Transcript Document

Mr. Mack
Keep'N You on Track
Every Child Counts Symposium
January 17, 2013
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PowerPoint available at:
www.acsa.org/advocacy
Budget Themes & Thoughts
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Basking in Victory
Erasing the Deficit
Wall of Debt – Work in Progress
Counting on Economic Growth
Investing in Education – Over Time
Centerpiece of Budget is “Local Control
Funding Formula (LCFF)”
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Political Backdrop
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Decisive win on Prop 30 = political capital for Brown
– Getting voters to do the impossible – raise taxes
– The low budget, late game strategy wins again
What Prop 30 really does vs. perception
The changing demographic of a major blue state
– Rise of the Hispanic voters
– Voters between 18 and 29
Democrat supermajority
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Potential to equalize power between Governor and Legislature
Budget & taxes
Urgency statutes
Veto override
Influence of organized labor
Unprecedented number of new lawmakers
877.954.4357 • www.sia-us.com
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Governor’s Budget
• Governor declares that deficit is erased
• Second budget in a decade without a projected deficit
• Increases GF spending by 5 percent - going from $93
billion in 2012-13 to $97 billion in 2013-14
• Increases funding for K-12 schools & higher education
• Expands Medi-Cal under state implementation of federal
health care reform
• Pays down $4.2 billion in budget-related borrowing
• Establishes a $1 billion reserve
877.954.4357 • www.sia-us.com
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Governor’s Budget
• Erases the LAO’s Projected deficit of $1.9 billion
– $1 billion by repaying less of borrowing from
special funds ($4.2 billion instead of $5.2 billion)
– $300 million from a better economic forecast
– Prop 39 Revenue accounting
– Increased estimates of property taxes which offset
general fund obligations
– Extending health care-related taxes and fees
– Use of State Highway Account Revenue to pay
debt service
877.954.4357 • www.sia-us.com
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Voters to the Rescue - Ballot Measures
Budget includes almost $6 billion for 2013-14 in new revenues from voter approval
of Prop 30 and Prop 39
– Prop 30:
• New tax rates on highest-income earners – married taxpayers
at $500,000 or above beginning in 2012 through 2018
• Increases state’s sales tax rate by one-quarter cent beginning
this year through 2016
– Prop 39:
• Requires multistate corporations to use the “single sales factor”
method of apportionment in calculating their taxable income
• The measure ends an advantage signed into law under a
previous budget deal allowing firms choosing the more
favorable of two methods for determining their tax
877.954.4357 • www.sia-us.com
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Proposition 98
• Prop 98 spending fell from $56.6 to $47.3 billion between 200708 and 2011-12 – A decline of 16.4%, not including
manipulations
• Most devastating cuts to public education in memory
• 2013-14 Prop 98 funding is proposed to be $56.2 billion or $2.7
billion higher than the revised 2012-13 guarantee
• Increased GF revenues drive the guarantee upward - Prop 30
and Prop 39 have a positive impact on the guarantee
• Governor dedicates $400.5 million of Prop 39 to meeting the
guarantee
• For 2012-13, the Administration estimates that Prop 98 is
funded beyond the guarantee and thus credits those dollars
toward future CTA v. Schwarzenegger settlement obligations
877.954.4357 • www.sia-us.com
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School Finance Reform
• Governor’s criticisms of current system
– State driven
– Overly complex
– Too much bureaucracy and administrative tasks
– Inequitable
– Not reflective of student needs
• Goals for new funding system
– Increase local control
– Reduce state bureaucracy
– Reduce inequities
– Reflect student needs
– Transparency
877.954.4357 • www.sia-us.com
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Local Control Funding Formula
(LCFF)
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Basic Grant
Supplemental (weighted) Grant
Concentration (weighted) Grant
Augmentations to the Base Grant
Add-ons to formula
Separately funded programs
Hold-harmless and transition
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Base Grant
• Base Grant per ADA by grade span (no more
revenue limit)
K-3 = $6,342
4-6 = $6,437
7-8 = $6,628
9-12 = $7,680
• When LCFF fully implemented (estimated in 7 years),
Base Grant should equal the undeficited statewide
average revenue limit for the current year ($6,816)
877.954.4357 • www.sia-us.com
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Supplemental / Concentration Grants
• Supplemental Grant
– Equal to 35% of Base Grant for each English Learner
