Transcript Slide 1

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Workshops created and presented by:
Gerry Shelton, Susan Stuart, Richard Gonzalez, Jack O’Connell, Kevin Gordon,
Partner
Partner
Chief Facilities
Partner
President and
Advisor
Partner
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Abe Hajela,
Partner
Barrett Snider,
Partner
Lee Angela Reid,
Senior Legislative
Advocate
2
Workshops created and presented by:
Adonai Mack
Legislative Advocate
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Dave Walrath
President, Murdock, Walrath & Holmes
3
Workshops sponsored by:
• Vetted among numerous energy-oriented companies
by CAG on behalf of School Districts.
• Energy services company that has a genuine track
record of work in the K-12 education space
• Direct representation of multiple lines of Energy
Efficiency Equipment & Energy Dashboards
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2013-14
BUDGET ACT
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Budget Act Themes and Thoughts
• Balanced and conservative
• Focus on K-12 schools & health care
• Compromise bridges key political and fiscal
differences
• It’s a transition year – LCFF, Common Core, Prop
39
• Balancing local control and equity
• Spend wisely – restore or redirect?
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How it Came Together
• Compromise represented strong win by
Governor across the board
– Legislature couldn’t assert extraordinary power
– His revenue numbers
– LCFF – Emphasis on poverty/ELL – solving cost issues
without spending more
– Prop 39 – largely the Governor’s vision
• Democrats – base raised, economic recovery
target, tinkering on poverty/ELL formula
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2013-14 Budget Agreement
• $96.3 billion budget with $1.1 billion in reserve
• Prop 98 grows to $56.5 billion in 2012-13 and
$55.3 billion in 2013-14
• $2.1 billion toward LCFF implementation
• Governor’s LCFF model with some modifications
• LCFF accountability system modified since May Revision
• Adult Education and ROCP MOE requirement
• $3.9 billion buy-down of K-12 inter-year deferrals (2 years)
• $1.25 billion for Common Core implementation
• $381 million to K-12 for Prop 39 implementation
• $250 million for career pathway innovative grants
• $50 million increase in mandate block grant funding
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State General Fund Revenues
(Billions
of Dollars)
$125.0
$124.8
$119.0
$115.0
$105.0
$98.9
$95.0
$93.2
$98.2
$95.3
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$97.1
$89.9
$86.8
$85.0
$75.0
$116.0
$112.3
$107.0
$110.2
$100.0
$104.5
$84.5
DOF
LAO
$79.4
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State Revenues
• The Governor appeared to low-ball 2012-13 &
2013-14 revenues to hold back legislators
• Actual tax receipts through May and June suggest
that LAO’s projections are more accurate
• Higher GF tax receipts mean a higher Prop 98
guarantee
• Prop 98 settle-up is used for one-time purposes in
later years – this fits the Governor’s plan to pay
down the “Wall of Debt” and appropriate funds
without creating on-going state costs
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Prop 98 Changes Over Time
$70.0
$67.0
$60.0
$55.0
$56.6
$56.5
$49.1
$50.0
$49.9
$48.5
$55.3
$46.9
$40.0
2006-07
2007-08
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2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2016-17
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Inter-Year (Cross-Year) Deferrals
Deferral*
Feb 2013 to July 2013
Mar 2013 to Aug 2013
April 2013 to Aug 2013
April 2013 to July 2013
April 2013 to Aug 2013
April 2013 to July 2013
May 2013 to July 2013
May 2013 to Aug 2013
May 2013 to July 2013
June 2013 to July 2013
Total Inter-Year Deferred
Original Amount
$
$
$
$
$
$
$
$
$
2,000.0
1,300.0
763.8
419.0
678.6
2012-13 Budget Act**
$(1,468.0+532)
$ (271+1,029)
$
$
0
0
$
(0+29.4)
$
1153.4
$
(503.0)
$
$
175.6
800.0
$
177.0
$
$
$
1,177.0
2,500.0
5,806.0
800.0
1,000.0
2,500.0
9,461.4
Current
.
