Ed Trust–West Responds to Governor Newsom’s 2020-2021 May Budget Revision
In response to Governor Newsom’s May Revision to the proposed 2020-21 State Budget, Dr. Elisha Smith Arrillaga, Executive Director of The Education Trust–West issued the following statement:
“As California braces itself for a ‘pandemic-induced recession,’ the Governor and the State Legislature are faced with a mountain of difficult decisions. All across the state, families, students, and communities of color are suffering from the disproportionate effects of the pandemic. Whether it’s struggling with basic needs, financial instability, access to technology, or the undeniable stress parents are experiencing, one thing is clear—our public school and college systems are central to how families and students will recover from this health and economic crisis.
We appreciate Governor Newsom for reaffirming his values of investing in California’s children and approaching the public education budget with an equity lens. It is encouraging that the Governor is minimizing cuts to the K-12 budget and prioritizing funding and basic needs support to the most marginalized students. We urge the Governor to hold districts accountable for spending targeted dollars on the most vulnerable students and engaging stakeholders in spending decisions.
We are concerned that the proposed cuts to early childhood education programs, the pause on expansion to universal preschool, and the decrease in workforce and infrastructure, will further exacerbate opportunity gaps that start long before children enter kindergarten.
The major cuts to higher education present significant equity challenges we must avoid. Maintaining financial aid programs for students experiencing poverty is an important step to affirm continued commitment to college affordability. It’s encouraging that Governor Newsom expects UC and CSU to minimize the impact on programs and services serving underrepresented students and will prioritize registration for these students. History has shown us, however, that during hard economic times, many students turn to community colleges and we must ensure that access, paired with adequate funding for the community college system, is guaranteed so that the millions of Californians looking to improve their skills are able to contribute to our recovery.
As the Governor and state leaders move forward with the budget process, one common-sense principle must apply: families and communities who have been most impacted should get the most support. We call on our fellow Californians – from students to parents, to educators, to advocates – to work together for more federal support, to turn out and vote for the School and Communities First initiative on the November ballot, and to organize in local communities to make sure districts and colleges across the state are targeting resources to students who are most in need.”
About The Education Trust–West
The Education Trust–West works for educational justice and the high academic achievement of all students at all levels, pre-K through college, in the state of California. We expose opportunity and achievement gaps that separate students of color and low-income students from other youth, and we identify and advocate for the strategies that will forever close those gaps.
The State Budget Process
- In January of each year, the Governor proposes a state budget for the following fiscal year that begins on July 1st.
- In the spring, the Legislature holds hearings on parts of the proposed budget.
- In May, the Governor revises the proposed budget according to updated state revenues received in April. The revised budget is called the May Revision or “May Revise”. Due to COVID-19, the state tax filing deadline was postponed until July. Therefore the May Revise won’t account for the full state revenues and cuts needed. This means the May Revise will be the first step in instituting cuts and reductions to balance our budget.
- The Legislature may add to, or change, the Governor’s proposals and differences between proposals are negotiated as the final budget takes shape in the Legislature. The Legislature also develops and passes “trailer bills,” which direct the budget’s implementation. The Legislature must adopt the final budget by June 15th.
- Finally, the Governor signs the budget by July 1st, and has the discretion to reduce or eliminate any expenditure by line-item veto. Due to COVID-19, this July enacted budget will be a “workload” budget or “stop-gap” budget to keep the government funded and meet its Constitutional deadlines. We should not expect this to be the absolute final budget.
- After everyone has filed their taxes in July and the state can gain a full picture of revenues and shortfall, we will see a second round of budget adjustments to the July enacted budget in August. We expect this final August budget to be the final budget for the 2020-21 fiscal year.
CARES Act Funding for Childcare: California received $350.3 million in federal funds for COVID-19 related child care activities. The May Revision includes a spending plan for these funds that includes family fee waivers and provider payment protection, stipends for state-subsidized child care providers, and support for at-risk children and children of essential workers.
Department of Early Childhood Development: In January, the Governor’s budget proposed creation of a Department of Early Childhood Development within the Health and Human Services Agency (CHHS). To achieve budget savings, the May Revision proposes to modify the proposal and transfer child care programs to the Department of Social Services, and maintains $2 million to support this transition.
State Preschool: The May Revision proposes the following reductions:
- $159.4 million General Fund to eliminate 10,000 slots scheduled to begin April 1, 2020 and 10,000 additional slots scheduled to begin April 1, 2021.
- $130 million Proposition 98 General Fund to align State Preschool funding with demand.
- $94.6 million Proposition 98 General Fund and $67.3 million General Fund to reflect a 10 percent decrease in the State Preschool daily reimbursement rate.
- $20.5 million Proposition 98 General Fund and $11.6 million General Fund to reflect suspension of a 2.31 percent cost-of-living adjustment.
- $3.3 million Proposition 98 General Fund and $3 million General Fund to eliminate a 1 percent add-on to the full-day State Preschool reimbursement rate.
