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Public school budgets projected to lose more than $18 billion of Proposition 98 funding in May Revision

Early this morning, the California Department of Finance and Gov. Gavin Newsom released a memo previewing the May Revision prior to the Governor’s announcement next week. The news is bleak and the memo underscores the necessity of further federal stimulus funding to help states weather the national recession caused by the impacts of the COVID-19 pandemic.

The memo projects a total general fund budget deficit of about $54.3 billion, of which $13 billion will be lost in the current 2019–20 year and $40.9 billion will be lost the budget year of 2020–21. The overall deficit is about 37 percent of General Fund spending authorized in the 2019 Budget Act.

Proposition 98 funding

Schools receive about 40 percent of the state’s General Fund revenue. In Gov. Newsom’s January budget proposal, schools were expected to receive $84 billion through Proposition 98. The new fiscal outlook projects Proposition 98 funding will plummet by some $18.3 billion over a three-year period of the past year, current year and budget year, with all of the impact hitting in the 4th quarter of the current year and all of the coming fiscal year. It is expected that the Governor will address the reduction in the Proposition 98 guarantee in his May Revision next week (either May 14 or 15). As schools experienced during the Great Recession, we anticipate that there will be a number of apportionment deferrals, state General Fund loans and mandate flexibilities to help mitigate much of the impact.  

“With skyrocketing costs due to the implementation of distance learning, the need for personal protective equipment and sanitizing schools, in addition to the uncertain future of in-person instruction when the 2020–21 school year begins, schools will be decimated by cuts of this nature,” said CEO & Executive Director Vernon M. Billy. “With California schools being crucial to reopening the economy, schools must get some relief from the state’s rainy day fund and advocacy for this and additional federal stimulus funding directly for schools is crucial right now to ensure the safety of students, staff and their families. It is well known that budgets are a reflection of values, and we are asking the state and federal governments to show their commitment to students and the future of this country.”

Read the DOF memo »

CSBA will continue to fight against any cuts to K-12 schools or measures which reduce the revenue you have available to pay for critical programs, staffing and services that help students succeed.

Click here to email your legislators and Gov. Newsom about the need for dedicated school funding.