STATE OF THE STATE BUDGET 2014-15

GOVERNOR’S JANUARY PROPOSAL

January 2014

Presented by Kerry Moriarty, CTA NODD School Finance

2013-14 BudgetIn Review

• Local Control Funding Formula implemented

• K-12 Districts 1.565% COLA, but imbedded in the LCFF Target

• 11.78% of LCFF Gap was funded• 32 of the 58 COEs already have funding at their target or above due to hold harmless clause

COLA $/ADA

K-3 $107

4-6 $109

7-8 $112

9-12 $130

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Proposition 98 Forecast

Governor’s 2014-15 January Budget Proposal Summary

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LCAP Timeline

Adopt Budget

Standards and Criteria

Adopt Spending

Regulations

Adopt LCAP Plan

Templates

District Adopts LCAP

Adopt Technical

Assistance &

Intervention Evaluation

Rubric

1/1/14 1/31/14 3/31/14 7/1/14 10/1/15

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DONEDONE

DONE

Local Control & Accountability Plan (LCAP)• Annual goals and specific actions based on state priority areas for

the district and each school in the district

• Description of expenditures implementing specific actions

• Adopted every three years and updated annually

• LEA shall consult with teachers, principals, administrators, other school personnel, parents, & pupils in developing the plan

• Public hearing including opportunities for written input with written response from district superintendent

• Adopted with the LEA’s budget & submitted to COE for approval

• SBE adopted regulations (January 16, 2014) that govern the expenditure of funds apportioned on the basis of the number and concentration of unduplicated pupils

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LCFF – Base Grant Entitlement Calculation

• 2014-15 target entitlement calculation• Grade span per-pupil base grants, based on 2014-15 statewide average

initial target of $7,829 per ADA

• Increased annually for a COLA

Factors K-3 4-6 7-8 9-12

2013-14 Base Grant/ADA

$6,952 $7,056 $7,266 $8,419

COLA @ 0.86% $60 $61 $62 $72

2014-15 Base Grant/ADA

$7,012 $7,117 $7,328 $8,491

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Deferral Repayment

• Governor proposes to repay all outstanding deferrals in 2014-15

• Improves cash flow• No program budget impact

• 2014-15, the 5-5-9* apportionment schedule should be implemented

* 5% paid in July, 5% paid in August & 9% paid in each of the following months except EPA funds which are distributed quarterly

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Prop 39 – Energy Efficient Funding• $316 million in 2014-15 to K-12 education to be allocated on a

per-ADA basis

• 85% of funding based on the average daily attendance (ADA) reported as of P-2 for the prior year & 15% based on the students eligible for free and reduced-price meals in the prior year 

• LEAs must encumber the Proposition 39 funds by June 30, 2018

• Receipt of funds is dependent on submission and approval of an expenditure plan by the California Energy Commission

• More information at http://www.cde.ca.gov/fg/aa/ca/prop39cceja.asp 8

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Common Core

• No new funding proposed in 2014-15, however,

$200 per 2012-13 enrollment received in

2013-14 for Common Core implementation ($1.25 B

statewide)• Must be spent by end of 2014-15

• Must hold a public hearing on expenditure plan• LEAs can spend the funds for the following allowed purposes:

• Professional Development• Instructional materials and supplemental instructional materials aligned

to the CCSS academic content standards• Technology

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State Categorical Programs Still Standing

• COLA = 0.86% for: • State Spec Ed• Child Nutrition• American Indian Ed Centers/American

Indian Early Childhood Ed

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Transportation

• Funded at 2012-13 level • Permanent add-on to LCFF • No COLA• Funds must be spent on pupil transportation

• Direct-funded Home-to-School Transportation JPAs will continue to receive direct funding in 2013-14 and 2014-15

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Lottery

• $126 per ADA – unrestricted

• $31 per ADA – instructional materials (Prop 20)

