The
Education
Coalition
Working together to support and
improve California’s public schools

May 20, 2020
Memorandum
TO:

CA State Policymakers

FM:

The Education Coalition

RE:

K-12 Education Budget Position Paper

The Education Coalition is comprised of the nine statewide K-12
education associations to provide consensus positions protecting
the integrity of Proposition 98 and funding in the budget for K-12
public education.
The nine statewide organizations include:
•
•
•

K

•
•
•
•
•
•

Association of California School Administrators [ACSA]
California Association of School Business Officials [CASBO]
California County Superintendents Educational Services
Association [CCSESA]
California Federation of Teachers [CFT]
California School Boards Association [CSBA]
California School Employees Association [CSEA]
California State Parent Teachers Association [PTA]
California Teachers Association [CTA]
Service Employees International Union [SEIU]

California State PTA

Each year, the Education Coalition issues budget position papers
and meets with legislative members of the budget and policy
committees to share our consensus position on the major budget
proposals in education in the state budget.

(CTA)

Attached is the Education Coalition’s position paper commenting
on concerns regarding the Governor’s May Revision. For further
information contact Dale Shimasaki, the Consultant to the
Education Coalition at 916-441-3909.

Union (SEIU)

1

 EDUCATION COALITION POSITION PAPER:
2020-21 STATE BUDGET

Education Coalition Responses to the May Revision for K-12 Education
Schools cannot physically reopen safely with the funding level proposed in the May
Revision.
The COVID-19 pandemic has caused enormous upheaval in the K-12 public education
system. The movement to distance learning required school districts to ensure equal
access to instruction, which required emergency purchases of electronic devices and
internet connectivity. School district and county offices of education leaders were
expected to move to distance learning models for all students, including students with
disabilities, at a speed to transition with limited access to sufficient tools and
professional development needed to ensure a seamless process. Classified staff were
also called into action to redesign the methods of delivering school meals while
maintaining a new standard of cleaning and safety protocols with insufficient supplies,
equipment, and adequate training.
As school districts and county offices of education prepare to re-open safely in the fall,
it will require significant resources, as unprecedented challenges will remain due to
COVID-19. Social distancing will require smaller class sizes and master schedule
changes to provide healthy and safe environments for students and staff. Properly
disinfecting schools and maintaining safe learning environments will be a top priority for
students, staff, and parents. All these efforts will require additional staff and increase
costs.
The COVID-19 pandemic has severely impacted the state’s economy and reduced the
state’s general fund revenues. This economic downturn creates a negative impact on
the Proposition 98 guarantee. For K-14 education, the May Revision estimates a total
decline of $19 billion from the Governor’s January Budget proposal. The reduction in the
Proposition 98 minimum guarantee, when combined with statutory technical
adjustments, creates a shortfall of $15.1 billion for K-12 schools over the 2018-19, 2019-20,
and 2020-21 fiscal years.
The Education Coalition appreciates the efforts the Governor is making to mitigate the
erosion of the Proposition 98 guarantee. Even with these efforts, the May Revision
proposes drastic cuts to K-12 education at a time when schools face significant costs
related to COVID-19 and as they prepare for re-opening in the fall. It is for these reasons
that the Education Coalition must respectfully oppose the proposed cuts in the May
Revision to K-12 education and ask that both the Administration and the Legislature
look to alternate revenue sources to ensure K-12 schools can provide quality and safe
educational environments for its six million students. This is an urgent matter and should
be addressed in the June budget to provide enough time for schools to physically
reopen safely.

2

 EDUCATION COALITION POSITION PAPER:
2020-21 STATE BUDGET

Items of Opposition in the May Revision
The Education Coalition is opposed to the following items in the May Revision:
• Local Control Funding Formula [LCFF] Reduction. The May Revision proposes a
$6.5 billion [10 percent] reduction to the LCFF. The reduction applies to all
components of LCFF including:
o Base Grant
o Supplemental factor
o Concentration factor
o Grade 9-12 Career Technical Education 2.6% add-on
o K-3 class size reduction
o Home-to-School-Transportation
Targeted Instructional Improvement Grant
A 10 percent cut to the LCFF equates to the following cuts:
o Equivalent Cut Per Student: $1,230
o Equivalent Cut Per Classroom: $21,667
o Equivalent Teacher Lay Offs (Salary & Benefits): 57,638
o Equivalent Classified Employee Lay Offs: 125,000
o Percentage increase in class size: 19.1%
These cuts will strip districts of the resources needed to re-open schools, which is critical
to the recovery of our state’s economy.
•

Cash Flow. The May Revision includes the deferral of payments to local
education agencies, totaling $5.3 billion by 2021-22. We understand deferrals
may be necessary to mitigate budget cuts. However, in addition to the deferrals,
counties are considering cancelling their Teeter Plans which allows counties to
allocate property tax revenues based on the total amount of property taxes
billed, but not collected. If cancelled, local school districts will have less property
tax revenues to meet their obligations. The combination of deferrals and
cancellation of Teeter Plans will exacerbate a local district’s cash flow needs.

•

Categorical Reductions. The May Revision proposes $352.9 million in reductions
to various categorical education programs. The Education Coalition is
concerned about the trigger reductions to these programs, particularly Adult
Education and Career Technical Education (CTE) related programs.

•

Nutrition. The May Revision withdraws the Governor’s January proposal to
provide an additional $60 million for the school nutrition program. Since the
COVID-19 pandemic outbreak, the state has called upon K-12 education to
expand nutrition programs to serve meals to eligible students and their families.
Nutrition funding has not increased commensurate with demand and the
Education Coalition urges rejection of this proposal.

