California School Fiscal Services
|Posted on June 17, 2016 at 12:20 AM||comments (2949)|
Facing a midnight deadline, the Legislature Wednesday passed a $171 billion state budget for the fiscal year starting July 1 that steers an extra $2 billion that Gov. Jerry Brown demanded into a rainy day reserve and commits an additional half-billion dollars for early childhood education over the next four years. Brown is expected to sign the budget, which his staff negotiated.
Education will fare well. The 4 percent overall increase in revenue for K-12 districts in 2016-17, while it pales compared with the unusual 11 percent increase last year, is large by historical standards. Forecasts of revenue in coming years are cloudy and will depend on whether a recession happens, as Brown predicts, and whether voters in November re-up Proposition 30, extending an income tax increase on the state’s wealthiest residents.
Here are some of the big numbers for education in the budget for 2016-17:
Including the 2016-17 state budget, revenue for K-12 schools and community colleges from Proposition 98 has grown $24.6 billion or 52 percent since 2011-12, the low point of funding following the recession.
$71.9 billion: The Proposition 98 guarantee, the main source of money for K-12 and community colleges. That’s $2.8 billion more than the revised total for 2015-16, and $3.5 billion more than the Legislature appropriated a year ago for the current year.
$10,657: Per-student funding, up 4.3 percent from $10,217 in 2015-16, according to the Legislative Analyst’s Office.
$63.5 billion: Portion of Prop. 98 to K-12.
$8.3 billion: Portion of Prop. 98 to community colleges.
LOCAL CONTROL FUNDING FORMULA
$2.94 billion: Increase in funding for the Local Control Funding Formula, the primary source of general funding for school districts, bringing total LCFF funding to $55.8 billion.
96 percent: With 2016-17 increase, progress toward reaching full LCFF implementation. That’s the point at which school districts will be restored to pre-recession levels, plus cost-of-living adjustments. For districts with high proportions of English learners, low-income students and foster youths, who receive extra money under the formula, funding levels are already substantially higher.
$506: Per-student LCFF funding increase for an average district in which 63 percent of students draw extra dollars as high-needs students. That breaks down to $84 in supplemental and concentration dollars for high-needs students and $422 in base dollars. Automatic longevity raises for teachers and mandated costs – primarily higher costs of employee pensions and special education – could consume $300 or more per student next year, according to several projections.
Zero: No cost-of-living adjustment, based on a federal formula, for non-LCFF programs, including special education and child nutrition.
A complex formula under Proposition 98, the main source of state funding for K-12 schools and community colleges, determines how much money they will receive annually. Each May, the Department of Finance predicts Prop. 98 revenue for the budget year starting July 1 and adjusts Prop. 98 revenue that the Legislature adopted for the previous two years to incorporate late tax receipts and accounting changes.
*as enacted by Legislature, revised to reflect actual revenues
** as estimated in May 2016 proposed budget
Despite Revenue Warning, School Funding Will Rise
ONE-TIME K-12 REVENUE
$1.28 billion: Discretionary district funding, which also counts toward paying down previously mandated costs the state had not reimbursed.
$200 million: K-12 college readiness grants to low-income students to add Advanced Placement courses and the 15 courses, known as A to G, that California State University and the University of California require for admission.
$18 million: Grants for dropout and truancy prevention programs.
TEACHER SHORTAGE REMEDIES
$20 million: Grants for teacher’s aides and other school employees to pursue a teaching credential;
$10 million: Grants for colleges and universities to establish an integrated or blended teacher preparation program providing a bachelor’s degree and teaching credential in four years;
$5 million: Re-funding the California Center on Teaching Careers or Cal Teach, a marketing and recruitment effort for teachers that was last funded in 2002.
Zero: No money to establish teacher residencies and re-establish a loan forgiveness program for teachers, the Assumption Program of Loans for Education (APLE).
EARLY CHILDHOOD EDUCATION
8,877: Additional full-day state preschool slots by 2019-20, starting with 2,959 in March 2017, at an additional cost in four years of $100 million.
88.4 percent: The projected percentage of California’s eligible 209,668 4-year-olds who will be able to enroll in preschool, once additional slots are phased in; for the combination of 420,000 eligible 3- and 4-year-olds, 61.7 percent will be served, according to the American Institutes for Research.
Note: The final budget does not include Gov. Brown’s proposed $1.6 billion block grant, which would combine funding for the state’s preschool and transitional kindergarten, giving districts discretion over which programs to support.
$3.6 million: Increase for part-time faculty office hours;
$2.4 million: increase for student success programs (PUENTE, MESA);
$15 million*: Increase for California Promise programs, which expand financial aid and fee waiver programs, and provide other support to students in districts partnering with community colleges. Pending legislation could provide $15 million more;
$25 million: Funding for Innovation Awards to address equity issues and encourage the use of technology;
$30 million: “Transformation grants” to campuses for programs helping students progress from remedial math and English courses to college-level instruction.