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Special Education

• 0.86% COLA on state/local

share ($4.39 per ADA)• Growth (state)

• $514.50 per unit of growth ADA

• FYI – not in budget, but important

Special Education Task Force • Appointed 32 members• Identify the state’s vision and mission for students

with disabilities

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Mandated Cost Reimbursement

$216.6 million for Mandate Block Grant (K-12)

Annual choice between existing mandate claim reimbursement process or block grant (little funding for reimbursement, however)

Higher rate for the 9-12 grade span is due to the inclusion of the Graduation Requirements in MBG 2013-14

LAO indicates Gov proposes adding 3 programs to MBG, but no additional funding

Proposed programs to be added:Uniform Complaint Procedures, Public Contracts, & Charter Schools IV

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Federal Funding

• Congress is working on a bill to fund K-12 education (and other programs) through October 2014 back to nearly pre-sequestration levels

• No additional cuts for federal program funds will occur in the current fiscal year

• New $250 million Race to the Top competitive grant fund was proposed to "develop or expand high-quality preschool programs for four-year-olds under 200% of the Federal Poverty Level"

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Adult Education

• Existing K-12 & community college Adult Ed programs will maintain the status quo for 2 years (including funding)• 2013-14 & 2014-15

• LEAs must maintain the same level of Adult Education expenditures in 2013-14 & 2014-15 as were expended in 2012-13

• LEAs will retain authority to independently continue existing Adult Ed programs, but it is expected that they will join a regional adult education consortium to gain access to future funding

• Gov intends to make an investment in Adult Ed through a categorical program in 2015-16

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ROC/P

• The LCFF compromise maintains the status quo for ROC/Ps

• Of funds received for that purpose, districts are required to expend the same level on ROC/Ps in 2013-14 and 2014-15 as in 2012-13

• Since 2007-08, ROC/Ps have been funded at local discretion because of Tier III flexibility

• Member districts of ROC/Ps operating as a joint powers agency (JPA) must also maintain allocations to the JPA at 2012-13 levels

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Reforms• Non-classroom based independent study – streamline and

expand instructional flexibility• Rigor and educational quality like classroom-based• Same educational minutes as classroom-based • Adequate teacher and student interaction• Maintain classroom-based equivalent pupil-to-teacher ratio unless a

new alternative ratio is collectively bargained • 1 unit of ADA per year for each student enrolled

• School Facilities – continue a dialogue about the future of school facilities funding, including consideration of what role, if any, the state should play.

• Rainy Day Fund – constitutional amendment for the 2014 ballot to strengthen the existing state budget Rainy Day Fund • Prop 98 Reserve where spikes in funding would be saved for future

years of decline.

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COE LCFF• The two-part formula includes:

• Per-ADA funding to support students attending community schools and juvenile court schools

• Unrestricted funding for general county office operations, distributed based on the total number of school districts in the county and the total ADA of all students in the county

• Counties will receive a base grant per ADA for students served in alternative schools and community schools• Targeted supplemental grants for English learners and low income

students, comparable to the LCFF for school districts• In 2014-15, all 58 COEs will have funding at their target or

above

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http://www.cde.ca.gov/fg/aa/lc/lcffoverview.asp

Community Colleges• Cost-of-living adjustment (COLA) - $48.5 million (0.86%) • Apportionment funding – Increase $155.2 million (3% increase in enrollment)

• Board of Governors must adopt a growth formula (first priority to districts identified as having the greatest unmet need in adequately serving their community’s higher educational needs)

• All districts will get some growth funding, and over time will be fully restored to pre-recession apportionment levels

• Financial Stability for Apportionments • Increase of $38.4 million in 2013-14 and $35.6 million in 2014-15 • Shift a portion of the redevelopment agency revenues to the following fiscal year

• Deferral repayment - $592.4 million (all deferrals eliminated)• Energy Efficiency Investments (Prop 39) - $39 million • Investing in Student Success

