State budget a blow to schools
Newsom’s revised proposal slashes funds to districts already hurting
SACRAMENTO — California’s coronavirus budget woes are going to hit education hard.
In a revised state budget plan that Gov. Gavin Newsom unveiled Thursday, guaranteed funding for public schools and community colleges dropped by $19 billion, or nearly a quarter, compared to January projections.
Newsom proposed using federal stimulus money, redirecting pension payments and temporarily raising corporate taxes to minimize the losses. But California is still facing a nearly $7 billion shortage next year for school funding, the single biggest item in the state budget, as the coronavirus pandemic ravages the economy.
The financial blow comes as many school districts already find themselves hurting for cash because of rising pension payments and other costs. Safety protocols to prevent the spread of the virus that would allow
schools to reopen in the fall would add a new burden. Education advocates are anticipating a repeat of the mass layoffs, pay reductions and program cuts that hit schools during the past recession a decade ago.
E. Toby Boyd, president of the California Teachers Association, the state’s largest teachers union, said the revenue losses would probably mean larger class sizes for students, an end to many arts programs and cancellation of team sports.
“You’re basically going to take the joy out of learning,” Boyd said.
The state budget still must be negotiated with the Legislature, which must pass a plan by June 15 or go without pay. Funding levels for schools and community colleges are largely locked in by Proposition 98, a formula that voters approved in 1988. But at a news conference Thursday, Newsom said he would prioritize school funding, which he called an investment in the future.
“Numbers change, values don’t have to. Values remain,” the governor said. “I want you to know that we are not just going to roll over and accept $19 billion of cuts to public education.”
His proposal includes giving schools $4.4 billion from the state’s federal stimulus funding and reserve accounts to address learning loss related to early school closures this spring. Newsom would also redirect $2.3 billion from paying down unfunded retirement liabilities to help school districts meet their pension obligations over the next two years, and he would temporarily limit corporate tax credits and writeoffs, which could net schools $1.8 billion in new revenue next year.
As a gesture that the cuts are not permanent, Newsom would also provide a supplemental budget appropriation to schools starting in 2021, worth up to $13 billion.
But the dire financial forecast means the governor had to reverse $1.7 billion of proposed spending increases, primarily for teacher preparation and retention. If Congress doesn’t come through with a stimulus package for states and local governments, schools are also set to lose 10%, or about $6.5 billion, from their base funding next year, and another $350 million for special programs.
Troy Flint, spokesman for the California School Boards Association, said every district will have to figure out for itself how to close that gap.
Many school districts have already been pushed to the brink of insolvency by pension, health care, special education and transportation costs that are rising faster than funding increases.
The school boards association conducted a survey of nearly 200 districts and county offices of education in February and found that nearly 80% were on track for deficit spending by the end of the school year. Even before the pandemic, the San Francisco Unified School District was scrambling to deal with a financial hole in the tens of millions of dollars, largely caused by a spike in the number of special education students.
“So this shock will have a greater effect even than what was experienced in the great recession, and that was devastating,” Flint said. “It represents the biggest funding crisis that schools have experienced, at least in living memory, if not ever.”
Flint said schools that don’t have large reserves or the ability to borrow will be very challenged, and will probably have to lay off teachers.
The governor’s budget includes no dedicated funding for additional costs that may arise as schools try to figure out how to open safely in the fall, such as personal protective equipment, a more frequent cleaning schedule and staggered learning schedules.
“Many schools will find it difficult, if not impossible, to reopen in the fall,” Flint said. In turn, he said, that would prevent many parents from returning to work and the economy from fully reopening.
With fewer options available for the state, which must balance its budget, advocacy will turn to the federal level. House Speaker Nancy Pelosi has proposed a nearly $1 trillion bailout for states and local governments, though Republican leaders swiftly rejected the plan.
Boyd said he was optimistic that Congress would come through with additional support for schools because education is a bipartisan issue.
“It goes across political lines. Education is the one equalizer,” he said. “If that means adding to the federal debt, then so be it, because our students deserve it.”
The California Teachers Association is also one of the major proponents behind a November ballot initiative that would raise an estimated $12 billion per year by increasing property tax assessments for large commercial properties. It would add about $5 billion for schools, and the rest would go to local government services.
Boyd said the current budget crisis has only affirmed the need for the measure. During the past recession, 33,000 of the union’s members lost their jobs. For some older students, this will be the second time their education has been interrupted with huge cuts.
“It’s just horrifying to think of that,” he said.
Newsom has not endorsed the initiative, which is fiercely opposed by business groups. But he said Thursday that he would consider it, among other tax proposals that have been put forward.
“Yes, we will pursue conversations with the Legislature, leaders all up and down the state,” Newsom said, “and we hope we can help guide some consensus about what is most appropriate to put forward to the voters this November.”