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Budget Plan Includes More Resources for Low-Income Students, English Learners

Governor Proposes New Funding Formulas for Education, with Greater Local Autonomy

By Jeff Hudson - January 10, 2013

Governor Jerry Brown rolled out his much-anticipated January budget proposal on Thursday – and as expected, his proposal includes a major overhaul of K-12 education finance.

The Governor proposes a transition to a new state funding formula for school districts, directing more resources toward school districts with high percentages of students who particulate in free- or reduced-price meal programs (based on modest family income) and students who are English language learners. Students who are foster children would also receive additional targeted funding.

The Governor also proposes major changes in terms of state funding for categorical programs (some of which would disappear); proposes that adult education programs be gradually transferred from K-12 districts to community colleges; and proposes changes in school accountability measures as well.

In general, the budget proposal would give districts greater flexibility and local autonomy in terms of how they use state funds, putting more decisions in the hands of local school boards, with fewer state restrictions and requirements.

The Governor framed his budget proposal as an indication that the state budget crisis, which has resulted in reduction after reduction in education funding, is finally coming to an end. “The budget cuts made in the last two years and the passage of Proposition 30 (last November) makes it possible to both live within our means and to increase funding for education,” said Governor Brown.

The Governor’s press office said in a statement that “After years of decline, this budget significantly increases state funding per student in K-12 schools – $2,700 by 2016-2017. Funding for K-12 and community colleges increases by $2.7 billion next year” – largely due to Prop. 30 –“and by $19 billion by 2016-2017. While K-12 school districts across the state will benefit from the increased funding—through a new school funding formula—school districts serving those students who have the greatest challenges will receive more generous increases—so that all students in California have the opportunity to succeed. The budget increases flexibility at the local level so those closest to the students can make the decisions.”

Nick Schweizer of the California Department of Finance told reporters that for 2013-14, California school districts would typically see an average of $400 more per pupil for the year, though Schweizer quickly added that this figure would vary from district to district, depending in part on what a district is receiving now from the state, and how many of students the district has in the groups targeted for additional state funding (students getting free- and reduced-price meals, English language learners, foster children).

Schweizer sought to ease the concerns of school districts in affluent suburban areas that have comparatively few students in the three targeted groups – these districts are already fearful that they could lose funding under the Governor’s proposal. “No one will lose funding they’re getting today,” Schweizer said.

Schweizer said that the state will “fully restore the reductions that have been made over the last several years, and provide cost of living adjustments that have been deferred due to the deficit factor.” But Schweizer also added that this process would likely take several years.
Schweizer said that the Governor feels that “the responsibility for adult education (programs) will rest with the community colleges. We would expect that the community colleges would work with K-12 district adult ed programs to decide where it is best to house adult education classes and make sure the needs of adult learners are met throughout the state. In many areas, adult ed will go to the community colleges, in many areas it has already.”

Sue Burr, the Governor’s chief advisor on education, added that “The Governor’s highest priority is education, it is the best place we can make an investment (of state funds) in the long term.” She added that the Governor is proposing the overhaul of current funding formulas because “we exist right now in a completely irrational funding system.”

Of course, as Sacramento political observers know, not all of what the Governor proposes in the January budget proposal carries over into the Governor’s May budget revise. And the actual budget that the California legislature approves typically reflects even more changes. But the January budget proposal does serve to establish the framework for the legislative debates to come, and the Governor has clearly made education funding the centerpiece of his budget proposal.

Among the highlights of the Governor’s proposals for K-12 Education funding as described in the 248-page budget summary:

Repayment of Deferrals

--“The Budget proposes repayment of $1.8 billion in deferred payments to fund programs and increase budget transparency. This investment will provide additional certainty of funding for expected levels of programs and services, while also reducing the substantial borrowing costs borne by schools as result of the deferrals.”

New Funding Formulas

--“The Budget proposes new funding formulas for both schools and county offices of education . . . The Budget proposes a new Local Control Funding Formula that distributes combined resources to schools through a base revenue limit funding grant (base grant) per unit of average daily attendance (ADA) with additional supplemental funding allocated to local educational agencies based on their proportion of English language learner and free- and reduced-price meal eligible students. The proposed formula entitles every school district to a base grant adjusted for grade span cost differentials, multiplied by ADA. The average base grant when fully implemented will be equal to the current average undeficited school district revenue limit. A K-3 grade span adjustment is provided to ensure that current K-3 Class Size Reduction program funding is targeted to students in those grades. Base funding will be used by each locality at their discretion to fulfill local educational priorities. Under the new formula, basic aid districts would be defined as districts whose local property taxes equal or exceed their district’s formula allocation. Those districts would continue to retain local property taxes in excess of their new formula allocation.

