FOLLOWING THE MONEY:
Understanding Los Angeles
Unified School District’s Finances
and Impacting the Budget
Advancement Project ©2012
Generous support for this curriculum was provided
by California Community Foundation
ABOUT US
ADVANCEMENT PROJECT
ACKNOWLEDGEMENTS
Advancement Project is a public policy change
organization rooted in the civil rights movement.
We would like to acknowledge a number of individuals and organizations that provided invaluable input
at the outset of this project and/or contributed to the
development of the budget curriculum.
We engineer large-scale systems change to remedy
inequality, expand opportunity and open paths to
upward mobility. Our goal is that members of all
communities have the safety, opportunity and health
they need to thrive. Our signature is reach and impact.
With our strong ties to diverse communities, unlikely
alliances, policy and legal expertise, and creative use
of technology, we and our partners have won over
15 billion dollars to extend opportunity.
Whether it is to build 150 schools, transform the City of
Los Angeles’ approach to its gang epidemic, or revolutionize the use of data in policymaking, Advancement
Project evens the odds for communities striving to attain
equal footing and equal treatment.
CONTENT
CONTENT DEVELOPMENT: Matt Agustin,
Sharon Scott Dow and Deanna Cooke
REVIEWERS: John Kim, Susan Lee,
Kimberly Patillo-Brownson, Caroline Rivas
and Amy Sausser
DESIGN:
Colleen Corcoran / designedbycolleen.com
EQUITY IN PUBLIC FUNDS
Equity in Public Funds reveals significant discrepancies between the allocation of public funds and the
needs of low-income communities and communities of
color. There is a need to demystify public finance and
strengthen advocacy campaigns to ensure the equitable use of public funds. There is currently no other
organization in the L.A. region that is systematically
working to increase transparency, accountability and
equity in the use of public dollars.
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CONTENTS
INTRODUCTION 4
PART I: FUNDING CALIFORNIA’S SCHOOLS 7
PART II: UNDERSTANDING FINANCIAL DOCUMENTS 15
Key Aspects of the LAUSD Budget 16
Reading the Budget 18
Other Major Financial Documents and Resources 24
Public Records Requests 24
PART III: EXAMPLE OF FISCAL RESEARCH 27
PART IV: THE BUDGETING PROCESS FOR LAUSD 29
PART V: 2011-2012 BUDGET ANALYSIS 33
PART VI: POWER ANALYSES 39
CONCLUSION 45
REFERENCES 46
APPENDICES 47
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INTRODUCTION
This curriculum is designed to help advocates understand fiscal information about the Los Angeles Unified
School District in order to advocate for policies that
best support the children and youth of our large and
diverse district.
For a full overview of the LAUSD, an
organizational chart can be found at: http://
notebook.lausd.net/pls/ptl/docs/PAGE/CA_
LAUSD/LAUSDNET/ABOUT_US/INFORMATION/
LAUSD%20OVERALL%20--%2011-1-2011.PDF
The City of Los Angeles is the 2nd most populous city
in the U.S. and the Los Angeles Unified School District
(LAUSD) is the 2nd largest school district in the country,
behind the New York City Schools. In LAUSD, the K-12
system educates nearly 700,000 students, of which
approximately 10 % attend public charter schools.
If we also include early childhood education, adult
education and vocational education, the number of
students in LAUSD surpasses 800,000 students.1
The magnitude of the LAUSD as well as the economic,
racial, ethnic and language diversity within it all lead
to the importance of advocates understanding how to
engage in the budgeting process in order to create a
healthy and productive environment in which our community members (children, youth and adults) can learn.
These students are served by nearly 1,200 schools.
LAUSD is spread over 710 square miles and includes
most of the City of Los Angeles, along with 31 other
cities and a number of unincorporated communities.
LAUSD enrollment is larger than in 25 States and
the District of Columbia. Making changes in LAUSD,
therefore, can be similar to the magnitude of making
changes to an entire state.
The operations and oversight of the district are
complex. LAUSD is governed by seven school board
members who are elected to represent seven districts.
The superintendent is hired by and reports to the school
board, and oversees the major functions of the school
district including the budget, instruction, operations,
and facilities. For instruction, the LAUSD is divided
into eight local districts with a local superintendent for
each, but note that these districts do not correspond
with the school board districts.
Why the LAUSD Budget?
This curriculum focuses specifically on
understanding the LAUSD Budget.
++
Funding for programs and services is
primarily allocated during the state and
local budgeting process
++
It is important for advocates to know of
the opportunities to provide input before
these budgets are finalized
++
To effectively impact this process it is
important to know the kinds of information the budget provides:
-- how to read the LAUSD budget and find
information in it
-- how to engage in the budgeting process
1. District and Community Profile, LAUSD Budget 2011-2012, P. IA-10
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INTRODUCTION
For advocates, this curriculum attempts to illustrate the
overall context of the budget, the budgeting priorities
and the fiscal landscape for LAUSD. The overarching
goals for this curriculum are:
1.
2.
The curriculum focuses on the following concerns:
1.
Understanding the sources of LAUSD funding
2.
Ability to read and understand the budget
document
Identifying how to understand the fund
structure and read the budget tables
3.
Knowledge of the timeline for engaging in
budget related advocacy
Showing the cycle of the budget development
so that advocates know when to engage
4.
Providing examples of how to research
fiscal information and what the current fiscal
situation is.
3.
Understanding of the current fiscal landscape
in LAUSD
4.
Awareness of the political landscape of
LAUSD (Power Analysis)
This curriculum will focus on the LAUSD budget as a
whole, and not on the individual budgets of specific
offices or schools. This focus responds to the current
fiscal climate and the fact that priorities in funding are
often decided at the district-wide level. For instance, in
2011-2012 the budget reflects changes caused by a
$408 million deficit resulting in layoffs and programmatic changes made at the district level, rather than
the school or district department level. For information
about more specific budgetary items that might relate,
for instance, to adult education, it will be necessary to
seek out the specific budget for that department or program. On the front page of the LAUSD website (www.
lausd.net) there is a link to departments within LAUSD
where you can find individual departmental budgets.
Further, our expectation is that this curriculum is
used in conjunction with existing organizing and
advocacy approaches. We expect that the individuals
using this curriculum have significant experience in
creating change in their communities or through their
organizations and so we have focused exclusively on
the budget and how it might relate to your advocacy
campaign.
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INTRODUCTION
Part I:
Key Questions for Advocates
NOTES
After each section, key questions for advocates
will be asked. The key questions are meant to
help advocates think through a specific advocacy campaign related to their work and relate it
to the issues discussed in that section. Appendix
A provides a list of questions that can help you
research the public finance issues related to your
campaign.
1.
What is my advocacy goal?
EXAMPLES:
++
To improve educational outcomes in the
schools in my community.
++
To provide greater funding for school
safety.
++
To reduce overcrowding in my local
school.
2.
How does public funding impact or
intersect with this advocacy goal?
EXAMPLE: Need public funding to pay for youth
programming to increase academic performance
[The City has various publicly funded programs;
how can I advocate for those programs to target
my community?]
3.
How would understanding the budget
advance my advocacy goal?
EXAMPLE: Knowing how funding for educa-
tional services is allotted will help me understand
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PART I: Funding California’s Schools
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PART I: FUNDING CALIFORNIA’S SCHOOLS
California voters and the state legislature have implemented funding mechanisms that make understanding
how school districts are funded statewide key to
understanding LAUSD budgets. This section discusses
some of the factors impacting school funding and how
this relates to the overall district budget. To start, it is
important to understand that the majority of funding to
LAUSD, approximately 85%, comes from the State of
California’s General Fund, therefore LAUSD’s budget
is fully subject to the challenges of the state budget. In
California’s current fiscal climate, funding for California
schools does not have the goal of creating vibrant
educational settings, instead it is to survive. And the
histories of the policies that are related to school
funding are particularly relevant to understanding
the current context.
RECENT HISTORY OF EDUCATION FUNDING
IN CALIFORNIA
Before 1971 funding for schools in California came
primarily from local city and county property taxes
directly to the local school districts. However, this
caused wide variations in the amount of funding that
school districts across the state received. Schools in
communities with higher home values had more money
to spend on education than schools in communities
with lower home values. This led to major changes in
how the State funds schools, and three major changes
are discussed below:
++
In 1971 the Serrano v. Priest decision in the
California Supreme Court ruled that it was
unconstitutional to have such variation in the
funding of schools, and that the state must
transition to having more uniformity in school
funding. From this ruling the state created
Revenue Limits for each school district in order
to equalize the funding received.
