Gov. Gavin Newsom signs the pre-K and K-12 education budget package on July 9, 2021 (courtesy of the Governor’s Press Office).

Gov. Gavin Newsom signs the pre-K and K-12 education budget package on July 9, 2021 (courtesy of the Governor’s Press Office).

Unprecedented California budget to usher in sweeping education changes

Big new spending on transitional kindergarten, teacher shortage, student mental health

By John Fensterwald

EdSource

Gov. Gavin Newsom and the California Legislature have seized a once-in-a-generation deluge of state and federal funding to set in motion a sweeping and ambitious set of education programs that seemed implausible six months ago.

The 2021-22 state budget, which Newsom signed late Monday, expands the state government’s commitment to meet the needs of all students and redefines what constitutes an equitable education for low-income kids in a state with rising inequality.

Last week, Newsom called the budget “unlike anything we have ever done in this state. So many things we’ve promoted, so many things we dreamed of, we’re delivering.” It contrasts sharply with the state budget passed a year ago, when Newsom and the Legislature cut spending in anticipation of a yearlong Covid-precipitated recession.

The budget will provide billions of dollars to speed up movement on long-discussed goals: creating transitional kindergarten (TK) for all 4-year-olds and extending the school year and school day for all low-income elementary students. It includes enough funding to make a dent in — if not potentially eliminate — a teacher shortage through teacher residencies and other credentialing incentives.

Recognizing the financial stress that older community college students have been under, the budget removes the age limit for Cal Grants, which will benefit 133,000 students. It also includes $115 million to develop pathways for an associate degree in which students don’t have to spend money on textbooks.

The TK-12 budget also reflects how the Covid pandemic added urgency to accelerate priorities and to think big, said Ben Chida, chief deputy cabinet secretary for Newsom. The pandemic “revealed a lot of the ways in which our existing education system was failing to serve kids’ basic needs” and address obstacles to learning, including trauma and poor nutrition, he said. Some of those areas include:

A massive, improvised effort by school districts to provide grab-and-go lunches after schools shut down last year will be transformed into universal, state-funded breakfast and lunches for all students, starting this fall;

Limited, sporadic funding for community schools, which provide health care, family services and after-school programs through local partnerships, will become a $2.8 billion investment to turn about a third of the state’s 10,000 schools into community schools;

Evidence of a rise in student depression, anxiety and self-abuse during the pandemic has spurred a $4 billion plan for a mental health and behavior system that will provide screenings, counseling and therapy from birth through age 25.

“The budget is remarkable. Almost all of the priorities are critical for improving education for students of color and investing in equity,” said Heather Hough, executive director of Policy Analysis for California Education, a California research center.

“What the governor is doing, from early childhood through college, is bold,” said Maria Echaveste, president and CEO of the Berkeley-based Opportunity Institute.

One legislative staffer familiar with the budget negotiations characterized it as “Linda’s budget,” shorthand for the influence of Linda Darling-Hammond, a close adviser to the governor and Newsom’s appointee as president of the State Board of Education.

Darling-Hammond deflected that comment, saying that Newsom had been talking about the same priorities — that “every student needs a great teacher,” and that there “must be a whole child, whole school, whole community” approach for students to learn and thrive. But she has been the most influential advocate for the biggest new K-12 expenditures, including the expansion of community schools and $3 billion budgeted for staff development and teacher recruitment targeted to low-income schools that struggle to attract and retain teachers.

Few of the education initiatives in the final budget Newsom negotiated with the Legislature were in his January budget. That’s because 2020-21 revenues for Proposition 98, the formula that determines community college and K-12 funding, mushroomed by more than $18 billion since then. That surplus rolls from last year into the 2021-22 budget, which is projected to have record funding as well.

The final budget does bear the imprint of the Legislature, with more money in some programs, less in others and the inclusion of universal school meals. But generally, said Assemblyman Phil Ting, D-San Francisco, who chairs the Assembly Budget Committee, “I would say that we were very much in sync (with Newsom) with the direction of where we wanted to go for education.”

Since the start of the pandemic, Congress has funneled an unprecedented $24 billion for K-12 schools to California. Including federal funding, the California Department of Finance is estimating per-pupil spending will average about $21,000 per student in 2020-21. That will likely place California above the national average for the first time in decades, Darling-Hammond said. For districts with high concentrations of low-income students, who qualify for extra Local Control Funding Formula and federal Title I money, Chida said funding could approach that of top-spending states like Massachusetts.

Most of the new state and federal funding will be one-time money, adding caution to long-term commitments. “The heavy reliance on one-time funding to create new programs and expand old ones — especially the use of short-term funds for long-term staffing and programmatic purposes — presents major sustainability concerns,” Susan Heredia, president of the California School Boards Association, said in a statement.

State revenue is volatile, dependent on unpredictable capital gains receipts of the wealthiest 1% of Californians. In the prolonged Great Recession, state revenue sank after stock market values plummeted. The situation flipped during the Covid recession: Stock prices and property values soared, as did state revenues. For how long is anyone’s guess.

