year.
But April 15 is Tax Day — the date when most Californians file their income taxes. Once the tax returns come in, the state knows how much money it actually has. On May 15th, the Governor releases the May Revision: an updated budget that reflects those real revenue numbers.
If revenues came in higher than expected, the May Revision typically includes more funding for education. If revenues came in lower, the May Revision may propose cuts — even to programs that were funded in January.
For school districts and the people who work in them, the May Revision is often the most consequential budget moment of the year.
✅ Legislature Responded — Here's What Actually Happened (June 15, 2026)
Prop 98 Guarantee — Legislature Demanded Repayment Schedule
The Legislature did not force restoration of the $3.9B — but it also did not simply accept the withholding. The joint budget summary states the Legislature commits "to a reliable schedule to pay districts the $3.9 billion omitted from the May Revision." CTA and CSBA had threatened legal action; the legal challenge remains possible. The Legislature projected higher revenues that could partially offset the shortfall via the Prop 98 formula itself.
LCFF Funding — Legislature Added $2B More
The Legislature's higher revenue projections (~$5B more than the Governor) translated to $2 billion more for TK-14 under Prop 98. The LCFF base funding grows accordingly. The Legislature also added $1B more for Community Schools (ongoing), expanding the Governor's proposal significantly.
COLA — 4.31% Confirmed in Final Budget Deal ✅
The final budget agreement confirms the 4.31% "Super COLA." This is now the enacted Funded COLA for 2026-27 — the rate that will flow into district LCFF allocations once the Governor signs the bills (expected late June). Districts and unions can plan with certainty on 4.31% for 2026-27. The Legislature votes on the implementing bills June 29.
Special Education — $2.4B Adopted; Teacher Pipeline Added
The Legislature adopted the Governor's historic $2.4 billion ongoing special education increase. It also added $450M on top of the Governor's proposed $250M for student teacher stipends in priority areas including Special Education and STEM — building the pipeline of credentialed SpEd teachers. Federal IDEA funds (~$1.5B) remain a separate federal variable.
Child Nutrition — Legislature Added $700M for Kitchen Upgrades
The Legislature added $700 million one-time for districts to upgrade or build school kitchens — aligned with the state priority that schools prepare fresh and nutritious meals. Family food pantries are also an eligible use. Universal free school meals remain protected. This is a significant investment in the infrastructure behind the school meals program.
Child Care — 22,770 New Slots Added; Preschool Shift into Prop 98 Adopted ✅
The final deal adds 22,770 new subsidized child care slots with a 2% COLA for all child care programs. The structural shift of state preschool funding into Prop 98 — which CSBA had opposed — was adopted in the final agreement. This is a significant governance change: state preschool now sits under the constitutional Prop 98 guarantee alongside K-12 and community college funding.
Transitional Kindergarten — $2.1B UTK Protected ✅
The $2.1B for Universal TK was adopted. The structural shift of state preschool into Prop 98 — confirmed in the final deal — means that TK and preschool now share the same constitutional funding guarantee. This was a Newsom priority and a significant structural change to how early education is funded in California going forward.
Transportation — $561M Preserved
The Legislature adopted the May Revision transportation baseline: $239M ongoing + $322M one-time for Home-to-School Transportation. No reductions. The one-time fleet modernization funds critical for districts with aging bus fleets were preserved in the Legislature's passed budget.
May Revision vs. January Proposal — Education Programs
January Baseline — For Reference
These are the education funding levels from the January 2026 proposal. Compare these to the May Revision numbers once released.
| Program | January Proposal | May Revision | Change |
|---|---|---|---|
|
Total Prop 98 Guarantee (TK–14)
Constitutional minimum — ~40% of state general fund; covers all K–12 + community colleges
|
$125.5B | $127.1B record high |
+$1.6B ⚠ $3.9B withheld |
|
LCFF — Total Program Funding
Base + supplemental + concentration grants to all districts; the primary K–12 funding engine
|
~$73B total program |
~$74B+ est. with 4.31% COLA |
+~$1B+ |
|
LCFF — Cost of Living Adjustment (COLA)
Applied to base & supplemental grants; sets the floor for district operating budgets
|
2.41% ~$3.1B increase |
4.31% ~$4.0B increase |
+1.9 pts +~$900M |
|
Special Education (AB 602 + State Augmentation)
State base allocation through SELPA; does not include federal IDEA funds (~$1.5B additional)
|
+$509M above prior year |
+$2.4B total above prior year |
+$1.8B above January |
|
Child Nutrition Programs
State + federal school meals (National School Lunch, School Breakfast, CACFP); universal free meals for all CA students
|
~$3.8B | No change reported | — |
|
Child Care & Preschool — COLA
CA State Preschool Program COLA; early ed advocates had sought a higher rate, not a cut
|
2.41% | 2.01% | −0.4 pts ↓ Cut |
|
Universal Transitional Kindergarten (UTK)
Full phase-in for all eligible 4-year-olds; drives certificated/classified staffing and facilities
|
~$2.1B program funding |
+$15M implementation training |
Base unchanged |
|
Home-to-School Transportation
$239M ongoing + $322M one-time fleet modernization; May Revision did not alter January figures
|
$561.2M | No change reported | — |
|
Student Support Block Grant (one-time)
Discretionary one-time grant to districts; teacher training, literacy, math, career pathways
|
$2.8B | $5.0B | +$2.2B |
|
Community Schools
Wellness, mental health, and career partnerships — 2,500 schools statewide
|
$4.1B cumulative invested |
+$1.0B + ~$500M repurposed |
+$1.5B |
|
Withheld Prop 98 Funds
Constitutionally owed to schools; governor deferring to next year — Legislature expected to contest
|
−$5.6B withheld in January |
−$3.9B still withheld |
+$1.7B released vs. January |
| Sources: California Department of Finance (DOF), 2026-27 January Governor's Budget (Jan 10, 2026) and May Revision (May 14, 2026); EdSource, "California schools could get billions more in Newsom's final budget plan — with one catch," John Fensterwald, May 14, 2026. LCFF total is approximate; Special Education reflects total state augmentation vs. prior year. Child Nutrition and Transportation not separately addressed in May Revision. Data updated May 14, 2026. | |||
✅ Final Budget Deal Reached — June 26, 2026
Governor Newsom and legislative leaders reached a final budget agreement on June 26, 2026 — balancing the General Fund with zero deficit for both 2026-27 and 2027-28. The 4.31% LCFF COLA is confirmed. The $3.9B Prop 98 settle-up will be paid from 33% of any higher-than-projected revenues. The preschool structural shift into Prop 98 was adopted. The Legislature votes on ~20 implementing bills on June 29; the Governor is expected to sign before July 1. View the full budget tracker →
Official Sources
- ◆ Department of Finance — May Revision Official source for all May Revision documents and summary tables
- ▲ Legislative Analyst's Office — May Revision Analysis The LAO publishes a same-day education analysis — always worth reading immediately
- ❖ EdSource — May Revision Coverage (Article Published May 14, 2026) "California schools could get billions more in Newsom's final budget plan — with one catch" — plain-language reporting on what the May Revision means for schools