Most California districts would get more in federal aid than they’d lose in budget cuts

Photo by Alison Yin for EdSource (2017)

Third graders participate in a workshop at Redwood Heights Elementary School in Oakland.

Photo by Alison Yin for EdSource (2017)

Third graders participate in a workshop at Redwood Heights Elementary School in Oakland.

State Superintendent of Public Instruction Tony Thurmond and coalitions of labor and school district groups are asserting that California schools won’t be able to open safely if Congress doesn’t provide more aid to cope with the coronavirus pandemic.

Yet by one measure, school districts collectively would get nearly as much in already promised federal aid as their proposed state funding would be cut in 2020-21. And many districts may get more than they’ll lose in state aid.

Through the federal Coronavirus Aid, Relief and Economic Security (CARES) Act that Congress passed in March, California’s K-12 schools would receive enough to cover more than 90% of the $6.4 billion that Newsom is proposing to cut from school districts’ and charter schools’ funding in the next state budget to make up for a massive projected decline in tax revenue.

Newsom is proposing a cut of approximately 8% of districts’ general fund, known as the Local Control Funding Formula. It provides a base amount and additional funding for “high-needs” students: English learners, and low-income, homeless and foster students in every district.

An EdSource analysis projects that of the 897 districts that receive their funding through the funding formula, 546 school districts and county offices of education — 60.4% of the total — would get more CARES Act funding than they’d lose in cuts to the funding formula. These numbers don’t include the 100-plus mostly wealthy “basic aid” districts excluded from the Local Control Funding Formula because their property tax revenues exceed what they would get through the formula.

The main factor for the wide differences in districts’ CARES Act funding is the allocation formula that Newsom has chosen to address students’ loss of learning as a result of pandemic-related school closures. He would direct $2.9 billion — about half of the CARES Act money going to K-12 — only to districts categorized as “concentration” districts under the funding formula. These are districts where at least 55% of students enrolled are high-needs.

All districts, however, would still be entitled to the rest of the CARES Act money: an additional $1.5 billion to tackle learning needs of students with disabilities and $1.5 billion that Congress is dispersing based on the proportion of students in poverty in each district. (EdSource previously estimated the district-by-district breakdown for that latter amount.)

Among those coming out ahead are the six large urban districts whose superintendents warned in a May 18 letter that they would have to delay the start of school without more state and federal funding to make up for “unreasonable” cuts they’re facing. EdSource’s analysis estimates that the combined federal aid proposed for those districts — plus San Francisco, Sacramento City and Oakland — would exceed the cuts to their general funds proposed in Newsom’s budget by $490 million.

Long Beach Unified would receive would $69 million less next year from the Local Control Funding Formula under Newsom’s proposed budget; it would receive $95 million in CARES Act funding. San Francisco Unified would lose $44 million in state funding and get $63 million from the CARES Act.

With available student data from the California Department of Education, EdSource calculated the CARES Act funding for each district, using formulas that Newsom included in his budget revision this month and that Congress detailed in the CARES Act.

3 reasons why that’s not enough

Education groups say they appreciate that Newsom is willing to commit to K-12 schools nearly half of the $9.5 billion California will receive from the CARES Act that Newsom can distribute how he wants. But they dispute that the CARES Act will make up for the reduction in state funding. They cite three reasons:

• Because of the coronavirus, school districts will face unanticipated, unprecedented — and as yet unfunded — additional costs to restart schools.
• Newsom has designated a total of $4.4 billion from the CARES Act to help students who have fallen further behind academically since distance learning began in March, but districts can’t use that money to replace budget cuts. And Congress is requiring that school districts spend CARES Act funding by Dec. 31. Those districts that haven’t begun to focus on how to remedy learning loss will not have much time to spend a lot of money.
• Many districts would get a substantial funding increase from Newsom’s method for distributing $2.9 billion of the $4.4 billion for learning loss, but­ those that aren’t “concentration” districts would get no money. As a result, 351 districts and the majority of the state’s 1,285 charter schools wouldn’t get enough federal funding to make up for cuts to their general fund.

On this last issue, Newsom is encountering considerable opposition among coalitions of school groups (see here, here and here), and the Legislature may be poised to spread the money more evenly, creating more “winners” and fewer “losers.”

On Thursday, the Senate Budget Committee passed a formula to allocate the $2.9 billion in federal funds from the CARES Act based on a district’s full Local Control Funding Formula allocation, including the base funding, instead of only to those with 55% or more high-needs students.

