Billy opened the “May Budget Revision Update: Implications for Schools” webinar by critiquing the major thematic elements of the Governor’s revised proposal. “This year’s May Revise contains more bright and shiny budget proposals than any in recent memory, and yet, at the same time, many of our underlying, structural funding issues still remain,” Billy said. “Gov. Newsom’s proposal is extremely generous … and is ambitious in terms of the new programs … which are well-intentioned and in areas of great need, and the Governor should be commended. At the same time, we are concerned about the creation of new programs with one-time funding that should be used for things like paying off deferrals.”
While the level of Proposition 98 funding is appreciated, many proposed funds are one-time money for categorical programs that would need ongoing funding. The May Revision also fails to repay the June apportionment deferral — in fact, increasing it from $2.3 billion to $2.6 billion — and uses that money to fund new programs, many of which only provide funding to schools that receive Local Control Funding Formula concentration grants.
CSBA Assistant Executive Director of Governmental Relations Dennis Meyers provided an overview of the May Revise, noting CSBA’s areas of concern that “set an agenda for advocacy over the next few weeks.”
One area of concern is the state’s backtracking on its “promise” to use supplemental payments to increase the state contribution to the Prop 98 guarantee over the next few years to bring the Test 1 amount up to 40 percent (from the current 38 percent). The Governor’s January Budget included a repeal of all but the first-year supplemental payment of $2.3 billion, and the May Revise pulls back even that payment, reportedly in favor of rebenching the guarantee for transitional kindergarten expansion. “The state is completely rolling back what it promised, which is to get to 40 percent of the General Fund,” said Meyers.
Nevada Joint Union HSD Superintendent McFadden said he feels like the proposal represents a missed opportunity to address more structural issues in the K-12 system. “While I want to congratulate the Governor and his administration for looking at various social-emotional, equity and academic barriers to learning for our students, and if you look at each of these areas in a silo, they are critical public policy issues,” McFadden said. “However, we as a whole continue to be challenged by a woefully underfunded system … When you look at this proposal, you see the bulk of the new funding is being obligated to a set of new categorical programs. So, a fundamental question is: what happened to local control?”
“We have a very large amount of one-time funds in this proposal, especially when you consider that we are already dealing with a large amount of one-time state and federal funds due to COVID-19 recovery,” Fine said. “I encourage you as trustees to ask your staff to, as they bring the budget proposal forward, that one of the most important pieces is a multiyear financial plan for a minimum of three years. It is during that time period that many of the one-time programs will cease to exist.”
Fine recommended two versions of the multiyear financial plan: one that is reflective of all the current conditions including the one-time resources, which would be the one the board adopts; and another version that takes the one-time funding out of the budget. “All these one-time resources and one-time proposals will mask what is truly going on in the structural, foundational issues of your revenue and expenditure budget,” he said. “You need to pay attention to the long term.”