• $100 million to increase orientation, assessment, placement, counseling, and other education planning services for all matriculated students

• $100 million to close achievement gaps in access and achievement in underrepresented student groups as identified in local Student Equity Plans

• Deferred Maintenance and Instructional Equipment • $175 million one-time split equally between deferred maintenance and instructional equipment

purchases

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UC & CSU

• $142 million each for UC & CSU• 2nd installment in 4-year funding plan proposed by Gov in

2013-14• 5% increase in 2013-14 & 2014-15, then 4% increase in

2015-16 & 2016-17

• No enrollment targets or growth funding• No tuition increases (to receive increase tuition must remain flat through 2016-17)

• Must adopt 3-year sustainability plans by 11/30/14• New Innovation Awards (One-time $50 million for UC, CSU & CCC)

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LCFF Emergency Proportionality Regulations

http://lcff.wested.org/lcff-channel/episode-7-local-control-funding-formula-spending-regulations

/

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LCFF Emergency Proportionality Regulations• Shall provide evidence in LCAP to demonstrate how funding

apportioned on the basis of the number and concentration of unduplicated pupils (UP generated funding)

• UP generated funding shall be used to increase or improve services for UPs as compared to the services provided to all pupils in proportion to the increase in funds

• LCAP shall include an explanation of how expenditures of such funding meet the LEA’s goals for its UPs in the state priority areas

• COE shall review descriptions in an LEA’s LCAP when determining whether the LEA has fully demonstrated that it will increase or improve services for UPs

• If LCAP is not approved by COE for failing to meet proportionality requirement, COE shall provide technical assistance to the LEA in meeting this requirement

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LCFF Emergency Proportionality Regulations• Conditions under which an LEA may use UP generated funds

for districtwide, schoolwide, countywide, and/or charterwide:• >55% UP in CY or PY, may expend Supp & Conc funds districtwide

&/or >40% UP in CY or PY @ site, may expend Supp & Conc fund schoolwide

• LCAP must describe how services are directed toward UPs in state priority areas

• If <55% UP, may expend Supp funds districtwide &/or >40% UP in CY or PY @ site, may expend Supp & Conc fund schoolwide, but shall:• LCAP must identify services provided districtwide/schoolwide• LCAP must describe how services are directed toward UPs in state priority

areas• LCAP must describe how services are the most effective use of the funds to

meeting district goals for UP in state priority areas

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Issues to Consider for Bargaining/Organizing• Additional funding for many districts

• More than double the new LCFF $ in 2013-14

• Funding flexibility (local control)• Common Core requirements• Common Core funding• Past or potential litigation regarding student test score related to teacher evaluation

• LCFF proportionality requirements• LCAP requirements & student outcome objectives

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Bargaining Implications

• SSCal is advising districts that REU requirement is not enough – instead districts should reserve 1 year’s increment of planned revenue growth

• SSCal is advising districts to use conservative LCFF estimates for out years in MYPs

• Large variances in per pupil and total funding between districts will create challenges when advocating for comparability• Labor market is the labor market, still have to compete

for talent

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Bargaining Advice• Determine estimate of district new $ for 2014-15

• Get necessary financial documents (2013-14 1st Interim, 2013-14 Budget – with ADA by grade span, 2012-13 Unaudited Actuals, 2013-14 UP% [CALPADS])

• FCMAT LCFF Calculator• Prepare bargaining teams with training & paradigm shift to bargaining on

offense • Push back on district bargaining delays Evaluate local readiness for

CCSS & expanded bargaining possibilities (and the responsibilities that go with these things)

• Prioritize local bargaining needs/goals• Consider QEIA best practices to inform local educational program

decisions• Prepare Organizing teams & work LPAE process to support improved

organizational capacity & bargaining plan • Time is now to assert right to consult on LCAP and as LCAP is

developed, prepare a timely demand to bargain on any impacts and effects of the LCAP on the bargaining unit

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