Funding School Air Conditioning in California After CalSHAPE: The 2026 Playbook for Cooling Classrooms with Prop 2, Deferred Maintenance, and Bonds

California returned to school in the late-August 2026 heat wave with a problem it has not funded. In Los Angeles Unified, students sat through 12 straight days above 90 degrees. Long Beach hit a record 109 degrees with 13 schools — roughly 14,000 students — in buildings with no air conditioning. Oakland Unified counts as many as 2,000 classrooms without it. Santa Barbara Unified shortened school days in late August because classrooms were too hot to hold class (as reported by CalMatters and the Santa Barbara Independent).

The timing could hardly be worse for districts. The state's signature school cooling program — CalSHAPE — has lapsed, and roughly $191 million in unspent funds is being clawed back to utility ratepayers instead of classrooms. Two new state laws now require districts to protect students from extreme heat, but neither comes with money to buy an air conditioner.

So the question every California superintendent, CBO, and facilities director is asking this fall is simple: with CalSHAPE gone, how do we actually pay to cool our classrooms? This guide answers that — with the funding pathways that still exist in 2026, what is and is not eligible, and the sequence that gets a district from a hot classroom to a funded project.

How many California schools don't have air conditioning?

By reported estimates, 15 to 20 percent of California's K-12 public schools have no functioning heating and air conditioning system at all, and as many as another 10 percent need major repair or replacement of the systems they have (CalMatters reporting, 2024–2026). That is potentially a quarter to a third of the state's school buildings with inadequate climate control — concentrated in older campuses and in the inland and coastal-valley regions now seeing the most extreme heat.

The instructional stakes are well documented: heat depresses attendance, concentration, and test performance, and it disproportionately affects the same student populations districts are already working hardest to support. "No child should be in a classroom that is overheating because they cannot learn, they cannot achieve, they cannot grow," San Diego Unified trustee Cody Petterson told CalMatters. The problem is now a facilities-funding problem, and it lands squarely on district capital planning.

Is CalSHAPE still available in 2026?

No. CalSHAPE — the California Schools Healthy Air, Plumbing, and Efficiency program — is winding down, and districts should not plan around it as a funding source.

CalSHAPE grew out of AB 841 (2020) and directed nearly $1 billion in investor-owned utility ratepayer funds, administered by the California Energy Commission, to help schools assess and upgrade aging HVAC and plumbing systems. On paper it was the largest dedicated school-HVAC funding stream California has ever had. In practice, it under-delivered: the program helped more than 4,500 schools assess their HVAC systems, but only 172 schools completed significant upgrades with program funds (CalMatters).

Here is where it stands in 2026:

Applications are closed. The California Energy Commission paused new applications in June 2024, citing budget constraints, and the Legislature and Governor did not extend the program in the 2026 session.

The money is leaving. Roughly $191 million in unspent funds is being returned to investor-owned utilities and their ratepayers by law. CalMatters reported the clawback flowing back to utilities such as SDG&E, Southern California Edison, and PG&E as small per-customer credits — money that will not reach classrooms.

The program sunsets January 1, 2027. Unspent balances are scheduled to liquidate to utilities in December 2026 ahead of the sunset (California Energy Commission program deadlines).

Existing grantees get more time — but that's it. Schools that already hold CalSHAPE grants have been given three additional years to complete their projects. If your district holds an active CalSHAPE award, finish and draw it down. If it does not, CalSHAPE is not a path forward — you need a different funding vehicle.

It is also worth noting what else has expired. The federal ESSER pandemic-relief dollars that many California districts used for ventilation and HVAC upgrades during 2021–2024 have now largely run out, their obligation deadlines passed. The two biggest one-time HVAC funding sources of the last five years — ESSER and CalSHAPE — are both effectively gone. That leaves districts back on the permanent facilities-funding system.

The new heat laws mandate protection — but not a dollar for cooling

California acted on school heat in 2026, but through safety mandates, not facilities funding. Districts need to understand both laws — they impose obligations without providing the capital to meet the underlying problem:

SB 1248 (Hurtado). Requires schools to adopt protocols for outdoor activities during extreme weather — monitoring forecasts, designating safe indoor alternatives, training staff to recognize heat stress, and setting criteria for canceling outdoor activity. Districts were required to have plans in place by July 1, 2026. No dedicated funding is attached.

AB 1653 (Lackey). Directs the State Board of Education to consider incorporating instruction on the symptoms of heat illness. Again, no funding is attached.

Both laws are real compliance obligations, and both point at the same gap: the state is requiring districts to manage heat risk while the classrooms themselves remain un-air-conditioned and the dedicated cooling grants have disappeared. The state's other visible heat response has leaned toward shade rather than air conditioning — the Governor's office announced in April 2026 that green-schoolyard efforts had replaced asphalt with trees and shade at 215 schools statewide. Shade helps outdoors; it does not cool a classroom. For that, districts are on their own capital budget.

How California school districts can fund air conditioning now: five pathways

With CalSHAPE and ESSER gone, HVAC and cooling projects move back into the permanent school-facilities funding system. There are five realistic pathways in 2026, and most districts will braid two or three of them together.

