California’s public schools, physically closed since mid-March and strapped for cash, are coming out of a frying pan and into a financial fire.

The fire comes in the form of a $6.5 billion cut to schools’ main source of funding as well as other reductions in Gov. Gavin Newsom’s revised budget that, if enacted, would mean single-year reductions to public education greater than those experienced during the Great Recession a decade ago, according to advocates.

Ricardo Cano
CalMatters

Newsom’s budget includes several nooks and crannies that ease a $15.1 billion shortfall for K-12 schools and community colleges. Still, the proposed education cuts arrive as schools expect to tack on more costs in order to safely reopen their doors for teachers and students in the fall.

That leads us to the frying pan: About 7 in 10 California school districts were spending more money than they were receiving prior to the pandemic, according to the California School Boards Association, and 40% were already weighing employee layoffs to help offset rising costs.

“School districts are in this very, very difficult place where they’re supposed to achieve things they’ve never done before and implement really deep budget cuts simultaneously,” said Kevin Gordon, a veteran education lobbyist.

Newsom’s revised $203 billion state budget includes across-the-board cuts that he said could be partially averted if the federal government provides assistance. Public education, which accounts for about 40% of the state’s budget, would be significantly impacted by a 10% cut, or $6.5 billion, to the Local Control Funding Formula the state uses to award money to schools.

Also gone would be many of the proposals for expanded preschool and teacher training and recruitment Newsom laid out in January, when he and lawmakers had advanced a record $84 billion budget for K-12 schools and community colleges.

Education Advocates Credited the Governor for Making Moves

One pandemic later, the state’s financial outlook has shifted significantly. Instead of adding to years of steady investments in public education and early childhood programs, state leaders now will have to decide what to salvage and where to cut, while local school officials will have to figure out those trickle-down effects on their local budgets.

Education advocates credited the governor for making moves that helped cauterize the $15.1 billion shortfall in education funding. For example, Newsom plans to steer $4.4 billion in federal CARES Act pandemic relief funds for schools to use to address students’ learning loss during distance learning. The governor also proposed temporarily reducing the rate school districts must contribute to cover employee pension obligations, effectively freeing up $2.3 billion in local budgets in the near term.

Newsom, who grew up with dyslexia, also plans to keep $645 million in special education funding he proposed in January, saying that “we are not even close to where we need to be in terms of protecting those folks.”

And while schools should expect a 10% decrease in the flat, per-pupil base grants every district receives under the state’s funding formula, Newsom vowed to protect the extra amounts the formula channels to schools with higher concentrations of students who are English learners, low-income, or foster youth.

Still, the proposed cuts could spell financial catastrophe for schools akin to the cuts students experienced during the Great Recession, when services and programs were slashed and more than 30,000 educators were laid off, leaving long-lasting damage to the state’s teacher workforce.

More Than 80% of Any Given District’s Budget Goes Toward Salaries and Personnel

“In that context, the cuts are too severe,” said Ted Lempert, president of the Children Now youth advocacy group.

So-called categorical services — such as after-school programs for kids, career technical training and adult education — are slated for a $353 million cut in the governor’s proposal. Advocates fear disadvantaged students will bear the brunt of the looming cuts, similar to recession-era cuts they say disproportionately affected the state’s poorest students.

“We need to be getting extra support to make sure that every kid is getting some significant learning right now, and there’s way too many kids who are falling through the cracks,” Lempert said.

The degree to which local districts will be able to weather the looming cuts will depend on their financial state prior to the pandemic.

“Every district’s in a different position. Some have reserves. Some have better fiscal conditions than others,” said Keely Bosler, director of the California Department of Finance.

More than 80% of any given district’s budget goes toward salaries and personnel.

“They are very employee-heavy, employee-intensive operations, so there will be a lot of hard (decisions) at school district levels,” Bosler said. “I don’t want to sugarcoat that.”

Some of the state’s school districts, steeling themselves for cuts, have already laid off some employees. Other districts that have struggled for years to balance their budgets will deal with far larger deficits. The Sacramento City Unified School District, for example, estimates a $77 million shortfall in its budget.

“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,” said superintendent Jorge Aguilar in a plea for federal assistance.

Another Conundrum Confronting California Districts

The Clovis Unified School District has never done layoffs in its 60-plus year history, according to Associate Superintendent Michael Johnston. The growing district of 43,600 students began planning for the likelihood of cuts right after schools physically closed March 13, leaving some district office positions unfilled.

Clovis Unified will tap its reserves to mitigate a projected $30 million in cuts, while looking at areas to trim that are “as far away from the classroom and that help us to be able to not lay off employees,” Associate Superintendent Michael Johnston said. That could mean forgoing routine investments in technology and infrastructure, and leaving more open positions unfilled.

Another conundrum confronting California districts: who to cover the costs to safely reopen schools. By one estimate, schools spent more than $2 billion on feeding students and families, and buying computers in bulk for distance learning. Now, they expect to spend more on protective equipment for teachers and students, cleaning supplies, increased bus trips, and more computers for students in the event that they’d have to revert to distance learning for portions of the school year.

Beyond the logistics of reopening, many school practitioners have sounded alarms about the growing, pandemic-induced mental health needs and additional academic support for students once schools reopen.

“This budget would be insufficient in ordinary times, and is less than what is required for most schools to reopen safely during a pandemic,” said Xilonin Cruz-Gonzalez, president of the state school boards association.

“If schools don’t reopen, our economy can’t fully reopen.”

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