Early Edge Resources

2026-27 California State Budget Proposal Summary: Early Learning and Care Investments

January 22, 2026

On Friday, January 9th, the administration of Governor Gavin Newsom introduced his 2026-27 state budget proposal. The budget is balanced, with a modest projected shortfall of $2.9 billion. There is no new significant spending, but rather continued implementation of previous investments. There is a projected deficit of $22 billion in the 2027-28 fiscal year with shortfalls in the two years following. As a result of federal H.R. 1, there is an expected $1.4 billion in state costs for 2026-27, with $1.1 billion going to Medi-Cal that serves 14 million low-income Californians, and $300 million to CalFresh that serves 3 million households.

Review the Governor’s full proposal summary

Read Early Edge’s statement

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Transitional Kindergarten (TK)

• Cost-of-Living-Adjustment: Provides a Cost-of-Living-Adjustment (COLA) adjustment of 2.41 percent.
• Expanded Learning Opportunities Program (ELOP): Provides $62.4 million ongoing Proposition 98 General Fund to guarantee $1,800 per pupil for Tier 2 local educational agencies, who have unduplicated pupil percentages below 55%. Funds support before‑school, after‑school, summer, and intersession programs for Transitional Kindergarten through sixth‑grade students.

Child Care / Mixed-Delivery System 

• Cost-of-Living-Adjustment: Provides $89.1 million ongoing General Fund for a COLA for child care programs administered by the Department of Social Services.
• No Additional Child Care Slots: Inconsistent with state law, does not include funding for the previously planned 44,000 subsidized child care slots for the 2026-27 fiscal year.
• L.A. Fire Recovery: $11.5 million one-time Proposition 64 for child care infrastructure, specifically targeted toward communities impacted by recent fires.

Multilingual Learners

• Community Schools: $1 billion ongoing Proposition 98 General Fund to expand the community school model to more school sites that have large concentrations of students from low-income families, English learners, and youth in foster care.

Professional Development and Teacher Pipeline 

• Discretionary Block Grant: Provides $2.8 billion for a discretionary block grant to local educational agencies to advance statewide education priorities, including professional development aligned to the English Language Arts and English Language Development Frameworks and the Literacy Roadmap with a focus on English Learners; teacher recruitment and retention strategies; and professional development for Transitional Kindergarten teachers and site administrators to support developmentally appropriate TK instruction.
• Teacher Residency Programs: Provides $250 million one-time Proposition 98 General Fund to continue educator residency programs through 2029-30.
• Golden State Teacher Grant Program: Allocates $14.4 million General Fund from the 2021 Budget Act to support the program in 2026-27.

Facilities and Infrastructure

• School Construction and Modernization: Allocates $1.5 billion in Proposition 2 (2024) bond funding to support school construction projects, including modernizations, new construction, and career technical education.

Governance

• Oversight of the Department of Education: Proposes to transition oversight authority of the California Department of Education from the State Superintendent of Public Instruction to the Governor and the State Board of Education, as recommended by a 2025 PACE report.