3

 EDUCATION COALITION POSITION PAPER:
2020-21 STATE BUDGET

•

Early Education. Maintaining access to safe and quality childcare is more
important now than ever. Early education needs to be funded at a level that
can continue to support both working families and essential workers. Californians
may face a second wave of the virus and need to be prepared to stay home
when childcare for essential workers will be vital once again.

Items of Support in May Revision
The Education Coalition is in support of the following May Revision proposals:
• Suspending Tax Credits. The May Revision proposes a temporary three-year
suspension of net operating losses and limitation on business incentive tax credits.
This will provide a $1.8 billion increase to the Proposition 98 Guarantee.
•

Federal Funds for Learning Loss Initiative. The May Revision proposes $4.4 billion in
one-time federal funds to local educational agencies to address learning losses
related to COVID-19 school closures. Of this amount, the May Revision proposes
$1.5 billion be allocated to local educational agencies based on the number of
students with exceptional needs and $2.9 billion to local educational agencies
that qualify for concentration grant funding based on the number of
“unduplicated” students (low-income, English learners and foster youth). The
Education Coalition recommends the $2.9 billion be allocated to all
unduplicated students, and not just those attending local educational agencies
that receive concentration grant funding. We look forward to further
conversation on how these funds are distributed among local educational
agencies.

•

Federal Elementary and Secondary School Emergency Relief Funds. The
Education Coalition supports the May Revision proposal to provide $1.5 billion to
local educational agencies based on the Title I formula for COVID-19 related
costs and $100 million for county offices of education to develop networks of
community schools.

•

CalPERS/CalSTRS Contributions. The May Revision proposes redirecting $2.3 billion
paid to CalPERS and CalSTRS towards long-term unfunded liabilities to further
reduce employer contribution rates in 2020-21 and 2021-22. This will provide
necessary short-term relief for school districts by reducing pension obligations.

•

Proposition 98 Supplemental Appropriations. Beginning in 2021-22, an amount
equal to 1.5% of General Fund revenues per year will be allocated to the
Proposition 98 Guarantee, up to a cumulative total of $13 billion. This will increase
the Proposition 98 share of the General Fund from 38 percent to 40 percent over
time. This is consistent with the intent of Proposition 98.

•

Special Education. The May Revision maintains the January budget proposal of
$645 million to increase special education base rates to approximately $645 per
average daily attendance (ADA).
4

 EDUCATION COALITION POSITION PAPER:
2020-21 STATE BUDGET

•

K-12 Facilities. The May Revision proposes $1.5 billion in capital outlay funds for K12 school construction from Proposition 51 bond funds.

•

Flexibility Proposals. The Education Coalition supports the flexibility proposals for K12 education included in the May Revision:
o Exemptions for local educational agencies if apportionment deferrals
create a documented hardship.
o Authority for local educational agencies to exclude state pension
payments on behalf of local educational agencies from the calculation
of required contributions to routine restricted maintenance.
o Subject to public hearing, increases on local educational agency internal
inter-fund borrowing limits to help mitigate the impacts of apportionment
deferrals.
o Authority to use proceeds from the sale of surplus property for one-time
general fund purposes.
o Options for specified special education staff to utilize technology-based
options to serve students.
o Extension of the deadline for transitional kindergarten teachers to obtain
24 college units of early childhood education, from August 1, 2020 to
August 1, 2021.

Items of Support Not in May Revision
The Education Coalition asks the Legislature and Administration to consider the
following budget priorities not included in the May Revision:
•

Suspension of Tax Credits. The Education Coalition supports suspension of
additional tax expenditures given the adverse impacts imposed by the COVID19 pandemic. Tax expenditures adversely impact the Proposition 98 Guarantee
in Test 1 years. The Department of Finance indicates that by 2020-21, there will be
a loss of $506 billion in General Fund revenue since 2008 from tax expenditures.
The following tax expenditures should be considered for suspension as each has
generated revenue losses of greater than $1 billion over ten years:
o Water’s edge election
o Research and Development (R & D) Credit
o Sales tax exemption for certain agricultural products
o Like-kind exchanges of investment property
o Subchapter S corporation election
o Airline fuel for international flights
o Sales tax exemption for farm machinery
o Deduction for dividends paid to Employee Stock Ownership Plans

•

Attendance Hold Harmless. Even when schools begin to reopen, they will
continue to struggle with student attendance due to illness, quarantine, or
5

 EDUCATION COALITION POSITION PAPER:
2020-21 STATE BUDGET

parents keeping their kids home out of caution. In addition, existing attendance
accounting requirements are incompatible with the need to claim funding for
services provided through a combination of classroom-based and distance
learning options. It is critical to schools that the Legislature provide a temporary
ADA hold harmless through the 2020-21 school year with continued stakeholder
engagement with school officials, until a vaccine is available and made widely
accessible. We support a thoughtful process for moving to enrollment-based
funding when Prop 98 funding is restored and if local educational agencies with
high attendance are held harmless.
•

Instructional Time Requirements. The Education Coalition supports providing
temporary flexibility around the adoption of trailer bill language to temporarily
suspend the instructional year and instructional minutes requirements for local
education agencies to accommodate distance learning. Current requirements
were designed for face-to-face classroom activities. The COVID-19 pandemic
has required schools to pursue education settings through distance learning and
social distancing environments which are not compatible to these current law
requirements. We would like to see continued commitment from the Legislature
and stakeholders to prioritize equity by providing resources to all students.

•

Executive Purchasing Power for Personal Protective Equipment [PPE]. Schools
need adequate PPE for students and staff to reopen. The Education Coalition
asks the state to use its purchasing power and existing contracts to purchase PPE
for schools with non-Proposition 98 funding in order to mitigate district by district
procurement competition that states experienced at the beginning of this
pandemic.

Sincerely,

The
Education
Coalition

6