Transcript PowerPlugs

Fourth District PTA
Advocacy Roundtable
Presented by
Ron Bennett
President and CEO
Funding Per ADA – Actual vs. Statutory Level
1
Average Unified District
$6,742
$6,700
$6,535
$6,411
$6,392
Dollars Per ADA
$6,150
$5,700
Loss of COLA
$5,821
$5,668
Loss of baseline dollars
$5,281
$5,244
$5,231
$4,981
$4,700
2007-08
2008-09
2009-10
Projected Statutory COLA
Loss due to midyear cut
$4,911
2010-11
Flat Funding
2011-12
Actual Funding
2012-13
Midyear Cut
Money Matters in Student Performance
Test Scores vs. Dollars Per Student
$23,000
Highest Performing States
$22,000
Maine
New Jersey
Rhode Island
Vermont
Wyoming
$16,000
Lowest Performing States
$8,700
California
$6,700
$0
Arizona
Nevada
Idaho
Mississippi
2
California’s Education Spending Continues to Lag
California’s K-12 Spending Per Student Lags Behind
That of the Rest of the U.S. More Than at Any Time in 40 Years
California’s Spending Per Student Minus Spending
Per Student in the Rest of U.S.
$600
$200
National Average
-$200
-$600
-$1,000
-$1,400
-$1,800
-$2,200
-$2,600
-$3,000
* 2010-11 data estimated
Note: Rest of U.S. excludes the District of Columbia
Source: National Education Association
-$2,856 (est.) per student loss in 2010-11
3
California’s Spending Lags the Nation
4
California’s Schools Lag Behind Other States on a Number of Measures
California Rank
California
Rest of U.S.
K-12 Spending Per Student (2009-10)*
44
$8,826
$11,372
K-12 Spending as a Percentage of Personal Income
(2008-09)*
46
3.28%
4.25%
Number of K-12 Students Per Teacher (2009-10)*
50
21.3
13.8
Number of K-12 Students Per Administrator (2007-08)
46
358
216
Number of K-12 Students Per Guidance Counselor
(2007-08)
49
809
440
Number of K-12 Students Per Librarian (2007-08)
50
5,038
809
*2008-09 and 2009-10 data are estimated.
Note: “California Rank” and “Rest of U.S.” exclude the District of Columbia. Spending per student and number of
students per teacher are based on Average Daily Attendance (ADA). Number of students per administrator, guidance
counselor, and librarian are based on statewide enrollment.
Source: National Education Association, National Center for Education Statistics, and U.S. Bureau of Economic
Analysis
Historic IDEA Funding
5
40.00%
Percent of Per Pupil Expenditures Funded
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
% Unfunded
% Funded
Source: Digest of Education Statistics 2010, National Center for Education Statistics
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
0.00%
Governor Brown’s Budget Revenues vs. LAO Forecast
6
Governor Brown’s Budget assumes revenues and transfers of $95.4 billion
in 2012-13, a 7.7% increase
The LAO forecasts a two-year shortfall of $6.5 billion,
including $2 billion in additional tax revenues related
to the Facebook initial public offering
$3.0 billion attributable to 2011-12;
$3.5 billion to 2012-13
The LAO forecast assumes passage of
Governor Brown’s original tax proposal
Reasons for the LAO’s Pessimism
7
Economic Outlook
The LAO forecasts stronger U.S. and California economic growth than
the DOF
Revenue Forecast
The LAO disagrees with the DOF’s assumption about capital gains
income; the DOF is too optimistic
Average home price appreciation for 2002-2006 was 18% annually;
2012-2015 forecast of 1.2%
Capital gains income between 2002-2006 of $88 billion annually;
$90 billion a year forecast by the DOF for 2012-2015
Recent shortfalls have been attributed to weak capital gains income
Competing Tax Initiatives
8
Governor Brown’s Budget assumes passage of $6.9 billion in new taxes,
but other measures could be on the ballot
Conventional wisdom says that if more than one tax initiative is on the
ballot, they all fail
What’s in play?
Governor Brown’s initiative – ½ cent sales tax and higher income tax
rates for $250,000 and above
California Federation of Teacher’s (CFT) millionaires tax
Molly Munger/Parent Teacher Association’s broad based income tax
Latest entry: Governor Brown’s compromise with CFT
¼ sales tax and higher income tax rates at $250,000 and above
How Do the Tax Initiatives Compare?
What is taxed?
Governor/CFT Compromise
Proposal
Governor’s Proposal
10.3% $250,000 to $300,000
11.3% $300,000 to $500,000
12.3% Over $500,000
10.3 % $500,000 to $600,000
10.8 % $600,000 to $1 million
11.3 % Over $1 million
Increases the sales tax rate
by a quarter cent
Increases the sales tax rate
by one-half cent
9
CFT “Millionaires Tax”
Munger Education/ECE
3% $1 million and
$2 million
5 % Over $2 million
Rate increase would range
from 0.4% on taxable
incomes between $14,632
and $34,692 and 2.2 % on
taxable incomes over
$3,402,994.
Estimated 2012-13
Revenues (DOF est.)
$7.9 billion
$6.9 billion
$9.5 billion
$5.5 billion
Estimated Revenues
in First Full Year of
Implementation
(DOF est.)
