AB477 - Fair Pay for Educators Act: local control funding formula: base grants: funding targets.

Amended IN Senate June 23, 2025 Amended IN Assembly March 24, 2025 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 477 Introduced by Assembly Member Muratsuchi (Coauthor: Assembly Member Addis) February 10, 2025 An act to amend Sections 2574, 42238.02, 42282, and 42284 of, and to add Section 42238.017 to, the Education Code, relating to education finance. LEGISLATIVE COUNSEL'S DIGEST AB 477, as amended, Muratsuchi. Local Fair Pay for Educators Act: local control funding formula: base grants: funding targets. (1) Existing law, commencing with the 2013–14 fiscal year, establishes a public school financing system that requires state funding for county superintendents of schools, school districts, and charter schools to be calculated pursuant to a local control funding formula, as specified. Existing law requires the Superintendent of Public Instruction to annually calculate a county local control funding formula for each county superintendent of schools that includes, among other components, a county office of education operations grant composed of (A) $655,920, as adjusted each fiscal year for inflation; (B) $109,320 per school district under the county office of education’s jurisdiction, as adjusted each fiscal year for inflation; (C) $70 per unit of countywide average daily attendance up to 30,000 units, $60 per unit for 30,001 to 60,000 units, $50 per unit for 60,001 to 140,000 units, and $40 per unit above 140,000 units, as adjusted each fiscal year for inflation; and (D) commencing with the 2022–23 fiscal year, add-ons of (i) $175,000 to the per-school district amount and (ii) $14 to each per-unit amount. This bill, commencing with the 2036–37 fiscal year, would increase each of those inflation-adjusted amounts to instead be $1,308,227, $520,751, $164, $144, $124, and $104, respectively, and would retain the requirement to adjust those amounts for inflation each fiscal year. The bill, commencing with the 2036–37 fiscal year, would increase the per-school district and per-unit add-on amounts to instead be $262,500 and $21, respectively. (2) Existing law requires the county office of education local control funding formula to also include, among other things, an alternative education base grant that includes, among its own components, a base grant equal to the grade span-adjusted base grant for average daily attendance in grades 9 to 12, inclusive, for the 2022–23 fiscal year, multiplied by 1.33, as specified. Existing law requires that amount to be adjusted for inflation each fiscal year. This bill, commencing with the 2036–37 fiscal year, would require the inflation-adjusted base grant component of the alternative education grant to instead be $24,593 and would retain the requirement to adjust that amount for inflation each fiscal year. (3) Existing law provides for the funding of necessary small schools and high schools, as specified. Existing law requires that funding to include, among other things, various specified per-pupil and per-teacher amounts for different tiers based on the numbers of pupils and teachers, as specified. Existing law requires those amounts to be adjusted for inflation each fiscal year. This bill, commencing with the 2036–37 fiscal year, would increase those various per-pupil and per-teacher inflation-adjusted amounts, as specified, and would retain the requirement to adjust that amount for inflation each fiscal year. (4) Existing law, commencing with the 2013–14 fiscal year, requires school district and charter school funding pursuant to the local control funding formula to include, among other things, a base grant based on average daily attendance in kindergarten and grades 1 to 3, inclusive, grades 4 to 6, inclusive, grades 7 and 8, and grades 9 to 12, inclusive, of $6,485, $6,845, $6,947, $7,154, and $8,289 per pupil, respectively. Existing law requires those amounts to be adjusted for inflation each fiscal year. This bill, commencing with the 2036–37 fiscal year, would increase those inflation-adjusted base grant amounts to instead be $14,879, $15,104, $15,551 and $18,023 per pupil, respectively, and would retain the requirement to adjust those amounts for inflation each fiscal year. (5) Existing law requires funding pursuant to the local control funding formula to include, in addition to the base grant, supplemental and concentration grant add-ons that are based on the percentage of unduplicated pupils, as specified, served by the school district or charter school. In addition to the base, supplemental, and concentration grants of the local control funding formula, existing law, commencing with the 2022–23 school year, requires the Superintendent to compute an additional add-on of $2,813 multiplied by the then current fiscal year’s average daily attendance in transitional kindergarten, as specified, and requires that add-on to be annually adjusted for inflation. This bill, commencing with the 2036–37 fiscal year, would increase that inflation-adjusted add-on based on attendance in transitional kindergarten to instead be equal to $4,220 $8,318 multiplied by the then current fiscal year’s average daily attendance in transitional kindergarten for the school district or charter school, as specified, and would retain the requirement to adjust that amount for inflation each fiscal year. