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  • 05/25/2020 9:12 AM | Cheryl Casagrande (Administrator)

    California schools can’t reopen safely without more federal dollars, state schools chief says

    SCHOOL FINANCE

    MAY 20, 2020
    DIANA LAMBERT
    12 COMMENTS




    CREDIT: ANDREW REED/EDSOURCE

    State Superintendent of Public Instruction Tony Thurmond during a staff interview at EdSource.

    California schools will not be able to reopen safely next school year unless they receive additional federal dollars, said California Superintendent of Public Instruction Tony Thurmond on Wednesday.

    Gov. Gavin Newsom’s proposed May budget revision would reduce funding to school districts by about $7 billion. The proposal includes a cut of $6.5 billion that is allocated through the Local Control Funding Formula, which directs additional funding to high-needs students — low-income, foster and homeless students, and English learners.

    “We believe our school districts can’t reopen safely if they have to implement these kinds of cuts,” Thurmond said. 

    Students, teachers and staff will need masks and hand sanitizer, Thurmond said. Schools will need to be sanitized every day, sometimes multiple times a day, and class sizes will need to be smaller to maintain 6 feet between everyone in the class.

    Despite a suggestion from Newsom that schools start early to make up for learning loss during school closures, Thurmond said most districts plan to open on their usual fall opening dates in late August or early September, but that in some cases instruction could include some in-class instruction and some distance learning. 

    “All of our focus on reopening is first and foremost safety for our students and for our educators and for our families,” Thurmond said.

    The cost of reopening with social distancing, alternate school schedules and other safety guidelines will be costly for districts already struggling with budget cuts, said Kindra Britt, deputy superintendent of communications for the California Department of Education. 

    The department is relying on federal dollars, including funds from the HEROES (Health and Economic Recovery Omnibus Emergency Solutions) Act and more funds from the CARES Act, the first stimulus bill Congress approved in March, to make up for state budget cuts, Britt said.

    Thurmond and other department of education officials are working with legislators and the governor to look at all possible scenarios, including what would happen if the federal dollars don’t arrive, Britt said.

    “We will have to really have some tough conversations if we don’t get federal funding,” she said.

    The state budget has yet to be approved by the Senate and there has been discussion about reallocating funds from other programs to increase education funding, Britt said.

    Despite questions about funding, school districts and the education department are moving forward with plans for reopening. Decisions about when California school districts will reopen will be made locally, but there will be guidance from state and county health officials and the department, Thurmond said.

    A California Department of Education task force that includes educators, education associations, union representatives and health officials has been sharing guidance about how to safely reopen schools with districts weekly, but will offer more comprehensive guidance soon, he said. 

    Thurmond will host a videoconference with school district and public health officials Thursday to discuss districts’ plans for reopening schools and to share guidance. The videoconference can be viewed on the department’s Facebook page.

    Conference attendees will discuss districts’ fiscal health, how schools will provide educational programs in the fall and how to ensure the health and safety of students and staff.

    One of the unanswered questions will be who will pay for the personal protective equipment that will be required for staff and students, Britt said. “That’s what school districts want to know,” she said. “Who will pay for these masks and all the increased costs?”


  • 05/19/2020 12:18 PM | Cheryl Casagrande (Administrator)

    Six urban California districts say proposed budget cuts will set back restarting school

    They urge tapping state's rainy day fund to give school more money

    SCHOOL FINANCE

    MAY 19, 2020
    JOHN FENSTERWALD
    1 COMMENT

    PHOTO: TOM BARRETT/ UNSPLASH

    Los Angeles Unified and five other urban California school districts collectively enrolling about 1 million students warned Monday that “unrealistic” funding cuts proposed by Gov. Gavin Newsom in his revised budget would force them to delay reopening of schools this fall.

    “Reopening our school campuses will require more — not fewer — resources to ensure and sustain proper implementation of public health guidance and the safety of all of those involved. Cuts will mean that the reopening of schools will be delayed even after State guidance and clearance from public health officials is given,” superintendents of the districts wrote in a three-page letter, dated May 18, to legislative leaders.