But districts and the state will have three years to spend federal money, and the state is phasing in its biggest initiatives — transitional kindergarten, summer and after-school programs, teacher recruitment and development — over four to five years.

Brooks Allen, the executive director of the state board and an adviser to Newsom, said the administration took the approach, “We have the opportunity, so let’s make large investments and try to scale up as quickly as we can to demonstrate what success can look like.” Then districts can prioritize them if revenues slow, he said.

With revenues high for at least the next three years, Chida said his advice to districts is “you should be hiring up, you should be building capacity.”

Bob Nelson plans to do that as superintendent of Fresno Unified, the state’s fourth-largest district in one of the state’s poorest cities. “We’re thrilled by the budget. When has a superintendent ever had this much one-time revenue to really do something substantive?” he said.

He lists priorities, starting with full-day transitional kindergarten. “That piece is crucially important for the kids of the Valley who don’t have the advantage of being born to privilege” and enter behind in their learning, he said.

He plans to expand dual-enrollment courses, in which high school students take community college courses, and to pay for Fresno teachers’ master’s degrees so they can qualify to teach them. The goal is for all students to have access to 12 college credits so they can tell themselves, “‘Hey, I’m college material. I’ve already proven it,’” Nelson said.

Anticipating a need for social and emotional supports when students return in the fall, Fresno will hire more psychologists, clinical social workers and additional academic counselors, plus a counselor in the city’s domestic violence shelter. Such expenses “may have seemed peripheral to education, but we know they are crucial in terms of closing the disproportionality gap,” he said.

In Fresno, 89% of students are English learners or foster, homeless or low-income students. Fresno Unified and other districts with large concentrations of these children will receive an additional $1 billion annually to hire more teachers, counselors and support staff, and, by 2025, $5 billion to allow every transitional kindergarten student to sixth grader to be offered summer school and after-school programs. Funding will be added permanently to the Local Control Funding Formula, making the first substantive change to the formula since its adoption in 2013.

Here are more details on key education initiatives, from child care through college, in the 2021-22 budget:

Behavioral Health Initiative

The one-time $4 billion investment in the Children and Youth Behavioral Health Initiative will help young people up to age 25 cope with anxiety, depression, stress and other mental health challenges.

“We’ve never seen an investment like this anywhere in the nation aimed at addressing children’s behavioral health issues,” said Dr. Mark Ghaly, California secretary of health and human services.

The initiative will streamline services and funding among schools, public health departments and community health organizations and fund staff training and school wellness centers. An online one-stop shop will help young people get counseling or other mental health services. “It’ll be easy to use, immediate and real-time,” Ghaly said.

Young people’s struggles with mental health increased in recent years, and the pandemic led to a spike in psychiatric hospitalizations, long waiting lists for treatment and large numbers of young people saying they feel depressed and anxious.

Alex Briscoe, principal of the California Children’s Trust, which advocates for children’s behavioral health, hailed the initiative as long overdue, especially for Black, Latino and low-income youth. But “it’s up to both state and local leaders and aligned and activated advocates, to capture the promise of these investments,” he said.

Big movement on early ed

Early childhood education is at the forefront of the state budget. Key early childhood elements include the creation of the $2.7 billion transitional kindergarten program for all 4-year-olds in the state by 2025, and adding 200,000 more subsidized child care spaces, which would almost double the state’s total supply. The budget also includes an increase in the amount the state pays to child care providers for each subsidized child, although the details have yet to be ironed out.

“The pandemic certainly shined a light on the needs, but the current administration had made a commitment to improve access and quality in early childhood education before the pandemic. I would say that the commitment to TK for all 4-year-olds is the biggest story,” said Deborah Stipek, a professor in the Stanford Graduate School of Education and an early education expert.

Early childhood advocates hail increasing access to early education, which they view as crucial to closing achievement gaps because about 90% of brain growth happens before kindergarten. Currently, California, which has almost 3 million children under the age of 5, trails behind other states in terms of access, with only 37% enrolled in transitional kindergarten and the state’s subsidized preschool program.

Many challenges lie ahead, advocates say, including recruiting enough TK teachers as the program ramps up and finding ways to stabilize the long-beleaguered child care sector.

“To truly transform early care and education, the state and federal government must acknowledge that the child care system is a market failure and commit to rebuilding early care and education from the ground up,” said Kristin Schumacher, senior policy analyst for the California Budget and Policy Center, a nonprofit research organization.

Fixing the teacher shortage

California has struggled with teacher shortages for years, but the problem worsened during the pandemic with the number of teacher candidates earning credentials declining and the number of teachers retiring increasing. To fill classrooms, schools have increasingly relied on underqualified teachers working on emergency-style or intern credentials.