Child Care: The May Revision proposes expenditure of $53.3 million in federal Child Care and Development Block Grant funds to increase access for approximately 5,600 children in the Alternative Payment Program. Additionally, it appropriates $13.4 million in federal funds through CHHS to reflect California’s 2020 Preschool Development Grant award. The following reductions are also proposed:
- $363 million one-time General Fund and $45 million one-time federal Child Care and Development Block Grant funds from the 2019 Budget Act for child care workforce and infrastructure.
- $223.8 million General Fund to reflect a 10 percent decrease in the Standard Reimbursement Rate and the Regional Market Rate.
- $35.9 million General Fund to reflect to reflect lower caseload estimates in CalWORKs Stage 2 and Stage 3 child care.
- $25.3 million General Fund to reflect suspension of a 2.31 percent cost-of-living adjustment.
- $10 million one-time General Fund from the 2019 Budget Act for child care data systems.
- $4.4 million one-time General Fund toward the Early Childhood Policy Council, which leaves $2.2 million available for both 2020-21 and 2021-22.
LCFF Investment: Barring additional federal funds to eliminate or reduce the necessary cut, the May Revision proposes to cut LCFF by $6.5 billion or 10 percent. The cost of living adjustment of 2.31 percent included in the January budget is eliminated.
Deferrals: The May Revision proposes to defer K-12 apportionments over the 2019-2020 and 2020-2021, of $5.3 billion with payment in 2021-2022. When apportionments are deferred, Local Education Agencies, or LEAs, incur financing costs for borrowing to maintain services that would otherwise be cut.
Pension Relief: The May Revision proposes to redirect $2.3 billion allocated for the employer’s long-term unfunded obligation to the CalPERS and CalSTRS pension systems, and instead use the funds to reduce the employer contributions in 2020-2021 and 2021-2022. This reallocation will reduce the CalSTRS employer rate from 18.41 percent to approximately 16.15 percent in 2020-21 and from 18.2 percent to 16.02 percent in 2021-22. The CalPERS Schools Pool employer contribution rate will be reduced from 22.67 percent to 20.7 percent in 2020-21 and from 25 percent to 22.84 percent in 2021-22.
Learning Loss Mitigation: The May Revision proposes to allocate $4.4 billion in federal funds to mitigate learning losses due to COVID-19 and school closures. Permissible uses include learning supports that begin prior to the school year, supplemental instruction, and providing devices or connectivity for distance learning. Funds will be allocated to local educational agencies offering classroom-based instruction based on a formula that takes into account the share of students most heavily impacted by school closures, including students with disabilities, low-income students, English learners, youth in foster care, and homeless youth.
Special Education: The May Revision sustains the Governor’s budget proposal to increase special education base rates, updated at May Revision to $645 per pupil. This new base rate represents a 15 percent increase in the Proposition 98 General Fund contribution to the base formula funding over the amount provided in the 2019 Budget Act.
Special Education Teacher Recruitment: The May Revision includes $15 million from the federal Individuals with Disabilities Education Act (IDEA) funds for the Golden State Teacher Scholarship Program to increase the special education teacher pipeline.
The May Revision includes the following Proposition 98 reductions to K-12 categorical programs, totaling $352.9 million:
- After School Education and Safety: $100 million
- K-12 Strong Workforce Program: $79.4 million
- Career Technical Education Incentive Grant Program: $77.4 million
- Adult Education Block Grant: $66.7 million
- California Partnership Academies: $9.4 million
- Career Technical Education Initiative: $7.7 million
- Exploratorium: $3.5 million
- Online Resource Subscriptions for Schools: $3 million
- Specialized Secondary Program: $2.4 million
- Agricultural Career Technical Education Incentive Grant: $2.1 million
- Clean Technology Partnership: $1.3 million
The following items were included in the Governor’s proposed budget in January and have been withdrawn due to the change in the state’s fiscal condition:
- Educator Workforce Investment Grants: $350 million
- Opportunity Grants: $300.3 million
- Community Schools Grants: $300 million
- Special Education Preschool Grant: $250 million
- Workforce Development Grants: $193 million
- Teacher Residency Program: $175 million
- Credential Award Program: $100 million
- Child Nutrition Programs: $70 million
- Classified Teacher Credential Program: $64.1 million
- Local Services Coordination (CCEE): $18 million
- Computer Science Supplementary Authorization Incentive: $15 million
- Online Resource Subscriptions for Schools: $2.5 million
- California College Guidance Initiative: $2.5 million
- Computer Science Resource Lead: $2.5 million
- School Climate Workgroup: $150,000
Overall Higher Education funding: $18.6 billion General Fund and local property tax revenues; this is a decrease of $17.4 billion from the total funding proposed in the January budget.
Tuition: No clear indication from the Governor on how tuition could be affected by cuts and reductions.
Summer Financial Aid Program at the UC and CSU: Absent additional federal funds, the May Revision makes a $10 million reduction, $6 million for CSU and $4 million for UC, to the summer term financial aid proposal. These reductions will not happen if the federal government provides sufficient funding to restore them.
