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Brown, Steinberg, Pérez Reach Accord

Legislature Sends Budget Bill to Governor

June 17, 2013

California moved several steps closer to a new State budget last week – and Governor Jerry Brown appears to have gotten much of what he wanted in terms of overhauling K-12 education funding via his proposed Local Control Funding Formula.

On Tuesday (June 11), Brown and the legislative Democratic leaders – Assembly Speaker John Pérez and Senate President pro Tem Darrel Steinberg – announced they’d reached a budget agreement in a joint news conference at the State capitol. Actual details of the agreement were still pretty sketchy at that point, but it was clear that the three men had reached a mutually acceptable agreement that would even out the differences between the Governor’s May Budget Revision and the competing version developed by the California Assembly and the California Senate.

Details included in the budget agreement (as scoped out by the Association of California School Administrators) include:

·         Funds Prop. 98 at $56.5 billion for 2012-13 and $55.3 billion in 2013-14.

·         Pays down deferrals at $4.3 billion over two years: $4.1 billion in 2012-13 and $266 million in 2013-14.

·         Increases funding formula target per-pupil Base Grant by $537 above the May Revision.

·         Provides additional funding to restore districts to at least their 2007-08 funding levels, which was the pre-recession highest funding level for schools.

·         Changes the Supplemental Grant rate to an additional 20 percent of the Base Grant for low-income and English learner students.

·         Districts would qualify for additional Concentration Grant funding at 50 percent of the Base Grant if 55 percent of their students are low-income and English learners.

·         The Concentration Grant for each low-income and English learner student in the May Revision was 35 percent for each disadvantaged student above a 50 percent threshold.

·         While the Supplemental Grant is reduced from the May Revision level of 35 percent of the base rate, the rate is calculated on the much higher Base Grant. Thus, there is very little difference between the lower Base Grant/higher Supplemental Grant approach vs. and higher Base Grant/lower Supplement approach.

·         Full implementation of the new funding mechanism is now estimated to take eight years. If additional funding is devoted to the system in coming years, districts would get to their targets faster.

·         With a hold-harmless provision, no district would get less money in the budget year than they do currently, and the vast majority will do better.

The actual bill sailed through the legislature on Friday – a day before the State-mandated deadline – with the vote playing out on a party line basis (Democrats voting aye, Republicans voting nay). With the Democrats holding a supermajority in both houses, they did not need to cut a deal with Republican legislators to get the majority required for passage. Several “trailer bills” followed, clearing up details of the budget agreement. The budget bill now awaits the Governor’s signature, he has until the end of June to sign it.

There are now hundreds of administrators in school districts up and down California who are rapidly studying the new budget bill with an eye toward the impact on their district’s budget. As Brett McFadden, Chief Budget Officer of the Pajaro Valley Unified School District (which serves a broad swath of southern Santa Cruz County and a portion of northern Monterey County, with a substantial enrollment of English Learners and students from lower income families) put it, “This is the most sweeping change to school finance policy in more than 40 years.  We’ll be sorting out the details of this for some time.  I’m hopeful that the new model will result in better policy outcomes for students and districts alike.”

Among others offering statements in reaction to the budget deal:

Tom Torlakson

State Superintendent of Public Instruction Tom Torlakson spoke on Wednesday regarding the budget deal reached by the Governor and legislative Democrats for the 2013-14 fiscal year:

"This budget puts California where it belongs: leading the way in the drive to bring the Common Core State Standards to life in our classrooms and prepare students to contribute to our State's future. Dedicating more than $1 billion to training teachers, buying new materials, and investing in technology will help ensure that all children, no matter where they come from or what school they attend, receive the kind of world-class education they deserve.

"The progress made by the Governor and legislative leaders to put more decision-making in the hands of local school districts and direct more resources to the students who need them most is nothing short of historic. I'm also grateful for the work done to preserve funding for priority programs like career-technical education, which plays an important role in strengthening California's economy.

