www.capitoladvisors.org
1
Workshops sponsored by:
2
www.capitoladvisors.org
Themes and Thoughts
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•
•
Revenue debate determined everything
Governor gives up very little…again
Triggers return…upside rather than downside
Last minute developments result in most important
issues for K-12 (STRS & Reserve Issues)
• Spending each new K-12 dollar for multiple
purposes
• Key issues acknowledged for January proposal
www.capitoladvisors.org
3
Overall Budget
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•
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•
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Total GF spending of $107.9 billion
Includes plan to address $74 billion in STRS liabilities
Continues focus on addressing state’s debt
Places revised Rainy Day Fund and Prop 98 reserve on
November ballot
Expands Child Care and Preschool for low-income families
Expands Medi-Cal by $2.4 billion over 2012-13 to cover
increased enrollment
Addresses climate change by allocating $832 million in Cap and
Trade proceeds
Invests more than $100 million in additional emergency drought
relief
www.capitoladvisors.org
4
Gov Wins on Revenue Assumptions
Administration Revenue Forecast
General Fund and Education Protection Account Revenues and Transfers (In Millions)
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
Personal Income Tax
$64,484
$66,522
$70,238
$74,444
$78,082
$82,029
Sales and Use Tax
$20,482
$22,759
$23,823
$25,686
$26,267
$26,775
$7,783
$8,107
$8,910
$9,644
$10,034
$10,292
$92,749
$97,388
$102,971
$109,774
$114,383
$119,096
$2,221
$2,287
$2,382
$2,499
$2,584
$2,672
4,432
2,510
$1,741
$2,076
$1,202
$1,837
$99,402
$102,185
$107,094
$115,473
$118,169
$123,605
$45
-$542
-$2,099
-$330
-$1,479
-$865
Corporation Tax
Subtotal “Big Three” Taxes
Insurance Tax
Other Revenues
Totals
Difference from LAO
Forecast
www.capitoladvisors.org
5
Governor vs. Legislature
• Governor rejected higher revenue assumption
• Legislature hip to Governor’s approach, but the
Governor held all the cards and prevailed
• Legislature scrambled to find funding for Pre-K,
Common Core, STRS, mandates, career
pathways, etc.
• Result was Revenue Triggers, Reversions and
less in deferral buy-downs
www.capitoladvisors.org
6
State General Fund Revenues
(Billions of Dollars)
$125.0
Jan. Budget
$115.0
May
Revision/2014-15
Budget Act
$105.0
May LAO
$95.0
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
www.capitoladvisors.org
7
Plan for Paying Down the Wall of Debt
As of end of
2010-11
K-14 Inter-Year Deferrals
$10.4
Economic Recovery Bonds
$7.1
Loans from Special Funds
$5.1
Prior year mandate claims
$4.3
Prop 98 Settle-up
$3.0
Borrowing from Local Gov
$1.9
Deferred Medi-cal costs
$1.2
2013-14
$6.1
$3.9
$3.9
$6.7
$2.4
$0.0
$1.8
2014-15
$1.0
$0.0
$3.1
$6.2
$1.8
$0.0
$2.2
2014-15T
$0.0T
$0.0
$3.1
$5.4
$1.8
$0.0
$2.2
2017-18
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
Deferral of state payroll
costs
$0.8
$0.8
$0.8
$0.8
$0.0
Deferred CalPERS
payments
$0.5
$0.4
$0.4
$0.4
$0.0
$0.4
$34.7
$0.2
$26.2
$0.1
$15.6
$0.1
$13.8T
$0.0
$0.0
Borrowing from
transportation funds
Total
(all amounts shown in billions)
www.capitoladvisors.org
T = with revenue triggers
8
California’s Long-Term Liabilities
• Liabilities being addressed ($220.5 billion)
– Retirement – Infrastructure – Budgetary -
$123.6 billion
$85.3 billion
$11.6 billion
• Not yet being addressed ($122.4 billion)
– Retirement – Budgetary -
www.capitoladvisors.org
$94.2 billion
$28.2 billion
9
Budget Act 2014-15
K-12 EDUCATION BUDGET
www.capitoladvisors.org
10
2014-15 Budget Act: K-12 Overview
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Provides Prop 98 funding at $60.9 billion
Provides $450 million for K-14 mandate backlog
Provides $4.75 billion for LCFF implementation
Provides $256 million increase for Pre-Kindergarten
Provides for potential restriction of school district
reserves (tied to passage of Budget Reserve
proposition in November 2014)
• Includes reforms to Independent Study
• Provides $250 million for CTE pathways grants
www.capitoladvisors.org
11
Proposition 98
• Test 1 Year for 2014-15
– Lower revenue numbers yield smaller Prop 98
guarantee
– Lower year-on-year growth yields less Maintenance
Factor repayment
– Recognition of increased revenue likely in January
proposal – creating one-time spending opportunities
