$4.6 billion Newsom proposes for learning loss too much at once, LAO says

The Legislative Analyst’s Office is recommending that Gov. Gavin Newsom scale back the $4.6 billion he is proposing for extended learning, summer school and learning-loss mitigations, while agreeing with the overall purpose and allocating the bulk of it for the students struggling most.

In a Jan. 29 analysis, the LAO, the Legislature’s independent analyst, said the money, when combined with $6 billion in Covid relief Congress approved in December, may be too much for districts to spend efficiently at one time. Some districts may end up using the money on projects they already were planning, resulting in no net benefit to students, it said.

The money is from an unexpected one-time windfall due to a 2020-21 budget shortfall that Newsom and the Legislature incorrectly forecast. Newsom wants lawmakers to quickly pass his request so that districts can plan for summer. The $4.6 billion doesn’t include $2 billion in financial incentives, now stalled in the Legislature, to bring back elementary students to school quickly.

The LAO recommends approving about a third of the $4.6 billion and to spread it out, with $1 billion for enrichment and academic activities this summer and $500 million in academic supports over two years. That would prevent a fiscal “cliff” if state and federal funding is reduced in 2022-23, the LAO said.

As for the remaining $3 billion, the LAO urges paying down some of the outstanding $3.7 billion in short-term debt from deferrals owed to districts, and helping districts defray higher employee pension costs two years from now.