CSU AND UC
4 percent: Increase in general revenue ($125 million for the University of California, $161 million for California State University System) as part of a multi-year agreement to extend a tuition freeze for in-state students;
$18.5 million: Additional ongoing money for UC by next May if it enrolls 2,500 more California residents by the 2017-18 school year, and regents agree to cap non-residents’ enrollment;
$20 million: One-time money to UC for outreach and support services for low-income and underrepresented minority students;
$35 million: One-time money for CSU to improve the four-year graduation rates with special emphasis on underrepresented and low-income students.
|Posted on May 25, 2016 at 5:45 PM||comments (2440)|
By Danielle Farrie and David Sciarra | May 23, 2016
In recognition of how unfair California public school funding had become, the Legislature in 2013 enacted the Local Control Funding Formula (LCFF), a groundbreaking reform of the state’s broken finance system. The new law eliminated numerous categorical grants and linked funding to pupil needs through weights for low income students, English learners, or those in foster care, along with larger allocations to districts with high concentrations of such students. It gives districts new flexibility to allocate existing funding to schools and students. The reform is also tied to a commitment by the state to “fully fund” the system by 2020-21, with the additional aid requirement estimated at $21 billion.
The good news is that California lawmakers have taken crucial steps toward a fair funding system. With the 2015-16 budget, the state has closed 70 percent of the gap toward full funding in just three years.
LCFF has begun to improve the availability of essential resources in California districts and schools, especially those serving significant numbers of students with greater needs. However, in only its second year, the new system has a very long way to go to overcome the profound inequities that existed before the law was passed.
The urgency of realizing the promise of the LCFF reforms is underscored in the recently released 5th Edition of “Is School Funding Fair? A National Report Card” by the Education Law Center, where we work. Based on data from the 2013 Census fiscal survey, the most recent year available, the Report Card goes beyond raw school spending numbers to analyze California’s overall level of school funding and the state’s investment in public education. The report also examines how well California targets funding to districts with high enrollments of poor students.
The Report Card shows that in 2012-13, prior to the implementation of the LCFF, California lagged on key indicators of funding fairness. The state earned an “F” for what is called “fiscal effort,” or the proportion of economic productivity invested in public education. This lack of investment yielded one of the lowest funding levels in the nation, with California ranking 40th on per-pupil funding adjusted for regional cost factors. On the distribution of funding relative to district poverty, California was essentially “flat.” This means the state was not allocating greater funding and resources to districts with high levels of student need. Given the lag in federal reporting of state fiscal data, it is too early to know the impact of the more recent increases in school funding.
However, the state’s decision to target significant new dollars to high-need schools will likely improve California’s rankings on funding fairness.
The importance of staying the course on the LCFF reforms to remedy this inequity is further driven home by the multiple California districts in our companion report, “America’s Most Fiscally Disadvantaged School Districts.” In the 2012-13 school year, California had 14 of the 47 districts on the list, more than any other state. These 14 districts, educating nearly 300,000 students, are disadvantaged because, relative to other districts in their regional labor market, they had higher student needs and lower per-pupil revenues. For example, San Francisco had 39 percent higher poverty than the average of other districts in its labor market, but only 83 percent of the average revenue for the region. Anaheim Elementary had 87 percent higher poverty and only 88 percent of the revenue. When districts such as these lack the funding to offer competitive wages and decent working conditions, they face a significant barrier in attracting and maintaining qualified teachers and support staff.
California schools are already at a disadvantage, with average teacher salaries far below the salaries of other professionals of similar age, degree level, hours worked per week and weeks worked per year. The Report Card documented that early career teachers (age 25) in California could expect to make 79 percent of the salary of their counterparts, while mid-career teachers (age 45) earn only 72 percent. The most disadvantaged districts must not only compete with other, better-paying professions, but are further hampered by their inability to compete with surrounding school districts that can better compensate their employees.
It should be no surprise that California, as the Learning Policy Institute has found, is facing a teacher shortage in its low-income and high-minority districts. Improving fairness in the state’s finance system is critical to reducing attrition and limiting the number of teachers without proper certifications in high-need districts.
Eradicating funding disparities among districts – and ensuring that funding permits salary levels to be competitive with other occupations requiring a college degree – is the key to overcoming California’s chronic teacher shortage. While the LCFF reforms should allow high-need districts to improve working conditions, whether the overall level of funding is sufficient to raise salaries to competitive levels remains to be seen.
We expect to see progress on school funding levels and distribution from the initial three years – 2013-14 through 2015-16 – of the LCFF reforms. But lawmakers, educators and advocates know that LCFF’s success hinges on sustaining the commitment to the planned phase-in and substantial increases in overall levels of state funding over the next several years. As has happened in states such as New York and Kansas, school funding reforms are often abandoned or weakened before they can make a difference in the quality and sufficiency of teachers, support staff and other education resources in classrooms and schools.
California is also uniquely dependent on voter support to extend Proposition 30, the ballot measure that provides revenue through personal income tax rate increases on high-income earners. If the measure is allowed to expire at the end of 2018, the state will face a significant gap in state revenues that will jeopardize the continued progress of the LCFF reforms. Fortunately, a recent Public Policy Institute of California poll shows that two-thirds of Californians support extending the tax increase.