"While it will take years to replace the resources our schools have lost, I'm grateful that this budget marks a substantial start in the recovery of our education system, including a modest restoration of funding for critical early learning programs. While no budget is perfect, this is one a teacher can be proud of."

ACSA

President-elect Marc Ecker of the Association of California School Administrators had plenty to say on Friday following the passage of the State budget and new funding formula for schools:

"ACSA applauds lawmakers for finalizing the 2013-14 State budget and for approving the most sweeping reform of education finance in decades. One of ACSA’s priorities was to ensure a balance in the new formula between the need for additional revenues specifically for English Learners and economically impacted students, and the need for additional funds in the base grant… The final formula provides on average more than $200 per ADA to the base grant for all students.

"We support this new funding formula because it emphasizes local decision-making and it allows for greater collaboration among school leaders, board members, teachers, parents and community members in support of students.

"Targeted resources, especially for low-income students and those with limited English proficiency, will enhance our efforts to close the achievement gap, promote literacy, and increase academic success in all of our classrooms.

"The shift from categorized funding and State-mandated program design and delivery to a new funding system focused on collaboration and local decision-making for students is long overdue.

"ACSA strongly advocated that funding for all school districts be restored to pre-recession levels, the highest funding levels for schools in recent years. Restoring these funds to base budgets is critical, but much work remains to put schools back on the path of providing quality educational services to all students. “

Ecker noted with approval that the budget includes a “one-time influx of $1.25 billion in 2013-14 specifically to support educators and students in the transition to Common Core” academic standards.

"While increased funding and a new funding formula are good news, ACSA will continue to work to ensure adequacy in education funding. The educational needs of California’s diverse student population are so great that they far outweigh the new levels of funding the State will invest over the next eight years. Our ongoing goal is help create a stable and sufficient funding system that enables all of our students to meet California’s high standards."

CSBA

“We appreciate the hard work of the Governor and Legislature to design a budget that reflects the priorities of the voters – the public wants fair funding for its schools and supports local control.  This budget moves school districts and county offices of education toward full restoration to pre-recession funding levels, giving school district leaders and board members the ability to better serve students,” explained Cindy Marks, president of the California School Boards Association and vice president of the Board of Education for Modesto City Schools.  “The provisions included in this budget will save some districts from fiscal disaster by improving their cash-flow positions,” she added.  Over the last five years, K-12 budgets were reduced by about $20 billion Statewide, $9 billion of which was in deferred payments.  As a result, districts across the State were forced to borrow money, without reimbursement for the interest paid on these short-term loans, to meet their fiscal obligations including payroll, facility maintenance agreements and general operating expenses.  “By making a commitment to buy down and eventually eliminate deferrals, governance teams can now better manage their budgets.  Fewer districts will be facing the prospect of insolvency,” said Marks.

Even though the 2013-14 budget is favorable to K-12 school districts, data presented to CSBA shows that 62 school districts will remain below pre-recession funding levels in eight years when the new formula is fully implemented.  CSBA remains committed to ensuring that the Local Control Funding Formula restores all districts to their 2007-08 funding levels.  “CSBA will raise the issue of fairness for all districts as discussions begin about the clean-up legislation,” said Marks.   Moreover, even with the increased funding in the 2013-14 budget, California’s K-12 education system will remain 48th out of the 50 states in per-pupil funding.  “CSBA will also continue its commitment to ensure our schools receive adequate long-term funding to support a 21st Century educational system,” Marks added.

Furthermore, CSBA applauds the investment in the implementation of the Common Core State Standards.  “It is encouraging that the Governor and Legislature recognize the enormity of the implementation of Common Core and its projected impact on the teaching and testing of students,” Marks explained.  The Common Core State Standards and Smarter Balanced Assessment system will change the delivery of instruction, necessitate a sustained investment in professional development for teachers and other school staff, and require the acquisition of technology to advance student learning and support new authentic assessments.  The California Department of Education estimates that the implementation of Common Core will cost $3.1 billion Statewide.  If both initiatives are to be successful, “We need a sustained investment in our schools.  CSBA is committed to working with the Governor and Legislature on long-term funding solutions to enable full implementation of both the Common Core State Standards and the Smarter Balanced Assessment system,” she added.