    Related

    Gov. Newsom’s Revised Budget Would Partially Offset Huge Drop In Revenue For K-12 Schools, Community Colleges

    The letter comes less than a week after Newsom released his May budget revision that would cut funding for school districts by about $7 billion. That proposal includes a cut of $6.5 billion in general funding through the Local Control Funding Formula, which directs additional funding to high-needs students — low-income, foster and homeless students and English learners. That 10% reduction would be the first cut in the formula since its passage seven years ago. Signing the letter were superintendents of the state’s three largest districts, Austin Beutner, L.A. Unified; Cindy Marten, San Diego Unified and Christopher Steinhauser, Long Beach Unified, as well as Vincent Matthews, San Francisco Unified; Kyla Johnson-Trammel, Oakland Unified; and Jorge Aguilar, Sacramento City Unified.

    They sent the letter to Senate President Pro Tem Toni Atkins, Assembly Speaker Anthony Rendon and the chairs of legislative committee reviewing the education budgets.

    The superintendents argued that the funding cuts, combined with the additional expenses to restart schools with measures to prevent spreading the coronavirus among students and staff, will be untenable without more state money and clear guidance they haven’t received. They cited protective equipment, cleaning supplies, additional counselors and nurses to take students’ temperature daily, more staff to handle students coming to school in shifts and efforts to address learning loss during school closures as among the potential costs.

    “We cannot in good conscience risk the health and safety of our students and staff by returning to the classroom prematurely and without funding for the necessary precautions,” they wrote.

    They suggested a half-dozen ways that the Legislature could provide financial relief not in the Newsom’s budget, including a utility surcharge to pay for computers and internet access for students and directing money from the state’s rainy day fund, called the Budget Stabilization Account, to K-12 schools. Newsom proposed tapping $7.2 billion from the fund in 2020-21 to fix the state’s projected deficit, but none of that would go to schools.

    The superintendents called for precise guidance from the state on the actions needed to open schools.

    “We cannot move forward with a plan without a price tag,” Marten said in an interview.

    But both Marten and Steinhauser backtracked from the letter’s implied threat to postpone the start of school without more money. They said they will stick with their scheduled openings — Aug. 31 in San Diego and Sept. 1 in Long Beach, but a lack of funding will affect their plans.

    “We have sent out the message we will open Sept. 1, but we don’t know what it will look like,” said Steinhauser, adding that each district in the state will make its own determination.

    Los Angeles Unified has set Aug. 18 as the first day of school, but Beutner said earlier this month but not before “science and health authorities tell us it is safe and appropriate to do so.” Nothing has changed, a spokeswoman said in an email.

    The superintendents also called for the Legislature to protect districts from liability in case students contract the coronavirus at school and to guarantee per-student funding for 2020-21, as Newsom assured districts for the current year.

    Legislators agree

    Several Democratic and Republican Assembly members signaled they’d favor adding funding for K-12 to the state budget during a subcommittee hearing of the Assembly Budget Committee on Monday. Assemblyman Al Muratsuchi, D-Torrance, said he’d support “pulling from other priorities” to raise K-12 funding beyond the minimum under Proposition 98, the formula that determines how much of the General Fund goes to community colleges and K-12 schools. Based on a plunge in estimated tax revenues, the Department of Finance is projecting $15 billion less in Prop. 98 funding next year.

    Newsom is proposing to blunt the impact of the $6.5 billion funding cut next year by steering nearly $6 billion in one-time funding from the federal CARES Act and to delay a portion of payments to districts instead of cutting their budgets further. In an analysis released on Sunday, the Legislative Analyst’s Office said that the net effect would be flat funding, “with federal funds and payment deferrals offsetting the reduction in Proposition 98 funding.”

    But Steinhauser said that the CARES money would have to be spent by Dec. 31 on measures to reduce learning loss or to reimburse districts for COVID-19 expenses. While useful, the funding would not address “deep and ongoing expenses” districts will face now and in coming years in the event the economy doesn’t immediately bounce back.