1. Proposition 2 modernization grants (the primary state vehicle). Proposition 2, the $10 billion facilities bond voters approved in November 2024, includes $8.5 billion for K-12 through the School Facility Program (SFP). HVAC and air-conditioning replacement is an eligible modernization cost — like-for-like modernization of building systems (HVAC, roofing, windows, envelope) is exactly what the modernization program funds. Modernization is a matching program, generally 60 percent state and 40 percent local, with a Financial Hardship provision that raises the state share for districts with limited local bonding capacity. The catch is competition: modernization demand under Prop 2 was oversubscribed almost immediately, and the June 30, 2026 application filing round has already closed. Districts should confirm the current OPSC application window, and — more importantly — get their projects design-ready and DSA-approved so they can file the moment a round opens. In a heavily oversubscribed program, readiness is funding.

2. State and local deferred maintenance. HVAC repair and replacement is textbook deferred maintenance. A district with a current, board-adopted deferred maintenance plan can direct restricted maintenance (Routine Restricted Maintenance Account) dollars toward HVAC, and can position for state deferred-maintenance matching through the process documented on Form SAB 40-20. Deferred maintenance rarely funds a full districtwide re-cooling on its own, but it is the right vehicle for failing units, targeted replacements, and keeping systems limping until a larger modernization or bond project lands.

3. Local general obligation bonds. For most districts, the durable answer to systemic HVAC gaps is a local Proposition 39 general obligation bond passed at the 55 percent threshold. Bonds provide the local match that unlocks Prop 2 state dollars and cover the portion of cooling work the state will not. Air conditioning is one of the most politically durable items a district can put on a bond project list — "cool, safe classrooms" polls well across the spectrum. If your district's bonding capacity is tapped or a measure recently failed, the 55 percent strategy guide and bond program management are the starting points.

4. Facility Hardship and emergency pathways. Where an HVAC system has actually failed and created an unsafe or unusable classroom, the SFP's hardship and emergency provisions can apply. These pathways are narrow and documentation-intensive, but for a genuinely failed system serving occupied classrooms they can move faster than a standard modernization grant. This is a route to evaluate with facilities counsel and OPSC, not a general funding plan.

5. Energy strategy to shrink the bill. Cooling is an operating cost, not just a capital cost. Districts increasingly pair HVAC replacement with energy measures — high-efficiency heat-pump systems, solar generation, and battery storage — financed through power-purchase agreements or on-bill utility programs that require little upfront capital and can offset the added load of new air conditioning. This does not replace the capital pathways above, but it changes the total cost of ownership and can make a board more comfortable committing bond or modernization dollars to cooling.

Can Proposition 2 pay for HVAC and air conditioning?

Yes. Air-conditioning and HVAC replacement is an eligible modernization cost under Proposition 2's School Facility Program. Prop 2 dedicates $8.5 billion to K-12 across modernization, new construction, transitional-kindergarten facilities, career-technical-education, and lead-in-water remediation, and building-systems modernization — HVAC included — is a core eligible use.

Two realities shape how districts should approach it. First, it is a match: modernization is generally 60 percent state and 40 percent local, so a district needs a local funding source (usually a GO bond) to access the state share, unless it qualifies for Financial Hardship. Second, it is competitive and oversubscribed: schools filed enough applications to exhaust the modernization set-aside almost as soon as Prop 2 passed, and only about 15 percent of the total had been allocated by the State Allocation Board as of spring 2026. The districts that win are the ones whose projects are fully designed, DSA-approved, and application-ready before the filing window opens. Treat Prop 2 as the anchor of your HVAC funding strategy, but build the local match and the project readiness around it.

A pending bill could reward heat-ready projects: AB 1822

Districts planning HVAC work should watch AB 1822 (Muratsuchi), a pending 2025–26 bill on "school facilities: project priorities: extreme heat and climate change." It passed the Assembly 77-0 in May 2026 and, as of this writing, is moving through the Senate; it is not yet law. If enacted, it would authorize the State Allocation Board to adopt an efficient response to extreme heat and climate change as a project priority, and those priorities would apply to applications received after January 1, 2027. In an oversubscribed program, scoring priorities decide who gets funded — so if AB 1822 becomes law, a well-documented heat-mitigation and HVAC project could move up the queue. Design your project now so it is positioned to benefit if the priority takes effect. We will update this guide as the bill advances.

The smart sequence: document, prioritize, then match the funding

The districts that will actually cool their classrooms are not the ones with the most funding — they are the ones with the best-documented need and the most application-ready projects. The sequence:

1. Document the condition. Commission or update a Facility Needs Assessment that inventories every HVAC system by campus, age, and condition, and calculate the Facility Condition Index so you can rank sites objectively. Prop 2, deferred maintenance, and bond project lists all require defensible condition data — and boards and communities trust a ranked, evidence-based plan far more than an anecdote about the hottest classroom.

2. Prioritize by risk. Rank campuses by a combination of climate exposure, system condition, and student impact. A failed system on an inland campus with no cooling is a different priority than an aging-but-functional system on a mild-climate campus. This ranking becomes your capital sequencing and your bond project list.

