Understanding how California public school districts are funded is no small feat. It is a process that begins at the state level, trickles down to the county level, and eventually into your local school district (money from the federal government is another story). However, it is not quite like your typical direct deposit. There are many different funds or “pots” this money enters into, and some of these “pots” can be pretty restrictive.
For example, when you receive your paycheck, you have the freedom to spend it how you see fit. If you need groceries, you go and get groceries. However, if your bank account worked like a school district’s, you could have a thousand dollars, but that money could only be spent on maintenance for your car. You desperately need groceries, but guess what? That thousand dollars must be spent on your car.
There are numerous allocations school districts receive that are earmarked for very specific disbursements. In addition to the usual earmarked pots, school districts also received a hefty amount of COVID funding over the last three years. Aside from the recent boost from the federal COVID money, schools in California have been funded the same way since the 1970s, with a few changes that started this earmarking practice.
Annual Budget Cycle
The mandated budget cycle for school districts and the constitutional cycle for the state have various deadlines throughout the year, and unfortunately, these deadlines are never in alignment. While the governor proposes budgets at the state level, the state legislature is part of the process as well. Throughout the entire process, the legislature will negotiate priorities with the Governor because both entities must be in agreement for the actual state budget to pass.
By January 10th each year, the Governor has a constitutional obligation to present his budget proposal for the upcoming fiscal year—this year’s is summarized below. School districts use this proposal to begin budgeting for the upcoming fiscal year, and sometimes, that process includes teacher and staff reductions. These reductions by law must happen by March 15th.
By May 14th, the Governor is constitutionally required to present a May revision. At this point in the year, most Californians have completed their taxes, and the Governor can better plan based on actual state revenues and has a better idea of what the priorities of the legislature are. The May revision is what school districts use to propose their official budgets. Around mid-June, school districts hold public hearings on their budget proposals, and after input has been received, the official budget is considered by boards of education seven days later.
After the May revision is published, the legislature has a constitutional duty to pass a budget bill itemizing expenditures by June 15th. This budget bill has been a work in progress since early February, ensuring the governor and legislature are on the same page for enactment of the new budget. If the legislature fails to provide the budget by June 15th, they forfeit pay until the budget bill is finished. Although school districts have already adopted their budgets by the legislature’s deadline, they will complete a 45-day budget adjustment in mid-July.
Budget Outlook - 2024-2025
Governor Newsom presented his January Budget Proposal to the legislature on January 10th, and the anticipated deficits, while not as bad as expected, are clearly evident. The non-partisan Legislative Analyst’s Office initially projected a $68 billion deficit. The Governor’s proposal contains a $38 billion one. Luckily for schools, the passage of Proposition 98 (1988) guarantees a minimum of around 41% of the state’s general fund under current economic conditions however, due to lower-than-usual revenues, the minimum guarantee of 41% doesn’t even keep up with the increased cost of doing business this coming year (i.e., electricity, water, fuel, consumable materials, employee benefits, retirements, etc.).
Aside from the Proposition 98 guarantee, there is typically a Cost of Living Adjustment (COLA) provided to help offset the increased costs of doing business year after year. The proposed COLA in the Governor’s proposal is only 0.76%---last year, it was 8.22%, and the ideal spot for school districts to simply maintain existing operations is 3%. For the Yucaipa-Calimesa Joint Unified School District (YCJUSD), this equates to around a $3 million loss this coming year, not to mention the loss of one-time COVID funds expiring in September of this year—roughly $7.8 million.
COVID-19 Funding
With the widespread economic disruption caused by the COVID-19 pandemic at the beginning of 2020, Congress took action by flooding markets (and schools) with federal dollars. In March 2020, the first allocation of Elementary and Secondary School Emergency Relief (ESSER) money came from H.R.748 - CARES Act. Two more rounds of funding followed: ESSER II & ESSER III.
Each of the ESSER Funds came with precise instructions for earmarking the money and had/have specific spending deadlines. Schools across the country are currently nearing the end of ESSER III in September 2024, with both ESSER I & II already spent or forfeited. YCJUSD utilized ESSER I, II & III in various ways to improve professional development programs, purchase new cleaning supplies and temperature check stations, enhance mental health resources, repair and upgrade facilities, implement various curriculum supports, and hire employees to support the return of students after the COVID-19 shutdown. Many of the benefits the YCJUSD gained from these dollars are, unfortunately, temporary without significant support from the state.
Declining Enrollment and Absenteeism
The foundational component of funding school districts state-wide is based on average daily attendance (ADA). School districts only receive funding from the state if students are actually attending school. Every day a student misses, there is less money for the district to use in support of educational programs and services. Prior to the COVID-19 pandemic, on average, students were in school for around 95% of the school year. Since the return after the pandemic, that number has stayed between 90-92%. However, this isn’t just a YCJUSD issue or even a California issue. This is affecting districts across the country.
How can a student who isn’t actually in your district come to school? They can’t, and this is where the declining enrollment problem compounds existing absenteeism. According to the Policy Institute of California, around 5% of students have left the state since 2019. YCJUSD is not exempt from statewide declining enrollment, losing around 200 students since 2019, and is projected to lose another 120 students into the next school year—that is around a $4.8 million loss over the course of four years.
Solutions
Given the short boost to the economy over the last few years and the influx of COVID funds, YCJUSD and its students were able to enjoy a curriculum supported by dozens of online programs and maintain a robust staff in the face of declining enrollment and higher absenteeism however, just like any household would when money is tight, the district needs to begin to assess what it can afford and what it can’t, and how it can still employ an effective and rigorous educational program for approximately 8,500 students.
Difficult decisions will be made by the YCJUSD Board of Education in the coming months. A budget cut is the last thing anyone wants to work through. Still, the YCJUSD Board of Education is ready to work with the district’s partners in education, labor, and the community to ensure the district continues to provide services that support student success, wellness, and achievement.
To learn more about the Yucaipa-Calimesa Joint Unified School District, please visit yucaipaschools.com or contact them at contact_us@ycjusd.us.