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California Schools Bracing for Covid-Fueled Budget Ax

Facing a possible $54 billion deficit caused by the Covid-19 pandemic and California's response to it, Governor Gavin Newsom has proposed a 19% cut to K-12 education that school districts up and down the state are already warning will be impossible to shoulder.

SACRAMENTO, Calif. (CN) — With tax collections at a standstill due to the coronavirus pandemic, the bleak education cuts headlining California Governor Gavin Newsom’s budget bill last week hardly surprised employees at the state’s 10,000 schools. But news of a multibillion-dollar shortfall slated for K-12 schools nonetheless jarred an embattled education system still recovering from the last global financial crisis.

Making matters worse, Newsom’s proposed cuts come as districts have been forced to take on unprecedented loads: schools are scurrying to provide millions of students with lunches and laptops while figuring out how to shift to online learning on the fly. Some districts, including the state’s three largest, claim the governor’s cuts could delay the start of the next school year.   

The pandemic-induced recession along with the staggering task of prepping teachers and campuses for social distancing learning has administrators and lawmakers prepping for a storm of cuts likely to rival the Great Recession.

“The type of numbers we’re looking at, there’s really no way to reduce our budget without impacting people,” said Kevin Bultema, assistant superintendent at Chico Unified School District.

Budget woes & Newsom’s fix

During a 75-minute press conference last week, Newsom ran through the state’s suddenly torched finances and announced across-the-board cuts due to what his administration believes is a $54 billion deficit.

There were few winners in the revised budget, but the largest loser was without a doubt the state’s 1,000 local school districts and their 6 million students. Compared to Newsom’s robust January proposal, the May revision calls for a 19% reduction in funding for K-12 education.   

The precipitous decrease is spurred largely by slowed income, corporate and sales tax revenues that drive the state budget and are constitutionally tied to education funding.

In the late 1980s, voters seeking to level the playing field and prop underfunded school districts approved an initiative that guarantees minimum funding levels for K-12 and community colleges. The formula created by Proposition 98 effectively mandates the state dedicate 40% of its General Fund to schools.

With the economy at a standstill and tax collections delayed, the May proposal assumes a 22% drop in revenue compared to the January plan. Furthermore, the troubling decline equals a $19 billion cut in required Proposition 98 funding

California Gov. Gavin Newsom speaks at a news conference at the Governor's Office of Emergency Services in Rancho Cordova, Calif. (AP Photo/Rich Pedroncelli,File)

Hoping to brace schools, Newsom has proposed a variety of actions to backfill the loss and bring education funding to the minimum level required. He wants to pull $4.4 billion from the state’s slice of the federal pandemic relief, commit to increasing education spending in subsequent years 1.5% above the minimum guarantee, allow districts to temporarily reduce their pension obligations and slash most of the new education programs introduced in the January blueprint.

The overriding crutch of Newsom’s plan, however, is the federal government: he acknowledges the education cuts would be “devastating” but claims they can be largely avoided if Congress and President Donald Trump send the states more relief.

“The federal government, we need you; these cuts can be negated and dismissed with your support. This is your moment,” Newsom said this month.

Schools on life support

The stunning reversal — Newsom had proposed record education spending in his ill-fated January plan — has districts of all sizes staring down budget deficits and layoffs.

Located in Northern California’s agricultural rich Sacramento Valley, Chico Unified School District spans 23 schools and boasts 12,000 students. The district, which is operating on a $150 million budget, expects to lose up to $12 million in state funding.

Like most California school districts, the vast majority of Chico’s budget each year goes to staff salaries, making it increasingly likely that next year’s plan will lead to job losses and cuts to after-school programs.


Bultema, the district’s assistant superintendent, says although Chico has a nearly balanced budget, good relationships with its employee unions and the ability to make nimble decisions larger districts often can’t, there’s no avoiding the fact nearly 90% of its budget goes toward employees. He said budget cuts are also likely to stall progress the district has made in terms of technological advancements, facility upgrades and the revival of student support services cut during the Great Recession.

“We’re definitely going to take a step back from some of those really important services for kids that we just are not going to be able to provide,” Bultema said. 

Larger districts in places like Los Angeles and Sacramento are also struggling with mounting budget woes and the prospect of negotiating furloughs and layoffs with teachers’ unions.

Residents of East Los Angeles stand in line and wait in their cars to collect food donations outside James A. Garfield High School as part of the school district’s effort to support families struggling through the Covid-19 pandemic. (Courthouse News photo / Martin Macias Jr.

Los Angeles Unified, the nation’s second largest public school district, has culled $200 million in unbudgeted spending to increase student meals, train teachers for online learning and expand summer school offerings.

Addressing the parents of the district’s 600,000 students, LA Unified Superintendent Austin Beutner on Monday blasted Newsom and the federal government’s response, warning the harm caused by education loss is “just as real a threat to [students] as is the coronavirus.”

“Governments have established virus task forces and job task forces. Where’s the education task force?” Beutner asked. “Cuts to funding at schools will forever impact the lives of children.”