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Relevant Terms for the
California School Budgets:
1. REVENUE LIMITS – Per pupil funding
provided to the school districts from
the State’s general fund and local
property taxes
2. TIER III FUNDING – Categorical funding
from the State that can be redirected for
other purposes by school districts
++
In 1978, Proposition 13 was passed that limited
the amount of property taxes to 1% of assessed
property value that limited the amount of local
funding that could go to schools2.
++
In 1988, Proposition 98 amended the constitution to assure that a significant portion of the
state General Fund would be used to fund
schools.
The combination of these three things is a major factor
in understanding how schools are funded in California.
Below we explore more detailed explanations of some
of the outcomes of these factors and the State’s current
funding approach.
REVENUE LIMIT FUNDING
The biggest funding category for school districts is
Revenue Limits (RL). Revenue limits are the State’s
response to needing to equalize the funding available
to school districts across the state. LAUSD’s RL is made
up of local property tax and state funding and is the
2. Weston, M. (2010). Funding California Schools: The Revenue
Limit System. The Public Policy Institute of California, p. 8.
8
PART I: FUNDING CALIFORNIA’S SCHOOLS
largest source of unrestricted funding for LAUSD. It
funds all the basic programs of the district and can be
spent with few restrictions. Most of this money is spent
on employee salaries and benefits.
The amount of LAUSD’s Revenue Limit is a unique
number provided by the state. Local tax dollars are
collected for schools to comprise the first portion of
the Revenue Limit. Those local communities that are
comprised of residents with higher incomes typically
contribute more to the Revenue Limit than do those
communities that are comprised of lower income
residents. The state makes up the remainder of the full
Revenue Limit that is not contributed by local tax dollars. However, with the current recession the state does
not always have the funding to pay for its full share of
the RL. Therefore, the state may defer payment until a
later year or default on a payment. If the state faces
deficits, defers or simply doesn’t give a cost of living
adjustment, the RL total amount suffers such that local
school districts do not receive the funding they need to
support their schools. In the case of LAUSD, its RL is at
the mercy of the State budget.
HERE IS HOW THE REVENUE
LIMIT WORKS:
1.
After the Serrano v Priest (1972) decision,
each district was given a unique revenue limit
in an effort to equalize pre-existing differences
in funding. This assisted districts each year
when extra money was available.
2.
A district collects its local share of property
taxes and then the state makes up the
difference-- similar to filling a glass of water.
With California having faced severe cutbacks
in its tax revenues as well as corresponding
cuts, the state has not able to provide the
necessary amount of funding to get each
district to reach its revenue limit. Therefore,
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there is a deficit in school funding. Schools are
not getting the funding they need to operate.
Advocates should be aware that when the state budget
defers a portion of its payments to schools in any fiscal
year to a later fiscal year, school districts that rely
more on the state are impacted more than districts that
receive more of their revenues from property taxes.
Below is an illustration of how Revenue Limits work and
how one school district may receive more state aid
than another district.
DISTRICT A: HIGH PROPERTY
DISTRICT B: LOW PROPERTY
Property Tax
Property Tax
Red equals the deferred amount by the state. Even
though both districts have the same revenue limit, the
low property tax district gets more money from the
state than the high property tax district. Generally, our
lowest property tax areas are where our lowest
income students live. Also note that advocating for
change in local Revenue Limits is an issue that has to
be taken to the State, rather than local government.
PROPOSITION 98 FUNDING GUARANTEES
Prop 98 amended the California Constitution to require
that the State spend a minimum amount of its general
fund budget on education. The goal was to ensure
that education was prioritized within the state budget
however it also allows education funding to fluctuate
with the annual variations in state tax revenues.
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PART I: FUNDING CALIFORNIA’S SCHOOLS
++
++
Categorical Funding
When the state has high revenues the education budget should go up, but when revenues
to the state go down, so does funding for
education.
Not all school districts are the same.
Deferrals: There are also times when the revenues are so low that the Prop 98 guarantee
has been suspended. During these years, the
state tracks what is owed to the school districts and when revenues increase, payments
are made to the districts (in order to fill the
funding gap).
The Legislative Analyst’s Office has a primer
on Proposition 98 found at: http://www.lao.
ca.gov/2005/prop_98_primer/prop_98_
primer_020805.htm
LOTTERY FUNDING
The lottery was passed by voters who wanted to help
schools by having a percentage of state lottery earnings go into local district budgets. In 2010 and 2011
the state lottery put in approximately $1.1 billion and
LAUSD received 90 Million of that amount. However,
the lottery supplies only between 1 and 2% of
LAUSD’s General Fund. Lottery funding is accounted
for in the category of “other state funding,” among
other state income.
CATEGORICAL FUNDING
There is a complex formula that accounts for specific
needs of school districts. For example, some school
districts may have a high number of special education
students, while other school districts are small and
require higher per pupil expenditures because they do
not benefit from economies of scale. The funding that
school districts receive to pay for the specific needs of
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Small rural districts may require higher
per pupil funding because of set costs.
The costs of buildings and utilities exist
in schools regardless of the number of
students enrolled. Therefore in rural
communities where enrollment is lower,
the cost per pupil will be higher in order
to pay for the set costs affiliated with
running the schools (such as buildings,
utilities and a set number of teachers).
++
Larger school districts may require additional funding because they have larger
numbers of students with special needs
such as ESL or special education or
because of the need to pay employees
for a higher cost of living in larger cities
rather than smaller towns.
the population in particular districts come in the form of
“Categorical Funding.”
In the last few years the state has relaxed its policies
to allow school districts to make decisions about the
best use of some of its categorical funding. California’s
school budgets have been cut and these cuts have
sometimes caused schools to have a deficit in some
categories of funding and a surplus in other categories
of funding. In 2009, the state legislature temporarily
relaxed restrictions on how some of these funds could
be used; and this change is in effect until 2014-2015.
This change is categorized into 3 tiers:
++
Tier I funding maintained for its original purpose and at its original funding level
10
PART I: FUNDING CALIFORNIA’S SCHOOLS
++
Tier II funding was reduced, but the purpose
of the funding did not change
++
Tier III funding gave school districts flexibility
to use the funding for whatever reasons
were most important for that school district.
However, the funding for Tier III categories
was reduced overall.
With Tier III funding, school districts are still provided
with the funding by categories, but the school board at
a regularly scheduled meeting with public input, can
change how they allocate those funds.
Additionally, for each of the categorical funding streams
there is flexibility in the ways that funding can be used
that fits within the intended goal of the restricted funding.
Information about how the funding can be used can
be found on the California Department of Education
website (http://www.cde.ca.gov), under the “Finance
and Grants” and then “Categorical Programs” tab.
PLEASE NOTE: Policies and laws are subject to
change and in 2012 Gov. Brown has proposed a
change that would remove restricted funding from the
state budget altogether, and use a per pupil formula
that adjusts for ESL and eligibility for free and reduced
lunch (weighted student formula). This would constitute
a major funding shift in how schools districts are
funded, essentially lifting most of the restrictions on how
state funding could be used.
FEDERAL FUNDING
On a statewide basis, California received $7.7 billion
in federal funding for K-12 education in 2011-2012.
LAUSD’s portion of this money is $2.036 billion.
Federal funds account for about 10% of the annual
revenues in local school districts in general and
for approximately 15% of the annual revenues in
LAUSD. Federal funding is driven by the Department
of Education’s focus on promoting educational excellence and creating equal access to education. Almost
all federal funding pays salaries and benefits for
specific policy goals decided by federal legislation.
Primarily their funding mechanisms focus on access to
education for low income youth and youth with
special needs.
