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Governor Gavin Newsom unveils the revised 2024-25 state budget during a press conference in Sacramento, May 10, 2024.
Source: AP Photo/Rich Pedroncelli
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Despite worsening state revenues, Gov. Gavin Newsom again pledged Friday to protect continued funding and large-scale initiatives for TK-12 schools that he is pushing.
“I don’t want to see cuts to education,” Newsom said during a news conference about the revised 2024-25 state budget proposal released in January. “Right now, I would like to see the community schools, pre-K, after-school, summer schools and all the hard work we’ve done preserved.”
Newsom's comments during a two-hour interview with reporters reflected the challenge of writing an annual budget based on fluctuating incomes of the top 1% of earners. Capital gains tax revenue, which soared to $349 billion in 2021-22, fell to $137 billion in 2023-24. This fiscal year ends on June 30.
Other state operations could also face additional cuts due to the expected shortfall. Newsom has left California State University System officials on edge by failing to make the same promises he made to ensure higher education access in schools. CSU President Mildred Garcia said in his statement that he was “deeply concerned” about the revised state budget, which would not allow for an increase next year but would allow for a 2% increase in 2025-26. january.
“As an institution training California’s evolving workforce, this budget puts us in a position to make difficult decisions,” Garcia said.
Newsom generally treats the two systems similarly, but it's unclear whether the University of California will face similar cuts. UC officials would not comment on the matter. In a statement Friday, UC President Michael Drake said he hoped to “fix a budget that sustains the university’s research, public service and teaching missions.”
The summary of revenue declines and spending cuts released by Newsom lacked the details that typically accompany May's budget revisions. But more information is expected to be available by Tuesday, the statutory budget language deadline.
Still, some TK-12 advocates expressed relief.
“Given the scale of the fiscal crisis, it is remarkable that the governor is able to write a budget that significantly protects K-12,” said education consultant Kevin Gordon. Chairman of the Capitol Counsel.
Derick Lennox, senior director of government relations and legal affairs for California county school superintendents, was more cautious. “We value the governor’s commitment to keep our schools as unharmed as possible, but much will depend on the details of Proposition 98 and what is available,” he said. TK-12 schools and community colleges.
Newsom said he expects general fund revenues to fall another $7 billion over the three years from 2022-23 to 2024-25, for a total of $27.6 billion. The total deficit has nearly doubled, but Congress has been using a combination of cuts, savings and spending delays since January.
Proposition 98 funding reductions will result in a shortfall of approximately $4.2 billion for TK-12 and community colleges. Details are scant, but Newsom would replenish most of the remaining $9 billion in rainy day funds for schools and community colleges by emptying them.
Newsom said average TK-12 funding per student in 2024-25 would be $17,502, $151 less per student than proposed in January. Nonetheless, the funding will include a 1% cost-of-living increase, slightly higher than in January.
The May amendment calls for about $1 billion in cuts to early education, starting in high school. Most programs are funded by the General Fund, not Proposition 98. The bill would preserve ongoing funding for an expanded transitional preschool program for 4-year-olds and a long-awaited pay increase for child care providers.
Cuts include:
- Newsom is funding $425 million for child and youth behavioral health initiatives, which he said will reflect more funding for wellness centers at school sites. Carl Pinkston of the Black Parallel School Board expressed concern. “In the wake of the pandemic, many students continue to show signs of trauma, which is having a negative impact on their academic performance and overall well-being,” he said. The initiative “is an important program that advocates for equity with the goal of improving behavioral health outcomes for children and youth.”
- Funding for additional slots for state-funded child care has been delayed. The state will continue to fund the 119,000 new slots funded so far, rather than funding 146,000 as planned. “The delay in access to child care for our youngest Californians over the next two years is a very serious problem,” said Mary Ignatius, executive director of the advocacy group Parent Voices CA. “Their childhood never stops,” she said. Their undiagnosed language or other developmental delays will make it more difficult two years from now.”
- Elimination of $550 million in facilities funding Kindergarten, transitional kindergarten, and full-day kindergarten programs. Newsom suggested the money could be included in a statewide school facilities bond. He said Friday that negotiations were continuing with legislative leaders over a bond for the November statewide ballot.
- $60.2 million was cut from the Golden State Teacher Grant Program. The program awards up to $20,000 to teacher candidates enrolled in a certification program who commit to working in priority schools for several years.
- Eliminates $48 million in 2025-26 and $98 million in 2026-27 to increase payments to state preschools that serve additional students with disabilities.
- All but $100 million was cut from ongoing funding for the middle class scholarship program, which previously received more than $600 million annually. Over the past few years, more than 300,000 students across UC and CSU have received scholarships, which are available to students with family incomes up to $217,000.
Criticism of key fixes for shortfalls
Newsom's solution to minimize budget cuts to schools and community colleges will rely on a controversial tactic. He would make up the largest part of the shortfall – $8 billion from an unexpected decline in Proposition 98 revenues in 2022-23 – by treating it as an overpayment on the state's funding obligations. Because schools and community colleges have already spent money, he will close the gap by cutting the general fund. However, it is not until 2028-29 that the state's revenue situation will probably have improved. Since Newsom announced the idea in January, repayment obligations have grown to $8.8 billion.
An accounting move of that magnitude has never been undertaken before. The Legislative Analyst Office (LAO) has questioned the tactic, and the California School Boards Association also hinted in a statement Friday that it may file a lawsuit.
The association's reasoning reflects the complexity of Proposition 98's formula for funding decisions. The school board association argues that the 2022-23 funding levels are not a voluntary overpayment but a constitutional obligation that sets funding levels for future years.
“These accounting gimmicks will lower the predictable future revenue of California schools by lowering the basis for calculating education funding for the following year,” said Albert Gonzalez, president of the School Boards Association. “It sets a terrible precedent that potentially destabilizes education funding and undermines the intent of voters who passed Proposition 98 35 years ago.”
The California Department of Finance insisted that this solution was legal. But on Friday, Newsom acknowledged that Proposition 98 is complicated.
“Unraveling complexity requires not just a PhD, but a physics degree, an engineering degree and everything else,” he said.