On May 14, 2020, Governor Gavin Newsom released the May Revision to the state budget proposal for 2020-21. Below are highlights of the revised budget and you can read CCSA’s full Budget Brief here. CCSA will work to ensure charter schools receive equitable treatment and that charter priorities are addressed in the budget process. We will provide regular updates in our Capitol Update newsletter as the budget moves forward.
The Governor notes that “COVID-19 has caused a global economic crisis which has had a profound impact on California. The May Revision is guided by the principle of prudent fiscal management to: protect public health, public safety and public education; provide assistance to small businesses and Californians most hurt by the pandemic; and to invest in a safe and quick economic recovery.” The impact of the pandemic on state revenue and spending is unprecedented. The May Revision projects a total revenue decline of 22 percent causing a $54.3 billion deficit over this year and for 2020-21 years.
For K-12 education, the May Revision includes total funding of $99.7 billion ($47.7 billion General Fund and $52 billion other funds). The Proposition 98 school funding guarantee will decline by $19 billion compared to the January projections. Though several options, including new federal funds pension relief, and apportionment deferrals could help offset some of this direct hit on schools. Specifically, the May Revision proposes:
School Apportionment Deferrals have become common in economic downturns, and the May Revision also proposes apportionment deferrals as a strategy to retain school funding without deeper cuts. In 2019-20, the Budget proposes to defer $1.9 billion of LCFF apportionments to 2020-21. An additional $3.4 billion is added to the 2019-20 deferral in 2020-21, for a total of $5.3 billion in LCFF deferrals scheduled for payment in 2021-22. In our budget advocacy this spring, CCSA has emphasized the cash-flow challenge deferrals have on schools. We are pleased the Governor included an option for exemptions for local educational agencies if apportionment deferrals create a documented hardship.
To help mitigate the impact of the significant fiscal crisis, the May Revision includes a number of fiscal and programmatic flexibilities including: