Troubled districts would get a lifeline from Newsoms’s cost-of-living adjustment

Struggling school districts could get a reprieve under a cost-of-living adjustment contained in Gavin Newsom’s $89.2 billion 2021-2022 education budget proposal.

The 3.84% adjustment for K-12 schools was made possible by higher than expected tax revenue from capital gains, as EdSource reports.

The potential extra funding would allow some districts to reverse their plans for cuts to next school year’s budget. In some cases, districts would even recoup some of the funds they had to cut over the past few years. But that respite may be short-lived, said Michael Fine, CEO of Fiscal Crisis and Management Assistance Team (FCMAT), a school finance watchdog. His organization anticipates that declining enrollment and higher pension obligations could lead to a budget “danger zone” in 2022-23. That’s also when the Department of Finance expects the state to slide into a $7.5 billion deficit.

West Contra Costa Unified is one of the districts that could temporarily benefit. The school district has been anticipating $15 million in cuts from its 2022-23 budget. If the adjustment is approved, Associate Superintendent of Business Services Tony Wold said the projected deficit would be staved off until 2023-24 and then effectively cut in half.

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