California Gov. Gavin Newsom Faces Daunting Budget Deficit: What Does This Mean for the State’s Schools?

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California Gov. Gavin Newsom Faces Daunting Budget Deficit as State’s Schools Hang in the Balance

California Gov. Gavin Newsom is set to unveil his plan to tackle a staggering budget deficit that could have far-reaching consequences for the state’s public schools. Just two years ago, California enjoyed a budget surplus of over 0 billion thanks to a thriving stock market and federal aid. However, economic slowdown and inflation have led to a deficit of billion last year and a projected deficit of up to billion this year.

Tough Decisions Ahead

Unlike the federal government, California law requires a balanced budget, meaning the state cannot spend more money than it has. Last year, Newsom and lawmakers managed to avoid significant spending cuts through smaller cuts, borrowing, and deferring some expenses. However, as the deficit continues to grow, tough choices will need to be made to balance the budget.

These decisions are further complicated by the upcoming election, as many lawmakers seek re-election. Every move Newsom makes will be scrutinized through the lens of his future political ambitions. With his term lasting until 2026, there is speculation that he may run for president in 2028.

The Impact on Public Schools

The budget deficit poses a significant threat to California’s public schools. During an economic downturn, cuts to schools are difficult to avoid due to a voter-approved law mandating that around 40% of the state’s budget be allocated to public education in most years. The Great Recession resulted in deep cuts to public schools, leading to layoffs and closures that many districts are still recovering from.

Over the past two years, the minimum amount California is required to spend on public schools has decreased by .7 billion. Lawmakers may need to cut public school funding by that much to balance the budget.

Governor Gavin Newsom, California, deficit, education, public school

California Gov. Newsom speaks in San Francisco on Thursday, Nov. 9, 2023. He is expected to disclose his plan to deal with California’s staggering budget deficit on Wednesday. (AP Photo/Jeff Chi, File)

Precarious Moment for Schools

Adding to the challenge is the expiration of billions of dollars in federal coronavirus aid in September. Districts that have come to rely on this funding will need to find alternative sources to replace the money in their budgets.

In Los Angeles, the nation’s second-largest school district, pandemic funding still contributes around 0 million to the budget, down from .8 billion last year. This funding supports 1,800 full-time jobs. Cuts to schools could have catastrophic effects, especially since many districts signed new contracts with labor unions over the past year that include pay raises reflecting inflation.

California’s public school funding usually receives a cost-of-living adjustment each year. However, this year’s adjustment is expected to be less than 2%, compared to last year’s increase of over 8%.

Hopes for Protecting School Funding

Despite the challenges, education advocates and school officials are optimistic that lawmakers will prioritize protecting public school funding this year. Assembly Speaker Robert Rivas, overseeing his first budget negotiations, has expressed his commitment to safeguarding classroom funding.

Lawmakers now have access to resources that were not available during the Great Recession. In 2014, voters approved a special savings account for public schools. By utilizing .7 billion from this account, lawmakers could help offset some of the most severe cuts. Additionally, they could reduce one-time spending from previous budgets that has not yet been utilized.

Although the Legislative Analyst’s Office estimated a billion deficit in December, it is possible that the actual deficit will be smaller. The stock market has rebounded to some extent, and income tax withholdings have increased slightly compared to last year. However, Democrats are hopeful that by May, after Californians have filed their tax returns, a clearer picture of the state’s finances will emerge.

Assemblymember Jesse Gabriel, chair of the Assembly Budget Committee, acknowledges that difficult choices lie ahead but remains hopeful that lawmakers will find ways to mitigate the impact on public schools.