DOF: $9.9 billion
DOF: $6.9 billion
DOF: $6.0 billion
DOF: $11.0 billion
Revenue Allocation
K-12 (89%) and CCCs (11%)
The new revenues would
increase the Proposition 98
guarantee by an estimated
$2.5 billion, leaving
$4.4 billion to close the
Budget gap.
K-12 (89%) and CCCs (11%)
The new revenues would
increase the Proposition 98
guarantee by an estimated
$2.5 billion, leaving
$4.4 billion to close the
Budget gap.
K-12 (36%); Social and
health services (25%);
UC, CSU, and CCCs (8%
each); county public
safety (10%); county
maintenance (4.9%); and
administrative costs (up
to 0.1%).
2012-13 through
2016-17: K-12 (60%);
repayment of state bond
debt (30%); and child care
and preschool (10%)
2017-18 and beyond: K-12
(85%) and child care and
preschool (15%).
How Do the Tax Initiatives Compare?
Governor/CFT
Compromise Proposal
Governor’s
Proposal
10
CFT
“Millionaires Tax”
Munger
Education/ECE
Does Measure Address
Realignment Revenue Yes
Shift?
Yes
No
No
Relationship to
Proposition 98
Counts toward the
Proposition 98
Counts toward the
Proposition 98
Counts toward the
Proposition 98
Counts toward the
Proposition 98
Temporary or
Permanent?
Income tax: 2013-2019
Sales tax: 2013-2017
Income tax 2012-2016
Permanent
Sales tax: 2013-2016
2013 through 2024
Revenues Available To
Close 2012-13 Budget
Gap
$4.4 billion
$4.4 billion
None
$1.5 billion
Revenues Available To
Close Budget Gap in
First Full Year of
Implementation
Approximately
$4.4 billion
Approximately
$4.4 billion
None
$3.0 billion
Sponsor
Governor Brown
Governor Brown
CFT
Molly Munger
Political and Logistical Challenges
A Field Poll in February placed CFT’s millionaire’s tax first
(63% support), then Governor Brown’s (58%), finally Munger’s (43%)
A March 7 Public Policy Institute of California (PPIC) poll placed
Governor Brown’s at 52%
Signature gathering to qualify
About 500,000 valid signatures for
Munger’s and CFT’s
About 800,000 for Governor Brown’s
(constitutional amendment)
About six weeks remaining to
submit signatures
11
Weighted Student Funding
Governor Brown has proposed a major change to California’s school
finance system
Revenue limits and over 40 categorical programs would be replaced
with a weighted student funding (WSF) formula
$4,920 per-ADA base rate, plus 37% additional for English Learners
and free and reduced-price lunch students
Six-year phase-in, with 5% phase-in in 2012-13; hold harmless in
budget year
Major categorical programs added to flexibility
Economic Impact Aid
Class-Size Reduction
Transportation
12
Weighted Student Funding
The WSF proposal has evolved since January and other changes are
expected
Grade span weights, similar to the charter school block grant
Major challenges and shortcomings
Eliminates deficit factor
Redistributes base funding ($5,244 per ADA vs. $4,920 per ADA)
Nothing “magical” about 37% weights
Disregards cost factors unrelated to disadvantaged students
Each Legislator will have winners and losers in his/her district
13
Transitional Kindergarten Proposal in 2012-13
Senate Bill 1381 (Chapter 705/2010):
Changed eligible birth dates for kindergarten and 1st grade
Established “Transitional Kindergarten (TK)”
According to current law, TK is to start in 2012-13
Districts offer TK to students who otherwise do not qualify for
traditional kindergarten due to change in age eligibility dates
Must offer TK to students turning five between December 2 and
November 2 in 2012-13
Can offer TK to students with birthdays between September 2 and
December 2
Not required at every school site – whatever works best for
the district
Not compulsory – students are not required to attend kindergarten
14
Transitional Kindergarten Proposal in 2012-13
15
Governor’s Proposal:
Eliminates all statutes associated with TK
TK would be an optional local decision
Allows students turning five at any time during the school year to:
Enroll in kindergarten, fully funded, at the beginning of the school
year
On a case-by-case basis, upon local board approval
Legislature has been generally unfavorable – future of proposal
uncertain
Resources will be available for TK in either current law or
Governor’s Proposal
K-12 Deferrals
16
Nearly $10 billion in payments of state aid for K-12 schools is deferred into
the next year
Equates to more than 38% of the principal apportionment
Districts receiving most of their funding from local sources:
Have always had to borrow to meet cash flow – mostly within year
Borrowing needs are less affected by deferrals of state aid
Districts receiving most of their funding from the state:
Historically, cash flow more closely matches spending
Operating cash needs often met without borrowing
Therefore, deferrals of state aid have a significant impact
Imposes new borrowing requirements to match cash needs
Requires borrowing across fiscal years
May require two Tax Revenue Anticipation Notes, with the
associated costs
Basic Aid Budget Reductions
17
Fair Share
Revenue limit districts have been impacted by a deficit of 20.602% in
2011-12 as an ongoing deficit beyond 2011-12
The comparable impact on basic aid districts includes a fair share
reduction of 9.57% for the 2011-12 fiscal year
The reduction of the fair share will be based on the 2011-12 P-2
revenue limit subject to the deficit factor for each of the
respective districts identified as “basic aid” in the 2011-12
The reduction is taken from categorical program funds
apportioned in the 2012-13 fiscal year
Thank you