$
.
(3,655.4)
*all amounts shown in millions
2013-14 Budget
Proposal**
** per final budget agreement
Approx. $3.5 billion remaining
in Intra-Year Deferrals
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Balance
$
$
242.3
5,563.7
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Governor’s Plan to Pay Down Debt
As of end of 2010-11
Deferrals to schools and community colleges $ 10.4
Economic Recovery Bonds
$ 7.1
Loans from Special Funds
$ 5.1
Prior year mandate claims
$ 4.3
Prop 98 Settle-up
$ 3.0
Borrowing from Local Gov
$ 1.9
Deferred Medi-cal costs
$ 1.2
Deferral of state payroll costs
$ 0.8
Deferred CalPERS payments
$ 0.5
Borrowing from transportation funds
$ 0.4
Total
$ 34.7
2012-13
$ 6.4
$ 5.2
$ 4.6
$ 4.9
$ 2.4
$
$ 2.0
$ 0.7
$ 0.4
$ 0.3
$ 26.9
2016-17
$
$
$ 0.5
$ 3.1
$
$
$ 1.1
$
$
$
$ 4.7
(In Billions)
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LCFF COMPROMISE
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LCFF Compromise
• Fundamental structure of Governor’s proposal
retained
• New: Economic Recovery Target (ERT)
• New: Base Grants increased
• New: Supplemental and Concentration Grants
adjusted
• New: CTE/Adult Ed in transition
• New: Accountability modified
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LCFF Entitlement Target
• Entitlement Target = Base Grant +
Augmentations + Supplemental Grant +
Concentration Grant + Add-ons
• Base Grant per ADA (will receive annual COLA)
K-3 = $6,845
4-6 = $6,947
7-8 = $7,154
9-12 = $8,289
• Augmentations – 10.4% ($711.88) for K-3 CSR
and 2.6% ($215.51) for 9-12
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LCFF Entitlement Target
• Supplemental Grant – additional 20% of Base
Grant + Augmentations for each EL, low income
and foster pupil (by enrollment)
• Concentration Grant – additional 50% of Base
Grant + Augmentations for each student eligible for
supplemental grant above 55% concentration
threshold
• Add-ons – Home-to-School Transportation and
Targeted Instructional Improvement Grant (TIIG)
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LCFF Excluded Categoricals
•
•
•
•
•
•
•
•
•
•
•
•
Special education
After School Education and Safety Program
State Preschool
Quality Education Investment Act
State Testing Program
American Indian Education Centers
Early Childhood Education Programs
Specialized Secondary Programs
California Partnership Academies
Agricultural Education Incentive Program
Foster Youth Programs
Adults in Correctional Facilities
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LCFF
Entitlement Target
TIIG Add-on
Trans. Add-on
Concentration Grant
Supplemental Grant
K – 3 CSR Augmentation
Base Grant
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9 - 12
Augmentation
Hold Harmless
Funding
2012-13 TIIG
2012-13 Trans.