Newsom had a strong rationale for wanting to target funds at those districts with the highest percentage of high-needs students. Based on standardized test scores, graduation and college-going rates, schools with predominately high-needs students have lagged behind wealthier schools with fewer of these students for decades.

And there is good reason to worry that the gap has grown wider during distance learning over the past few months. English learners, low-income and special education generally faced more obstacles to learning because many didn’t have access to a computer or internet at home. Others may have experienced turbulence in their home lives or were disadvantaged by their districts’ slow or ineffective management of distance learning.

Districts will be able to spend the $2.9 billion in federal funds on an early start to the school year, on instructional supports during the coming school year, extending the school year, providing intensive academic help, mental health services and counseling and teacher training in distance learning and in social-emotional learning. Because school closures probably set back most students to some degree, Newsom didn’t restrict districts to using the learning loss money only on high-needs students; instead, he directed the funding to districts where they are concentrated.

An arbitrary divide

But critics say Newsom’s 55% threshold for district funding for those who would and wouldn’t get federal funding creates an arbitrary divide.

Westside Union School District and East Whittier City Elementary School District in Los Angeles County illustrate how the 55% concentration threshold would affect small districts. Both would get more than $2 million in federal learning-loss aid for special education students.

But Westside Union, where 50% of its 9,211 students qualify as high-needs, would get none of the federal learning loss aid. By contrast, East Whittier City, where 56% of its 8,300 students qualify as high-needs students, would get $6.3 million.

“The governor and Department of Finance need to recognize that all districts are hurting,” Assemblyman Al Muratsuchi, D-Torrance, stated during a May 18 Assembly Budget Committee hearing on education spending (listen at 1:34). “This is a survival budget. The stark differences in creating winners and losers is something that I cannot support.”

Muratsuchi is not alone in demanding changes to Newsom’s formula. Where education groups disagree is to what extent the money should be directed to all students or high-needs students.

EdSource’s analysis of the net effect of CARES Act funding on districts’ budgets in 2020-21 found that 546 districts would see an increase of about $492 per pupil, and 351 districts would see a budget cut of about $426 per pupil under Newsom’s proposal.

Under the Senate Budget Committee’s proposal, which would eliminate the 55 percent “concentration” threshold, 598 districts would get enough federal funding to more than offset the loss in state funding for a net increase of $223 per student. The other 299 districts would see a net cut of about $56 per pupil.

Advocacy groups for low-income students, collectively called the Education Equity Coalition, argue that the Senate Budget Committee plan would go too far in diluting Newsom’s focus on the children most impacted by learning loss. This coalition, made up primarily of civil rights and student advocacy groups, proposes a middle ground, tying funding to the proportion of high-needs students without the concentration threshold.

“The Senate approach gives all districts nearly the same amount of learning loss funds with only slight adjustments based on high need student population,” said John Affeldt, managing attorney at Public Advocates, a public interest law firm, which is a member of the Equity Coalition. “As Gov. Brown said in introducing the funding formula (in 2013), ‘Equal treatment for children in unequal situations is not justice.’”

The Assembly has not yet taken up the issue of how to allocate CARES Act funding.

Rising costs from the pandemic

It’s not clear to what extent some of the federal funding for learning could be used to defray the costs of reopening school, such as reducing class sizes to achieve social distancing or funding a new remote distance learning model that improves instruction.

Education groups insist the new costs will be substantial.

“Until we have a vaccine, there are many steps to safely reopen schools in person,” said Jeff Freitas, president of the California Federation of Teachers during a press conference of the Education Coalition last week. The coalition includes the state’s school employees unions, the California State PTA and organizations representing school boards, administrators and business officials. “We must continue social distancing. We need clean and safe environments. This all means smaller class sizes, which can only happen with more teachers. It means more bus runs, which can only happen with more bus drivers and buses. It means more cleaning, which can only happen with more custodians and cleaning supplies. It means more nurses and psychologists to help the physical and mental health concerns of our students.”

Steve Ward, legislative analyst for Clovis Unified, said, “Nothing in the state budget addresses these things. There’s a need to get kids back on campus, but how much is that going to cost?” The district is active in the 50-district California School Funding Coalition, mostly made up of small and medium-size districts. Its position on the state budget can be found here.

Districts like Los Angeles Unified and San Diego Unified warning that without more funding they may have to start school with distance learning may find this paradox: They may have substantial money to address learning loss while having to open school still relying largely on a form of instruction that contributed to that loss.

“Distance learning is not a way to address learning loss; it exacerbates it,” said Arun Ramanathan, CEO of Pivot Learning, an Oakland-based nonprofit that works with over 100 high-needs school districts in 16 states.

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