Gov. Gavin Newsom and legislative leaders announced Monday that they have reached an agreement on the 2020-21 budget that reportedly will preserve spending for K-12 schools and community colleges at current levels but potentially could cut funding by nearly $1 billion for the University of California and California State University.

In a statement, Newsom, Senate President pro Tempore Toni G. Atkins and Assembly Speaker Anthony Rendon said they had agreed on a budget  “that is balanced, responsible and protects core services — education, health care, social safety net and emergency preparedness and response.” They did not release details with the statement, or the wording of the budget language. (EdSource will update the story as details become available.)

Newsom and the Legislature face a July 1 deadline and had been negotiating a particularly difficult budget for several weeks. Since Newsom proposed the first draft in January, the coronavirus pandemic has pushed the state into a recession and sent state revenues plunging. That created a projected $54 billion revenue shortfall for next year; Proposition 98, the formula that determines spending for community colleges and K-12 schools, would fall by $14 billion.

Newsom and the Legislature, in separate  versions of the budget, assumed that the federal government would provide additional stimulus aid to fill in the hole in funding. But if the money doesn’t come by fall, Newsom proposed cutting spending by $6.4 billion, while the Legislature’s budget called for sustaining  funding at the current levels by issuing late payments to districts, called deferrals. A press release last week by organizations representing superintendents and schools indicated that Newsom had agreed to eliminate the cuts. The Los Angeles Times, quoting unnamed sources, said Monday that the final budget will add an additional billion in deferrals for schools and community colleges.

The Legislature and Newsom had proposed cutting the UC and CSU budgets by nearly $1 billion if Congress did not pass the $2 trillion HEROES Act, which is awaiting action in the U.S. Senate.

An additional sticking point to an agreement has been whether  to include a 2.3 percent cost-of-living adjustment; Newsom had cut it, and the Legislature included it.  Another disagreement has been over how to distribute nearly $3 billion in federal CARES Act funding for districts to address learning lost during school closures. Newsom wanted the funding to go only to districts with high concentrations of low-income students, English learners, foster students and homeless students. The Legislature’s formula would distribute the money among more districts.

“This agreement reflects our shared commitment to supporting schools, and is built on a foundation of equity — allocating billions of dollars for students most affected by learning loss and continuing our state’s leadership toward reforming the criminal justice system,” said the joint statement.

Newsom, Rendon and Atkins expressed continued optimism that Congress would help California and the other states with additional relief. “Californians are doing their part — now it’s imperative for our federal partners to pass a responsible and comprehensive relief plan so states and local communities can continue to keep Americans safe while leading our national economic recovery,” the statement said.

Story originally published by EdSource.

John Fensterwald