Gov. Gavin Newsom is proposing some long-range solutions designed to lift the state’s economy out of a $54 billion hole dug by the impact of the COVID-19 virus. However, school districts will face a fiscal blow.

According to Dr. Kelly Bowers, Livermore Valley Joint Unified School District Superintendent, the state’s legislative analyst has informed school districts that it’s likely that this will be the most challenging fiscal situation that California public education has faced, including the 2007-2008 recession. All districts will have to deal with budget reductions or employee concessions, or a combination.

“Our board and leadership are fiscally responsible and prudent,” Bowers stated. “Working together, we will weather this challenge, just as we have dealt with others in the past.”

The shortfall in K-12 education money will make it tougher for teachers and classified personnel to negotiate contracts. In K-12 education, Newsom promises growth in the Proposition 98 funding, which is shrinking by $12 billion from the January version of his budget. He said he will move various revenue sources in the General Fund to ensure Prop. 98 funds after a three-year period won’t fall into a permanent downward spiral.

Newsom will also move $4.4 billion in discretionary money from the federal CARES Act to K-12 education. Newsom noted it can be used for summer school and adjusting for learning loss due to the shelter-in-place order and virtual education.

It’s not clear, though, whether the CARES Act will survive in the Republican-controlled Senate. President Trump called the bill “DOA” or dead on arrival.

Tax revenue is down; the state has paid out unemployment benefits to 4.6 million applicants; and the unemployment rate in California went from under 4% to 24% in the second quarter of this year. Personal income has declined by 9% this year.

In looking at the overall budget, Newsom said that it fell from $222 billion in January to $203 billion, an 8% decline. In a move to reduce the budget, Newsom also announced at a May 14 news conference in Sacramento that he, his staff and other state workers will take 10% salary cuts.