State budget provisions complicate school reopening under COVID-19 conditions

While touted by Gov. Gavin Newsom and legislative leaders as preserving K–12 funding and positioning schools to reopen this fall, the 2020–21 state budget trailer bill language strips local educational agencies of critical flexibility needed to safely and effectively resume instruction.

Distance learning

Assembly Bill 77 states that in-person instruction should be offered to the greatest extent possible, only allowing distance learning under two circumstances: On an LEA or schoolwide level as a result of an order or guidance from a state or local public health officer and/or for pupils who are medically fragile or would be put at risk by in-person instruction, or who are self-quarantining because of exposure to COVID-19.

The unclear language in the bill was clarified in a June 26 letter submitted by Assemblymember Phil Ting (D-San Francisco), chair of the Assembly Committee on Budget, to the Senate Journal that said, “This section is not intended to require an LEA to seek out or receive approval from a state or local public health officer prior to adopting a distance learning model. This section is also not intended to prevent an LEA from adopting a distance learning, hybrid, or mixed-delivery instructional model to ensure safety.”

Certificated & classified layoffs

Further restricting options for LEAs is the prohibition of layoffs for certificated and specified classified employees (nutrition, transportation or custodial services) in 2020–21. With staffing costs comprising between 80 and 90 percent of local budgets, eliminating budget balancing may lead to deeper-than-necessary cuts in programs that serve students and families. CSBA is reviewing whether the limitation on classified layoffs would override contract language in collective bargaining agreements with classified bargaining units in violation of the state constitution.

While this budget does provide more relief when compared to the May Revision, the many caveats contained in AB 77 cloud the picture for LEAs and leave many schools in a position where they have to consider laying off staff that fall outside the restricted job classifications, and making cuts in other areas such as the arts, sports and other extracurricular programs.

Among other significant policy provisions:

Extends the 2019–20 average daily attendance hold harmless to the 2020–21 school year and suspends the Local Control and Accountability Plan, contingent on student participation reporting and local Continuity of Learning and Attendance plan elements due by Sept. 30, 2020.
Maintains instructional day requirements but allows flexibility for instructional minutes in 2020–21 school year; LEAs may meet the 180 days through a combination of in-person and distance learning.
If schools or LEAs are using distance learning, a host of additional requirements to track attendance would be required, including “a weekly engagement record” for every student.
Adopts short-term fiscal flexibilities: Increases LEA inter-fund borrowing allowances; Allow sale of surplus LEA property for one-time spending purposes; excludes on-behalf pension payments from the Routine Restricted Maintenance Account requirements; extends audit timelines; and clarifies LEA uses of Senate Bill 117 COVID relief funds.

Breaking down the deferrals

In lieu of funding cuts called for by Gov. Newsom in the May Revision, the final budget leans on approximately $11 billion in deferrals for schools in 2020–21. However, more than $5 billion of these deferrals could be rescinded if additional federal funds become available.

State budget deferral schedule

In the current fiscal year:

$1.85 billion from the June apportionment deferred until July of 2020

In the 2020-21 fiscal year:

$1.54 billion from the February 2021 apportionment deferred until November 2021
$2.375 billion from the March 2021 apportionment deferred until October 2021
$2.375 billion from the April 2021 apportionment deferred until September 2021
$2.375 billion from the May 2021 apportionment deferred until August 2021

To help manage cash flow issues, CSBA’s Cash Reserve Program provides LEAs with a reliable and economical short-term cash flow funding option. There is no cost to apply for a Tax and Revenue Anticipation Note (TRAN) and no obligation to issue. For more information, visit www.csba.org/cashreserveprogram.

While the budget would allocate $5.53 billion in existing CARES Act federal funds and general fund dollars for COVID-19 closure impacts, the $2.9 billion portion headed to LEAs to address learning loss will be based on Local Control Funding Formula supplemental and concentration grant formulas. CSBA had recommended the $2.9 billion be allocated to all unduplicated students, and not just those attending LEAs that receive concentration grant funding.

Among other funding items of note:

Allocates the following amounts in CARES Act and General Fund for COVID-19 impacts:
- $1.5 billion to all LEAs for learning loss, based on special education enrollment
- $980 million to all LEAs, based on the total LCFF formula
- $45 million for existing community school models
- $112.2 million for LEA school meal reimbursements during summer and COVID closures
Provides $2.3 billion ($1 billion this budget year) in funding relief for LEA statutory contributions to CalSTRS and CalPERS retirement systems.
Provides $645 million in Proposition 98 funding for special education services and supports – $545 million to base rate increases and $100 million for the low-incidence pool.
Restores May Revision reductions to fully fund K-12 career tech, after-school and adult education programs.

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