Blog

Your Education Road Map

Politics K-12

Betsy DeVos. Donald Trump. The Every Student Succeeds Act. Congress. State chiefs. School spending. Elections. Education Week reporters keep watch on education policy and politics in the nation’s capital and in the states.

Education

In California, Agreement to Ban Teacher Layoffs and Let Districts Seek Multimillion-Dollar Loans

By Daarel Burnette II — June 23, 2020 3 min read

California’s superintendents put up a big stink last month when Gov. Gavin Newsom told school districts they might have to cut billions of dollars out of their budgets this fall—and then strongly urged them to open their schools back up as soon as July to help get the economy moving again.

That’s impossible, they told the Democratic governor, in letters, during legislative testimonies, and again through the local press. In order to reopen schools shuttered by the COVID-19 pandemic, districts will need billions of dollars more than they received last school year, not less. Otherwise, they said, districts will have to wait until a vaccine is discovered.

Across the country, superintendents are taking a similar tack by threatening to keep schools physically closed if they’re forced to swallow double-digit budget cuts.

On Monday, Newsom and the California legislature came to an agreement to allow districts to take out multimillion dollar loans in order to keep them afloat this fall. In addition, districts will get more than $5 billion from California’s share of the federal CARES Act, which Newsom has encouraged districts to use for reopening costs this fall. The plan is expected to pass the legislature later this month.

“I think the funding will substantially exist,” Newsom said at a press conference. “We think a lot of that anxiety is mitigated.”

California’s plan is a gamble and unlikely to be replicated in other states since the state’s school spending methods, political dynamics, and economic forces are so unusual.

If Congress doesn’t provide states with another pandemic relief package and if, as expected, the current recession lasts through 2021, California’s budget cuts next year will be much, much more severe than the 10 percent Newsom threatened last month.

California at the beginning of the last recession told districts to take out low-interest, government-backed loans, thinking that the housing crash was a blip and the economy would bounce back sooner than later. That didn’t happen,and the districts that took out loans had to make some of the deepest cuts in the nation, ultimately laying off more than 30,000 educators.

“California in that moment was doing everything they could to mitigate a really horrible circumstance,” said Jason Willis, a scholar with WestEd who has written a paper on options to mitigate inequitable budget cuts this fall.

The state again is encouraging districts to dig into their savings to keep revenue flowing or take out Tax Revenue Anticipation Notes, better known as TRANs loans. These loans, while usually low-interest, are government-backed and can only be used during one fiscal year.

In other states, districts typically take out short-term loans from local banks, though those can sometimes come with a higher interest rate and are predicated on a variety of factors, including how politically and financially stable the state’s legislature is and the district’s fiscal health.

The agreement reached this week would place a ban on California’s districts laying off any of their classified employees, including teachers, custodians, bus drivers and cafeteria workers. That would leave tens of thousands of teacher aides working in financially struggling districts vulnerable to mass layoffs.

In most other states, legislatures are waiting to see whether or not Congress will provide another big coronavirus aid package before deciding what sort of budget cuts, if any, to send along to districts. That has left many districts in a precarious fiscal situation: They can lay off teachers now, or wait for a potential bailout, which likely won’t come until a handful of weeks before school starts.

All that raises the prospect of late summer and fall budget cuts, which can academically wreak havoc on the start of the school year.

Let us know what you think!

We’re looking for feedback on our new site to make sure we continue to provide you the best experience.

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Future of Work Webinar
Digital Literacy Strategies to Promote Equity
Our new world has only increased our students’ dependence on technology. This makes digital literacy no longer a “nice to have” but a “need to have.” How do we ensure that every student can navigate
Content provided by Learning.com
Mathematics Online Summit Teaching Math in a Pandemic
Attend this online summit to ask questions about how COVID-19 has affected achievement, instruction, assessment, and engagement in math.
School & District Management Webinar Examining the Evidence: Catching Kids Up at a Distance
As districts, schools, and families navigate a new normal following the abrupt end of in-person schooling this spring, students’ learning opportunities vary enormously across the nation. Access to devices and broadband internet and a secure

EdWeek Top School Jobs

Great Oaks AmeriCorps Fellow August 2021 - June 2022
New York City, New York (US)
Great Oaks Charter Schools
Great Oaks AmeriCorps Fellow August 2021 - June 2022
New York City, New York (US)
Great Oaks Charter Schools
Data Analyst
New York, NY, US
New Visions for Public Schools

Read Next

Education Obituary In Memory of Michele Molnar, EdWeek Market Brief Writer and Editor
EdWeek Market Brief Associate Editor Michele Molnar, who was instrumental in launching the publication, succumbed to cancer.
5 min read
Education Briefly Stated Briefly Stated: December 9, 2020
Here's a look at some recent Education Week articles you may have missed.
8 min read
Education Briefly Stated Briefly Stated: Stories You May Have Missed
A collection of articles from the previous week that you may have missed.
8 min read
Education Briefly Stated Briefly Stated: Stories You May Have Missed
A collection of stories from the previous week that you may have missed.
8 min read