BELOW IS A LIST OF CATEGORICAL FUNDING STREAMS PROVIDED TO LAUSD:
Targeted Instructional Improv Grant (AB825) Class Size Reduction (K-3)
California State Lottery
ROC/Skills Center Entitlement
Supplemental Hourly Program School/Library Improvement Block Grant
Instructional Materials Block Grant
Year-Round School Operational Grants
Deferred Maintenance Funding
Prof Dev Block Grant AB825 & Instr Buyout
School Counselors Grades 7-12
Class Size Reduction (9)
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$460.6
$155.0
$73.7
$56.9
$58.0
$43.6
$35.5
$14.1
$26.1
$23.2
$16.7
$12.3
Arts & Music Block Grant
$8.8
School Safety & Violence Prevention Programs
$7.7
CAHSEE Intensive Instructional Services $6.1
Mandated Cost Reimbursement
$0.0
Staff Development - Reading/Math
$5.4
Gifted and Talented Students
$4.5
Pupil Retention Block Grant AB825
$4.3
Charter Categorical Block Grant
$6.8
Pupil Assessment$3.9
California Peer Assistance & Review Program $2.6
All Other State Revenue, inc remaining Gov Props
$22.6
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PART I: FUNDING CALIFORNIA’S SCHOOLS
++
Title I funding (Improving The Academic
Achievement of the Disadvantaged, 1965)
is the basis for much funding to low income
youth. These funds provide services such
as free and reduced lunch, and dollars for
support services for low income students.
Title I grants to LAUSD include basic grants,
migrant education grants, early education,
and school improvement grants. Currently this
funding is often listed as No Child Left Behind
Funding, because of the federal education
plan to improve public schools.
++
Special Education funding is also provided
from the federal government. This funding
stream is intended to ensure that people
with disabilities are fully integrated into the
educational environment. Special education
grants to LAUSD include “Basic” grants as
well as several preschool grants.
++
Additional federal support includes funding
for high quality teaching/administration,
professional infrastructure development.
Other sources of federal funds are Medicare
Part D Subsidy, Medi-Cal, and other federal
funds that are used for the benefit packages
of retired employees.
Because federal funding begins with Congress, it is
up to local representatives to hear about the issues at
hand which can then be taken to Washington D.C.
Being in California is advantageous because of its
large delegation within Congress.
PROPERTY TAXES help to comprise the Revenue Limits
within a district. However, property taxes have been
restricted by the implementation of Proposition 13
since 1978. Prop 13 capped property taxes at 1% of
the assessed value and capped increases to assessed
value of a home at no more than 2% per year. Further,
it was designed to put limitations on other ways to
increase local taxes.
GENERAL OBLIGATION BONDS are used to fund
capital improvements and building projects. General
obligation bonds are issued by the district and often
have a tax levied in order to pay off the bond. The
LAUSD website indicates that in 2012, there have
been four voter approved general obligation bonds
that total $13.6 billion since 1997. The District is one
of the largest issuers of general obligation bonds in
California and the nation. To provide oversight of the
use of these bonds, there is a Citizen’s Bond Oversight
Committee. Information about general obligation
bonds and the Citizens Bond Oversight Committee can
be found on the district’s Facilities Division website:
www.laschools.org.
PARCEL TAXES are another way to raise revenues at
the local level. Cities can put a parcel tax on the ballot
that allows them to tax, not based on property values
but on property ownership. However, these taxes
require a 2/3rds vote from the constituency.
++
LAUSD has attempted on several occasions
to pass a parcel tax measure. For example,
there was an unsuccessful 2010 bid to have
the voters approve a $100.00 parcel tax that
would raise $9 million over 4 years. There is
another bid to have a parcel tax placed on the
2012 ballot.
++
Parcel taxes can be designated for a specific
purpose such as class size reduction, for
music, or for some other specific purpose.
LOCAL FUNDING
Local funding for LAUSD generally comes from
property taxes (which make up the local part of
Revenue Limits), General Obligation Bonds and
Local Parcel Taxes.
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12
PART I: FUNDING CALIFORNIA’S SCHOOLS
Parcel taxes can be challenging to implement because
they have to be specifically approved by the voters.
Politically parcel taxes are sometimes challenging
because they are a flat tax with no adjustment for the
size of a parcel or purpose of the parcel. A person
owning a single home would pay the same tax as
a large business on another parcel. However, there
are some exceptions made as part of the parcel tax.
LAUSD’s 2012 proposal currently includes an exemption for low-income senior citizens who own property.
CONCLUSION
With much of the funding coming from state sources it
is important to identify whether the target for advocacy
is LAUSD or the State. Also understanding the limitations of the funding is important to setting a campaign
strategy to achieve goals.
This section provided an overview of the types of funding that are available within LAUSD and how these
different funding streams can be used. The next section
will explore in greater detail the budget items that are
within LAUSD and how the budget is laid out.
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Part I:
Key Questions for Advocates
1.
What are the potential sources of funding
related to my campaign goals?
Are they federal, state or local? Further, given
the source of funding, which body would
I need to lobby to change how the funding
is used?
2.
Is the funding restricted or unrestricted?
Whether restricted or unrestricted have I
identified how the funding can be used?
a. Are they part of the tiered revenues?
b. What are the actual restrictions on
the funds?
NOTES
13
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PART II: Understanding Financial Documents
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PART II: UNDERSTANDING FINANCIAL DOCUMENTS
To explore the budget itself, this curriculum utilizes the
LAUSD 2011-2012 Budget as its “textbook.” Financial
materials related to the LAUSD’s budget can be found
at the LAUSD’s Chief Financial Officer’s website:
http://notebook.lausd.net/portal/
page?_pageid=33,175012&_dad=ptl&_schema.
KEY ASPECTS OF THE LAUSD BUDGET
ÒFundsÓ are budgets for distinct
categories of revenues that are
characterized by how the money
can be used either by state
law or by local school board
determination.
One of the most important factors in understanding
the budget is the fund structure. The fund structure
organizes the revenues and expenditures for LAUSD.
California school districts are required to organize their
financial reporting in the form of funds.
An advocate should consider each fund of LAUSD’s
27 funds as a separate account. Within all these funds
lie the details of the operations of LAUSD. If you can
understand the layout of one fund, you can apply this
knowledge to any of the funds in the district. The total
listing of funds appears on the next page. Most of
these separate funds serve specific purposes utilizing
categorical funding sources. For categorical funds,
income and expenditures are either prescribed by law
or restricted by the board of education for a specific
purpose. If the board has restricted the money, it can
likewise remove the restriction. Also note that funding
for Adult Education and Child Development draw
down independent state, federal and local revenues;
they also rely partly on the General Fund to supply
their full operating budget.
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16
PART II: UNDERSTANDING FINANCIAL DOCUMENTS
OPERATING FUNDS
General Fund
Basic instruction, support, administration with restricted and unrestricted funds
Adult Education Fund
Federal, state, and local revenues restricted to adult education programs
Child Development Fund
Federal, state, and local revenues for Early Childhood Education Centers
Cafeteria Fund
Federal, state, and local revenues for district’s food services program
Deferred Maintenance Fund
Major maintenance projects for plumbing, heating, air conditioning, electrical, roofing,
floors, paint
CAPITAL PROJECTS FUNDS
Building Fund
Sale of bonds before 1997
Building Fund – Proposition BB
April 1997 local school bond measure for construction, repair, modernization
Building Fund – Measure K
November 2002 local school bond measure for construction, repair, modernization
Building Fund – Measure R
March 2004 local school bond measure for construction, repair, modernization
Building Fund – Measure Y
November 2005 local school bond measure for construction, repair, modernization
COUNTY SCHOOL FACILITIES FUNDS
County School Facilities Fund
– Proposition 1D
November 2006 state school construction bond
County School Facilities Fund
– Proposition 55
March 2004 state matching funds to Measure R above
County School Facilities Fund
– Proposition 47
November 2002 local school construction, modernization, facility hardship grants
County School Facilities Fund
– 1A
2002 facility construction, modernization
Capital Facilities Account Fund
Developer fees
State School Building LeasePurchase Fund
Relief for over-crowding
SPECIAL RESERVE FUNDS SPECIAL RESERVE FUNDS
Special Reserve Fund
Land purchase, ground improvements, construction, improvements, new acquisitions
Special Reserve Fund – FEMA
– Earthquake
January 1994 Northridge Earthquake FEMA funds
Special Reserve Fund – FEMA
– Hazard Mitigation
FEMA funds with 25% district match for retrofit/replacement of overhead lighting and suspended ceilings
Special Reserve Fund –
Community Redevelopment
Agency
Reimbursements of tax revenues for certain redevelopment agencies based upon agreements;
restricted to capital projects within redevelopment areas
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17
PART II: READING THE BUDGET
DEBT SERVICE FUNDS
Bond Interest and
Redemption Fund
Payment of principal and interest on BB, K, R bonds; income derived from ad valorem taxes on
property
Tax Override Fund
Accumulation of resources from ad valorem tax levies for repayment of State School Building
Aid Fund
Capital Services Fund
Accumulation of resources from ad valorem tax levies to repay Certificates of Participation
(COP) and long term leases agreements; revenues from operating transfers, user fees, and
investment income
INTERNAL SERVICES FUNDSNDS
Health and Welfare
Benefits Fund
Claims, administrative costs, insurance premiums for district’s health and welfare program
Workers’ Compensation SelfInsurance Fund
Claims, excess insurance, administrative costs
Liability Self-Insurance Fund
Claims, excess insurance, administrative costs
FIDUCIARY FUNDS
Attendance Incentive Reserve
Fund
50% of salary savings from substitutes to reward teachers for not being absent
STUDENT BODY FUNDS
School Sites
Each school has an account to hold student body funds – not part of the budget, but reported in
the district’s Comprehensive Annual Financial Report
READING THE BUDGET
In this section we lay out the basic parts of the budget that will
help clarify where to look first for information that you need.