beyond ongoing 2015-16 priorities
• $4.4 billion of prior year Prop 98 settle-up used for the
deferral buy-downs
• $991 million in redirected on-going funds plus $113
million in reappropriated reversions used for the
Legislature’s shopping list
www.capitoladvisors.org
12
Prop 98 Changes Over Time
$65.0
$60.0
2013-14 Budget Act
2014-15 Budget Act
$55.0
May LAO
$50.0
2012-13
www.capitoladvisors.org
2013-14
2014-15
13
K-14 Deferral Buy Down
• $5.2 billion of the remaining $6.2 billion in K-14 interyear deferrals eliminated in budget [$5.2 billion=$4.7
billion (K-12) + $530 million (CCC)]
• Paid with one-time funds from 2012-13 and 2013-14,
and on-going funds from 2014-15
• Reduction of $991 million [$897 million (K-12) and $94
million (CCC)] from May Revision used to fund
Legislative priorities
• Higher 2013-14 and/or 2014-15 revenues than
projected in budget will trigger buy-down of the
remaining deferrals
www.capitoladvisors.org
14
Inter-Year (Cross-Year) K-12 Deferrals
Funds Used for
Buy-down
2013-14 Budget Act
Proposed in 2014-15
May Revision
2014-15 Budget Act
2012-13
$3,655
$1,295
$4,950
2013-14
$242
$2,781
$3,023
$1,496
$ 599
$1,496
$ 599
$5,571
$4,675
$9,469
$8,572
$ 897
2014-15
Total Buy Down
Since June 2013
$3,897
Remaining Deferrals
Total
(all amounts in millions and rounded)
www.capitoladvisors.org
15
LCFF Entitlement Target
• Entitlement Target = Base Grant + GSAs
+ Supplemental Grant + Concentration
Grant + Add-ons
• Base Grant per ADA (with .85% COLA)
K-3 = $7,011
4-6 = $7,116
7-8 = $7,328
9-12 = $8,491
• GSAs – 10.4% ($729) for K-3 and 2.6%
($221) for 9-12
www.capitoladvisors.org
16
LCFF in One Chart
Entitlement Target
2014-15 Funding
TIIG Add-on
Trans. Add-on
29.56% of 2014-15 gap
Concentration Grant
12% of 2013-14 gap
Supplemental Grant
2012-13
“Included”
Categoricals
2012-13 TIIG
2012-13 Trans
9-12 GSA
K-3 GSA
2013-14
Funding
Base Grant
(adjusted for .85%
COLA)
www.capitoladvisors.org
2012-13
Revenue
Limit
17
Stand-Alone Categoricals
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Proposed for Ongoing Funding (no COLA)
After School Education and Safety Program
($547 million)
State Preschool ($509 million)
Child Nutrition – Breakfast Startup ($1 million)
County Office of Education Fiscal Oversight
($5.3 million)
California School Information Services ($5.5
million)
K-12 Internet Access ($8.3 million)
State Testing Program ($126.8 million)
California Partnership Academies ($21.4 million)
Agricultural Education Incentive Program ($4.1
million)
Specialized Secondary Programs ($4.9 million)
www.capitoladvisors.org
•
•
•
•
Proposed for Ongoing Funding
(includes .85% COLA)
Special Education ($3.3 billion)
Foster Youth Programs ($15.2 million)
American Indian Education Centers and Early
Childhood Education Programs ($4.6 million)
Child Nutrition ($155.4 million)
Proposed for One-time Funding
• Adults in Correctional Facilities ($16.9 million)
• Emergency Repair Program ($188.5 million)
18
K-3 GSA
• As a condition of receipt of funds – each school with K-3 enrollment must
transition to school site K-3 average class enrollment of 24:1
• Transition each year to close gap between last year’s school site K-3
average class enrollment and 24:1, in proportion to LCFF gap closure (12%
in 2013-14; 29.56% in 2014-15)
• Can locally negotiate alternative ratios and/or alternative transition
• Not waivable by State Board of Education
• In the audit guide for 2014-15: http://eaap.ca.gov/wpcontent/uploads/2014/05/2014-15-Guide-for-Annual-Audits-of-K-12-LEAsand-State-Complicance-Reporting.pdf
– Verifies average, active and maximum average enrollment counts
– Checks enrollments in both prior and audit year
– Instructs auditors to disallow K-3 GSA funds received if a finding is made
www.capitoladvisors.org
19
LCFF Supplemental and Concentration Grants
• General Requirement in Statute
– At full LCFF implementation, base grants pay for
core program and supplemental/concentration
grants are for increased or improved services for
EL, low-income and foster youth
• Specific Spending Rules in SBE Regulation
– Proportionality
– Seven Step Calculation
– Set 2013-14 base year spending and calculate
proportional increases in spending or results for
EL, low-income and foster youth for each
subsequent year
www.capitoladvisors.org
20
LCFF Supplemental and Concentration Grants
• Districts over 55% unduplicated count or schools