CTA

On Wednesday – after the budget deal was announced by the Governor and legislative leaders, but before actual passage of the budget, California Teachers Association president Dean Vogel said:

“We are extremely encouraged by the historic State budget agreement in Sacramento to overhaul education funding for K-12 schools. Thanks to the hard work of educators and parents to pass Proposition 30, the new spending plan provides all schools with more resources, begins repaying schools the money they are owed from years of budget cuts, recognizes the need for smaller class sizes and helps meet the needs of school districts serving at-risk students. As school doors close for the year this month, new doors are opening with the new funding plan. Additional funding for our students of greatest need will help more dreams become realities.

“While it will take years for our schools to fully recover, this budget agreement is a big step in the right direction. It’s been a long time since we’ve seen a State budget proposal with a significant increase in education funding. We call on all lawmakers to support this compromise on the governor’s Local Control Funding Formula as part of the final budget because the numbers add up to renewed opportunities for our schools. We are also encouraged by the $1.25 billion for the implementation of the Common Core State Standards. These new standards will dramatically impact teaching and learning and educators must have the resources they need to help students succeed. CTA is still reviewing school district accountability provisions, but this agreement holds the promise of a better future for our students.”

Others

Senate Republican Leader Bob Huff: “Because the budget passed today relied on the governor’s more conservative revenue projections it was a far better outcome for Californians than the plan legislative Democrats originally put forward.  Their plan optimistically assumed $3 billion more in tax revenues than the governor’s, and they proposed to spend it all.  However, the budget approved today still includes major spending increases for new programs and expands existing State programs, which will cost much more in future years and create pressure for additional tax increases.

“I am disappointed that the $47 billion voter approved tax increases from Proposition 30, which support this budget’s record-high State spending level of $230 billion, did not satisfy the Governor and legislative Democrats. In fact, they included an additional tax increase on managed health care plans and borrowed $500 million from AB 32 cap and trade tax revenues to bolster spending further and grow our State’s debt-load.

“While Senate Republicans support many elements of this budget plan – such as additional funding for education programs and debt repayment – other features – such as the failure to prioritize the remaining $25 billion in budgetary debt and the $180 billion of unfunded retirement liabilities is greatly concerning. Simply put, the State budget will never be in good fiscal shape until we deal with these debts and liabilities.  We need to pay our existing bills before we make new spending commitments – that’s just common sense. ”

Arun Ramanathan, Executive Director of the Education Trust—West: “ETW congratulates Governor Jerry Brown, Senate President pro Tem Darrell Steinberg, and Speaker of the Assembly John A. Pérez for their historic agreement to transform our State’s education finance system. Governor Brown’s Local Control Funding Formula (LCFF) will close longstanding funding gaps between rich and poor districts and direct additional funding to low-income students, English Learners, and foster youth.  We applaud the Governor and legislative leaders for retaining the concentration grant for students in our highest poverty districts and for moving forward with immediate implementation of the new funding formula. We are similarly encouraged by the massive new State investment in implementing the Common Core State Standards.”

“But we also recognize that the promise of LCFF will not be achieved unless these additional dollars directly benefit the disadvantaged students they are intended to support. Longstanding achievement and opportunity gaps will not be closed by giving complete spending flexibility to school district central offices, but by providing additional supports and services to low-income students and English Learners in their classrooms and schools. State law must ensure full financial transparency for district and school-level spending, true parental involvement in spending decisions at the school level, and accountability for student outcomes.”

Sources: EdBrief staff, California Department of Education, Association of California School Administrators, California School Boards Association, Sen. Bob Huff, the Education Trust – West.