New Proposed California Budget Offers $4 Billion Less for Education

Staff Writer
California Gov. Gavin Newsom speaks at Hanzo Sushi Thursday, April 29, 2021, in San Fernando, Calif. Businesses could be spared billions of dollars of higher taxes in coming years as a result of federal coronavirus relief funds flowing to the states. Newsom announced a budget plan this spring that would use $1.1 billion from the latest federal COVID-19 relief law to bolster a depleted unemployment compensation accounts. (AP Photo/Marcio Jose Sanchez, file)

While strong tax revenues in some states are boosting lawmakers’ efforts to increase funding for K-12 schools, policymakers in one of the country’s largest markets are preparing for a more significant hit to the education budget than originally expected.

New, gloomy fiscal projections in California have led Gov. Gavin Newsom to amend his initial state budget proposal, and the revised blueprint reflects a more negative impact to districts than the original draft released earlier this year.

The new proposal, released this month, allocates $93.8 billion to K-12 education — a $4 billion decrease in funding compared to estimates from January.

The governor’s new budget proposal would provide $4 billion less for education, as flagging revenue projections take a toll.

The proposed reductions largely come in the form of cuts to two major block grants the state approved last year. The biggest is a $2.6 billion reduction to the Learning Recovery Emergency block grant, which was intended to support academic intervention after the pandemic and bolster student and teacher social-emotional needs over five years.

Newsom, a Democrat, also proposed an additional $607 million cut to a smaller discretionary grant, building upon the $1.2 billion cut he proposed in January. The grant was meant to be used for a variety of activities, instructional materials, arts, and equipment.

And the new proposal also reflects recent declines in student enrollment, which equates to less education funding because money is allocated to schools on a per-pupil basis.

Cutting the one-time grants rather than base funding for schools would potentially ease the immediate impact to districts, many of which have not yet spent the majority of the grant money.

But the reductions would still be “disruptive,” said Kenneth Kapphahn, principal fiscal and policy analyst for the California Legislative Analyst’s Office, the nonpartisan fiscal advisory arm of the state legislature.

Many districts have spent the past year identifying options for how to spend that money, developing plans, building budgets, and in some cases started the collective bargaining process, he said.

“All of those activities were premised on the availability of those funds,” Kapphahn said. “If those reductions happen and are part of the final budget agreement, districts would need to revisit all of those actions.”

How much money each individual district could see cut would vary by school system. The learning recovery grant, for example, was spread across the state based in part on how many students were from low-income households or are English language learners.

“The amounts for individual districts ranged anywhere from a few hundred dollars per student to closer to $2,000 per student,” Kapphahn said “The districts that were expecting more are the ones that would have to make larger changes and adjustments in response.”

Needs Not Going Away

These looming cuts come at an uncertain time for the K-12 industry, as one-time federal pandemic aid is coming to an end, the pace of venture capital is slowing, and inflation continues to squeeze district budgets. And as the largest state market with nearly 6 million students enrolled in just over 1,000 pubic school districts, California represents a big piece of the education market.

The reductions might negatively affect some districts’ immediate spending plans, but Kapphahn pointed out that between other state and federal aid school systems in California will still have large amounts of one-time funding available to allocate.

There remains a lot of interest at both the state and district level to make up for learning lost during the pandemic, he said. So far the state, in trying to address that district need, has maintained funding for expanding after-school and summer school programs.

School district officials also are highly motivated to improve attendance, which in many K-12 systems hasn’t recovered from the student absences experienced during the pandemic, Kapphahn said.  

For now, district officials are waiting to see where the finalized state budget lands. The state’s Senate and General Assembly are developing their own versions of the budget, which Kapphahn said will likely incorporate a number of the governor’s proposals, before a final version is reached.

The deadline for the state to pass the budget is June 15.

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