3. Match each project to the right vehicle. Failing single systems to deferred maintenance and hardship; systemic districtwide replacement to a bond-plus-Prop-2 modernization strategy; efficiency and load reduction to energy financing. Put HVAC explicitly in your five-year facilities master plan so it is part of the capital story, not a series of emergencies.

4. Get design-ready before the window opens. In an oversubscribed Prop 2 environment, the constraint is not eligibility — it is readiness. Advance HVAC modernization projects through design and DSA so they can file the day OPSC opens a round.

5. Watch the sequencing against fiscal reality. Districts in fiscal distress should be realistic about local match capacity and predevelopment costs. The answer is usually a phased plan that protects the general fund while still moving the highest-risk campuses first.

Frequently asked questions

Is CalSHAPE still accepting applications in 2026?

No. The California Energy Commission paused CalSHAPE applications in June 2024, and the program was not extended in the 2026 legislative session. Roughly $191 million in unspent funds is being returned to investor-owned utilities, and the program sunsets January 1, 2027. Schools that already hold CalSHAPE grants have three additional years to complete their existing projects, but no new applications are being accepted.

How can California school districts fund air conditioning now that CalSHAPE has ended?

The main pathways in 2026 are: Proposition 2 modernization grants (HVAC is an eligible modernization cost), state and local deferred maintenance (via the Routine Restricted Maintenance Account and Form SAB 40-20), local Proposition 39 general obligation bonds at the 55 percent threshold, the School Facility Program's Facility Hardship and emergency provisions for failed systems, and energy strategies (efficient heat pumps, solar, and storage financed through power-purchase agreements) to reduce the operating cost of cooling. Most districts combine a local bond with Prop 2 modernization for systemic HVAC replacement.

Can Proposition 2 pay for HVAC and air conditioning?

Yes. HVAC and air-conditioning replacement is an eligible modernization cost under Proposition 2's School Facility Program. Modernization is generally a 60 percent state / 40 percent local match, so districts need a local funding source (usually a bond) to access the state share, unless they qualify for Financial Hardship. The program is heavily oversubscribed, so project readiness — full design and DSA approval before the filing window opens — matters as much as eligibility.

How many California schools do not have air conditioning?

By reported estimates, 15 to 20 percent of California's K-12 public schools have no functioning HVAC system at all, and as many as another 10 percent need major repair or replacement. The gap is concentrated in older campuses and in regions experiencing the most extreme heat.

What do California's 2026 school heat laws require?

SB 1248 (Hurtado) requires schools to adopt extreme-weather protocols for outdoor activities — monitoring forecasts, designating indoor alternatives, training staff on heat stress, and setting cancellation criteria — with plans required by July 1, 2026. AB 1653 (Lackey) directs the State Board of Education to consider instruction on heat-illness symptoms. Both are safety mandates; neither provides funding to install or replace air conditioning.

What is AB 1822 and how would it affect HVAC funding?

AB 1822 (Muratsuchi) is a pending 2025–26 bill that would let the State Allocation Board adopt an efficient response to extreme heat and climate change as a School Facility Program project priority, applying to applications received after January 1, 2027. It passed the Assembly 77-0 in May 2026 and is moving through the Senate; it is not yet law. If enacted, it could improve the scoring position of well-documented heat-mitigation and HVAC projects in an oversubscribed program.

Is HVAC replacement considered deferred maintenance?

Yes. HVAC repair and replacement is a core deferred-maintenance category. Districts can direct Routine Restricted Maintenance Account funds toward HVAC and position for state deferred-maintenance matching through Form SAB 40-20. Deferred maintenance is best suited to failing individual systems and targeted replacements; systemic districtwide re-cooling generally requires a bond-plus-modernization strategy.

What happened to the federal ESSER funds districts used for HVAC?

The federal Elementary and Secondary School Emergency Relief (ESSER) pandemic funds that many California districts used for ventilation and HVAC upgrades from 2021 to 2024 have now largely expired, with their obligation deadlines passed. Combined with the end of CalSHAPE, the two largest one-time HVAC funding sources of the last five years are effectively gone, returning districts to the permanent facilities-funding system.

What should a district do first if its classrooms are too hot?

Start by documenting the problem: a Facility Needs Assessment that inventories HVAC systems by campus and a Facility Condition Index that ranks them objectively. That condition data is required for Prop 2, deferred maintenance, and bond project lists, and it turns "the hottest classroom" into a defensible capital plan. Then match each project to the right funding vehicle and get the highest-priority projects design-ready before the next OPSC filing window.

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School Leaders helps California school districts turn a hot-classroom crisis into a funded plan — Facility Needs Assessments and Facility Condition Index scoring to document HVAC need, deferred maintenance and Prop 2 modernization strategy, and bond program design and management to secure the local match. Our team is former superintendents, CBOs, and facilities directors who have run these programs from inside the district.

Contact our team to build your district's classroom-cooling funding strategy.

Related reading: Bond Program Management & Prop 2 | Deferred Maintenance & SAB 40-20 | Facility Condition Index Guide | Five-Year Master Plan Guide | Modernization vs. New Construction | How to Pass a School Bond