    Marten said mitigating a 10% cut in the funding formula won’t be enough to cover a possible 20% increase in expenses next year. Bringing students back to the classroom under multiple scenarios will cost more, she said.

    “We have to act soon or risk prolonging distance learning,” she said.


  • 05/07/2020 9:47 AM | Cheryl Casagrande (Administrator)

    The coming storm: big budget cuts, rising costs for California schools

    By one projection, a 15% cut may await schools in 2020-21

    SCHOOL FINANCE

    MAY 6, 2020
    JOHN FENSTERWALD
    9 COMMENTS

    PHOTO BY ZAIDEE STAVELY / EDSOURCE

    A school mural at Havenscourt Campus in Oakland

    State officials insist it’s too early to predict the size of the fiscal hole in the 2020-21 state budget. The filing deadline for the income and capital gains taxes for last year has been pushed back to July, and the path of the coronavirus remains unpredictable.

    Next week, when he releases the May revision of the state budget from January, Gov. Gavin Newsom will likely say it’ll be bad, but stay tuned for the details later this summer.

    “We can build scenarios around different levels of cuts and reductions,” said David Gordon, superintendent of the Sacramento County Office of Education, “but it’s all speculation till we see the actual numbers.”

    Related

    Gov. Newsom Assures School Districts They’ll Be Funded During Coronavirus Closures

    Nonetheless, there are some ballpark estimates. As unemployment soars and the outlook for a steep recession looms, analysts are cranking new data into old forecasts, and the projected impact on education funding is ugly — probably a bigger dollar cut next year than the worst year in the Great Recession. Whether school districts, community colleges and early education programs will feel the full impact may depend on how much Newsom funds them beyond the statutory minimum.

    Newsom this week acknowledged overall state revenue declines would be in the “tens of billions.” The California Department of Finance pointed to a scenario in the January budget (page 228) of a “moderate” recession with revenue losses of $50 billion — $25 billion for each of the first two years — followed by further annual declines of $15 billion to $20 billion for years after that.

    In testimony on April 16 before the Senate budget committee last month (starting at 13:50), Legislative Analyst Gabriel Petek applied COVID-19’s financial equivalent of a coronary thrombosis to the Great Recession. His conclusion: a two-year, $35 billion hit in revenue, with 80% — $28 billion — falling in 2020-21 and only $7 billion in the current year that ends June 30. That’s because plummeting personal income taxes in calendar 2020, which account for about two-thirds of General Fund revenue, will wallop the 2020-21 fiscal year and beyond.

    When he closed schools in March, Newsom assured K-12 schools they’d get their full state funding for 2019-20 year as long as they agreed to feed low-income students, provide distance learning for all students and child care for essential workers. Districts won’t directly be affected by a drop this year in the funding through Proposition 98, the formula that determines how much of the General Fund goes to K-12 and community colleges.

    But 2020-21 will be painful. Prop. 98, a constitutional provision that voters passed in 1988, is a complicated formula. But as a rule of thumb, K-12 and community colleges receive 40% of the General Fund each year. A 40% slice of the LAO’s estimated $28 million drop in revenue for the coming year would be $11.2 billion for K-12 and community colleges. That compares with a cut of $7.4 billion in Prop. 98 in 2008-09, the worst single year during the Great Recession.

    In terms of percentages, the Prop. 98 drop in 2008-09 was 13%, about $1,200 per student. Prop. 98 has grown more than $30 billion since the nadir of the Great Recession and a loss of $11 billion next year would be 14 or 15%, about $1,700 per student. And that’s for a “moderate” recession; the COVID-19 recession is looking to be severe, at least for the next year or two.

    During the Great Recession, the American Recovery and Reinvestment Act, which Congress passed in 2009, helped school districts weather the recession with $6 billion in help during the first two years. When the money ran out, Prop. 98 cuts continued until 2011-12.

    Newsom is fond of calling California, the world’s fifth-largest economy, a “nation state,” but he’s counting on Washington, D.C., to help it and other states ward off financial disaster. Unlike the federal government, states have to balance their budgets each year.

