Friday, October 23, 2015

Prop 98 minimum school funding guarantee has jumped almost 32%: FINAL BUDGET REPORT NOTES BIG SCHOOL SPENDING UPTURN


by Tom Chorneau | SI&A Cabinet Report :: The Essential Resource for Superintendents and the Cabinet

October 20, 2015(Calif.)  ::   The Proposition 98 minimum school funding guarantee has jumped almost 32 percent from the depth of the recession to surpass $68.4 billion for the 2015-16 fiscal year, according to a new report from the nonpartisan Legislative Analyst.

The gains, which have not gone unnoticed as both the state and national economies have rebounded dramatically in the past four years, are nonetheless impressive after so many years of struggle.

Adjustments made to the guarantee as a result of final tallies from tax collections assigned to prior years resulted in a $612 million increase to the 2013-14 budget year and a whopping $5.4 billion designated to last year’s budget.

A large share of the income can be attributed to higher income taxes being paid by the state’s biggest wage earners – a plan adopted by voters in 2012 – but capital gains taxes paid by Wall Street investors in the past two years have also been a major source of additional state revenue.

In addition, the LAO noted that the state has paid down a big chunk of the past debt owed schools, much of it generated during the five-year recession.

The Proposition 98 “maintenance factor” – a liability to the state when the funding guarantee slips below a long-range benchmark – is expected to fall to just $743 million at the end of 2014-15, the smallest it has been almost a decade.

Rising revenue has also allowed the state to pay down debt owed on K-14 mandates – an expense created by legislation that requires schools to perform new duties that are otherwise not covered in the budget. The 2015-16 budget includes $3.8 billion for mandate reimbursement that goes to both K-12 schools and community colleges.

A $500 million, one-time grant to improve teacher training and support is being distributed to school districts, county offices of education and charter schools based on the number of full-time equivalent certificated staff they employed in 2014-15.

The LAO pointed out that the teacher training money can be used for a broad array of activities, including beginning teacher support, assistance for struggling veteran teachers, training for implementation of new state standards, and administrator training.

School funds for facility repairs – long neglected since lawmakers turned off a required set-aside during the budget crunch – will also get some relief in the 2015-16 budget: statute requires the state to provide a total of $800 million to school districts for emergency facility repairs.

Also, the budget offers $50 million in grant money to help some schools improve Internet connections. According to the LAO, the only schools eligible are ones that cannot administer online tests or are forced to shut down all other online activities in order to conduct testing. The Department of Finance must approve projects with costs exceeding $1,000 per test-taking pupil and notify the Legislature.

Other budget highlights that may have been overlooked:

  • Trailer legislation modifies Transitional Kindergarten rules to allow school districts and charter schools to enroll four-year-old children if their fifth birthday falls between December 2 and the end of the school year. These children will begin generating attendance-based funding when they turn five. Before, only children turning five years of age between September 1 and December 2 could enroll in the new early learner program.
  • Clarifies requirements related to identifying low-income students: Statute contains certain rules relating to how LEAs are to identify low-income students for the purposes of generating LCFF supplemental and concentration funding. The LEAs identify most low-income students based on annual paperwork that these students submit to participate in the National School Lunch Program. To identify some other low-income students, LEAs use what is known as the “alternative household income form.” Trailer legislation clarifies the information that LEAs must include on the alternative form and how the forms can be used and shared by LEAs.
  • Trailer legislation also adds intent language imposing new LEA reporting requirements once LCFF is fully implemented. At that time, LEAs will be required to report annually the amount of supplemental and concentration funding they received on behalf of low-income students, English learners, and foster youth as well as the amount they spent on behalf of these students.

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