1. LETTER FROM THE CHIEF FINANCIAL OFFICER
TO THE BOARD OF EDUCATION ABOUT THE
SUPERINTENDENT’S FINAL BUDGET: This is a
good place to get the basic overview of the
budgeting decisions for the given fiscal year.
The letter provides an overview of the current
fiscal state, the process to get to the budget
and an overview of the budgeting decisions
made. There is also information about any
policy changes that have taken place.
2. TABLE OF CONTENTS: This is a great place to
start to understand the budget and where to
find the information that is most relevant to
your question.
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3.
Some of the key items that may be relevant to
an advocacy campaign include the following:
a. SECTION I: INTRODUCTION AND SUMMARY
i. Significant policies affecting the district’s budget
ii. Description of funds used by the district
iii. Budget and Fund Highlights
b. SECTION II: FINANCIAL DETAILS: In this section
the revenues and expenditures are provided
by fund type and whether the funding source is
restricted or unrestricted.
i.
ii.
iii.
iv.
perating Funds (E.G. Salaries, supplies, etc)
O
Capital Funds (Building and facilities needs)
Debt Service Funds (Bond, Tax and Capital Services)
Internal Service Funds (Health and Welfare, Workers
Compensation and Liability)
v. Fiduciary (Attendance Incentive Reserve Fund and
Annuity Reserve Fund)
18
PART II: READING THE BUDGET
c. SECTION III: APPENDICES: This section includes
a variety of resources that help illuminate
information about the district itself. Below is the
introduction describing each of the appendices
in the 2012 Budget.
This Section provides information related
to a number of areas of importance with
regard to the district’s budget for the 201112 fiscal year. Included in this Section are
the following:
APPENDIX A – BUDGET PRINCIPLES AND
PROCESSES: This section explains the general
principles used by the district in preparing its
budget, and the process for developing and
amending the budget.
APPENDIX B – HOW EDUCATION IS FUNDED
IN CALIFORNIA: This section presents an
overview of California’s complex funding mechanisms, and summarizes significant legislation that
has impacted K-12 funding since the 1970s.
APPENDIX C – AVERAGE DAILY
ATTENDANCE (ADA): These pages provide
information regarding Average Daily Attendance
(ADA), which is utilized by the State to allocate
many funding sources to local school districts.
ADA is based almost entirely on actual in-seat
attendance, without reference to most excused
absences. The page provided reflects information
regarding estimated 2010-11 ADA data.
APPENDIX D – REVENUE LIMIT
INFORMATION: The Revenue Limit is the single
APPENDIX E – SCHOOL STAFF AND
RESOURCES: These pages provide information
related to the staffing of district schools, based
on existing allocation formulas. This information
is provided for elementary and secondary
schools, magnet schools, options schools, special
education schools and programs, adult schools,
regional occupational centers and programs,
and other district schools for which the allocation of positions and other resources occurs.
Information is also provided regarding the
allocation of support staff, instructional materials,
and other supplies to district schools.
APPENDIX F – ENROLLMENT TRENDS: The
district uses data on live births in Los Angeles
County and historical grade retention ratios,
as well as economic factors and other relevant
information, to project enrollment. Estimated
enrollments in grades 1 through 12 for the 201011 through 2012-13 school years are calculated
using various scenarios, generally involving
weighted and true averages. The grade retention
ratio uses past trends to estimate student progress
from grade level to grade level. Enrollments in
kindergarten are calculated as a percentage
of live births in Los Angeles County five years
earlier. Separate enrollment charts are provided
for regular district schools, fiscally independent
charter schools and total district wide enrollment.
APPENDIX G – BUDGET AND FINANCE
POLICY: These pages provide the complete text
of the district’s Budget and Finance Policy,
as adopted by the Board of Education in
June 2004.
largest funding source for California school districts. These pages provide information regarding
the various revenue limit rates.
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19
PART II: READING THE BUDGET
The table on page 22 provides overall balances
and expenditures for each of the major funds. You
provide the complete text of the district’s Debt
will see that there are comparison columns starting in
Management Policy, as adopted by the Board of 2007/2008 going through the current fiscal year. For
Education.
the previous year, there is a preliminary number for the
third quarter report, “3rd Interim Amount.” For the curAPPENDIX I – CAPITAL BUDGET: These pages
rent fiscal year, there is an approved amount that was
provide information regarding the district’s capital voted on, and then there is an estimate of the amount
facilities plan and other major capital expenditures that takes into consideration updated fiscal information.
anticipated during the next several years.
The rows are divided by the funds and are broken
down by the following:
APPENDIX J – NOTES: These pages provide
information regarding a number of items through- THE “SOURCES OF FUNDS” INCLUDE:
out the budget.
++ Beginning balance – existing balances from
previous years or other sources. This may
APPENDIX K – GLOSSARY AND ACRONYMS:
include reserve funds that must be kept in the
These pages provide definitions of terms and
Fund Account.
abbreviations appearing throughout the budget
document.
++ Revenue – the money coming from this year’s
funds
APPENDIX H – DISTRICT DEBT
MANAGEMENT POLICY: These pages
EXAMPLE OF BUDGET TABLES
++
Total Revenues – the combination of the
beginning and new revenue
The budget document has a series of tables that start
THE “USES OF FUNDS” INCLUDE:
with summary tables and get progressively more
++ Expenditures – the money that is being spent
detailed about the revenues, expenditures, and subfunds. This section will provide examples of some of
++ Balance – what is left over
the types of tables provided in the LAUSD Budget that
++ And the total use which includes both of these
will help advocates identify the fiscal information that is
numbers.
readily available.
The Multi-Year General Fund Projections looks at revenues by the general source of the funding such as State
Revenue Limit funds, federal funding, then other state,
and other local revenues and other financial sources.
The expenditures section is broken down by types of
expenditure such as employee type, supplies, services
or other expenditures. This table is also provided by
unrestricted and restricted funds separately.
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20
PART II: READING THE BUDGET
MULTI-YEAR PROJECTION GENERAL FUND
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21
PART II: READING THE BUDGET
SUPERINTENDENT’S 2011-12 FINAL BUDGET
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22
PART II: READING THE BUDGET
A section of tables looks at revenues of the various sub funds under each type of overarching fund. The example
below illustrates that one can locate the type of fund and sub-fund most likely to relate to a particular campaign.
One is also able to see the increases and decreases of the funding for the previous four years for the fund and
sub-funds.
SUPERINTENDENT’S 2011-12 FINAL BUDGET
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23
PART II: READING THE BUDGET
Within the IB pages are tables that disaggregate the revenues by the fund, whether the revenues are restricted
or unrestricted and the specific source of the funding. The table below is one example. The table disaggregates the sources of unrestricted funding to the General Fund.
SUPERINTENDENT’S 2011-12 FINAL BUDGET
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24
PART II: READING THE BUDGET
The table below illustrates the budget breakdown by both sources of funds and expenditures. The expenditures
portion is provided by the category of expenditures such as certified or classified salaries.