2012-13
“Included”
Categoricals
2012-13
Revenue Limit
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Economic Recovery Target
• Goal is to restore all districts to at least 2007-08
funding levels by leveling up LCFF “losers”
• ERT = undeficited revenue limit in 2012-13 +
COLA (1.94%) for 2013-14 thru 2020-21 +
categorical funding in 2012-13 w/o 20% flex
reductions or “fair share” reductions
• A district will transition toward the greater of its
LCFF Entitlement Target or ERT
• Most districts will have LCFF ET > ERT
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Economic Recovery Target
• Approx. 230 districts will have ERT>LCFF ET
• Approximately 96 of the 230 districts will have an ERT
above the 90th percentile (more than $14,500 per ADA)
and will not be eligible to receive ERT payments
• 45 of those 96 districts receive necessary small school
funding
• 130+ of the 230 districts will have an ERT below the 90th
percentile and will receive ERT payments to restore them
to their ERT by 2020-21
• ERT payments will be made in 8 equal, annual
installments and will be in addition to any LCFF “gap”
funding
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Impact on Small School Districts
• Funded in LCFF if eligible
• LCFF changes eligibility rules and funding levels by
ratcheting down school sizes
• Continues soft landing for declining enrollment ADA is “greater of current or prior year”
• NSS funding increased proportional to increases in
statewide average LCFF allocations
• Uncertainty for some small districts above the 90th
percentile with respect to Economic Recovery
Target payments
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County Offices of Education
• New oversight responsibilities – LCFF
• Supplemental and concentration grants different (supplemental
Grant = 35%, concentration grant = 35% after 50%)
• Creates two-part formula based on costs for regional services
and for alternative education
Regional support funding:
 Base grant of $655,920
 Additional amount of $109,320 per school district in the county
 Additional $40 to $70 per ADA in the county (based on a sliding scale,
with less populated counties receiving a higher amount per ADA)
Alternative education funding:
 Base rate of $11,045 per eligible pupil (pupils who are incarcerated, on
probation, probation-referred, or mandatorily expelled)
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Budget Act LCFF Data Runs
2012-13
English
Learner, Low
Income and
Average
Foster Youth 2012-13 Per 2013-14
Daily
Unduplicated Pupil
Compromise
District Type Attendance Percentage Allocation
Proposal
District Name
Jefferson County
LMNOP
ELEMENTARY
Elementary
XYZ City Unified UNIFIED
Pre-Recession
Funding (0708 with COLA Compromise
Applied) in Proposal,
2020-21
2020-21
46
48%
10,413
10,929
14,539
14,539
8,890
43%
6,391
6,621
9,317
9,851
Economic
Recovery
Payment
(X=Yes)
X
• DOF has produced LCFF data runs, which we are
providing to you
• Outcomes are predicted, not guaranteed
• Use this for general planning purposes, but make your
own assumptions and do your own calculations
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CTE/ROCPs
• Partnership Academies, Ag Incentive Grants and
Supplemental Secondary Grants pulled out
• ROCP funds stay in the LCFF
• 2-year prohibition on redirection of ROCP JPA
funds
• 2-year MOE requirement on ROCP expenditures
• Grade 9-12 augmentation – restrictions (now
you see them, now you don’t)
• $250 million career pathways funding (onetime)
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Adult Education
• Adult Ed funding stays in the LCFF
• 2-year MOE requirement on Adult Ed
expenditures
• $25 million in 2013-14 for 2-year planning
and implementation grants
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Grades K-3 Class Size Reduction
• Transition to 24:1
• Identify gap between 2012-13 K-3 average class
enrollment by school site and target of 24:1
• Begin to close K-3 class size gap in proportion to
progress toward closing LCFF entitlement gap –
2013-14 progress toward entitlement target is
11.74%
• Base Grant add-on is per ADA while CSR goal is
based on enrollment
• Can locally negotiate a different ratio
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LCFF Accountability
• Compromise between January proposal (local control)
and May Revision (strict expenditure restrictions)
• Major decisions moved to SBE rather than Legislature
• Most provisions will not apply for 2013-14, but be
careful
• Follow broad reference in trailer bill and DOF guidance
– Need to plan ahead for 2014-15
– Advocacy groups mobilized to scrutinize spending
decisions
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Expenditure of Supplemental and
Concentration Grant Funds
SBE to adopt regulations by Jan 31, 2014 that:
• Require a school district, COE, or charter school to
“increase or improve services” for grant generating
students “in proportion to the increase in funds
apportioned on the basis of the number and
concentration” of those students
• Authorize use of these grant funds for school-wide
or district-wide purposes in a manner that is no
more restrictive than the restrictions in Title I of
the federal No Child Left Behind Act of 2001
6/19/2013
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Accountability – State Priorities
1) Compliance with Williams criteria – instructional
materials, teacher assignments and credentials,
facilities
2) Implementation of SBE adopted academic content
standards, including programs and services for ELs
to access the common core and ELD standards
3) Parental involvement
4) Pupil Achievement – statewide assessments, API,
completion of A-G requirements, CTE sequences
and AP courses, EL progress toward proficiency,
college preparation (Early Assessment Program)
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Accountability – State Priorities (cont.)