(EL), Economically Disadvantaged (NSLP eligible), and/or
foster student – unduplicated count
• Concentration Grant
– Equal to 35% of Base Grant For Each EL, Economically
Disadvantaged, and foster student above 50%
concentration threshold
• EL students eligible for Supplemental and Concentration
Grants for no more than 5 years
877.954.4357 • www.sia-us.com
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Augmentations and Add-ons
• Augmentations to the Base Grant
– K-3 Class Size Reduction funding augments the K-3
Grade Span Base Grant - 11.23% (approx. $712)
– CTE funding augments the 9-12 Grade Span Base
Grant - 2.8% (approx. $215)
• Add-ons
– Home-To-School Transportation and Targeted
Instructional Improvement Grant (TIIG) funding
permanently added to the entitlement for districts
currently receiving those funds
877.954.4357 • www.sia-us.com
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LCFF Funding
Entitlement Target
TIIG Add-on
Trans. Add-on
CSR Augmentation
Concentration Grant
CTE
Augmentation
Supplemental Grant
Base Grant
877.954.4357 • www.sia-us.com
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LCFF - Transition
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An “Entitlement Target” will be calculated for each district
– Equal to Base Grant + Supplemental Grant + Concentration Grant
+ Augmentations + Add-Ons
– Entitlement Target adjusted each year for COLA, demographic
changes, grade span changes
2013-14: each LEA receives at least a hold-harmless amount equal to
2012-13 funding for revenue limits + included categoricals
Each FY thereafter: each LEA receives some amount of growth, added
to the hold-harmless amount, that moves the LEA toward its
Entitlement Target
Administration estimates 7 years to reach Entitlement Targets
– 50% of Prop. 98 growth used to move LEAs toward Entitlement
Targets (other 50% buys down deferrals)
– Growth funding proportionally moves all LEAs toward the
Entitlement Targets
877.954.4357 • www.sia-us.com
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LCFF Funding
Entitlement Target
TIIG Add-on
Trans. Add-on
CSR Augmentation
Concentration Grant
Supplemental Grant
Base Grant
877.954.4357 • www.sia-us.com
CTE
Augmentation
Hold Harmless
Funding
2012-13 TIIG
2012-13 Trans.
2012-13
“Included”
Categoricals
2012-13
Revenue Limit
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Separately Funded Programs
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Federally funded programs
QEIA (for next two fiscal years only)
Special Education
After School Education and Safety
Child Nutrition
Preschool
Various programs not funded in all districts
– e.g., High-Speed Internet Access, Indian Education
Centers, FCMAT
877.954.4357 • www.sia-us.com
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Expenditure of LCFF Funds
• Base Grant, CTE Augmentation to 9-12 Base Grant, and
Add-ons are unrestricted and completely discretionary
• Supplemental and Concentration Grants are “Available for
any purpose that benefits the students generating the
funding”, but funding need not strictly “follow the student”
• Must hold average pupil-teacher ratio in K-3 to 24:1 (or
locally bargained ratio) or risk loss of K-3 CSR Augmentation
– 24:1 implemented in stages during transition
877.954.4357 • www.sia-us.com
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LCFF – County Offices of
Education
• County Offices of Education (COE)
– New two-part formula for Base Grant
• Per ADA funding for county community and court
schools
• Discretionary general fund based on total ADA within the
county
– COEs eligible for the Supplemental and Concentration
Grants for EL and economically disadvantaged pupils
– Same transition and hold-harmless provisions apply to
COEs
877.954.4357 • www.sia-us.com
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New Accountability System
• Governor proposes to redefine fiscal accountability for LEAs and
charter schools
• Eliminates most current programmatic and compliance
requirements
• Makes LEAs and governing boards accountable to the
community with less emphasis on the State
• Requires LEAs to create the District Plan for Student
Achievement – to be concurrently adopted with the annual
budget
877.954.4357 • www.sia-us.com
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New Accountability System
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The District Plan must address at least the following:
1. Basic conditions for student achievement (qualified teachers,
sufficient materials, school facilities - Williams type elements)
2. Programs or instruction for low-income and English language
learners
3. Implementation of Common Core Standards (progress
toward college and career readiness as measured by the
API, graduation rates, completion of college-prep and CTE
courses)
DOF suggests that no State agency would review the District Plans
Instead the K-12 Audit Guide would be revised to require
independent auditors to verify the Plans contain all mandatory