SUPERINTENDENT’S 2011-12 FINAL BUDGET
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25
PART II: READING THE BUDGET
OTHER MAJOR FINANCIAL DOCUMENTS
AND RESOURCES
LAUSD BUDGET REALITIES: This website was devel-
oped to provide current information on the state of the
budget. It also provides analyses of the impact of the
State Budget on the LAUSD budget as well as how
they both impact instruction and personnel. This is a
good place to start to find information about LAUSD’s
budget. http://budgetrealities.lausd.net/
THE FISCAL OUTLOOK: This document provides
PUBLIC RECORDS REQUESTS
If the information needed for your advocacy campaign
is not available through any of the published and
publically available documents, it may be necessary to submit a public records request. Under the
California Public Records Act, public agencies are
required to provide immediate access to the public for
documented information. This act pertains to all state
and local agencies but does not fully cover courts,
legislature, private non-profit organizations and federal
agencies. Key requirements include the following items:
++
Public agencies are required to provide
prompt access and assistance when a request
is made
++
Agencies are allowed 10 days to decide if
copies can be provided
++
Agencies must always allow access to a
physical form of the records
THE COMPREHENSIVE ANNUAL FINANCIAL
REPORT: This report provides information on the
++
Fund balances and reconciliations of accounts after
the year ends. It provides a good overview of how
funding was actually utilized over the course of
the full year. http://notebook.lausd.net/portal/
page?_pageid=33,175012&_dad=ptl&_schema
Access is free, but if copies of documents are
requested, agencies may charge a copying
fee
++
Agencies must have a legitimate reason for
exemptions. These exemptions include items
such as personnel or medical records, police
investigative work, and others. For specific
information on exemptions, a guide to the
California Public Records Act can be found at:
projections of the revenues and expenditures that the
state will have in the upcoming year and for 3 years
after this. It is used widely by the legislature and local
agencies who are reliant upon state funding for their
budgetary needs. The Fiscal Outlook can be found
at: http://www.lao.ca.gov/reports/2011/bud/fiscal_outlook/fiscal_outlook_2011.aspx.
THE QUARTERLY INTERIM FINANCIAL REPORTS:
Quarterly Interim Financial Reports are provided as
a way to provide ongoing tracking of actual and
projected revenues and expenditures.
http://notebook.lausd.net/portal/
page?_pageid=33,175012&_dad=ptl&_schema
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http://controller.laCity.org/HELP_for_the_Public
index.htm
26
PART II: READING THE BUDGET
Tips for an Efficient Public
Records Request
1.
Make your inquiry simple – and plan to
make every request in writing so that
you keep a record of your request.
2.
Include date limits on your requests.
3.
If you are concerned about the copying
fees, request to be informed of the total
costs prior to having the request fulfilled.
Agencies charge different fees for
copies.
4.
You are entitled to request a written
response within 10 days
Part II:
Key Questions for Advocates
1.
2.
How much money has been allocated for
the budget items I need?
Do I need additional documents or
resources? If so, what else do I need
to know and where might I find this
information?
NOTES
CONCLUSION
In this section we are seeking to help advocates
understand the basics of reading the budget to find the
information they need. It is also likely necessary to go
beyond the budget and seek information from additional
fiscal documents. However, it is necessary to identify
what you can and cannot find in the budget itself as a
starting point and this section explored that goal.
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27
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28
PART III: Example of Fiscal Research
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29
PART III: EXAMPLE OF FISCAL RESEARCH
Below is an example of understanding how to identify
fiscal information in the budget and in auxiliary fiscal
documents.
STARTING A SAFE PASSAGES PROGRAM
You are interested in improving safety for youth arriving and leaving your local elementary school. In your
community you are finding that children do not feel
safe leaving their school in the evening and walking
even a few blocks to arrive home safely. Your organization wants LAUSD to provide a Safe Passages type
program to increase safety for these children.
RESEARCH QUESTION: What funding does LAUSD
have for developing a Safe Passages program at my
local school?
RESEARCH: To identify the program specific funding
To identify how the funds can be used, one can go
to the California Department of Education website
(http://www.cde.ca.gov/) and search for this funding.
It comes up under the Learning Support tab and the
“Before and After-School” sub-tab.
On this page we find that this is funding to be used to
augment the learning of students in elementary and
middle schools. The programs should be coordinated
with the school curriculum and they should run on
every day that the school is open, a minimum of 15
hours per week, and always until 6pm. This is a grant
that is awarded to school districts, so the specifics of
the programs must be laid out in advance of applying
and thus can be specific to the needs of the district.
However, this means that this funding is likely not easily
changed. Programs will likely have to run as they are
outlined in the grant. Further, this funding is not listed in
the Budget at Tier III funding and thus is unlikely to be
reallocated to other purposes.
opportunities, it is helpful to look through the specific
revenue and expenditures within the budget to identify
any categories that may be specific to your topic. In
particular, starting with Restricted Funding may be
relevant to the program you want to develop. Also,
specific programs or funding streams may not be in
places that we would intuitively seek them. However,
using the “search” button has proven to be a great tool
for quickly locating information. We did both of these
techniques to identify that there is a specific funding
stream for “After School Education and Safety.”
OUTCOME: On page II – 40 of the LAUSD Budget
begins the list of the revenues that are part of the
General Fund. On this list of State Sources of Restricted
Funding is the After School Education and Safety
(ASES) funding source. In this funding stream for
2011-2012 is $74 million dollars. This is one of the
larger sources of restricted funding in the budget.
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30
PART IV: The Budgeting Process for LAUSD
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31
PART IV: THE BUDGETING PROCESS FOR LAUSD
OVERVIEW OF THE BUDGETING PROCESS
One of the key factors in advocacy related to the budget is understanding when and how to engage in the
budgeting process. Every jurisdiction (e.g. LA City, LA
County) has a process with shared similarities as well as
difference. This part of the curriculum guide outlines the
process that LAUSD uses to develop its budget and highlights some key points at which advocates can engage.
The LAUSD budgeting process lasts for approximately
12 months, however November through June is the
timeframe in which many advocates work to influence
the budget for the following year.
In November the district budget begins to be planned
in earnest in response to the state Fiscal Outlook
becoming available. The Fiscal Outlook provides
projections of the revenues and expenditures that the
state will have in the upcoming year and for 3 years
after this. It is used widely by the legislature and local
agencies who are reliant upon state funding for their
budgetary needs. The Fiscal Outlook can be found
at: http://www.lao.ca.gov/reports/2011/bud/fiscal_outlook/fiscal_outlook_2011.aspx.
Over the period from November through June,
there will be several versions of the budget put out
by the Superintendent’s office and then discussed
at the school board meetings. The revisions will be
in response to community input about the priorities,
school board member’s priorities, and changes in the
fiscal outlook, among other things. The school board
must ratify the budget by June 30th.
The district offers a calendar of hearings and working
meetings for public input. You can find this calendar
at: http://laschoolboard.org/. Advocates can also
meet individually with school board members or their
staff. During this process, remember that school board
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officials must follow open meeting laws, so don’t expect
that multiple board members have talked with each
other about an issue unless it is in an open meeting.
LAUSD School Board officials
must follow open meeting laws,
so donÕt expect that multiple
board members have talked with
each other about an issue unless
it is in an open meeting.
The Budget Balancing Plan
The Budget Balancing Plan shares with the public
the priorities for the LAUSD for the following
year. Community members can respond to
these priorities by testifying in the school board
meetings or by voicing their concerns with their
elected officials. For example, in February 2102,
hundreds of advocates protested the budget plan
that eliminated funding for Adult Education completely (doing away with this program in LAUSD)
and greatly reduced funding for Early Childhood
Education. Between testimony in the Valentine’s
Day Board meeting and the protestors outside,
the school board delayed a ratifying vote on the
budget and allowed the superintendent to reconsider plans for ways to balance the budget4.
32
PART IV: THE BUDGETING PROCESS FOR LAUSD
Below is a November through June calendar that highlights some of the major points for community input into the
budgeting process.
THE BUDGET PROCESS
NOVEMBER
-- The California Fiscal Outlook becomes
available. In this document there is an analysis
of the current fiscal year, and assessment of
the potential fiscal situation for the following
fiscal year. This document provides information
based only on the current laws and fiscal
status therefore, advocates may focus on
identifying different solutions to any current fiscal
challenges.
DECEMBER
-- The State Department of Finance releases
independent revenue estimates. These can
be used in conjunction with the November
California Fiscal Outlook to garner a realistic
vision of the types of policies that will impact the
budget.
-- LAUSD provides the First Interim Report of
current year revenues, expenditures and
balances.
JANUARY
FEBRUARY
-- LAUSD produces a preliminary budget for the
following fiscal year referred to as the Budget
Balancing Plan that responds to the state budget
and provides options to create a balanced budget.
Note that this could be released earlier if they
deem necessary to do so.
-- When the State is reducing funding to LAUSD,
this is considered the “Worst Case Scenario” or
“Doomsday” Budget.
