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Will Huntsberry's biweekly education report (Thursdays)
School districts get the vast amount of their money from the state. And the outlook for the state budget right now is … very bad. There are two options California schools can look to for help.
On Wednesday, I polled people on the best metaphor for the spread of coronavirus. On the one hand, each new revelation – and they are coming fast – seems more urgent than the next. On the other, we must wait on the worst, which is still weeks away.
Lava – that was the winner. Each little bite it takes out of the landscape is devastating. It’s hard to comprehend the forest further down the hill that will be leveled in the lava’s slow, sweet time.
One such ecosystem: school budgets.
School districts get the vast amount of their money from the state. And the outlook for the state budget right now is … very bad.
Many businesses are shuttered. The economy has just plain stopped. And that means the state will receive much less tax revenue than it anticipated. Add to that, increased state spending on an inconceivable spike in unemployment claims.
Public health and Medi-Cal costs will also likely go up, as the Los Angeles Times reported.
All that signals nothing good for school districts, which are already squeezed for money. In recent years, they’ve had rising special education costs, decreasing enrollment (which means they get less money) and increasing pension costs. State spending has been going up, but only just enough to keep up with those rising costs.
Last year, a Stanford University concluded the state should raise education spending by $25 billion per year to adequately educate children around the state. It seems likely we’ll now be headed in the opposite direction.
There are two options California schools can look to for help. One is the state’s roughly $20 billion in reserve money built up over the last several years. But that money is likely to vanish quickly in the current economic disaster, experts say.
“It’s likely we are going to need every penny of the reserves,” Chris Hoene, executive director of the California Budget and Policy Center, told the Times.
Congress is also poised to pass a stimulus package on Friday that will include $30 billion for schools, said Rep. Susan Davis, who represents portions of San Diego and serves on the House education committee. The U.S. Senate pushed for $20 billion, while some other Democrats had been hoping for $40 billion, she said.
“The COVID-19 needs are just very great and we know they’re affecting school districts, and that’s why tried to move as quickly as we could to get them some relief,” she told me.
Davis said that in theory, this package should provide near-immediate money for school districts that might need it. But it’s unclear how much districts will actually need in the current year. Gov. Gavin Newsom already promised to fully fund schools through the rest of this year, even though they are all closed for the foreseeable future.
Districts (like all government agencies), however, are currently in the process of drawing up their budgets for the next fiscal year. They generally have to approve those budgets by July 1, when the next fiscal year begins. The coronavirus has made that planning nearly impossible.
Davis said the federal money – which will be funneled through state governments to schools – doesn’t come with many strings attached. Districts may be able to use it to plug holes that they foresee in their current budget planning process, she said.
It’s also possible the federal government will provide more money for schools in the months ahead.
“I certainly hope so,” Davis said.
One unique bond that seemed headed for failure on election night, however, managed to eke out just enough votes to pass.
Chula Vista Elementary School District’s bond proposal would in part pay for housing for teachers.
On election night, the measure was several percentage points below the 55 percent threshold needed to pass.
“I kept telling the district, “Let’s just wait and see,” said Dale Scott, an independent financial adviser who helped Chula Vista put the bond on the ballot.
Last Friday, days before the ballot counting stopped, Chula Vista had 54.99 percent of the vote – just .01 percent away from where it needed to be for a victory. This week, as the final votes were counted, Chula Vista ended up with 55.27 percent of the vote.