with over 40% unduplicated count may use funds
on district/school-wide basis, but must:
–
–
Identify in the LCAP services provided on a
district/school-wide basis
Describe how those services are directed toward meeting
LCAP goals for unduplicated pupils
• Districts or schools with lower unduplicated counts
may still use funds on a district/school-wide basis,
but in addition must:
–
Describe how district/school-wide services are the “most
effective” use of these funds to meet LCAP goals for
unduplicated pupils
www.capitoladvisors.org
21
Rainy Day Fund
• Rainy Day Fund has two components:
– Budget Stabilization Account (BSA)
– Public School System Stabilization Account (Prop
98 Reserve)
• Two types of transfers may be made from the
General Fund (GF) to the Rainy Day Fund:
– Revenue from personal income tax on capital gains
that exceeds 8% of total GF revenues for that fiscal
year (Peak Revenue Transfer)
– 1.5% of GF revenues for each fiscal year (1.5%
Transfer)
www.capitoladvisors.org
22
Transfers Into the Rainy Day Fund
If a Peak Revenue Transfer is made, then:
• A portion of that transfer would have otherwise gone directly to K-14 as
a Prop 98 allocation
• That “lost” Prop 98 funding goes to the Prop 98 Reserve only if:
– Existing Prop 98 Maintenance Factor is paid off (est. 5 – 6 years)
– Prop 98 Guarantee is calculated under Test 1 (1988, 2011, 2012, 2014)
– Remaining Prop 98 allocations cover prior year Prop 98 allocations,
adjusted for growth and COLA
• If conditions are not met, then “lost” funding flows back into Prop 98
• Any transfers to the Prop 98 Reserve:
– Are deemed to be expenditures toward meeting the Prop 98 Guarantee
– That exceed 10% of full Guarantee, flow back into Prop 98
• The remainder of the Peak Revenue Transfer goes into the BSA until it
reaches 10% of GF revenues (if the BSA exceeds that 10% cap, these
transfers are diverted to be spent on state infrastructure)
www.capitoladvisors.org
23
Transfers Into the Rainy Day Fund
When the annual 1.5% transfer is made, then:
• Half goes to discharge state debt obligations
(e.g., deferrals, budgetary loans, prior year
mandate claims, unfunded pension liabilities)
through 2029-30 and is optional thereafter
• Half is transferred to BSA until it reaches 10%
of GF revenues (if the BSA exceeds that cap,
these transfers are spent on state
infrastructure)
www.capitoladvisors.org
24
Transfers Out of the Rainy Day Fund
• Transfers must be made out of the Prop 98
Reserve in any year in which Prop 98
allocations are less than the prior year
Guarantee, adjusted for growth and COLA
• Transfers, up to 50% of the balance, may be
made out of either part of the Rainy Day Fund,
if a Budget Emergency is declared:
– If conditions of disaster or extreme peril exist
– If General Fund revenues are less than each of the
three prior fiscal years, adjusting for population
growth and COLA
www.capitoladvisors.org
25
Local Budget Reserve Restrictions
• Transparency - Commencing with the adopted or
revised 2015-16 budget each district with reserves in
excess of the minimum level recommended by the
SBE shall review and discuss in public hearing:
– The recommended minimum reserve
– The level of excess reserves identified in the budget
– A statement of reasons substantiating the excess reserves
• The Cap – In a year following a transfer into the Prop
98 Reserve, no district adopted or revised budget shall
contain reserves in excess of:
– Three times the recommended minimum in districts with ADA
greater than 400,000
– Two times the recommended minimum in all other districts
www.capitoladvisors.org
26
Local Budget Reserves
SBE minimum recommended reserves for FY
2014-15:
• The greater of 5% or $64,000 for districts with 0 to
300 ADA
• The greater of 4% or $64,000 for districts with 301
to 1,000 ADA
• 3% for districts with 1,001 to 30,000 ADA
• 2% for districts with 30,001 to 400,000 ADA
• 1% for districts with 400,001 and over ADA
www.capitoladvisors.org
27
Local Budget Reserve Restrictions
• The County Superintendent may grant an exemption
from the Cap for two consecutive years out of three
under “extraordinary fiscal circumstances”, but the
district must:
– Provide documentation that substantiates the circumstances
– Identify the funds associated with those circumstances
– Document that no other funds are available for that purpose
• When is the Cap triggered?