The $2.8 billion for programs to attract, retain and train educators includes $1.5 billion for a new Educator Effectiveness Block Grant over five years for staff professional development and $1.3 billion for other programs. These include expanding teacher residencies, awarding Golden State Teacher grants for teacher credential candidates who commit to teaching at a low-income school for four years, and funding for classified employees to become credentialed teachers.

According to Darling-Hammond, all the programs combined could supply 50,000 new teachers over the next five years — enough to fill the projected gap from the increasing number of retirements and resignations and replace unqualified teachers hired on emergency credentials. All of this assumes the state will find enough candidates to complete the programs and take jobs in high-need districts.

“It’s a substantial investment this year in addressing the teacher shortage,” said Mary Vixie Sandy, executive director of the California Commission on Teacher Credentialing. “It can’t resolve all the problems, but we can put a stake in the ground and set a five-year goal.”

Cal Grants for older students

College affordability advocates for years have pushed to reform how California awards financial aid, with the goal of helping students pay for nontuition costs like housing and food. Last year, the California Student Aid Commission proposed a $1 billion plan to expand aid for community college students, but it was shelved after Covid-19 spread.

The 2021-22 state budget makes progress by eliminating age requirements preventing many older community college students from getting Cal Grants for nontuition expenses. An estimated 133,000 additional students will receive aid, at an estimated annual cost of $155 million.

Jake Brymner, director of government and external relations for the California Student Aid Commission, said the proposals that came before the pandemic built momentum that ultimately led to the expansion in this year’s budget.

“I think there was a growing public recognition that we have a system that wasn’t adequately meeting the needs of our students,” Brymner said.

In June, a survey by the Student Aid Commission found that 47% of college students reported an increase in housing costs during the pandemic, while 53% reported a spike in food costs.

Lande Ajose, Newsom’s senior policy adviser on higher education, said the pandemic “teed up a lot of opportunities and allowed us to really think about where we want to take the state now and into the future.”

The budget for higher education also includes a $2 billion fund to support campus housing at the University of California, California State University and community college systems and a requirement that high school students fill out the federal financial aid application that students must complete to receive state and federal aid for college.

“Having all high school students complete the FAFSA is huge. It makes me anxious, knowing that we have students who are food and housing insecure and that they have access to federal dollars that we’re not taking advantage of,” Ajose said.

Extending broadband

After decades of calls to expand broadband access for California students, the budget injects $6 billion into that effort. The state could potentially double that investment if Congress passes President Joe Biden’s American Jobs Plan.

Connecting to the internet became a lifeline during the pandemic as many schools, businesses and health care providers switched to providing virtual services. But although access to devices and internet service increased during the pandemic, hundreds of thousands of families still lack adequate service, according to a 2021 study from the University of Southern California.

In a bill announced Monday, lawmakers are now proposing to direct $3.25 billion to build “middle-mile” broadband lines, which connect the greater highway of broadband service to the “last mile,” and $2 billion for last-mile lines that connect to end users in rural and urban areas. Middle mile is essential to connecting rural areas with hubs for major carriers like larger metropolitan areas, but last mile is often difficult to afford and build in remote areas.

Broadband advocates applauded the bill’s emphasis on building in areas that are currently unserved or underserved. Historically, private internet companies that have relied on government subsidies for their projects have failed to provide affordable service to many low-populated areas or communities where many people live in poverty.

“There’s a whole lot of infrastructure that ISPs (internet service providers) have built with our taxpayer dollars,” Sunne Wright McPeak, president and CEO of the California Emerging Technology Fund, referring to how private internet companies have historically neglected low-populated areas despite receiving public funding to build in remote areas. “To the extent that they want subsidies to be a partner and reach underserved populations, then it’s time to step up or step aside.” The technology fund is a statewide nonprofit foundation that seeks to close the digital divide by speeding the deployment of broadband to underserved communities.

California’s plan for broadband also includes creating a “broadband czar” and a nine-member council within the California Department of Technology to oversee the deployment of the state’s upcoming broadband financing and construction.

College savings accounts

The budget includes a new annual program that Newsom created while mayor of San Francisco: providing a college savings account for all low-income public school children. Newsom proposed the plan in his May budget revision, but he hadn’t talked much about it this year.

It will start off big in 2021-21, providing a $500 savings account for every first to 12th grade low-income student, including undocumented students, with $1.8 billion in federal stimulus funds and $91 million in state funding. Starting in 2022-23, the state will use $170 million from the general fund to open accounts for every new low-income first grader. The program will provide $1,000 per student for homeless and foster youths. The program will be run through the California Kids Investment and Development Savings program, or CalKIDS, a smaller 2-year-old program that provides every child born in California with $25 to invest in the state’s 529 college savings plan, ScholarShare 529.

EdSource reporters Michael Burke, Karen D’Souza, Sydney Johnson, Carolyn Jones, Diana Lambert, Ashley Smith, and Ali Tadayon contributed to this report.

EdSource is a nonprofit newsroom that reports on state and local education issues.

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