The 2026-27 Budget

K-12 Mandates

The Commission on State Mandates (the Commission) recently found two new requirements to be reimbursable state mandates: (1) expanding the requirement to offer menstrual products in public school restrooms and (2) confirming that public high school students complete the Free Application for Federal Student Aid (FAFSA) or California Dream Act Application. In this post, we provide background on school mandates, then describe our assessment and recommendations for each of the new mandates. This post fulfills a requirement for our office to analyze new mandates, as specified in Section 17562 of the Government Code.

Background on School Mandates

Constitution Requires the State to Reimburse Local Governments for Mandated Activities. State law tasks the Commission with determining whether new state laws or regulations affecting local governments create state-reimbursable mandates. Typically, the process for determining whether a law or regulation is a state-reimbursable mandate takes several years. State law further requires our office to analyze any new mandates identified by the Commission as a part of our annual analysis of the state budget. In particular, state law directs our office to report on the annual state costs for new mandates and make recommendations to the Legislature as to whether the new mandates should be repealed, funded, suspended, or modified.

School Districts Receive Reimbursement Through Mandates Claims Process or Block Grant. The state reimburses school districts and county offices of education (COEs) for mandated activities either through the state’s traditional claims-based process, or from the K-12 mandates block grant. Under the state’s traditional mandate reimbursement process, districts submit claims for the actual cost of performing each mandated activity. The State Controller’s Office (SCO) pays claims from funds appropriated in the state budget. The SCO audits some claims and reduces payments accordingly. As an alternative to the claims-based process, the state created a K-12 mandates block grant in 2012-13. (At the same time, the state created a similar block grant for community colleges.) Districts and COEs can elect to receive reimbursement through the block grant, which provides upfront per-student funding in lieu of submitting claims. Currently, all active K-12 mandates are included in the block grant. Virtually all districts and COEs participate in the block grant rather than the traditional claims-based process. (Although charter schools are not able to submit test claims for mandates, they are eligible to participate in the mandates block grant.) The per-student rates vary, with funding per K-8 student ($32.18) roughly half of the rate for high school students ($61.94). The higher high school rate is in recognition that the most expensive K-12 mandate—related to graduation requirements—is specific to high school programs.

Menstrual Products in Public School Restrooms

Background

In 2021-22, State Added to Block Grant a Mandate Associated With Stocking Menstrual Products in Public School Restrooms. In May 2019, the Commission found that requirements added by Chapter 687 of 2017 (AB 10, C. Garcia) impose a reimbursable state-mandated program, beginning January 1, 2018. The mandate requires certain schools to stock 50 percent of restrooms with menstrual products (defined as tampons and sanitary napkins) at all times at no cost to students. The mandate applies to schools that enroll any students from grades 6 through 12 and have a student body where more than 40 percent of students are low income. (These schools are known as Title I schools based on their eligibility to receive federal Title I, Part A funding.) In 2021-22, the state added $560,000 to the mandates block grant for this purpose.

Commission Recently Found New Requirement Related to Menstrual Products in Public School Restrooms to Be a Mandate. In March 2024, the Commission found that requirements added by Chapter 664 of 2021 (AB 367, Garcia) impose a reimbursable state-mandated program, beginning January 1, 2022. Chapter 664 expands upon the previous requirements to stock public school restrooms with menstrual products in two ways. First, it requires all schools serving students in grades 6 through 12 to stock menstrual products—not just Title I schools. Second, Chapter 664 requires schools to stock menstrual products in every female restroom, all-gender restroom, and at least one male restroom (compared to half of all restrooms in the previous mandate). Additionally, schools are required to post a notice in every restroom with a menstrual product dispenser stating the statutory requirement that schools must provide menstrual products at no cost to students.

Commission Estimates Ongoing Statewide Mandate Costs of $19.3 Million. School districts submitted claims to SCO for 2021-22 (reflecting a half-year of costs), 2022-23, and 2023-24. In total, the SCO received 117 reimbursement claims (20 for 2021-2022, 56 for 2022-23, and 41 for 2023-2024) submitted by 74 school districts, representing a total of 906 eligible schools. In December 2025, the Commission adopted a statewide cost estimate that projects the ongoing costs of the mandate based on claims data submitted for 2023-24. As Figure 1 shows, the Commission’s statewide cost estimate for the mandate is $19.3 million. In developing the ongoing statewide cost estimate, the Commission calculated average costs per school that submitted claims data for complying with each of the required activities under the mandate. The Commission then applied the average cost per school to all schools that are required to comply with each activity of the mandate.

Assessment

Some Reported Costs Likely Overstated. In reviewing the unaudited claims data reported to the SCO, we found numerous districts with per-student claims that far exceed the average total costs claimed. For example, the 15 percent of claims with the highest per-pupil costs were more than ten times the average of all claims, and half of the total claimed costs for stocking restrooms with menstrual products at Title I schools was submitted by a single district. Although these claims may reflect the actual costs incurred by some districts with unique circumstances, we do not think it is reasonable to assume that these higher costs are representative of the typical costs for districts to comply with the mandate. Removing these higher submitted claims reduces the average per-student costs of complying with the mandate by nearly one third.