5) Pupil engagement – attendance, dropout and
graduation rates
6) School climate – suspension and expulsion
rates, etc.
7) Access, including for subgroups and special
needs, to a broad course of study in specified
subject areas
8) Pupil outcomes in specified subject areas
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Local Control and Accountability Plans
By July 1, 2014 each LEA must adopt (over 2 public
hearings) a local control and accountability plan
(LCAP) that describes:
• Annual goals, for all students and for each LCFF
subgroup, for each of the specified state
priorities and for any additional identified local
priorities
• The specific actions the LEA will take to achieve
those goals
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Budget Aligned to LCAP
• For 2014-15, and each subsequent year, the
LCAP must be adopted before the LEA adopts its
budget
• The county superintendent, or SPI, shall
disapprove a budget that does not include the
expenditures necessary to implement the LCAP
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Updated LCAPs
For 2015-16, and each subsequent year, the LCAP must be
updated to include:
• A review of LCAP goals, an assessment of progress
toward the goals and the effectiveness of specific actions
linked to those goals, and any changes to the goals and
specific actions
• A listing and description of expenditures (CSAM) for that
fiscal year that implement the specific actions identified
in the LCAP
• A listing and description of expenditures that will serve
students that generate supplemental and concentration
grants
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Evaluation and Technical Assistance
• SBE to adopt LCAP evaluation rubrics by October 1, 2015
that:
– Assist LEAs in evaluating strengths and weaknesses and areas
needing improvement
– Assist county superintendents or the SPI to identify LEAs in
need of technical assistance
– Assist the SPI to identify LEAs for which intervention is
warranted
• California Collaborative for Educational Excellence
(CCEE) - $10 million to create the CCEE to provide
technical assistance to LEAs to meet the state priorities
identified in each LCAP
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Oversight and Intervention
• LCAPs submitted to county superintendent (the SPI for
COEs) for review, and shall be approved if:
– LCAP adheres to SBE template, and
– The budget includes expenditures sufficient to implement
the specific actions identified in the LCAP
• If LCAP is not approved, or if the LEA requests technical
assistance, the county superintendent (or SPI) may:
– Assist in identifying strengths or weaknesses related to the
state priorities
– Assign an academic expert or team to assist in implementing
effective programs and improving student outcomes
– Assign the CCEE to provide advice and assistance
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Oversight and Intervention
The SPI is authorized to intervene if both of the
following criteria are met:
• The LEA did not improve outcomes for three or
more pupil subgroups (ethnic, socio-economically
disadvantaged, ELs, special needs, foster youth)
with respect to more than one state priority for
three out of four years, AND
• The CCEE has provided assistance and submits
findings of failure to implement recommendations
or persistent inadequate performance
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Oversight and Intervention
SPI intervention may include:
• Modifications to the LCAP
• Budget revisions to improve outcomes related
to the state priorities
• Stay and rescind any actions, other than those
required by CBAs, if doing so will improve
outcomes
• Appoint a trustee to exercise this authority
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LCAP Timeline
• January 31, 2014
– SBE regulations on use of supplemental/concentration grant
funds
• March 31, 2014
– SBE template for LCAPs
• July 1, 2014
– First LCAPs with 2014-15 budget expenditures aligned to the
LCAP
• July 1, 2015
– First LCAP update with additional expenditure reporting
• October 1, 2015
– SBE evaluation rubrics
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OTHER MAJOR BUDGET ISSUES
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Funding for Common Core
• $1.25 billion in one-time funds
• Distributed based upon prior year enrollment (approx. $200
per pupil)
• Goes to school districts, COEs, charter schools
• May be used for professional development, instructional
materials, and technology enhancement
• LEAs may encumber funds in 2013-14 or 2014-15
• Funds subject to annual audit
• LEAs must:
– Create plan for use of funds, describe and adopt at a public
meeting
– By July 1, 2015, report detailed expenditure information to CDE
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Proposition 39
• $2.5 billion over 5 years focused on K-14
exclusively
• Starting in 2013‐14 - $381 million for K‐12
• CA Energy Commission (CEC)to develop
guidelines, application “form,” and approve
applications. CDE to distribute funding.
