Fourth District PTA
State Financial Update
Ron Bennett
Chief Executive Officer
January 23, 2015
Overall, a Positive Year for Education
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The 2015-16 State Budget proposed by the Governor would be good news in
any year
But particularly coming after such a long and deep recession, this State
Budget restores the hopes and dreams of many Californians
The recovery is not complete and won’t be until at least 2021 under
the Governor’s plan
But the incremental progress is significant – particularly for public
education
During the recession, we took more cuts than any other segment of the State
Budget
The Governor acknowledges this and is keeping his commitment toward
restoration of our losses
After all, temporary losses to public education become permanent
impairments on the lives, hopes, and dreams of our children
Progress Toward LCFF Implementation
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Full LCFF
Implementation
2020-21
100
90
2015-16 Governor’s State
Budget: 58% Cumulative
Gap Closure
80
70
60
2015-16
Trend Line
50
40
30
20
10
0
2013-14
2014-15
2015-16
2016-17
Trend
2017-18
Actual
2018-19
2019-20
2020-21
Proposition 98: The Minimum Guarantee
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The improving economy has boosted the Proposition 98 minimum funding
guarantee
State revenues are up in the current year and moderate growth is
projected for 2015-16
In turn, the state’s obligation to K-12 education and community colleges
increases
For the current year, the minimum guarantee increases by $2.3 billion to
$63.2 billion from the level adopted in the 2014-15 State Budget Act
From this revised level, the Governor’s State Budget proposes a 2015-16
Proposition 98 guarantee of $65.7 billion, an increase of $2.5 billion, or 4.1%
Funding is based on Test 2: (1) the growth in state per-capita personal
income, which is projected to rise 2.91%, and (2) the change in K-12
ADA, which is expected to be flat
Proposition 98 Funding
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Budget Restores Investment in Education
(Proposition 98 Funding in Billions)
$75.0
$70.0
$63.2
$65.0
$60.0
$57.9
$58.7
2012-13
2013-14
$65.7
$56.6
$55.0
$51.7
$49.6
$49.2
$50.0
$47.3
$45.0
$40.0
2007-08
2008-09
2009-10
2010-11
Source: Governor’s State Budget Summary, page 6
2011-12
2014-15
Proposed
2015-16
Proposition 98 and the Major K-12 Proposals
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The Governor’s State Budget proposes:
$4 billion for LCFF gap closure
$1.1 billion for discretionary one-time uses, including Common Core
implementation (one time)
$1 billion to eliminate the remaining K-14 apportionment deferrals
$500 million for an Adult Education Block Grant
$273 million for the Emergency Repair Program (one time)
$250 million for one-time CTE incentive grants (each of the next three
years)
$198 million additional ADA growth in the current year and a $6.9 million
decrease for ADA decline in 2015-16
$100 million for Internet connectivity and infrastructure
Commitment to Adult Education,
ROC/P, and CTE
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Adult Education, CTE, and Regional Occupational Center/Program (ROC/P)
have been on life support for most of the past seven years
First, inclusion in the list of Tier III programs during the “Great
Recession” gave districts flexibility to reduce these programs and use
the swept dollars to support other K-12 programs
Districts took advantage of the flexibility and cut 50% of the
programs statewide
Then the state folded the dollars for these programs into the LCFF base,
but required that districts maintain levels of effort for 2013-14 and 201415
The maintenance of effort (MOE) requirement expires in June 2015,
with no ongoing dedicated funding source after that
Absent the Governor’s proposed actions, these critical programs would
likely be eliminated over time
Career Technical Education
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The Governor proposes $250 million in each of the next three years for a
new transitional CTE Incentive Grant Program, in lieu of continuing the
Career Pathways Trust Grant
Priority given to LEAs working in partnerships with other LEAs to offer
regional programs
Unlike the Career Pathways Trust Grant, it is a matching grant program
Intended to accelerate the development of new and expanded highquality CTE programs
Between 2011-12 and 2012-13 CTE enrollment decreased 11.8%
statewide*
*CTE State Enrollment Analysis
Adult Education
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The Governor includes a $500 million block grant for Adult Education in his
2015-16 Budget
This is new money and does not include any portion of the funds previously
required as part of the maintenance of effort (MOE) from K-12 schools
The 2013-14 State Budget provided $25 million for two-year Adult
Education planning grants to 70 regions for consortia of school districts
and community colleges
In 2013-14 and 2014-15, K-12 districts were required to maintain the
same level of spending as they had in 2012-13 for Adult Education
Adult Education
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Each consortium is required to designate an allocation board, which will
make recommendations for the distribution of funds
Adult Education programs serving the highest need populations will have
priority for funds
Administrative costs will be limited to 5%
Each consortia is required to report to the Chancellor and Superintendent of
Public Instruction (SPI) annually on the progress toward goals in the Adult
Education Plan
For 2015-16, funding will be provided directly to the K-12 school districts in
the same amount as their MOE
CalSTRS and CalPERS
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The employer contribution costs for both CalSTRS and CalPERS are
projected to double over the next several years
CalSTRS – From 8.25% in 2013-14 to 19.1% in 2020-21
CalPERS – From 11.442% in 2013-14 to 20.4% in 2020-21
The 2015-16 State Budget proposal does not address these cost increases
for school districts or county offices of education
The Governor does propose allocation increases for the California
Community Colleges partly in recognition of increased expenses in the
area of retirement benefits
LCFF Implementation Promise
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$24
$22
$20
(in Billions)
$18.5 B
$18
$16
$14
$14.1 B
$12
$10
2020-21
Recognizing Higher Retirement Costs
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$24
$22.9 B
$22
(In Billions)
$20
$18
$18.5 B
$16
$14
$12
$10
2020-21
?