LA and other urban districts like San Diego, Long Beach, Oakland and Sacramento have sent Newsom and lawmakers a joint letter stating the current plan could prevent them from opening on time, let alone early as Newsom has suggested.

Beutner noted budget cuts stand to harm the poorest of families and said the state should be giving education the same “full-throated response” given to health care. 

“California prides itself in being where America comes to see its future. We have led the nation in efforts to help those who are most vulnerable and the most marginalized among us. This is the starkest test we’ve faced yet about our commitment to these values and we cannot fail,” Beutner said. 

Meanwhile Sacramento City Unified School District, one the oldest districts in the west founded in 1854, is warning a $77 million hole in its next budget will ultimately lead to teacher cuts. The district is in a longstanding contentious labor dispute with its teachers union and claims it’s careening toward bankruptcy is due to the 15% raise it gave the teachers in 2017.

“We can reasonably expect over the next year that, like other districts in the same fiscal situation as Sac City, we’ll need to employ other strategies that could include furloughs, pay cuts, loss of jobs and loss of programs,” the district said in a statement.

Stephanie Gregson of the California Department of Education echoed the districts’ concerns during a recent Assembly budget hearing.

“A cut of this magnitude will result in teacher layoffs, larger class sizes and reduction in transportation; all the things we cannot afford our schools to do, especially during a pandemic,” Gregson testified.

To stave off furloughs and firings, teachers unions are urging the federal government to answer Newsom’s call and send a lifeline to strapped-for-cash states like California.

“We must collaborate as educators, lawmakers, parents, administrators and community members to identify and commit to funding sources that will stop all cuts to education and make way for the resources necessary to make our schools and colleges fit for our students’ safe return,” said Toby Boyd in a statement, California Teachers Association president. “More than $10 billion in proposed cuts will lead to cuts to vital student programs, educator layoffs, furlough days and pay cuts just like it did during the last recession when we lost 33,000 educators.”


Lawmakers respond

Staff at Belvedere Middle School in Los Angeles maintain the grounds while students work from home during the Covid-19 pandemic. The school, which opened its doors in 1924, serves grades 6 through 8 under the LA Unified School District, the second largest district in the country. (Courthouse News photo / Martin Macias Jr.)

With a June 15 budget deadline approaching, California lawmakers have begun sounding off on the troubles facing education and scheming ways to soften the blow. 

Kevin Kiley is vice chair of the Assembly Education Committee and says the state should consider decreasing certain education spending mandates to give districts more flexibility during the pandemic. The Republican said districts are often hamstrung by the regulations and that recent funding boosts haven’t always had the desired effect.

“Maybe we can kick some of the bad habits that have gotten our education system in such trouble to the point where its barely above the worst in the country,” said Kiley, who represents parts of Sacramento, Placer and El Dorado counties.

Others like Assemblyman Kevin McCarty, D-Sacramento, are pushing Newsom to prepare a backup education plan in the likely event the U.S. Senate rejects the $3 trillion Heroes Act passed last week by the House. He says “draconian” cuts to education will stunt California’s economic recovery and reiterated lawmakers will need to act quickly if Newsom decides to ask voters for a new source of education funding on the November ballot.

“What are our plans if Senator McConnell and crew don’t go ahead and support California with our needs? What is our plan B?” McCarty asked a member of Newsom’s finance team Monday during a budget subcommittee hearing, referring to U.S. Senate Majority Leader Mitch McConnell. “If we’re waiting around for three or four more weeks and not prepared for that, it has disastrous consequences on kids and schools throughout California.”

Whether or not the Legislature and Newsom decide to place an emergency measure on the ballot remains to be seen, but voters will act on at least one education-related proposal in November.

A coalition of education officials and labor unions have qualified an initiative that would reform California’s landmark property tax law, Proposition 13, and raise taxes on certain commercial properties. Proponents say the reform could produce up to $12 billion for local governments and schools, but Newsom and the state’s other influential Democrats have yet to publicly get behind the effort to disband one of the most popular and influential tax measures ever approved.

Return on investment

Sierra Nevada Brewing Company in Chico, California. (Courthouse News photo / William Dotinga)

In Chico, California’s largest city north of Sacramento and home to a state university, bountiful almond and walnut orchards and Sierra Nevada Brewing Company, the pending budget cuts stand to halt several years of school renovations and improvements.

Voters in the growing city of nearly 100,000 in recent years approved bonds to fund school construction projects and campus expansions, but Bultema cautioned the district may have to reduce maintenance spending to balance its budget as it did during the last downturn.  

While the pandemic has erased hundreds of millions in new state education grants and training programs announced in January that were meant for districts like Chico, Bultema is urging Newsom and lawmakers to hold the line on education funding. He says healthy school districts pay off in the long run by reducing the need for social services.

“There isn’t that expectation that we’re going to see an infusion of federal dollars immediately, so that’s going to require us to cut probably more quickly than we even had to back in the recession and probably more deeply,” Bultema said. “I think we’re going to pay a greater price in the future for the cuts that would happen to education today.” 

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