“The proposed formula provides supplemental funding to districts based on the proportion of English language learners and free- and reduced-price meal eligible students they serve. Supplemental funding is equal to 35 percent of the base grant. When the proportion of English language learners and economically disadvantaged students exceeds 50 percent of its total student population, the school district will receive an additional concentration grant equal to 35 percent of the base grant for each English language learner and economically disadvantaged student above the 50-percent threshold. Under the formula, charter schools are essentially treated the same as a district, except they cannot receive a higher concentration grant than the school district in which they reside. The supplemental and concentration grants are available for any purpose that benefits the students generating the funding.”

“While most categorical program funding is redistributed through the new funding formula, the Targeted Instructional Improvement Grant program and Home-to-School Transportation program funding allocations will be distributed as permanent add-on programs to the new funding formula allocations for each district. Schools will be provided with discretion to use these funds for any purpose.”


--“The Budget proposes to focus accountability on the core requirements and outcomes expected of schools and to better integrate accountability with the local school district budget process. The new system moves away from expenditure requirements and other input-based measures. The Budget requires that all school districts produce and adopt a District Plan for Student Achievement concurrent and aligned with each district’s annual budget and spending plan. While school districts have some discretion regarding the content of the plan, all plans are required to address how district will use state funding received through the new funding formula toward improvement in the following categories:”

  1. “Basic conditions for student achievement (having qualified teachers at each school site, sufficient instructional materials available for students, and school facilities in good repair).”
  2. “Programs or instruction that benefit low-income students and English language learners.”
  3. “Implementation of Common Core content standards and progress toward college and career readiness (as measured by Academic Performance Index, graduation rates, and completion of college-preparatory and career technical education courses).”

“The Budget eliminates most programmatic and compliance requirements that school districts, county offices of education, and charter schools are subject to under the existing system of school finance. Important requirements that remain in place include federal accountability requirements, as well as fiscal and budgetary controls and academic performance requirements.”


“A variety of temporary program and funding flexibility options, which have been provided to local schools since 2008-09, are set to expire over the next two fiscal years.”
“Consistent with the Administration’s policy of having those closest to the students make that decision, the Budget proposes the following permanent changes:”

  1. “Routine Maintenance Contributions – Eliminate the minimum contribution requirement for routine maintenance.”
  2. “Deferred Maintenance Program Matching Requirement – Eliminate the required local district set-aside for deferred maintenance contributions.”
  3. “Surplus Property – Allow districts to use the proceeds from the sale of any real and personal surplus property for any one-time general fund purposes.”

“As schools transition to a new funding formula and as funding grows, it is important to consider other flexibilities currently granted to schools. These include the ability of schools to reduce the school year by up to five days or the equivalent number of minutes without incurring penalties, and the ability of schools to reduce their budget reserves to significantly lower levels. The Administration will engage local school officials and education stakeholders in a discussion of the need for additional flexibility until funding returns to the 2007-08 level.”

Adult Education

“Currently, K-12 school districts and community colleges are authorized to provide adult education instruction. However, there is no statewide requirement or mechanism to coordinate the efforts of these two systems. As a result, the state has an inefficient and redundant system that is not always structured in the best interest of adult learners. Further, funding for the K-12 adult education program is currently flexible, available for any educational purpose and many districts are eliminating their programs and redirecting this funding to support their core instructional programs.”

“To create a more accountable and centralized adult education learning structure, the Budget proposes $315.7 million Proposition 98 General Fund to fund a comparable K-12 adult education service delivery system. It proposes an increase of $300 million to support the program within the community colleges. It also shifts $15.7 million for the Apprenticeship Program. The proposal eliminates the current bifurcated system and places the community colleges in a position to improve coordination at the regional and statewide levels.

Community colleges are better positioned than K-12 schools to address the needs of adult learners because that is their core function. Funding will be allocated from a new adult education block grant based on the number of students served, and the colleges will be encouraged to leverage the capacity and expertise currently available at the K-12 district adult schools. Additional detail of this proposal is discussed in the Higher Education Chapter (of the budget summary document).”

To read a copy of the full budget summary, click here. The section covering K-12 Education starts on Page 15 and continues through Page 31.

Editor's Note:  Jeff Hudson is the editor of EdBrief and an award-winning education reporter and writerin print, radio and television media.