-- The numbers that are used to produce the
state budget plan as well as the LAUSD
budget are preliminary
Example: according to the Public Policy
Institute of California (20123), 60% of the
State General Fund is highly dependent on
personal income taxes, and the actual amount
of collected income tax will not be available
until at least April 15.
-- Additionally, other items may change the
projections of how much revenue will be
available in the General Fund to go to school
districts.
-- The Governor’s proposed state budget for the
following fiscal year starting July 1, is presented
to the CA State Legislature.
-- During this time, education and other bills are
introduced to the Legislature.
-- Also, in the last part of the month, the state
Department of Finance presents a state budget
and the Legislative Analyst’s Office provides an
initial review.
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3. Rueben, K & Weston, M. (2012). California Budget.
The Public Policy Institute of California.
4. http://latimesblogs.latimes.com/lanow/2012/02/laschool-board-delays-vote-on-massive-budget-cuts.html
33
PART IV: THE BUDGETING PROCESS FOR LAUSD
THE BUDGET PROCESS (cont.)
MARCH
-- LAUSD provides Second Interim Report of
current year revenues, expenditures and
Balances. The school board reviews next year’s
budget planning estimates.
-- Based on the Budget Balancing Plan, LAUSD
must send preliminary lay-off notices to
teachers. Teachers may request a hearing
about the layoff.
APRIL
-- The Board of Education discusses recommend-
ations for critical funding issue and provides an
opportunity for community input regarding the
priorities for the following year.
MAY
-- By mid-May the Governor releases the revised
budget proposal, taking into account updated
information on revenues and expenditures. This
draft of the budget is presented to the Board
and the public.
-- The Final Budget, taking into account the new
data from the state and the critical funding
issues, is presented to the board.
JUNE
-- A public hearing prior to the final adoption of
the budget is required.
-- The board votes on its adoption
-- Adoption of the Final Budget by June 30th.
-- This “Final Budget” must be reviewed and
approved by the LA County Office of Education.
-- June 30th is generally considered the end of the
process, however, the budget must be approved
both by the County Office of Education and the
State. These reviews typically do not result in an
effort to change the ratified budget. However,
if these entities decide not to ratify the budget,
the process may be drawn out until November
before there is a final budget.
OCTOBER - NOVEMBER
-- By 10/31, the Board must set the timeline for
developing the budget for the year.
-- From the previous year’s budget:
By October 8th, the LACOE Superintendent
notifies the state Superintendent of approval
or disapproval of all district budgets.
Districts that have disapproved budgets will
have a Budget Review Committee created to
give recommendations by 10/31
-- From the previous year, if the district’s budget is
not approved, then by 11/30 LACOE Superintendent develops and adopts a fiscal plan.
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34
PART V: 2012-2013 Budget Analysis
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35
PART V: 2012-2013 BUDGET ANALYSIS
The following is a summary and analysis of how the
district addressed the multiple goals and priorities of
its constituents in the midst of declining revenues for
education spending in the city and state. This analysis
is being included as an example of how to understand
the district’s process of addressing a volatile fiscal
environment through various means and developing a
budget that continues to provide services to LAUSD’s
students.
At least over the past 5 years LAUSD has had losses
in revenues. These devastating losses have significant
impact on educational services, staffing at LAUSD and
certainly on the overall educational quality available
to students and families.
In February of each year, LAUSD must issue a preliminary budget that illustrates what the projected revenues
will be for the following fiscal year and how the district
will address any deficit in funding. In February of
2012, LAUSD faced a $557 million dollar deficit for
the 2012-2013 school year. This deficit was due to
several factors including:
++
Declining enrollment, without concurrent
reductions in costs
++
Higher than expected expenditures
++
Expiring one time resolutions to the budgets
in the past that included things such as negotiated furlough days
In the 2008-2009 school year the LAUSD total
revenues were over 11.6 billion dollars and was up
in 2009-2010 to $13.8 billion; in 2012-2013 the
authorized total revenues now stands significantly less
at $8.5 billion dollars. A significant amount is being
lost in the district’s funding for Capital Funds In 20122013 the amount of money budgeted from Building
Fund – Measure R comes close to a billion dollars less
than was attained in 2009-2012. For Building Fund –
Measure Y, that revenue allocation for 2012-13 is also
lower than previous years. Under Operating Funds,
the current year’s allocation for the Unrestricted Adult
Education Fund is also less than previous years.
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36
PART V: 2012-2013 BUDGET ANALYSIS
The final budget reflects how the LAUSD was able to compensate for the $557 million.
This can be seen in the following table:
DOLLARS TYPE BY FUND
Appendix A can be found on page III-77 of the
adopted budget.
TYPES OF FUNDS IN THE BUDGET
The following data uses the Authorized Amounts found
on page IB-7 of the 2012-2013 Final Budget.
As shown in the chart on the following page,
Operating Funds and Capital Funds (for buildings
and structures) account for 78% of the LAUSD’s
expenditures when combined. Operating Funds are
the primary funds used to operate the schools. Within
the Operating Funds are the General Fund, Adult
Education Fund, Child Development Fund, Cafeteria
Fund and Deferred Maintenance Fund.
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The Capital Funds are about 25% of the 2012-2013
budget and account for the proceeds of LAUSD’s Bond
sales. The bonds are used to build, repair and modernize schools. Because these are primarily bonds that
are voted on by residents, the time to work on bond
measures is when they are being placed on the ballot.
Debt Service Funds are used to pay taxes and interest
on Bonds and other funds that must be repaid. These
Funds account for 14% of the year’s authorized
expenditures.
Internal Service Funds are used for costs affiliated
with insurance for LAUSD employees, claims against
LAUSD, and the administrative costs to address them.
These funds account for 8% of the LAUSD Budget in
2012-13.
37
PART V: 2012-2013 BUDGET ANALYSIS
The Operating Budget accounts for over half of
the LAUSD Budget expenditures. Earlier in this curriculum there is an outline of the types of funds that
are included in the operating fund. However, for this
analysis it is important to realize that this is likely the
place where, at the district level, the use of the funding can be altered. In particular, the General Fund’s
unrestricted revenues are a good place for advocates
to identify changes in the use of funds.
EXPENDITURES BY FUND FOR 2012-13
Fiduciary Funds – 0%
On Page IB-7 is the breakdown of the operational
expenses for the 2012-2013 budget. As illustrated
below, the primary fund within the operating fund is
the General Fund; which is broken down into restricted
and unrestricted funding. Approximately half of the
Operating Fund Budget is for unrestricted General
Fund expenditures, whereas about 41% is comprised
of the restricted fund. There are relatively small
amounts of funding for both restricted and unrestricted
uses for adult education and for child development,
respectively.
OPERATING FUNDS EXPENDITURE
BY TYPE 2012-13
Internal
Service
Funds
8%
Debt Service
Funds
14%
THE OPERATING FUNDS
Child Development Restricted – 0%
Operating Funds
53%
Child Development
Unrestricted – 2%
Cafeteria Fund – 5%
Adult Education Restricted – 0%
Adult Education
Unrestricted – 0%
Capital Funds
25%
General Fund
Restricted
52%
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General Fund
Unrestricted
41%
38
PART V: 2012-2013 BUDGET ANALYSIS
REVENUES FOR THE GENERAL FUND
Focusing specifically on the General Fund, below, the
figure illustrates the basic sources of revenues for the
General Fund. As discussed earlier, the largest portion
of funding comes from the Revenue Limit, followed by
other State revenue sources. The Federal funding coming in forms such as Medicare and Title I Funding, and
provides just under a $100 million in funding, or under
20 % of the total General Fund.
GENERAL FUND REVENUES BY TYPE
2012-13
3000
2500
2000
1500
500
0
Uses of unrestricted resources in the General Fund are
found on page IB-17 of the Final Budget. These uses
are primarily for salaries and employee benefits with
by far the largest single amount going to pay certified
salaries (teachers, librarians, district administrators and
others). Another major expense is for classified salaries, including instructional aids, custodians, carpenter,
plumbers, and supervisors in these fields. And finally
employee benefits such as health insurance and workers compensation are large expenses. Other operating
expenses includes costs of contracts, utilities, rents
travel and instructional consultants. Capital Outlay
includes the cost of facilities, books and media to stock
libraries and equipment. These combined, total nearly
2.6 billion dollars in expenditures.
