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ACSA May 2020 Revise Analysis

The Association of California School Administrators is the largest umbrella organization for school leaders in the United States, serving more than 17,000 California educators.

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GOV. NEWSOM'S MAY REVISION BUDGET PROPOSAL Gov. Newsom's May Revision reflects the dramatic impacts of the COVID-19 pandemic on our state's economy. The May Revision estimates a total deficit of $54 billion over the three year-budget period. The governor framed his proposal as a budget focused on stopping the spread of COVID-19, while protecting the state's core functions, including public education. While California is in a better position to confront this recession in comparison to the Great Recession, without an influx of significant federal funds, the May Revision proposes devastating cuts to public education and other key programs. The governor's May Revision is sobering, as it proposes a $15.1 billion reduction in K-12 funding, which would adversely impact student learning, and the overall health and well being of children and adult learners throughout the state. While Gov. Newsom includes various proposals to mitigate the impact of this recession on students, the proposals in totality represent a seismic reduction in public education funding. EDUCATION FUNDING OVERVIEW Proposition 98 The May Revision includes significant reductions ($19 billion) to the Proposition 98 guarantee. The reduction to the K-12 portion of the guarantee is $15.1 billion over the three-year budget period (2018- 19, 2019-20, and 2020-21). Local Control Funding Formula (LCFF) The May Revision includes a 10 percent ($6.5 billion) reduction to the LCFF, which is calculated using last year's funding level, plus COLA. The cut is a 7.69 percent reduction from 2019-20 LCFF funding levels. The proposal includes a trigger that would reverse the cut if federal funds are provided to backfill the reduction. Special Education The May Revision retains the governor's proposal from January to shift prior year "one-time" Special Education funding to ongoing, SPED base grant funds. Notably, the SPED proposal does not include the additional $250 million for the SPED base that was proposed in January. Under the May Revision, SPED base funding would amount to $645 in per-pupil funding. Lastly, the May Revision retains replacing AB 602 distribution formula with one that is based on a three-year rolling average of total Average Daily Attendance (ADA). Pension Obligations The May Revision proposes buying down CalSTRS and CalPERS employer contribution rates over the next two years by redirecting a $2.3 billion non-Proposition 98 payment included in last year's budget. The proposal would reduce CalSTRS and CalPERS school employer rates by about 2 percent from projected levels. Specifically, under the proposal, CalSTRS rates would be 16.5 percent in 2020-

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