elements and related expenditures
877.954.4357 • www.sia-us.com
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Special Education
• $3.6 million for Special Ed growth
• 1.65% COLA
• Federal and state funding streams separated
• Several Special Education add-on programs
added into the AB 602 base calculation or
consolidated
877.954.4357 • www.sia-us.com
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AB 602 Funding
• Consolidates funding for several special education
program add-ons into the base AB 602 formula
• Budget mentions collapsing 15 funding streams
• Only 9 have been identified so far
• Approximately $94 million
• Two appropriations ($88.7 million and $2.7 million)
for regionalized services and program specialist
services
• $2.5 million for personnel development
AB 602 Funding
• The funding for these programs will be collapsed to
reduce the number of add-ons
• The two Workability funding streams
• $13.2 million in low-incidence disability for
specialized books, materials, and equipment with
$1.7 million for specialized services
• $1.1 million and $200k both used for personnel
development
Mental Health – AB 3632
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Maintains funding of shift of AB 3632 to education
Preserved - not included in program restructuring
$426 million to SELPAs
$69 million from federal special education funds
Increase of $40 million to backfill one-time support
from First 5 Commission in 2012 budget
Adult Ed
• Eliminates existing Adult Ed structure
• Folds $558.9 million in K-12 Adult Ed funding into the
LCFF
• Shifts $15.7 million in K-12 Apprenticeship funding to
Cal. Comm. Colleges (CCC)
• Provides an additional $300 million in Prop 98 funds
to CCC for Adult Ed
• New $315.7 million Adult Ed Block Grant
administered by CCC
877.954.4357 • www.sia-us.com
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Adult Ed
• CCC Adult Ed Block Grant funding allocated based
upon number of adults served
– Only for core program (Elem and secondary ed, CTE,
ESL, citizenship)
• CCC encouraged to “leverage the capacity and
expertise of currently available at K-12 district adult
schools.”
• K-12 districts may continue to operate Adult Ed
programs
877.954.4357 • www.sia-us.com
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State Mandates
• Increase the education mandate block grant by $100
million
• Intends to add both the Behavior Intervention Plan
mandate and the High School Science Graduation
mandate into the block grant
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Folds in ongoing BIP and Grad Requirements
– MBG will not cover prior-year claims for both
– Consistent with the motivation for establishing the MBG, inclusion
of these added mandates creates savings to the State.
Mandate Funding
• 2012-13 claims will be the first year impacted by MBG – Decision
already made
• September 30, 2013 districts again have an option for claiming for
2013-14: continue filing or choose block grant
• 77 percent of school districts and charter schools applied for block
grant
• Block grant funding proposed to be $300 million for K-14 mandates,
or $47 per student for K-12 districts and COEs - $24 per pupil for
charter schools
877.954.4357 • www.sia-us.com
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Mandate Funding
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Two mandates approved for claims to be filed in 2013
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Five pending mandates approved but pending Ps&Gs
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Charter Schools IV – Petition review for districts and COEs
Public Contracts – Requirements imposed on districts
Behavioral Intervention Plans
California Public Records Act
Uniform Complaint Procedures
Parental Involvement Programs
Williams Case Implementation I, II, III
Eight mandate test claims pending
For prior year claims on Graduation Requirements Mandate and Behavioral
Intervention, districts need to file GR and BIP in Feb 2014 or lose that prior year
funding
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First Time Filing for BIP goes back to 1994/95
877.954.4357 • www.sia-us.com
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Technology-Based Learning
• Intended to allow schools to more easily offer
asynchronous online courses to students
• Would create a “streamlined and outcomefocused independent study agreement”
• Proposal to rewrite Independent Study law to
fundamentally change how ADA is generated for all
students enrolled in Independent Study
877.954.4357 • www.sia-us.com
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Technology-Based Learning
• How it would work:
– Would eliminate all current rules for Independent Study
(including pupil/teacher ratios)
– Parent, teacher and student develop new independent study
agreement that outlines specific learning objectives
– Teacher then determines if student met learning objectives
– If yes = full ADA
– If not = unclear (either no ADA or partial?)