If California can deliver on its commitment to funding fairness, the state has an unprecedented opportunity to increase essential resources and improve student outcomes across the state.
|Posted on March 22, 2016 at 12:15 AM||comments (2610)|
|Posted on February 11, 2016 at 11:45 AM||comments (1024)|
It's so true that just a few years of revenue increases and we can forget how quickly it can change for the worse. This is a great article that reminds us to not lose our heads by expecting continued increases. Most especially, our increased obligations to both STRS and PERS have a considerable impact on any future revenue increases.
If you haven't done so yet, take a few minutes and project out the costs of your STRS and PERS increases in real dollars over the next 5 years. Then compare that number to our projected LCFF increases during the same period. This is information that you can share with your Board at every opportunity.
Remember, you can't spend the same dollar twice!
|Posted on January 9, 2016 at 12:40 AM||comments (3130)|
$122.6 billion total General Fund expenditures for 2016-17, an increase of $6.5 billion over 2015-16.
Total Proposition 98 K-14 funding guarantee in 2016-17 of $71.6 billion, and $257 million in one-time increases for prior years adjustments.
Total per-pupil expenditures from all sources are projected to be $14,184 in 2015‑16 and $14,550 in 2016-17. Ongoing K‑12 Proposition 98 per-pupil expenditures are $10,591 in 2016‑17.
$2.8 billion for the fourth-year investment in the Local Control Funding Formula, building upon almost $12.8 billion provided over the last three years, a 5.4 percent increase over 2015-16. The proposed funding level is enough to bring total formula implementation to 95 percent of target rates.
$1.6 billion to establish a new early education block grant by combining Proposition 98 funding of three existing early childhood programs: State Preschool Program, transitional kindergarten, and the Preschool Quality Rating and Improvement System Grants.
$1.2 billion in one‑time Proposition 98 General Fund for school districts, charter schools and county offices of education discretional block grants.
Assumes continued SB 740 Facility Grant funding at current year level.
$20 million one‑time Proposition 98 General Fund for Charter School Startup Grants to support operational startup costs for schools opening in 2016 and 2017, which will help offset the loss of federal funding previously available for this purpose.
There is no specific proposal on school facilities, but the Governor expressed significant concern over the current program and the proposed state school bond on next November’s ballot. He also encouraged continued dialog to shape a future program for state school construction.
|Posted on January 6, 2016 at 12:35 AM||comments (2659)|
Cabinet Report by Tom Chorneau
(Calif.) After using the budget process to initiate or support massive policy changes for K-12 education in recent years, Gov. Jerry Brown is likely to give schools a respite when he unveils his 2016-17 spending plan on Thursday.
After ushering in a restructuring of the state-school financial relationship, Brown pushed through new accountability and performance goals, new testing and a full integration of the Common Core State Standards – almost all of it through the budget.
There is a sense around the Capitol that Brown will hit the pause button this year on any major changes, allowing schools time to continue to absorb all the hefty alterations already thrown at them.
If so, attention from school mangers can once again refocus on just the revenue numbers.
Estimates made by the non-partisan Legislative Analyst’s office in November concluded that the Proposition 98 minimum funding guarantee will increase in 2016-17 by $2.3 billion over this year to slightly more than $71.4 billion.
Meanwhile, the state controller’s office also reported last month that tax collections for the year were running about even with estimates made when the current budget was signed last summer – so unlike recent years, there’s little chance of any drama sparking up over how much the state has to spend next year.
In keeping with his past spending plans, Brown is expected to pay down debts before considering new programs.
The Proposition 98 “maintenance factor,” for instance, peaked at more than $14 billion in 2012. But through careful management, Brown has reduced the obligation – generated when the minimum guarantee falls below historic funding levels – to just $195 million. The 2016-17 budget is likely to contain that last payment, marking the first time the state has been without a maintenance factor obligation since 2005-06.
The governor has also greatly reduced what the state owes schools on education mandate claims, cutting the backlog by more than $4 billion since taking office. The LAO estimates that there remains a total of $2 billion in mandate claims still pending, most of it – $1.7 billion – owed to K-12 schools and the remaining $300 million to community colleges.
The improving fiscal landscape means that the state’s Local Control Funding Formula obligation will reach the 90 percent mark in 2015-16. The phase-in targets that began in 2013-14 are expected to be at 96 percent by 2019-20.
The LAO does not believe, however, that rising revenues will trigger a controversial spending cap on schools anytime soon, as some fiscal experts had previously thought.
The Public School System Stabilization Account, or PSSSA, was enacted both by a voter initiative passed in 2014 and supporting state legislation. The law imposes a cap on school district reserves in a year following a contribution by the Legislature to the state reserve fund, although there are several conditions that also must be met.
The LAO has said that some of those conditions will be met in 2015-16 but not all of them, including a big jump in revenue that is not in the forecast.