?
Trigger Capping District Reserves
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The enactment of SB 858 (Chapter 32/2014) and Proposition 2 together
establish a hard cap on school district reserves if certain conditions are met
Triggering conditions include:
The Proposition 98 maintenance factor must be fully repaid
Proposition 98 must be funded based on Test 1
Proposition 98 is sufficient for enrollment growth and statutory COLA
A deposit must be made into the Proposition 98 reserve when capital
gains revenues exceed 8% of General Fund revenues
In defending this controversial budgeting restriction or attempting to ease
the growing sense of doom, some have argued that it is highly unlikely that
the cap will ever be triggered
THIS CONCLUSION IS WRONG – it may be triggered sooner than we
think!
Discretionary Funds
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The Governor’s State Budget proposal provides more than $1.1 billion in
discretionary one-time Proposition 98 funds, including $20 million for COEs
The allocation amounts to about $180 per ADA for districts
The Governor suggests the one-time funds may be used to further
investments in the implementation of Common Core State Standards (CCSS)
Other uses detailed in the proposal are:
To support the implementation of newly adopted English language
development and California’s Next Generation Science standards, and
To support expenditures that occur due to the evolving accountability
structure of the LCFF
Negotiations Under the LCFF
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Revenue Limits
Categorical Programs
Any increase was
restricted and not
generally available for
negotiations
Base Revenue Limit
Annual COLA always
available for
negotiations
LCFF
Targeted Funds
Any increase used to fund
LCAP strategies for targeted
students
Must negotiate issues within
the scope of bargaining
Base Grant
Annual increase to
base grant always
available for
negotiations
The Year in Review
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July
2013
Governor signs
AB 97 (Chapter
47/2013) to
enact the LCFF
January
2014
Feb-Apr
2014
The SBE
approves
emergency
LCFF spending
regulations and
the LCAP
template
LEAs conduct
local needs
assessment,
consult with
stakeholders,
and prepare a
first draft of the
LCAP
Apr-May
2014
The first draft of
the LCAP is
presented to
advisory groups
for review and
comment,
revisions are
made, and the
plan is presented
for public
comment
June
2014
First LCAPs are
adopted and
submitted to the
COEs and the
state for
approval
The Year in Review
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Nov
2014
Sept
2014
July
2014
Oct
2015
Future
SBE must adopt an
evaluation rubric
SBE adopts the permanent LCFF spending
regulations and the LCAP template
SBE readopts emergency regulations which include
additional revisions to the LCAP template
SBE readopts emergency regulations and conditionally
approves changes to the permanent regulations and the LCAP
template
State Board of Education Updates –
Evaluation Rubrics
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Student
Focused
E.C. 52064.5 requires the SBE to adopt
evaluation rubrics on or before
October 1, 2015
Purpose of Evaluation Rubrics:
Allow LEAs to evaluate their
strengths, weaknesses, and
areas that require improvement
Assist county superintendents
to identify needs and technical
assistance
Assist SSPI to direct interventions
when warranted
Provide standards for improvement
as it relates to LCFF priorities
The Continuing Evolution of the LCAP
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Evaluation
Rubrics
Vision
• Serve as a tool to ensure
LEAs are able to align
resources with goals
• Align with the LCFF
design principles
• Guide reflection and
provide helpful ideas
• Support continuous
improvement
• Extend to all strategic
planning and
implementation efforts
Evaluation
Rubrics
Concept
• Used as a tool in creating
and assessing LCAP goals
• Organized around the three
planning categories
(Conditions of Learning,
Engagement, and Pupil
Outcomes)
• Provide an at-a-glance
understanding of strengths
and needs
• Not intended to be scored
or used to rank LEAs
Evaluation
Rubrics
Activities
• January SBE Meeting
 Present the rubrics
concept
• March SBE Meeting
 Share evaluation rubrics
draft
• May SBE Meeting
 Share examples of tools
and other resources
• July SBE Meeting
 Present final draft
• Sept SBE Meeting
 Final SBE approval
Thank you!