RESTRICTED FUNDING IN THE
GENERAL FUND 2012-13
1000
In Millions
GENERAL FUND
UNRESTRICTED EXPENDITURES
Capital Outlay
$27.0 – 1%
Revenue
Limit
Sources
Federal
Revenues
Other State
Other
Revenues Financing
Sources
Other Operating
Expenses $186.9 – 5%
Books and
Supplies
$140.3 – 4%
Classified Salaries
$406.3 – 12%
Certificated Salaries
$1,707.8 – 50%
Employee
Benefits
$899.7 – 26%
Other Outgo.
$60.8 2%
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39
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40
PART VI: Power Analysis
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41
PART VI: POWER ANALYSIS
This section of the curriculum is focused on Power
Analysis. We use some of the tenets of the Power
Analysis process developed by Strategic Concepts in
Organizing and Policy Education (SCOPE) combined
with Advancement Project’s experiences with power
analysis for fiscal policy advocacy.
SCOPE’s model of Power Analysis is sophisticated and
requires much greater detail than we will provide in
this curriculum. They describe their Power Analysis as:
Power Analysis is a visual and interactive tool that is
used to map and analyze power relationships in the
communities where we live or work. Challenging the
traditional “us” vs.“ them” analysis, this tool helps
participants look deeply at the range of perspectives
held by key players such as elected officials, allies,
and opponents.
For more information specifically about SCOPE’s
model and process for the Power Analysis, please
contact them directly for training at www.scopela.org.
Who should we target in our
budget focused advocacy?
What considerations should we
make in doing advocacy that
includes fiscal advocacy?
1. DEFINE THE PROBLEM AND HOW IT
RELATES TO THE BUDGET.
First note that this curriculum is designed to focus on
the LAUSD Budget as a whole. Therefore, it will not
focus on changing funding within particular schools,
nor does it detail state level advocacy. However, both
are referred to as they relate to advocacy at the district
level. Both of these are particularly important given that
much of the funding comes from the state, and the services are delivered at the school level. However, there
is much to be said about making district level advocacy
a priority. At the district level, your advocacy will likely
be directed towards particular programs or services for
particular groups of students in the district. There is an
opportunity to assure equity in how LAUSD funds educational programming among its jurisdictions and to
protect funding for programs that are important to you.
Even though the state sets the budget limits, it does not,
for the most part, determine how education is provided
at the local level. Therefore this power analysis section
will focus on the district level advocacy.
In this budget climate, many programs, interest groups,
and issues are in danger of losing some and sometimes
all of their funding as districts strive to close the growing budget holes they are experiencing as a result of
the looming deficit at the state level. For this reason,
this power analysis is predicated on the need for an
advocacy campaign to protect funding, restore past
cuts in funding, or to increase funding for underfunded issues.
IDENTIFY THE PROBLEM:
IDENTIFY AND RESEARCH YOUR ISSUE
As you consider your campaign, the first step is to
identify and articulate the issue that you care about. As
for any campaign, it is important when thinking about
budget advocacy that advocates develop an in-depth
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42
PART VI: POWER ANALYSIS
understanding of the basic statistics and information
about the program for which they are advocating. This
includes information such as the number of students
served, the student outcomes of the program, the
particular challenges that it faces, and who the key
players are who will help you in mapping out your
advocacy course of action.
FUNDING: IDENTIFY YOUR ISSUE’S
CURRENT FUNDING SOURCE AND ALL
POSSIBLE FUTURE FUNDING SOURCES
Further, in the current budget climate, a strong understanding of the benefits and challenges of the budget
climate for your issue at the state and local level will
help illuminate how to advocate effectively for your
issue. It does so by helping advocates understand both
the restrictions that the district has on its funding, and
the tradeoffs that advocates and the district are making
by supporting one program at the potential expense
of another budget item. Recall that there are both
restricted and unrestricted dollars in the budget. The
questions advocates can ask with regards to
funding are:
1.
Where does my issue’s current funding come
from in the LAUSD budget and in the state
budget?
2.
How much funding does my issue/ program
need to operate? What is the current deficit
for my issue that I will be advocating to fill, or
funding level that I wish to maintain?
3.
What are the other funding streams received
by LAUSD that could possibly fund my issue?
If the district does fund this issue, for each funding
stream, ask what other programs might experience a
funding shortage and how that will ultimately impact
education overall.
FOLLOWING THE MONEY
It is also very important to understand the current funding situation and the potential future funding situation
of your issue or program. Budget cuts could mean any
of the following scenarios for your issue, each of which
dictates a different strategy for advocacy. For instance
some common options are:
1.
Funding could be fully eliminated for specific
programs.
2.
Funding could be reduced and thus lead to
decisions about cutting services, eliminating
jobs, requiring furloughs for employees, or
shortening the school year.
3.
Funding could be shifted from another
program and could increase the budget in the
program for which you advocate.
4.
Knowing where your issue falls currently and
has the potential to fall further in the budget
process in terms of the above options will help
you to advocate for the current district and
anticipate and guard against future threats to
your issue.
2. SET YOUR AGENDA FOR THE BUDGET
AND IDENTIFY THE OPPOSING AGENDA.
Depending on what is at stake related to your issue,
you will want to identify what you are planning
to accomplish. Is it maintaining teachers with no
furlough days? Is it keeping the school year at its
present length? Is it saving a program? This may be a
changing target as the district negotiates its options for
addressing funding. Therefore the advocates must stay
aware of the dynamic work within the district.
It is important to also note the opposing agenda on
the issue that you care about, so that you are aware of
what the response will be to your goal.
43
PART VI: POWER ANALYSIS
Recall the Types of Funding
3. IDENTIFY THE KEY BATTLES OR STATE/
COMMUNITY LEVEL ISSUES THAT EXIST
AND MAY IMPACT THE POLICY.
1.
Unrestricted Funding from the State, local
property taxes and state sales taxes
2.
State or Federal Categorical Funding,
Some of those purposes include:
++
K-3 class size reduction
++
Home to school transportation
++
Middle and high school supplemental
counseling
++
Professional development
++
Supplemental funding for low-income
and English Language Learners
(Economic Impact Aid)
3.
Federal Categorical Funding, including:
++
Title I Funding which must be spent on
low-income students
4. IDENTIFY THE DECISION MAKERS.
++
Title III Funding which must be spent on
English Language Learners
++
IDEA Funding which must be spent on
special education students
Decision makers are people who are your targets for
advocacy because they will ultimately decide what
happens with your issue. Sometimes there are other
people who influence the decision makers, and you
may want to advocate with them as well; however it
is important to distinguish them from the people who
have the decision making power. For LAUSD, the
decision makers are often the same. They include the
Superintendent, school board members, and the staff
member(s) for the Superintendent who focus on your
particular issue. As of October 2012 decision makers
include:
There are often various issues taking place in the policy
and funding communities that may have an impact on
the issue that you are attempting to influence. These
may be things taking place at the state or at the district
or even federal level. For instance, there may be
policies that are changing such as a lawsuit that may
mandate funding for the services for which you are
advocating. It is important to track the status of the state
budget and expenditures to anticipate the ongoing
fluctuations in district funding. In other words, since
much of the local budget comes from the State: keep
an eye out for what budget issues may impact your
district.
a. Board of Education
i. Marguerite LaMotte (District 1)
ii. Monica Garcia (District 2)
iii. Tamar Galatzan (District 3)
iv. Steve Zimmer (District 4)
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44
PART VI: POWER ANALYSIS
v. B
ennet Kayser (District 5)
vi. Nury Martinez (District 6)
vii. Richard Vladovic (District 7)
1.
Who has the power? As we indicated earlier,
LAUSD budgeting decisions are developed
by the Superintendent and his or her staff
and then sent to the school board for
ratification. Therefore, the staff in the pertinent
programmatic areas have significant influence
on how the budgets are made. Identifying
who the key staffers are requires getting
to know your issue area and under what
funding mechanisms it is supported. However,
it is the school board that makes the final
decision about how funding is allocated.4
2.
How might an advocate understand whether
the person in power supports or is against
your issue? It may be discerned through news
articles, attending the school board meeting,
memos that are put out or through personal
meetings with the targeted person or her/his
staff members.
3.
Once advocates find out their targets’ position
on a funding issue, they can set their strategy
to either maintain their support or move the
decision maker closer to supporting their
campaign goal of increasing or maintaining
funding for a particular issue. Part of the
considerations are 1) the key battles, 2) the
allies and opposition, and 3) how all of these
factors relate to how advocates will set their
campaign strategy.
b. Superintendent John Deasy
5. IDENTIFY THE ORGANIZED OPPOSITION
AND ALLIES.