Using School-Level Estimates Does Not Capture Scale of School Size. To calculate statewide costs, the Commission calculated an average cost per Title I and non-Title I school, then applied the per-school costs to all schools that did not submit claims. This approach treats each school similarly without regard to its student enrollment. Costs, however, likely will vary depending on school enrollment, as larger schools on average are likely to have more restrooms and more utilization of menstrual products. Based on our analysis, school districts that submitted claims have an average school enrollment of 761—greater than the average of 609 for schools not included in the claims data. This suggests the Commission’s approach may overstate costs.

LAO Cost Estimate Is $10.3 Million. To develop our cost estimate, we used the submitted claims data from 2021-22 through 2023-24. However, for reasons stated above, we excluded claims in the top 15 percent of per student costs In addition, we made an associated adjustment to exclude the bottom 15 percent of claims with the lowest per-student costs to remove outliers of districts submitting lower claims. Rather than calculating an average cost per school, we developed an average per-student cost using claims data and the total enrollment in every school that offers any grade between 6^th grade and 12^th grade. This approach results in an average cost per enrolled student of $2.32. Multiplying this rate by the total number of students enrolled in schools that offer any combination of grades 6 through 12 results in total statewide costs of $10.3 million.

Recommendation

Add Menstrual Product Mandate and $10.3 Million to K-12 Mandates Block Grant. Given the intent of Chapter 664 was to ensure students in certain schools have access to menstrual products free of charge, we recommend the Legislature add the mandate to the K-12 mandates block grant. In tandem, we recommend increasing the block grant funding by $10.3 million based on our statewide cost estimate. We recommend increasing the high school per-student block grant rate more than the K-8 rate, as the mandate applies to all high school grades but only a portion of grades K-8. Under this approach, the K-8 rate would increase by $1.66 per student and the high school rate would increase by $2.47 per student.

FAFSA

Background

In 2024, Commission Found Requirements Related to Financial Aid Applications to Be a Reimbursable Mandate. Chapter 560 of 2021 (AB 469, Reyes) added three new requirements for local education agencies: (1) confirm that high school seniors complete the FAFSA, the Dream Act application, or an opt-out form; (2) direct students or their guardians having difficulty with these applications to the appropriate support or assistance; and (3) fill out an opt-out form on a student’s behalf if the student is unable to do so. In May 2024, the Commission found that some requirements added by Chapter 560 impose a reimbursable state-mandated program.

Commission Estimates Ongoing Statewide Mandate Costs of $9.1 Million. In May 2025, the Commission published their estimate of the cost of the FAFSA mandate. As Figure 2 shows, the Commission estimates ongoing statewide costs of $9.1 million. This estimate is based on claims data received from 26 school districts from 2021-22 through 2023-24. The Commission calculated a cost per 12^th grade student for each activity and applied it to the percentage of students that filed a FAFSA or opt-out form (depending on the activity).

2025-26 Budget Included $2.1 Million Increase to K-12 Mandates Block Grant for FAFSA Mandate. The 2025-26 budget added $2.1 million to the K-12 mandates block grant to cover costs associated with the FAFSA mandate. This equates to a $1.17 per student increase to the block grant rate for high school students. The $2.1 million added was based on calculations made by the Department of Finance (DOF) that account for estimates of increased workload for school counselors due to the mandate. These costs are scaled statewide based on the number of 12^th graders in the state and California’s student-to-school counselor ratio.

Assessment

Commission Estimated Costs Are Based on Reasonably Representative Sample of Districts. The Commission received mandate claims from 26 districts between 2021-22 and 2023-24. The claims include districts from all over the state, with average shares of students who are low income similar to the statewide average. Although these are only a small subset of the nearly 1000 districts in the state, they are reasonably representative of districts in California.

Funding Added to Mandates Block Grant in 2025-26 is Lower Than the Commission’s Estimate, but Based on Reasonable Assumptions. The $2.1 million added to the block grant for the FAFSA mandate is less than the commission’s estimate of $9.1 million. This amount is based on estimates by DOF. According to the California Student Aid Commission, 74 percent of 12^th graders completed financial aid applications on time in the first year of the requirement. DOF assumes half of the remaining students will receive one-on-one assistance from their school counselor to submit the application. We think this methodology more closely reflects the costs of implementing the mandate in a cost-effective manner. Moreover, we think DOF’s estimate is more likely to reflect the long-run costs of complying with the mandate. As students and schools become more familiar with the requirements to submit financial aid applications, completion rates likely will rise and costs associated with the mandate would decrease.

Recommendation

Maintain $2.1 Million Added in 2025-26. We recommend maintaining the $2.1 million already added to the K-12 mandates block grant. Although this amount is lower than the Commission’s statewide cost estimate, it is based on a methodology and set of assumptions that better reflect long-run costs of implementing the mandate in a cost-effective manner.