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. This act shall be known, and may be cited, as the Fair Pay for Educators Act. SECTION 1. SEC. 2. Section 2574 of the Education Code is amended to read: 2574. For the 2013–14 fiscal year and for each fiscal year thereafter, the Superintendent annually shall calculate a county local control funding formula for each county superintendent of schools as follows: (a) Compute a county office of education operations grant equal to the sum of each of the following amounts: (1) (A) Six hundred fifty-five thousand nine hundred twenty dollars ($655,920). (B) Notwithstanding subparagraph (A), commencing with the 2036–37 fiscal year and for each fiscal year thereafter, one million three hundred eight thousand two hundred twenty-seven dollars ($1,308,227), as adjusted each fiscal year pursuant to paragraph (4). (2) (A) One hundred nine thousand three hundred twenty dollars ($109,320) multiplied by the number of school districts for which the county superintendent of schools has jurisdiction pursuant to Section 1253. (B) Notwithstanding subparagraph (A), commencing with the 2036–37 fiscal year and for each fiscal year thereafter, five hundred twenty thousand seven hundred fifty-one dollars ($520,751) multiplied by the number of school districts for which the county superintendent of schools has jurisdiction pursuant to Section 1253, as adjusted each fiscal year pursuant to paragraph (4). (3) (A) (i) Seventy dollars ($70) multiplied by the number of units of countywide average daily attendance, up to a maximum of 30,000 units. (ii) Notwithstanding clause (i), commencing with the 2036–37 fiscal year and for each fiscal year thereafter, one hundred sixty-four dollars ($164) multiplied by the number of units of countywide average daily attendance, up to a maximum of 30,000 units, as adjusted each fiscal year pursuant to paragraph (4). (B) (i) Sixty dollars ($60) multiplied by the number of units of countywide average daily attendance for the portion of countywide average daily attendance, if any, above 30,000 units, up to a maximum of 60,000 units. (ii) Notwithstanding clause (i), commencing with the 2036–37 fiscal year and for each fiscal year thereafter, one hundred forty-four dollars ($144) multiplied by the number of units of countywide average daily attendance for the portion of countywide average daily attendance, if any, above 30,000 units, up to a maximum of 60,000 units, as adjusted each fiscal year pursuant to paragraph (4). (C) (i) Fifty dollars ($50) multiplied by the number of units of countywide average daily attendance for the portion of countywide average daily attendance, if any, above 60,000 units, up to a maximum of 140,000 units. (ii) Notwithstanding clause (i), commencing with the 2036–37 fiscal year and for each fiscal year thereafter, one hundred twenty-four dollars ($124) multiplied by the number of units of countywide average daily attendance for the portion of countywide average daily attendance, if any, above 60,000 units, up to a maximum of 140,000 units, as adjusted each fiscal year pursuant to paragraph (4). (D) (i) Forty dollars ($40) multiplied by the number of units of countywide average daily attendance for the portion of countywide average daily attendance, if any, above 140,000 units. (ii) Notwithstanding clause (i), commencing with the 2036–37 fiscal year and for each fiscal year thereafter, one hundred four dollars ($104) multiplied by the number of units of countywide average daily attendance for the portion of countywide average daily attendance, if any, above 140,000 units, as adjusted each fiscal year pursuant to paragraph (4). (E) For purposes of this section, countywide average daily attendance means the aggregate number of annual units of average daily attendance within the county attributable to all school districts for which the county superintendent of schools has jurisdiction pursuant to Section 1253, charter schools authorized by school districts for which the county superintendent of schools has jurisdiction, and charter schools authorized by the county superintendent of schools. (4) For the 2014–15 fiscal year and each fiscal year thereafter, adjust each of the rates provided in the prior year pursuant to paragraphs (1), (2), and (3) by the percentage change in the annual average value of the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States, as published by the United States Department of Commerce for the 12-month period ending in the third quarter of the prior fiscal year. This percentage change