    By July 1, California’s K-12 schools will receive $1.9 billion as its share of the $2.2 trillion in relief from the CARES Act, which Congress passed on March 27. California schools would get at least $20 billion more if Congress agrees to include $200 billion, sought by the Council of the Great City Schools and other education organizations, in the next round of relief. In an April 8 letter to House Speaker Nancy Pelosi, Newsom requested a $1 trillion package for state and local governments, including several hundred billion dollars for K-12.

    Pelosi’s all in for that plus more money for special education, but Senate Majority Leader Mitch McConnell isn’t yet, and negotiations could be long and hard. In a column this week, longtime Capitol Hill observer Marguerite Roza, director of the Edunomics Lab and a research associate professor at Georgetown University, warned school systems not to engage in a “game of chicken” with Congress while they should be preparing for tough decisions.

    Stocking up with cash

    School districts have one advantage they lacked heading into the Great Recession: budget reserves that average 17% of their budgets, a historically high level, according to a recent LAO report. But there is a wide variation, too, with big districts tending to have smaller savings. They will need big reserves if, as expected, the state resorts to a tactic used extensively during the Great Recession to avoid additional funding cuts. That is to use “deferrals,” which are late payments to school districts, by months or, as occurred in the Great Recession, into the next fiscal year. The advantage to districts is that they can budget the IOU as revenue and avoid layoffs. By 2012-12, $10 billion – about a quarter of what the state owed districts – was paid  one to five month late.

    The challenge is they have to borrow money to make payroll — a burden for some small districts, charter schools and larger districts living on the edge. In an April alert, the Fiscal Crisis and Management Assistance Team, the state agency that oversees districts’ financial health, warned districts to build up their cash reserves. “Cash deferrals are more favorable than actual reductions in state funding,” it said but districts have to pay attention to how much money they have on hand, it said.

    “This is the time your school boards should bless those who stood strong and said, ‘We are not going to eat into our reserves,'” said Gordon.

    The state has built up a rainy day fund — the Budget Stabilization Account — that as of February was $17.5 billion, also a historic level. But there will be big demands for the money and no assurance that Newsom will direct any of it to schools. There is a separate Prop. 98 reserve, but the LAO reports it’s only $377 million — less than 1% of school spending.

    Unlike the Great Recession, the pandemic has imposed unprecedented expenses, from food to computer purchases. A return to school could compound staffing needs and add to expenses. Addressing learning deficits and issues of trauma will demand more counseling, after school programs or perhaps an extended year, adding cost pressures for districts looking to cut costs.

    In an April 23 letter to Newsom, Assembly Speaker Anthony Rendon and Senate President Pro Tem Toni Atkins, 760 nonprofit children’s organizations, advocacy groups and health agencies called on them to “prioritize kids” in the next state budget, “holding crucial children’s programs and services harmless and increasing targeted supports as much as possible.”

    The release of the May budget revision next week may offer some early signals of Newsom’s willingness and ability to do so:

    Status of cost of living adjustment: In his pre-COVID-19 budget in January, Newsom proposed increasing spending by nearly $4 billion, including $1.2 billion for a 2.3% cost of living adjustment for the Local Control Funding Formula, the source for most district spending. Now, education groups would be happy with just the COLA alone and will be watching closely to see if it’s included.

    Pension increases: Some of the state’s largest school districts have called on the Legislature to suspend school districts’ contribution increases for two years to the two pension funds representing school employees. Since 2014, districts’ payments to for teachers, through CalSTRS, and other school employees, through CalPERS have more than doubled. The increases are required to restore the pension funds’ financial health from investment losses during the Great Recession and unwise benefits decisions before then. Postponing higher payments would free up nearly $2 billion for districts over the next two years. Districts are hoping Newsom will agree, in the May revision.

    Learning loss: Last week, Newsom suggested that districts should start school early to mitigate the loss of learning that most students, but especially low-income children, have experienced during two months of school closures. He did not indicate how the interventions would be paid for. District leaders hope Newsom will identify a funding source in the May revision.


    https://edsource.org/2020/the-coming-storm-big-budget-cut-rising-costs-for-california-schools/630938

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