Berkeley school officials say they may need to make mammoth budget cuts in the fall because analysts are warning that the COVID-19 crisis will leave California schools financially devastated.
The bulk of public school funding comes from the state, which is bracing for a recession spurred by mass coronavirus layoffs and consequently low income-tax revenue. School finance officials last week projected an $18 billion drop in California’s education funding over two years.
While BUSD leaders await a clearer picture from Gov. Gavin Newsom’s May budget revision Wednesday, they’re already putting together potential packages of budget cuts at the $2 million, $4 million and $6 million levels for the 2020-21 school year.
Those reductions would put a major strain on a district that has struggled to shear about $5 million off of its budget over the last three years.
A report last week from the Fiscal Crisis Management and Assistance Team startled BUSD leaders by predicting that the cost-of-living adjustment (COLA) in the state’s education budget will be -2% at best and -10% at worst. Previously, school leaders across the state were expecting the COLA to be funded at 2.29%.
With each 1% COLA reduction, BUSD loses about $800,000, said Superintendent Brent Stephens, as the district’s general fund is about $100 million (about $153 million when you include local taxes and other restricted sources). A -2% COLA, the rosiest scenario in the analysts’ report, would cost BUSD about $4 million.
Stephens told Berkeleyside he felt a sense of “despair” when he read the FCMAT report Wednesday.
At the time, the superintendent was getting ready for the Berkeley School Board meeting that night, where he planned to propose working on a list of $2 million in possible reductions for the fall, to get the district ready to weather a predicted oncoming recession.
His final proposal was marked up with highlighter-yellow, changing the numeric figure to the $2-6 million range at the last minute.
“Reductions of these magnitudes, I have to point out, would be very painful for BUSD,” said Stephens, before his pitch got unanimous approval from the board. Budget committees will immediately reconvene to come up with recommendations, and officials will make a decision about any cuts in the fall.
Board President Judy Appel said she’s presided over the district during tough times in the past — she took office in 2012 — but she said this moment feels markedly different.
“When we went through the last decline it was just as distressing, but there was more lead-up to it,” she said in a phone interview. “This is so sudden. It’s just really going to impact schools.”
Appel and Stephens said they can’t predict now what will end up on the chopping block.
The refrain in previous years has always been, “Stay out of the classroom” or, “No cuts to school sites,” with advocates encouraging reductions within the district’s central office over teacher layoffs or the elimination of academic programs.
There’s still some room to make less direct cuts, Stephens said.
“All the way up to the $2 million mark, there are still strategies available to us that would avoid laying off classroom teachers,” he told Berkeleyside.
But the superintendent could make no guarantees about what would happen past that point.
At the same time, the School Board also just approved some new expenses for next year, including a new Title IX investigator position proposed by student activists.
“It’s my preference to hang onto those new positions because they were created for an important reason,” said Stephens, who also said the district is in the process of reestablishing the executive-level position that’s been vacant since Director of Programs and Special Projects Pat Saddler left BUSD.
Matt Meyer, president of the Berkeley Federation of Teachers, said he’s relieved the union had just settled its new contract before the coronavirus outbreak. That contract guarantees a 12% raise over two years and support for special-ed teachers. In the fall, marathon negotiating sessions could take place in person, and nobody was predicting the extent of the financial downturn.
Those salary hikes will be funded in large part by a new voter-approved parcel tax. Another special BUSD tax, the Berkeley Schools Excellence Program, locks in relatively small class sizes throughout the district, meaning the teaching workforce has to stay a certain size too. But the BSEP measure has a provision allowing the district to declare a fiscal emergency and expand class sizes, up to a point.
Meyer said Berkeley schools “couldn’t function” with the level of cuts on the table, but he said he agrees with BUSD officials that local districts need more support to survive.
“As a union, we’re active in fighting for no cuts and no layoffs and making sure our programs can be sustained,” said Meyer. “That fight is at the state and federal level at this point.”
BFT is pushing for stimulus funding for schools and will campaign for Schools and Communities First, the November state proposition that would reform Proposition 13 and generate more funding for education. Meanwhile, there are a few new federal funding sources for districts, and BUSD is hoping to benefit.
There are other existing local property taxes supporting schools too. The whole package, funding everything from construction projects to music classes, is supposed to insulate BUSD a bit from the impacts of economic fluctuation and California’s below-average per-pupil funding.
It does to an extent, said Stephens, but all the tax and bond revenue is tied to specific uses and can’t cover all the rising costs, like special education and retirement contributions. Before the pandemic, Stephens had penned a three-part series arguing that state funding for education was already insufficient.
It’s not just the COLA, but also the entire funding structure, that’s up in the air next year. State funds are usually tied to attendance rates, but since schools were ordered closed, the money has continued to flow at previous levels. But if social-distancing measures are still in place in the fall, requiring smaller and less frequent classes, nobody is sure yet how the state will determine how much money to doll out.
The virus has also introduced a new set of costs and equity concerns, with students who were already struggling missing out on months of school, and disparities exacerbated by kids’ different home situations.
“At the very moment we have increased needs to serve our students, we’re also facing the prospect of decreased resources,” Stephens said at a recent town hall.
Even the governor’s May revision, usually a clear picture of the coming fiscal year, is likely to be revised again in the fall, he said.
Meyer said the new financial reality could affect an entire generation of BUSD students.
It took years for the state to return to a pre-Great-Recession level of school funding, so climbing back up from the current crisis could take even longer, he said.
“I don’t know what else to say but it’s depressing,” Appel said. “It’s so hard that after all these years of building up so much, we have to consider how to cut drastically.”