• Guidelines issues following “public input”
• Funds allocated 85% on a per pupil basis and
15% on the basis of the number of NSLP eligible
pupils
• Goal to get funding out in the budget year.
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Proposition 39
• Multi-year project approval being considered
• Grantees receiving more than $1 million must spend at
least 50% on projects of $250K or more
• Energy Conservation Assistance Account – Revolving loan
program with low/no interest loans - $28M in 2013-14
– Considerations for small LEAs
• $15,000 minimum grant for small LEAs of 100 ADA or less
• $50,000 minimum grant for ADA between 101 and 1,000
• $100,000 minimum grant for ADA between 1,001 and 1,999
• 2‐year advance on allocation available for districts with ADA
1,000 or less - August 1st Application to CDE
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Proposition 39
Energy Commission Guidance Details To Come
• Project Criteria Summary must:
– Focus on energy efficiency & demand reduction first
– Be cost-effective
– Require contracts with specific project details (i.e. Energy
calculations, specifications, & costs)
• Submit annual financial audits
• “Alternative energy generation projects and other innovative
energy projects may be considered only if the LEA can document
on their annual expenditure report that all other cost effective
energy efficiency projects are already installed or have
committed installation contracts.”
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Proposition 39
• Project Design Recommendations
– Benchmarking
– Sequencing of facility priority
– Surveys and assessments
• Project Examples
– Lighting Retrofits
– Lighting Controls
– Heating & Cooling
Equipment
– Heating & Cooling Controls
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–
–
–
–
–
Water Heating
Building Envelope
Water Efficiency
Pool Equipment
Demand Response
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Child Nutrition
• COLA on state programs funded at 1.565% ($2.438
million)
• Decrease in projected meals served led to “growth”
funding decrease of -$1.331 million
• Increased federal funds to CDE:
– $1.0 million to increase the frequency of compliance
reviews as a result of new federal requirements
– $200,000 to increase technical assistance on new federal
requirements under the Healthy, Hunger-Free Kids Act
of 2010
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Special Education
• 2013-14 COLA funded at 1.565%
• Protects Necessary Small Special Education
Local Plan Areas
• Does not backfill $61 million federal
sequestration cut
• Governor vetoes $30 million for equalization
• Debate over re-appropriation begins
• Consolidates various programs
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Child Care and Preschool
• Backfills $15.9 million in sequestration cuts ($11.1
million-General Child Development; $4.2 millionAlternative Payment programs; $.6 million-Migrant
Day Care)
• Authorizes transfer of unused CalWORKs Stage 2
funds to Stage 3, if needed
• Re-appropriates $10 million in unused 2012-13
funds to establish new slots ($7 million-General
Child Development; $2.6 million-Alternative
Payment programs; $.4 million-Migrant Day Care)
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School Facilities Changes
• Eliminates minimum contribution for routine restricted
maintenance
• Eliminates state funding for deferred maintenance,
makes it a local discretion with no match
• Allows LEAs to use proceeds from the sale of surplus
property for any one-time general fund use through 2016
• Makes permanent the requirement that a school district
give first call on surplus property to charter schools (sale
or lease)
– Revises to only apply to charters with at least 80 units indistrict ADA for the following fiscal year
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School Facilities Program
• State facilities bond funds mostly exhausted
• OPSC no longer processing applications for
eligibility, modernization, and new construction
• Applications are checked for appropriate state
approval and indexed by date order
• Expect OPSC to resume processing some
applications as we get closer to state bond
approval
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Mandates
County Office of Education
 $28 per K-8 ADA
 $56 per 9-12 ADA
 $1 per countywide ADA
School District
 $28 per K-8 ADA
 $56 per 9-12 ADA
Charter School