shall be determined using the latest data available as of May 10 of the preceding fiscal year compared with the annual average value of the same deflator for the 12-month period ending in the third quarter of the second preceding fiscal year, using the latest data available as of May 10 of the preceding fiscal year, as reported by the Department of Finance. (5) (A) For the 2022–23 fiscal year to the 2035–36 fiscal year, inclusive, add one hundred seventy-five thousand dollars ($175,000) to the amount specified in paragraph (2), as that rate was adjusted pursuant to paragraph (4). (B) Commencing with the 2036–37 fiscal year and for each fiscal year thereafter, add two hundred sixty-two thousand five hundred dollars ($262,500) to the amount specified in paragraph (2), as that rate was adjusted pursuant to paragraph (4). (6) (A) For the 2022–23 fiscal year to the 2035–36 fiscal year, inclusive, add fourteen dollars ($14) to each of the amounts specified in subparagraphs (A) to (D), inclusive, of paragraph (3), as those rates were adjusted pursuant to paragraph (4). (B) Commencing with the 2036–37 fiscal year and for each fiscal year thereafter, add twenty-one dollars ($21) to each of the amounts specified in subparagraphs (A) to (D), inclusive, of paragraph (3), as those rates were adjusted pursuant to paragraph (4). (b) Determine the enrollment percentage of unduplicated pupils pursuant to the following: (1) (A) For the 2013–14 fiscal year, divide the enrollment of unduplicated pupils in all schools operated by a county superintendent of schools in the 2013–14 fiscal year by the total enrollment in those schools in the 2013–14 fiscal year. (B) For the 2014–15 fiscal year, divide the sum of the enrollment of unduplicated pupils in all schools operated by a county superintendent of schools in the 2013–14 and 2014–15 fiscal years by the sum of the total enrollment in those schools in the 2013–14 and 2014–15 fiscal years. (C) For the 2015–16 fiscal year and each fiscal year thereafter, divide the sum of the enrollment of unduplicated pupils in all schools operated by a county superintendent of schools in the current fiscal year and the two prior fiscal years by the sum of the total enrollment in those schools in the current fiscal year and the two prior fiscal years. (D) (i) For purposes of the quotients determined pursuant to subparagraphs (B) and (C), the Superintendent shall use a county superintendent of schools’ enrollment of unduplicated pupils and total pupil enrollment in the 2014–15 fiscal year instead of the enrollment of unduplicated pupils and total pupil enrollment in the 2013–14 fiscal year if doing so would yield an overall greater percentage of unduplicated pupils. (ii) It is the intent of the Legislature to review each county office of education’s enrollment of unduplicated pupils for the 2013–14 and 2014–15 fiscal years and provide one-time funding, if necessary, for a county office of education with higher enrollment of unduplicated pupils in the 2014–15 fiscal year as compared to the 2013–14 fiscal year. (E) For purposes of determining the enrollment percentage of unduplicated pupils pursuant to this subdivision, enrollment in schools or classes established pursuant to Article 2.5 (commencing with Section 48645) of Chapter 4 of Part 27 of Division 4 of Title 2 and the enrollment of pupils other than the pupils identified in clauses (i) to (iii), inclusive, of subparagraph (A) of paragraph (4) of subdivision (c), shall be excluded from the calculation of the enrollment percentage of unduplicated pupils. (F) The data used to determine the percentage of unduplicated pupils shall be final once that data is no longer used in the current fiscal year calculation of the percentage of unduplicated pupils. This subparagraph does not apply to a change that is the result of an audit that has been appealed pursuant to Section 41344. (2) For purposes of this section, an “unduplicated pupil” is a pupil who is classified as an English learner, eligible for a free or reduced-price meal, or a foster youth. For purposes of this section, the definitions in Section 42238.01 of an English learner, a pupil eligible for a free or reduced-price meal, and foster youth shall apply. A pupil shall be counted only once for purposes of this section if any of the following apply: (A) The pupil is classified as an English learner and is eligible for a free or reduced-price meal. (B) The pupil is classified as an English learner and is a foster youth. (C) The pupil is eligible for a free or reduced-price meal and is classified as a foster youth. (D) The pupil is classified as an English learner, is eligible for a free or reduced-price meal, and is a foster youth. (3) (A) Under procedures and timeframes established by the Superintendent, commencing with the 2013–14 fiscal year, a county superintendent of schools annually shall report the enrollment of undupli [Text truncated for display. Full text available on Congress.gov.]