University of California
Base Resources: The May Revision has withdrawn the $169.2 million ongoing General Fund, or 5-percent, UC base increase proposed in the January budget.
UC General Fund reduction: Absent additional federal funds, the May Revision makes a cut of $338 million ongoing General Fund to reflect a 10-percent reduction of the UC budget. In implementing this reduction, the Administration expects UC to minimize the impact to programs and services serving underrepresented students and student access to the UC.
UC Extension Centers: The May Revision has withdrawn the $4 million in one-time General Fund to support degree and certificate completion programs at UC extension centers as proposed in the January budget.
Subject Matter Project: The May Revision proposes $6 million in federal funds to support subject matter projects to address learning loss in mathematics, science, and English/language arts resulting from the COVID-19 pandemic.
California State University
Base Resources: The May Revision has withdrawn the $199 million ongoing General Fund, or 5-percent, CSU base increase as proposed in the January budget.
CSU General Fund reduction: Absent additional federal funds, the May Revision makes a cut of $398 million ongoing General Fund to reflect a 10-percent reduction of the CSU budget. In implementing this reduction, the Administration expects CSU to minimize the impact to programs and services serving underrepresented students and student access to the CSU.
Expanded and Continuing Education: The May Revision has withdrawn the $6 million in one-time General Funds to support degree and certificate completion programs as proposed in the January budget.
California Community Colleges
California College Promise program: The May Revision maintains the state’s investment in two years of free community college.
The Student Centered Funding Formula: The May Revision reflects the revised 2019-20 Student Centered Funding Formula rates, utilizes past-year data sources that have not been impacted by COVID-19, and extends the existing hold harmless provision by an additional two years. Absent additional federal funds, the May Revision proposes a cut of available SCFF Proposition 98 General Funds by $593 million, or roughly 10 percent when combined with a foregone cost-of-living adjustment. This decrease will not happen if the federal government provides sufficient funding to restore them.
Categorical Programs & Student Success Completion Grant: The May Revision sustains support for the Student Success Completion Grants and sustains several categorical programs at current funding levels, including the Educational Opportunity Programs and Services (EOPS) Program and the Disabled Students Programs and Services (DSPS) Program
Legal Services for Undocumented Individuals: The May Revision sustains the proposal to provide $10 million in ongoing Proposition 98 General Fund to support immigrant legal services at our CCCs.
Cost-of-Living-Adjustment: Absent additional federal funds, the May Revision makes a $167.7 million Prop. 98 General Fund cut to the 2.31% cost-of-living adjustment. These reductions will not happen if the federal government provides sufficient funding to restore them.
Enrollment Growth: Absent additional federal funds, the May Revision makes a $31.9 million ongoing Proposition 98 General Fund cut for enrollment growth. These reductions will not happen if the federal government provides sufficient funding to restore them.
Faculty Support: The May Revision has withdrawn the $15 million one-time Prop. 98 funds for a pilot fellowship program and the $10 million one-time Prop. 98 funds for part-time faculty office hours, as proposed in the January budget.
Food Pantries: The May Revision has withdrawn the $11.4 million in Prop. 98 General Funds to establish, or support, food pantries at CCC campuses as proposed in the January budget. It proposes statutory changes to support community college food pantries within available Student Equity and Achievement Program funding.
Zero-Textbooks-Cost Degrees: The May Revision has withdrawn the $10 million in one-time Prop. 98 General Funds to develop and implement zero-textbook-cost degrees as proposed in the January budget.
Dreamer Resource Liaisons: The May Revision has withdrawn the $5.8 million in Proposition 98 General Funds to fund Dreamer Resource Liaisons and student support services as proposed in the January budget. It proposes statutory changes to support Dreamer Resource Liaisons within available Student Equity and Achievement Program funding.
Instructional Materials for Dual Enrollment: The May Revision has withdrawn the $5 million in Proposition 98 General Funds for community colleges to provide instructional materials for dual enrollment students as proposed in the January budget.
California Student Aid Commission
General Commitment: The May Revision maintains the state’s investment to provide students with continued access to major financial aid programs, including the California College Promise fee waiver, Cal Grant awards, the students with dependent children Cal Grant supplement, and the Middle Class Scholarship. Protecting these programs ensures that hundreds of thousands of low and middle income Californians can still attend a CCC, CSU, or UC campus without the burden of paying tuition.
Student Loan and Debt Service Outreach: The May Revision has withdrawn $4.5 million in one-time General Funds, of the original $5 million investment in January. The proposal has been revised so that the funds support the work of the Student Debt Loan Work group, it will no longer provide outreach grants to higher education institutions.
Golden State Teacher Grant Program: The May Revision cuts $88.4 million in one-time General Funds provided in the 2019 Budget Act to support the Golden State Teacher Grant Program.
Cal Grant Awards for Private Non-Profit: The May Revision cuts $8.9 million in General Funds. The maximum Cal Grant award for private nonprofit institutions will decrease from $9,084 to $8,056. This adjustment is required because the segment did not meet its associates degree for transfer (ADT) admittance levels.