Special ed and high-needs students get windfall in budget deal

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This article was published on Cal Matters by Joe Hong on June 28, 2021.

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California schools are poised to get a record-breaking amount of money in the state budget to help students recover from the 15 months of chaos, virtual classrooms, hybrid schedules and ever-shifting guidance.

Districts with lots of high-needs students, including those with disabilities, stand to get even more money. 

Educators will use some of the extra funding to hire counselors who could better address the mental health impacts of the pandemic. Lawmakers hope the unprecedented funding will also help address the pre-pandemic costs of special education and employee pensions.

“The pandemic hit everybody, and everybody could use more mental health support and counseling,” said Sara Noguchi, superintendent of Modesto City Schools. “But the pension costs each year are also significant. And that is just one of the areas that’s been difficult to manage.”

More money across the board

The state will spend an unprecedented $93.7 billion from its general fund on education this year, and the typical California district will rake in millions in new funding. 

Modesto City Schools, for example, which has close to 30,000 students, is getting an extra $16.5 million this year to start. This money comes with almost no strings attached and can be spent on anything from payroll to maintenance. 

But that’s just the beginning.

The state calculates funding for school districts using what’s called the Local Control Funding Formula. Under the formula, all districts receive a base amount of money per student, and more money for foster children, English learners, or those qualifying for free or reduced-price lunch. If any of those groups make up a bit more than half of a district’s enrollment, the district gets even more money. 

The budget deal also reflects Gov. Gavin Newsom’s proposal to direct $1.1 billion  to districts with a high concentration of those vulnerable student groups; the Legislature had wanted to spread the money out over all districts that have high-needs students. 

Special education gets extra attention

Education experts are calling this fiscal year “the year of special ed,” with good reason: Not only are California lawmakers increasing state special ed spending by $656 million, President Joe Biden’s administration has promised even more funding over the next several years. 

“Special education funding has never, ever been the amount that is needed,” said Jonathan Kaplan, a senior policy analyst at the California Budget & Policy Center. “The federal government is the one that requires schools to provide an appropriate education, but they’ve never provided the funding. State dollars are provided to supplement what the federal government is providing.”

This year, California will provide a 4.05% cost of living adjustment for all special education programs. 

In addition, the state will also provide another $550 million for “dispute resolution” for students who received little or no special education services during the pandemic. 

“Coming out of the pandemic we expect we’re going to see an increase in the number of students who need services,” said Richard Barrera, board president at San Diego Unified School District.

Early childhood education

The final budget deal also dedicates ongoing funding to transitional kindergarten. This intermediate grade level was established to accommodate 4-year-olds who don’t turn 5 by Sept. 1, the cutoff for admission for kindergarten. 

The budget deal includes a timeline to implement transitional kindergarten for all 4-year-olds in California by 2025-2026. The plan would cost $2.7 billion once fully implemented.

The state is also spending billions to expand child care subsidies. This year, $1.5 billion will go toward 120,000 additional kids, mostly those of essential workers. Next year child care subsidy spending would increase $2.7 billion. 

“I’ve never seen such an expansion and an attempt to improve the quality of childcare, really since the advent of Pre-K in the 1960s,” said Bruce Fuller, a professor of education at UC Berkeley. “The expansion of early education, in sheer dollar amounts, rivals the increases in K-12.”

Easing the fiscal burden of pensions

In past years, increases in overall education funding were dwarfed by the tens of millions of dollars some districts were required to pay to employee retirement funds. The cost of pension liability stressed district budgets, especially during the pandemic.

“Every year the pension costs continue to rise,” said Modesto City Schools Superintendent Noguchi. “Last year, there was no cost of living adjustment but an increase in pension costs.”

The overall increase in funding this year would help districts with their pension liabilities, a fiscal burden that pushed some districts into deficits.

Money for more teachers, more class time, more meals

The budget deal includes $2.8 billion in one-time funding to help school districts recruit, retain and train teachers. With a high number of teacher retirements this year, some districts face a looming staffing shortage. As the pandemic recedes, more teachers could keep class sizes low and allow students who fell behind to get more one-on-one attention.

The state is also providing $1.8 billion this year as a part of a multi-year $5 billion funding package to expand summer school and afterschool programs. Districts with more low-income students, foster children and English learners would get more funding for these programs.

In line with the legislature’s proposal, the budget will invest $54 million this year and $650 million in ongoing spending to pay for breakfasts and lunches for all students.