Governor says his budget proposal reinvests in education and respects local control with new funding formula
Published: January 14, 2013
Summary from CSBA’s Governmental Relations Department, based on the Department of Finance
2013-14 Governor’s Budget Summary
Gov. Jerry Brown released his proposed 2013-14 budget Jan. 10, declaring that the state deficit is over and the budget is balanced. A total general fund budget of $97.7 billion is proposed, with $56.2 billion provided for Proposition 98 education funding. As he stated earlier in the week, the budget the governor is asking the Legislature to adopt would reinvest in education—K-12, community colleges and the public university systems. Proposition 98 funding for K-14 is $2.7 billion more than the revised 2012-13 amount. However, the total amount available for additional spending in 2013-14 is $4.9 billion, as some money would be freed up from the current-year deferral pay-down and from the November voter-approved Proposition 39, the Income Tax Increase for Multistate Businesses Initiative. For K-12, the governor would use $1.8 billion to pay down more deferrals, $400 million for school energy efficiency projects (pursuant to last year’s Proposition 39) and $1.6 billion to begin implementing a new “local control funding formula,” as the governor now refers to plans to “weighted student funding” that would provide money to address the increased costs of educating English learners, economically disadvantaged students, and children in foster care.
Key elements of local control funding
Calling the local control funding formula “fair, right and just,” the governor would begin implementing the new allocation method in 2013-14. The proposal would provide local districts and county offices of education with flexibility and discretion to decide how to budget their funds with the goal of improving student achievement. Flexibility is provided by permanently eliminating nearly all categorical program requirements. Accountability is provided by requiring that districts develop a plan for student achievement with their annual budgets.
The plans are to describe how programs would serve and improve the achievement of students, including those students in the weighted categories of English learners, low-income students and foster youth.
Breakdown of the funding allocation methodology: Base, supplemental and concentration grants
- The local control funding formula is comprised of a base grant, grade span adjustments, supplemental and concentration weights for each district and county office of education. A base amount per unit of average daily attendance would get local educational agencies to the undeficited average revenue limit, which is estimated to be $6,650. Variations for grade span levels would be provided for K-3, 4-6, 7-8 and 9-12. In addition, a supplemental grant equal to 35 percent of the base grant would be provided for unduplicated counts of English learners, economically disadvantaged students (based on free and reduced-price meal eligibility), and foster youth. An additional concentration factor would be provided to districts for each English language learner, economically disadvantaged and foster youth above a 50 percent threshold.
- The formula proposes to provide the supplemental and concentration grant funding for English learner students for no more than five years per student.
- A 24-to-1 student-to-teacher ratio in grades K-3 is proposed to be the maximum standard upon full implementation of the local control formula; the ratio may be exceeded if agreed to at the local level as part of a locally bargained agreement.
- Department of Finance officials advise that the average undeficited revenue limit figure is $6,650, and they estimate that about 90 percent of LEAs are currently below that figure.
Accountability provisions via a District Plan for Student Achievement
Districts would be required to adopt a District Plan for Student Achievement “concurrent and aligned with” their annual budget and spending plan. The plans would be required to address how districts plan to use state funding received through the new funding formula towards improvement in three main categories, but districts would have some discretion in the content of their plan.
The three main categories are:
- Basic conditions for student achievement
- Programs or instruction that benefits low-income students, English learners and foster youth
- Implementation of Common Core State Standards and progress toward college and career readiness as measured by the Academic Performance Index, graduation rates and completion of college preparatory and career technical education courses
Although the budget proposes to eliminate most programmatic and compliance requirements to which LEAs are currently subject, federal accountability requirements and fiscal and budgetary controls and academic performance requirements would remain in place. More details on the local funding formula will be available in forthcoming trailer bill language.
County offices of education
The budget proposes a two-part funding formula for COEs, modeled to some extent on county office work group proposals: per-ADA funding allocation for students attending community schools and juvenile court schools, and unrestricted funding for general COE operations. The per-ADA amount would also allocate the supplemental grants for English learners, economically disadvantaged students and foster youth that the district formula includes.
Other education proposals contained in the budget
Deferrals: With the $2.2 billion current-year deferral pay-down and the $1.8 billion proposed in the budget, the total outstanding deferral debt for K-12 would be reduced to $5.6 billion at end of the 2013-14 fiscal year. The governor proposes to pay off all remaining deferrals by the end of the 2016-17 fiscal year.
Cost-of-living adjustments: The base grant of the local control formula would eventually receive a COLA as the funding model reaches its targeted level, but few other programs are proposed to receive a COLA.
A COLA of 1.65 percent is proposed for the following programs that would remain outside of the local funding formula: Special Education; Child Nutrition; American Indian Education Center; and American Indian Early Childhood Education.
Targeted Instructional Improvement Grant and home-to-school transportation: These programs are proposed to remain as separate funding add-ons to ensure that LEAs currently receiving these funds would continue to receive the same dollar amount. These programs are not proposed to receive COLAs.
Special education: The governor proposes to separate federal funds from the state funds for special education and to consolidate funding for several state special education program add-ons into the state’s base AB 602 formula calculation.
Adult education: The governor proposes a significant shift in how adult education is provided by shifting responsibility to community colleges. Those K-12 districts that currently provide adult education would retain their funding. Community colleges would pay for adult education services from their increased Proposition 98 funding. The budget proposes $300 million for community college adult education programs.
Implementation of Proposition 39’s energy funding for schools: The governor proposes that $400 million from last year’s Proposition 39 be allocated by the California Department of Education on an ADA basis for school energy efficiency projects.
Online learning—technology-based instruction: To promote additional opportunities and greater instructional flexibility, the governor proposes statutory changes that would allow school districts to offer more online courses and do so in a manner that would not require simultaneous participation of all students and instructors. Statutory changes related to independent study contracts will be proposed.
Mandates: The budget provides $300 million for the Mandates Block Grant for K-12 and community colleges. This is a $100 million increase in funding and is intended to cover costs associated with adding two programs to the block grant: the Behavioral Intervention Plan and the graduation requirement mandate.
Charter schools: The local control funding formula would also apply to charter schools, and they are treated the same as a district; a charter school could not receive a higher concentration grant than the school district in which it resides.
The budget proposes changes to a number of charter school facility-related programs. They include:
- Shifting the Charter School Facility Grant program and the Charter School Revolving Loan Program from CDE to the California School Finance Authority
- Extending for five additional years the 2012-13 requirement that school districts with identified surplus property and facilities first offer to sell those resources to charter schools before selling them to other entities or disposing of those assets
Conclusion
CSBA’s response to the proposal has been favorable to the Ggovernor’s commitment to increase funding for schools, pay down apportionment deferrals and create a funding system that relies on local governing boards to set local priorities, which he refers to as subsidiarity. Gov. Brown is to be applauded for his untiring work to get Proposition 30 approved by voters in November and for his continuing work to steer decision-making authority away from the state to local governing boards. Some details of the new funding formula need to be worked out, especially to ensure that all LEAs are restored to their pre-recession level of funding. Additionally, CSBA will be looking into the mandate proposal in greater detail once budget trailer bill language is available.
All in all, this budget proposal is the best we have seen in five years and, with a growing economy, school funding is pegged to be increasing annually into the foreseeable future. What happens when the temporary revenues contained in Proposition 30 expire in 2019 will hang over the heads of budget planners until a solution is crafted, either by the Legislature or by another ballot initiative.
CSBA will continue to provide details on the budget proposal as they become available.