 $14 per K-8 ADA
 $42 per 9-12 ADA
$50 million for inclusion of
Graduation Requirements
• No funds for filed claim
reimbursement
• Amends Behavioral
Intervention Program to
essentially define away the
state mandate – CSBA
remains concerned
• Block Grant election August 30
• Block Grant increased by
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Governor’s Vetoes
• The Governor vetoed funding for
– federal funds support ($225,000) by eliminating the requirement
to develop a child care preschool plan for a universal preschool
program
– federal funds support ($225,000) by eliminating the requirement
to translate parent notifications and templates
– Prop 98 support ($30,000,000) of Special Education by deleting the
proposed equalization of special education funding
– Prop 98 support ($5,000,000) of State Preschool by deleting some
of the proposed increase in preschool slots
• The Governor sustained funding, but provided comments on
the future of the California Collaborative for Educational
Excellence, Specialized Secondary Programs, and the
Agricultural Career Technical Education Incentive Program
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2014 Policy and Budget
OTHER ISSUES
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School Facilities Bond in 2014?
• Governor doesn’t support status quo, wants
simplification and more local control
• Potential conflict with 2014 water bond
• Potential bond language being discussed
• 2014 state bond probably $5-7 billion
• Supported by SPI and education community
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Parcel Taxes
• Expect discussions in early 2014
• Dems control 2/3 needed to place
Constitutional Amendment on ballot
• Lowering vote threshold from 2/3 to 55%
• Polling trending down
• Assembly working on alternative to allow school
boards to levy different types of taxes
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CABs Legislation
AB 182 (Buchanan) moving through Senate
– Limiting CABs to Ed Code and financings to 25 years with
max 8% interest rate
– LEAs may use Gov. Code for standard bonds with
financing at 30 years (down from 40)
– Requiring a 4 to 1 repayment
– All CABs must be callable
– Requires two public presentations, financial analysis of
the CAB, rationale for it, comparison with standard
bond, and info about the underwriter
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Local Bond Campaign Reform
• AB 621 (Wagner) prohibits an LEA from entering
into a financial advisory, legal advisory,
underwriting, or other similar relationship with
an individual or firm if that individual or firm
provided, or will provide, bond campaign
services to the bond campaign
• Would take effect January 1, 2014
• Bill pending in the Senate
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Cost Pressures
• Common Core Standards – Professional
Development, Instructional Materials and
Technology
• CalPERS Contributions
• CalSTRS Contributions
• Affordable Care Act
• Return to 180 Day
• Return to 24:1
• Employee Salaries and Benefits
• Energy Costs
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Collective Bargaining
• Expenditure, program and accountability rules
are yet to be developed, so do not go beyond
2013-14
• Maintenance of Effort requirements
• Make management decisions within new
accountability framework
• Consider 2014-15 and following year obligations
before finalizing agreements
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The Budget Act and Trailer Bills
• AB 110 - Budget Bill - The 2013‐14 State Budget
• SB 73 - Proposition 39 implementation - Implements the
California Clean Energy Jobs Act (Proposition 39) by allocating
energy efficiency funds, and providing grants to K‐12 and
Community Colleges
• AB 86 - K‐12 Education – Main education trailer bill; includes
retiring deferrals, $1.25 billion for Common Core, and $250
million for CTE grants
• AB 97 - Local Control Funding Formula - Implements the LCFF;
includes LCFF grants, LCFF transition, ERT, LCFF accountability,
and MOEs for ROCPs and adult education
• SB 91 - Local Control Funding Formula – Enacts amendments
to AB 97
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Thank You
• We will send you this PowerPoint
• Please feel free to use the content as you wish
• Questions? Please contact Kristie Rucker at
[email protected], or (916) 557-9745
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