Credit: AP Photo/Rich Pedroncelli

Credit: AP Photo/Rich Pedroncelli

Gov. Gavin Newsom’s first education budget, which the Legislature passed on Thursday, remains his budget. After negotiations with legislative leaders, Newsom’s spending priorities remain largely intact and signal the directions his administration will take over his first term.

Education leaders largely praised the education budget when Newsom released his initial budget in January and the revision in May, and were still on board this week.

“The governor successfully held true to principles he laid out in January and got significant wins across the board,” said Kevin Gordon, president of Capitol Advisors Group, an education consulting firm. “He found creative ways to address crucial issues that educators statewide are articulating.”

Funding for K-12 schools and community colleges is determined by a complex formula laid out in Proposition 98, which voters passed in 1988. It’s roughly 40 percent of the state’s budget, varying a bit from year to year.

Newsom funded the minimum increase required by Prop. 98, which will raise the level by $2.9 billion, to $81.1 billion in 2019-20. For additional money, Newsom turned to the General Fund, where K-12 had to compete with health care, housing, homelessness and legislators’ own priorities .

The final budget provides about $3.5 billion beyond Prop. 98. By far the biggest piece is the $3 billion that will relieve districts from escalating school pension costs. Next is $300 million in one-time money to fund facilities for districts to transition to full-day kindergarten — half of what Newsom had requested.

But Newsom also turned to the General Fund to address issues that State Board of Education President Linda Darling-Hammond and others have pressed for: $90 million in tuition fellowships for aspiring teachers who commit to teach subjects with chronic teacher shortages — special education, science and math, and bilingual education — and about $35 million more in training for administrators and teachers.

“We’re glad to see the teacher shortage and building a teacher pipeline addressed,” said Elisha Smith Arrillaga, executive director of Education Trust-West, a nonprofit that focuses on equity for under-served students.

Newsom also turned to the General Fund to follow through on a campaign pledge to vastly expand early childhood education, including a long-term plan to implement universal preschool. The $1.8 billion in new money will take the state partway there, with substantially more seats in preschool for low-income 4-year-olds and subsidized care for infants and toddlers.

Smith Arrillaga credited Newsom for keeping the commitment to the Local Control Funding Formula, the finance system that former Gov. Jerry Brown championed that steers more money to low-income students, English learners and foster students, while giving districts more authority over spending decisions. About two-thirds of the $2.9 billion increase under Prop. 98 for K-12 will be cost-of-living increases for the funding formula.

“For a first budget, I give him an A, for holding true” to the funding formula and special education — “areas where we needed more money,” said Dennis Meyers, assistant executive director for governmental relations for the California School Boards Association.

Special education, however, turned out to be the biggest area of disagreement between Newsom and the Legislature. Not over the level of funding, which educators universally praised, but over how Newsom wanted to spend it.

The state’s share of funding for students with disabilities has declined significantly over the past decade, leaving districts to absorb an increasing portion of rising costs. Recognizing districts’ complaints, Newsom proposed a 21 percent increase in special education funding. But he wanted to channel the money only to a fraction of districts — those with both an above-average proportion of low-income children and with a higher than average percentage of students with disabilities.

District and special education leaders opposed the idea and, in the budget conference committee, leaders from the Assembly and the Senate countered with a different plan. They proposed equalizing the funding rates for special education, which vary greatly across the state. And they proposed covering costs for 3- and 4-year-old students with disabilities, which the federal government mandates but the state has not funded.

Newsom capitulated, agreeing to move halfway toward full funding equalization and adding nearly a half-billion dollars to help districts pay for special education costs for preschool-age children. Newsom did get one concession: Funding beyond next year would depend on a plan to ensure academic and other outcomes improve for special education students.

The final agreement includes a few more noteworthy changes to Newsom’s budget:

Pension relief — The $3.1 billion in pension relief for districts will be apportioned differently than Newsom had proposed. Instead of all if it going to reduce districts’ rising costs of teacher and administrator pensions through the CalSTRS pension fund, $900 million will go toward cutting the higher costs of pensions for other school employees, such as bus drivers, secretaries and teacher aides, through CalPERS, a separate pension system. That’s a victory for unions representing those workers, who may be in a better position to bargain for higher wages.

There will be both short- and long-term pension help. In the short run, the reduced payments to CalSTRS and CalPERS will free up $850 million for districts to spend however they want during the next two years.

After-school funding — Newsom initially called for no increase to the current $600 million in funding for the state’s after-school programs, which 400,000 students attend. But responding to pleas that state minimum-wage increases could force some providers to close, the Senate proposed $100 million more and the Assembly wanted to add $80 million. Newsom agreed to $50 million more.

With votes of 60-15 in the Assembly and 29-11 in the Senate, the Legislature passed the budget two days before the June 15 statutory deadline. But there’s still work to be done nailing down details in several “trailer bills” that will be decided in the next two weeks. Newsom assumed the state would change its tax code to conform with actions by a Republican Congress in 2017 in closing some corporate deductions. A failure to follow Congress’ lead could mean a loss of $1.7 billion in revenue, lowering the Prop. 98 total by several hundred million dollars.

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