It’s important to understand not only what the opposing
agenda is, but also who your allies are and who your
opponents are. For the LAUSD, there are a number of
organizations who could be in support of your issue
or against it at any particular time. The organizations
and people to be aware of could include any of the
following:
a. K-12 teachers
b. Unions
c.
PTA
d. Education advocates focused on your issue
e.
State lobbyists seeking cuts to taxes
f.
State lobbyists seeking to reduce cuts for K-12
Once these different groups are identified, the point
of the Power Analysis is to understand how each of
these groups will relate to your particular issue and
campaign.
The first step is to understand who has the power or
influence related to your issue and how much power
they have. The second step is to understand whether
they are for or against your proposal, and the third
step is to create a strategy for getting those against
your proposal to change position.
We anticipate that many advocates have their own
formal or informal version of Power Analysis, and that
this explanation merely helps advocates consider fiscal
information as they do their advocacy.
4. Note that the budget still must be approved by the County
and State as well.
FOLLOWING THE MONEY
45
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46
PART VII: Conclusion
FOLLOWING THE MONEY
47
PART VII: CONCLUSION
In this curriculum, the Los Angeles Unified School
District was used as a case study. We employed its
2011/2012 Budget as a foundation to learn about
the relevancy of fiscal analysis in advocacy.
Specifically, this curriculum is designed to provide
advocates with several explicit lessons. These lessons
include:
1.
How to read a school district budget
2.
How to research the budget
3.
When and how to influence the district budget
Beyond these lessons, we expect that the budget
curriculum provides a foundation and template for
understanding other school district budgets and how
communities and advocates can influence them.
In particular, the first section of this curriculum provides
an overview of how public education is funded in
California. This section is relevant to any school district
in the State of California and is critical information for
how one can understand and influence fiscal decisions
in a particular district.
REFERENCES
California Fiscal Outlook 2011.
http://www.lao.ca.gov/reports/2011/bud/fiscal_outlook/fiscal_outlook_2011.aspx
Superintendent’s Final Budget 2011-2012.
Los Angeles Unified School District.
http://notebook.lausd.net/pls/ptl/docs/PAGE/CA_
LAUSD/LAUSDNET/ABOUT_US/INFORMATION/
LAUSD%20OVERALL%20--%2011-1-2011.PDF
Superintendents Final Budget 2012-2013. Los
Angeles Unified School District.
http://budgetrealities.lausd.net/
budget_transparency/
Weston, M. (2010). Funding California Schools:
The Revenue Limit System. The Public Policy
Institute of California.
This curriculum and the accompanying training provide
a solid foundation for advocates interested in fiscal
analysis. But this is only the first step to engaging in
fiscal analysis for policy change. Fiscal analysis can be
a powerful tool for advocates as they pursue their goal
of strengthening and bettering their communities.
FOLLOWING THE MONEY
48
Appendices
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49
APPENDIX A: KEY QUESTIONS FOR ADVOCATES
Key Questions for Advocates
What are your fiscal questions?
1.
What is your current campaign?
2.
How are public finances related to this
campaign?
3.
What data do you need to better
understand and promote your campaign?
4.
What are your fiscal research questions?
5.
Where will you begin to look for this
information?
Analysis
6.
Identify the places in the budget and other
documents that relate to your campaign.
a. What are the revenue sources?
b. On what is the funding being spent?
7.
How much is being spent on your issue or
within your community(ies)?
a. Is enough of the budget going towards your
issues?
b. Is this money being spent in ways that are
equitable across the City?
c.
Is the money being spent in ways that best
support the people most in need?
8.
Is the funding in general funds or restricted
funds? How much leeway do you have to
change the target of the funding?
9.
Who has the power to respond to your
proposal?
FOLLOWING THE MONEY
10.What are the most strategic moments in the
process to have your voices heard?
Findings
11.What did you find? Should the budget be
changed to better support your campaign?
12.Are there things that need to change about
how these assets are distributed or utilized?
13.If so, at what point and with whom will you
advocate for these changes?
How will this impact your campaign ?
14.What impact do you expect the fiscal
changes to eventually have on your
community?
15.How much time will it take to organize to
obtain this change? What percentage of
your time will it take?
16.Who will be your allies in this campaign?
17.Who will be your opponents?
18.What will be the cost and benefits to you,
your organization and community to
engage in this work?
19.How will this impact other campaigns you
are currently working on?
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APPENDIX B: LINKS TO ADDITIONAL RESOURCES
LAUSD’S “BUDGET REALITIES” -
http://budgetrealities.lausd.net/
“Here you will find up to date information on the district’s
budget, and the ongoing challenges we face. Each year
since 1985, California’s spending on public education has declined from the national average. Today,
California schools rank at the bottom of almost every
national ranking in terms of spending and supports
for children.”
- From budget realities website
LEGISLATIVE ANALYST’S OFFICE:
http://www.lao.ca.gov/laoapp/main.aspx
This body provides fiscal and policy advice to the
State of California’s legislature. In particular, they
process the Fiscal Outlook that forecasts the amount of
revenues the state will receive, and is used by policy
makers to begin to plan the budget for the upcoming
year.
SUMMARY OF THE CALIFORNIA PUBLIC
RECORDS ACT:
http://www.ag.ca.gov/publications/summary_public_records_act.pdf
EQUITY IN PUBLIC FUNDS AT
ADVANCEMENT PROJECT:
http://www.advancementprojectca.org/index.
php?q=/c/what/sc/pf
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APPENDIX C: KEY OFFICES RESPONSIBLE FOR
FISCAL ACCOUNTABILITY
OFFICE OF THE CHIEF FINANCIAL OFFICER
The Office of the Chief Financial Officer partners
with all other LAUSD groups to support the district’s
academic objectives while also maintaining the
appropriate fiduciary roles expected by the district’s
taxpayers (LAUSD website)
ACCOUNTING & DISBURSEMENTS DIVISION
The mission of the Accounting and Disbursements
Division is to effectively receive, disburse, and account
for funds to meet the instructional and operational
needs of all students and the district. Its branches are:
Accounting Controls, Accounts Payable, General
Accounting, Payroll Services, Revenue, and Treasury
(LAUSD website)
BUDGET SERVICES & FINANCIAL
PLANNING DIVISION
The mission of Budget Services and Financial Planning
is to accurately provide the schools, students, the
community, the administration and the Board of
Education with budget, financial planning, and related
services that maximizes, distributes, and safeguards the
resources available to carry out the educational and
support activities of the district (LAUSD website)
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APPENDIX D: GLOSSARY
APPENDIX D: GLOSSARY
BUDGET: A plan of financial activity for a specified
fiscal year indicating all planned revenues and appropriations for the year.
CALIFORNIA PUBLIC RECORDS ACT: A law passed
by California in 1968 that made access to government
records explicitly available to the public unless there is
a specific reason to not make them accessible.
REVENUE: Cash or credits the district receives dur-
ing the fiscal year as income to finance general or
restricted operations. They include items such as taxes,
fees from specific services, interest earnings, and grants
from the State or Federal governments.
TRANSPARENCY: In government, transparency refers
to holding all public activity and officials accountable
to counter the possibilities of corruption.
COMPREHENSIVE ANNUAL FINANCIAL REPORT:
The report is the annual publication of the LAUSD’s
financial condition at conclusion of the fiscal year. The
report is prepared to conform to Generally Accepted
Accounting Principles (GAAP) for governmental units
and presentation of the financial data in conformity
with the Adopted Budget.
EXPENDITURE: A payment made for cost of ser-
vices rendered, materials, equipment, and capital
improvements.
FISCAL YEAR: The time period for the LAUSD budget
which begins on July 1 of a calendar year and ends on
June 30 of the following year.
GENERAL FUND: The fund for the deposit of general
receipts which are not restricted, such as property,
sales, and business taxes and various fees; also functions as a set of subfunds (primarily by departments) to
track appropriations and expenditures.
RESERVE FUND: The fund in which general
unrestricted cash is set aside outside the budget for
unforeseen expenditures and emergencies. The funds
can be transferred into the budget for such purposes.
Unallocated general revenue and unencumbered general fund appropriations to departments at the close of
the fiscal year are transferred into this fund.
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www.AdvancementProjectCA.org
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Los Angeles, CA 90026
Phone: (213) 989-1300