May Revision sees slight increase for K-12 funding

budget

Gov. Gavin Newsom released his much-anticipated budget revision on May 9, taking a cautious approach in most areas despite larger-than-expected growth in state General Fund revenues.

Overall, the May Revision projects an increase of $3.2 billion in state General Fund short-term revenues over the January budget. K-12 education will see an increase in funding over prior years, with Gov. Newsom recognizing that Proposition 98 is a “floor, not a ceiling,” and proposing $4.4 billion above the Proposition 98 requirement.

“We’re encouraged that Gov. Newsom continues to identify and address some of the more pressing issues facing California public schools, such as special education, early learning, employer pension contributions and teacher recruitment, training and retention,” CSBA President Dr. Emma Turner said. “In his first budget, the Governor has made significant progress toward providing the resources needed to give all students a high-quality education. In the coming months, we look forward to partnering with the Governor to accelerate this work and secure the investment needed to lift California from the bottom of the national rankings in per-pupil funding and into the top 10.”

Education funding highlights from the May Revision include:

A reduction in the statutory cost-of-living adjustment from 3.46 percent in the January budget to 3.26 percent for Local Control Funding Formula grants and the handful of categorical programs that receive COLA, such as special education and child nutrition.

CalSTRS

The administration proposes increasing its non-Proposition 98 General Fund commitment to the CalSTRS system on behalf of school employers from the $3 billion proposed in January by an additional $150 million in the May Revision, for a total amount of $3.15 billion. The additional $150 million in one-time funds is proposed to buy down employer contribution by an additional 0.4 percent, representing an employer contribution level of 16.7 percent for 2019–20. The employer rate buy down for 2020–21 would remain the same as in the January budget at 17.1 percent.

Special education

In January, the administration proposed $577 million, composed of both ongoing and one-time funds, for special education with a new allocation method outside of the current special education funding model. In the May Revision, an additional $119.2 million is proposed for special education with the new allocation method and commits the new total of $696.2 million entirely to ongoing support.

California Republic Flag in front of The California Capitol Building

Full-day kindergarten

The May Revision includes a reduction of $150 million, for a new total of $600 million in one-time non-Proposition 98 funding to districts that do not currently offer full-day kindergarten to construct new facilities or retrofit existing facilities. The proposal increases the state match to 75 percent, from 50 percent in the January proposal, and also extends available funding over three years with the priority in the first two years for those school districts that do not currently provide full-day kindergarten.

Charter schools
The May Revision includes four specific charter school transparency provisions that will likely be included along with the budget and therefore precede any other charter reform bills:

Prohibit charter schools from discouraging students from enrolling in a charter school or encouraging students to disenroll from a charter school on the basis of academic performance or student characteristic, such as special education status.
Prohibit charter schools from requesting a pupil’s academic records or requiring that a pupil’s records be submitted to the charter school prior to enrollment.
Create a process for families of prospective and current charter school students to report concerns to the relevant authorizer.
Require the California Department of Education to examine the feasibility of using data from the California Longitudinal Pupil Assessment Data System to identify charter school enrollment disparities that may warrant inquiry and intervention by corresponding authorizers.

Proposition 98 Reserve

For the first time, the state will make a required contribution into the Public School System Stabilization Account — also known as the Proposition 98 Rainy Day Fund — a mechanism to lessen the impact of volatile state revenues on K-14 schools. The deposit of $389.3 million is equal to the difference between the Proposition 98 “Test 1” funding level and the prior year funding level adjusted for growth and inflation, but not more than the amount of capital gains revenues in excess of 8 percent of total revenues. What this translates to is about $65 per average daily attendance being put into a bank account rather than being sent out to local educational agencies. This deposit will not trigger the school district reserve cap — a deposit of approximately $2.1 billion, according to the Legislative Analyst’s Office, would be needed for the cap to take effect.

Teacher loans and training

The May Revision proposes $89.8 million in one-time non-Proposition 98 General Fund to provide an estimated 4,500 loan repayments of up to $20,000 for newly credentialed teachers to work in high-need schools for at least four years. Funds will be prioritized for teachers in hard-to-hire subject matter areas (special education and STEM) and school sites with the highest rates of non credentialed or waiver teachers.

Additional funding proposed in the May Revision for teacher retention and training include:

$44.8 million one-time non-Proposition 98 General Fund to provide training and resources for classroom educators to build capacity around inclusive practices, social emotional learning, computer science and restorative practices as well as subject matter competency, including STEM.
$13.9 million ongoing federal funds for professional learning opportunities for public K-12 school administrators to provide the knowledge, skills and competencies necessary to support the diverse student population served in California public schools.

Computer science and technology

The administration will develop a comprehensive plan to achieve the goal of providing access to computer science education for all students for consideration as part of next year’s budget.

$15 million one-time non-Proposition 98 General Fund for broadband infrastructure.
$1 million one-time non-Proposition 98 General Fund, available over four years, to the State Board of Education to establish a state Computer Science Coordinator.

Other Proposed Adjustments

Classified School Employees Summer Assistance Program — An increase of $36 million one-time Proposition 98 General Fund for an additional year of funding for this program, which provides a state match for classified employee savings used as income during summer months.
Wildfire-Related Cost Adjustments — An increase of $2 million one-time Proposition 98 General Fund to reflect adjustments in the estimate for property tax backfill for basic aid school districts impacted by 2017 and 2018 wildfires. Additionally, an increase of $727,000 one-time Proposition 98 General Fund to reflect adjustments to the state’s student nutrition programs resulting from wildfire-related losses.

What is next?

With the release of the May Revision, budget negotiations kick into high gear as the Legislature will move to get a budget to the Governor by June 15. While the Governor’s proposals drive the budget conversations almost exclusively, there are other issues that legislators will want included in the budget and many have made their requests known to the education budget subcommittees in both the Assembly and Senate. CSBA will provide updates as the process moves along.

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