– Would not use testing data – would be teacher’s judgment
– No bill language – details to emerge
877.954.4357 • www.sia-us.com
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Prop 39 – Energy Efficiency
• Passed by voters in Nov 2012
– Bond for energy efficiency for K-12, higher ed, and
local governments
– Generates $2.5 billion over 5 years
• Gov. proposes to use $450 million for K-14 with no
funds going to higher ed or local governments
• $550 million in each of next 4 years
• CDE to develop guidelines for K-12 projects
877.954.4357 • www.sia-us.com
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Deferrals
• Governor stays true to commitment to eliminate deferrals
over time.
• $2.2 billion buy out of inter-year deferrals stays in place
with passage of Prop 30
• Proposes to buy out an additional $1.8 billion in existing
inter-year deferrals
• $5.6 billion in inter-year deferrals would remain, down from
over $10 billion
• $3.5 billion in intra-year deferrals remain, in addition to
2012-13 “Cash Management Plan”
877.954.4357 • www.sia-us.com
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Key Education Components
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K-12 Deferrals — $1.8 billion Prop 98 GF to reduce inter-year budgetary deferrals
New School Funding Formula — Additional $1.6 billion in Prop 98 GF for school districts,
COEs and charter schools in 2013-14, an increase of 4.5 percent
New County Office of Education Funding Formula — Additional $28.2 million Prop 98
GF to support a new funding formula for COEs in 2013-14
Energy Efficiency Investments — $400.5 million Prop 98 GF to support energy efficiency
projects per Prop 39
Charter Schools — $48.5 million Prop 98 GF to support projected charter school ADA
growth
Special Education — $3.6 million Prop 98 GF for Special Education ADA growth
K-12 Mandates Funding— Additional $100 million to the K-12 portion of the mandate
block grant to support costs associated with the Graduation Requirements and Behavioral
Intervention Plans mandates
877.954.4357 • www.sia-us.com
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Key Education Components
•COLA – Select Programs— $62.8 million to support 1.65% COLA for select categorical
programs, including: Special Education, Child Nutrition, American Indian Education
Centers, and the American Indian Early Childhood Education Program
•Emergency Repair Program — $9.7 million one-time Prop 98 GF Reversion Account
for the Emergency Repair Program
•Average Daily Attendance (ADA) — An adjusted increase of $304.4 million in 2012-13
and an increase of $2.8 million for 2013-14
•Child Nutrition Program—$77 million in federal local assistance funds to reflect growth
of nutrition programs at schools and other participating agencies
•Prop 98 Adjustment – Credits over-appropriation of $162.8 million in the 2012-13 Prop
98 guarantee to retire future funding obligations of the CTA v. Schwarzenegger
settlement
877.954.4357 • www.sia-us.com
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Federal Issues - Sequestration
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Super committee failure to agree on $1.2 trillion in deficit reductions
over 10 years triggered across-the-board spending cuts - 7.8% ($3.5
billion) Jan 1, 2013
American Taxpayer Relief Act (fiscal cliff deal) – Jan 2, 2013
– Delayed automatic cuts to March 1, 2013
– Reduced cuts by $24 billion total
– Education cuts reduced to 5.9% (approximately $2.9 billion)
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Three upcoming battles:
– Mid-February, when we reach the debt ceiling
– March 1, the new effective date of sequestration
– March 27, when the current Continuing Resolution expires
877.954.4357 • www.sia-us.com
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Federal Issues
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ESEA Reauthorization
– House and Senate continue to be deadlocked
– Action towards reauthorization will be delayed until after Congress
deals with Sequestration, the Debt Ceiling, and Appropriations –
late 2013 or 2014 at the earliest
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NCLB Waiver
– SBE and the SPI pursued a state-defined waiver of the ESEA
mandate to identify schools/LEAs in Program Improvement and of
the specific sanctions imposed by ESEA on those identified
– This waiver was denied in early January 2013
– SBE is considering this issue
877.954.4357 • www.sia-us.com
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Common Core…and more
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Common Core implementation/relationship to LCFF
Next Generation Science Standards
2014 adoption of math materials with ELD to follow
Reauthorization of assessment system
– CAHSEE – to be or not to be?
– Technology capacity
• API revision
• SARC reform
877.954.4357 • www.sia-us.com
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It’s a Proposed Budget
• Huge policy and fiscal decisions that will indeed be
modified
• As economy shifts, proposals are impacted
• The Legislature gets a say
• The May Revision – opportunity to adjust to political
and economic factors
877.954.4357 • www.sia-us.com
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Thank You!
Adonai Mack
Legislative Advocate
[email protected]
(916) 444-3216
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