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In This Moment (6/25): Budget Analysis with Some Initially Positive Signs

June 25, 2020

This week has brought a great deal of budget analysis, which will continue for the foreseeable future. It appears that Local Control Funding Formula (LCFF) base grants will remain at 2019-20 amounts, and there will be very few direct cuts to categorical programs. Though there is no Cost of Living Adjustment (COLA) for 2020-21, the significant cuts to LCFF base amounts outlined in the Governor’s May Revise have been avoided by all accounts.

In addition to budget news, we share updates on an Assembly Constitutional Amendment (ACA-5), Assemblymember Weber’s measure that addresses affirmative action, which will be placed before voters in November (referenced in last week’s blog post).

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Legislature Prepares to Send Budget Compromise to Governor Friday

After passing a shell of a budget in order to meet the June 15 Constitutional deadline, the Legislature and the Governor announced Monday that they had reached a deal. Budget watchers have been chasing down the details of the budget all week as the budget bills become publicly available. Specific details of the K-12 budget are included in AB 77, the education omnibus trailer bill that includes many K-12 appropriations and policy changes that go along with SB 121, the main budget bill. While legislators are still clarifying details, and will be for the next days and weeks, it looks like LCFF base grants will remain at 2019-20 amounts and there will be very few direct cuts to categorical programs. Additionally, this deal implements large deferrals of payments of the principal apportionment from the 2020-21 fiscal year into the 2021-22 fiscal year. A similar tactic was used during the Great Recession. Over $5 billion of these deferrals could be rescinded if additional federal funds become available. Here are more highlights from AB 77:

ADA Hold-Harmless: Includes language that Average Daily Attendance (ADA) for Local Educational Agencies (LEAs) in 2020-21 shall be based on 2019-20 ADA reported at the second apportionment period (P2) for all full school months from July 1, 2019 to February 29, 2020.

Instructional Time/Distance Learning: Includes a number of new provisions related to instructional time and distance learning. There is no waiver of the minimum number of school days requirement (generally 180 days), but an LEA may meet the minimum number of days through a combination of in-person and distance learning. An LEA may meet the number of instructional minutes required for each grade level through a combination of in-person instruction under the direct supervision of a certificated employee, or through the time value of assignments as determined by a certificated employee. In-person instruction should be offered to the greatest extent possible, but the language allows for distance learning at an LEA or schoolwide level as a result of an order or guidance from a state or local public health officer. The Governor and Legislature wanted to ensure that a distance learning-only approach on a district-wide or school-wide basis would only occur where there were clear health and safety issues or in consideration of students who would be more vulnerable to the virus. Many LEAs are planning on some sort of hybrid approach to reopening schools.

No COLA: As expected, AB 77 specifies that the COLA shall be zero for 2020-21 but staves off dramatic reductions to LCFF base amounts previously proposed in the May Revision. The bill also establishes a zero COLA for categorical programs that would normally receive a statutory COLA.

Federal and State Appropriations: Allocates nearly $5 billion of federal funds (mostly Coronavirus Relief Funds) and approximately $540 million of state General Funds to LEAs through several different formulas. Approximately $1.5 billion is allocated to LEAs based on 2019-20 special education enrollment, about $2.9 billion is allocated to LEAs in proportion to their 2019-20 combined supplemental and concentration grant funding, and nearly $1 billion to LEAs in proportion to their 2019-20 LCFF entitlement

Certificated Employee Summer Layoffs: Eliminates the authority, for 2020-21, to layoff certificated employees by August 15 based on receiving less than a 2% increase in LCFF funding.

Classified Layoffs: Prohibits termination of classified employees in positions related to nutrition, transportation or custodial services during the 2020-21 fiscal year

Police on School Sites: Includes intent language that LEAs evaluate the presence of police officers and other law enforcement personnel at schools and to consider alternative options for pupil safety. Several school districts in the state are already discussing policing on school sites and are taking steps locally to address this issue.

More details will be provided as the budget details are digested and analyzed. The Legislature is scheduled to vote on the budget deal Friday, June 26. The State Assembly, which is on summer recess, will have to return to the State Capitol to vote on the budget which will then be sent to Governor Newsom who will have 12 days to act on the budget.

California Voters Will Vote on Affirmative Action in November

Wednesday, the Senate passed Assembly Constitutional Amendment (ACA) 5, authored by Assemblymember Shirley Weber (D-San Diego) with the 2/3 vote needed to ensure the measure will appear on the November 2020 ballot. This bill places a measure before voters during the November 3 General Election that, if approved, would permit the use of race, gender, and ethnic diversity as factors in college admissions, government hiring, and government contracting.

In 1996 California voters approved Proposition 209, which prohibits the state from granting preferential treatment to any individual or group on the basis of race, sex, color, ethnicity or national origin in the operations of public employment, public education or public contracting. Although Proposition 209 also purported to prohibit discriminationas described above, that discrimination was already illegal under the California and U.S. Constitutions. Some of the same backers of Proposition 209 also earlier championed Proposition 187, a measure to restrict or eliminate services (including public education) for undocumented workers, families, and children.

If ACA 5 becomes law, there are limitations on the use of “affirmative action” based on precedent set by the U.S. Supreme Court. The repeal of Proposition 209 would permit the use of race and/or gender as a ‘plus’ factor in college admissions, public employment, and public contracting. It would not permit the use of quotas or policies that are broadly tailored and do not consider the totality of the individual college applicant, job applicant, or contract bidder.

The University of California Board of Regents unanimously supported ACA 5 last week and California State University (CSU) Chancellor Timothy P. White said that his system also supports the proposed amendment. As in previous years, this issue remains contentious and will certainly garner much attention as we inch closer to November.