January 14, 2020

Initial Impressions from Governor’s State Budget Proposal by School Services of CA

Written by School Services of California

On January 10, 2020, Governor Gavin Newsom released his proposal for the 2020–21 State Budget, his second budget proposal as California’s chief executive. The Governor is proposing significant changes and additional investments in several education areas including special education, educator recruitment and professional development, increased transparency for the Local Control Funding Formula (LCFF), and additional funding and opportunities for community schools and low-performing schools.

The purpose of this article is to provide a quick overview of Governor Newsom’s proposals regarding the 2020–21 State Budget. We address the education topics highlighted by Governor Newsom this morning in his press conference, press release, and high-level State Budget summary but reserve our commentary and in-depth details for inclusion in our Special Fiscal Report, to be released soon.

Economic Outlook

As the Department of Finance has been signaling in recent monthly Finance Bulletins, the 2020–21 State Budget proposal reflects a revised revenue forecast that is $5.8 billion higher from 2018–19 through 2020–21 compared to the 2019–20 State Budget Act. Over the three fiscal years, the personal income tax is down $1.5 billion, the sales and use tax is up $129 million, and the corporation tax is up almost $5 billion.

The budget continues to build additional reserves for the state’s Rainy Day Fund. The Governor’s proposal assumes nearly $2 billion in 2020-21 and an additional $1.4 billion over the remainder of the three-year forecast period. The state’s Rainy Day Fund is projected to be $18 billion in 2020–21 and $19.4 billion by 2023–24.

Level of Proposition 98 Funding

The proposed 2020–21 State Budget includes Proposition 98 funding of $84 billion for 2020–21, which Governor Newsom notes is an “all-time high.” The Proposition 98 funding levels for the current budget year (2019–20) and last year (2018–19) have been revised to $81.6 billion and $78.4 billion, respectively. When combined with more than $819 million in settle-up payments for prior fiscal years, the State Budget proposes an increased investment of $3.8 billion for K–14 schools.

While there are many representations of the actual per-student funding provided, Governor Newsom’s Budget asserts that total per-pupil expenditures for K–12 education from all sources are projected to be $17,508 in 2019–20 and $17,964 in 2020–21. Ongoing K–12 per-pupil expenditures of Proposition 98 funds are $12,600 in 2020–21, an increase of $496 per pupil over the level provided in 2019–20.

Due largely to projected increases in revenues and year-over-year declines in average daily attendance (ADA), Test 1 is projected to be operative for fiscal years 2018–19 through 2020–21.

Public School System Stabilization Account (PSSSA)

The budget projects that a $524.2 million deposit into the PSSSA is required for 2019–20, which represents an increase of $147.7 million over the deposit projected in the enacted 2019–20 State Budget. Proposition 2 requires deposits made into the account be spent in fiscal years in which the minimum Proposition 98 funding level is not sufficient to fund the prior-year funded level adjusted for any deposits. This means that a withdrawal of $37.6 million is projected to be made from the PSSSA in 2020–21.

Local Control Funding Formula

Governor Newsom proposes a $1.2 billion increase for the LCFF, which reflects a 2.29{310f4324ad65b0a2030a48dd153b38f905c81f5512720fdadc65be8f0797b958} cost-of-living adjustment, and brings total LCFF funding to $64.2 billion.

The Governor also proposes, as his response to the findings of the LCFF audit last fall, $600,000 in one-time funds to create an online Local Control and Accountability Plan (LCAP) portal to collect information from local educational agencies (LEAs) across the state and to co-locate the School Accountability Report Card and the LCAP online to make it easier for the public to access and compare both accountability tools.

Special Education

The Governor’s Budget proposes to use all of last year’s $645 million one-time augmentation to fund special education base grant increases this year and make some changes to the existing AB 602 formula by using a three-year rolling average of local LEA ADA, while still allocating funds through Special Education Local Plan Areas. The LEAs with base rates higher than the proposed rates will be held harmless.

The Governor is proposing a three-phase, multi-year process to improve special education, which we will detail further in our Special Fiscal Report to be released soon.

Educator Recruitment and Professional Development

The State Budget proposes approximately $900 million in one-time Proposition 98 funding for teacher recruitment and preparedness. Of that $900 million:

  • $350 million is for Educator Workforce Investment Grants to support professional learning opportunities in high-need areas
  • $193 million is for the Workforce Development Grant Program
  • $175 million is to expand the Teacher Residency Program
  • $100 million is for the California Teacher Credential Award Program
  • $64.1 million is to expand the California Classified School Employees Credentialing Program

Addressing the Achievement Gap

The Governor also proposes a couple of initiatives to help support LEAs in closing the achievement gap, including $300 million in one-time funds to establish community school grants and another $300 million in one-time funds to establish opportunity grants for the state’s lowest performing schools and districts and to expand the capacity of the California Collaborative for Educational Excellence within the statewide system of support.

School Nutrition

The Governor proposes $60 million in Proposition 98 funding for school nutrition, $10 million in Proposition 98 funding to provide training for school food service workers, $10 million in one-time non-Proposition 98 funding, and $1.5 million non-Proposition 98 funding annually for the California Department of Food and Agriculture to establish a Farm-to-School Grant Program.

Computer Science

To support the implementation of the state’s Computer Science Content Standards, the Governor includes the following in one-time Proposition 98 funding:

  • $15 million for grants to LEAs to support approximately 10,000 teachers in earning a supplementary authorization on their credential for computer science
  • $2.5 million for a county office of education within the system of support to identify computer science best practices
  • $1.3 million to develop a new University of California Subject Matter Project in computer science and $340,000 to prepare approximately 1,200 educators for the new project

Early Childhood Education

The Governor is proposing to establish the Department of Early Childhood Education Development under the California Health and Human Services Agency, which would consolidate all child care funding streams and programs (except for the State Preschool Program) under this new department.

The budget also includes an increase of $31.9 million in 2020–21 and $127 million in ongoing non-Proposition 98 funding to support an additional 10,000 State Preschool slots at non-LEAs.

Other Funds

For the second consecutive year, the Governor does not include any discretionary funding in the budget for LEAs, nor does he propose additional funding for the California State Teachers’ Retirement System or the California Public Employees’ Retirement System contribution rate relief for LEAs.

Summary

This very broad extract of the Governor’s Budget proposals is provided to keep you informed. Over the next few hours and days, we will be working to distill the information and make it actionable for LEAs. Stay tuned for our Special Fiscal Report and for our Governor’s Budget Workshop. These forums provide us with an opportunity to add the details and clarifications that allow you to assess the impact of the Governor’s proposal.

 

Written by School Services of California

Public Education’s Point of Reference for Making Educated Decisions

Copyright 2020 School Services of California, Inc.

Posted January 10, 2020