–
–
–
–
Only if ACA 1 is approved by the voters
Only after current Prop 98 Maintenance Factor is paid off
Only in a Prop 98 Test 1 year
Only if you do not have an exemption from your COE
• Make sure to read the fine print
www.capitoladvisors.org
28
CalSTRS
• Eliminates the CalSTRS unfunded liability ($74.4
billion*) over the next 32 years
• Does so by increasing contributions from:
– The State (total $20 billion)
– CalSTRS school employees (total $8 billion)
– School employers (total $47 billion)
• The 1990 CalSTRS funding plan, and vested rights
• 63% of funding burden on school employers
– Actual impact will differ across districts
– No additional funding for this purpose (see LCFF)
www.capitoladvisors.org
29
Governor’s CalSTRS Proposal
Future Changes in Contribution Rates
20.00%
19.10%
15.00%
10.25%
10.00%
9.21%
6.33%
5.00%
0.00%
2013–14
2014–15
2015–16
2016–17
2017–18
2018–19
2019–20
2020–21
2021–22
Employers
State
Employees (hired before 1/1/13)
Employees (hired on/after 1/1/13)
www.capitoladvisors.org
30
STRS: State and Employer Contributions
State Contributions
(Dollars in Millions)
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Current Law Rate
Proposed Increase
New Rate
3.29%
3.52%
3.52%
3.52%
3.52%
3.52%
3.52%
0.16
1.37
2.81
2.81
2.81
2.81
2.81
3.45%
4.89%
6.33%
6.33%
6.33%
6.33%
6.33%
School Employer Contributions
(Dollars in Millions)
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Current Law Rate
8.25%
8.25%
8.25%
8.25%
8.25%
8.25%
8.25%
Proposed Increase
.63%
2.48
4.33
6.18
8.03
9.88
10.85
8.88%
10.73%
12.58%
14.43%
16.28%
18.13%
19.1%
New Rate
www.capitoladvisors.org
31
STRS: Employee Contribution
Employees Hired Prior to January 1, 2013
(Dollars in Millions)
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Current Law Rate
Proposed Increase
New Rate
8.00%
8.00%
8.00%
8.00%
8.00%
8.00%
8.00%
0.15
1.2
2.25
2.25
2.25
2.25
2.25
8.15%
9.20%
10.25%
10.25%
10.25%
10.25%
10.25%
Employees Hired On/After January 1, 2013
(Dollars in Millions)
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Current Law Rate
Proposed Increase
New Rate
www.capitoladvisors.org
8.00%
8.00%
8.00%
8.00%
8.00%
8.00%
8.00%
0.15
0.56
1.21
1.21
1.21
1.21
1.21
8.15%
8.56%
9.21%
9.21%
9.21%
9.21%
9.21%
32
Vergara Decision
• Challenge by students to laws protecting California
teachers
• On June 10, 2014, Los Angeles Superior Court
Judge ruled EC 44929.21 (Probationary Period), EC
44932-44948.5 (Dismissal Statutes), and EC 44955
(Layoff) are unconstitutional
• Court reasoned that the above-referenced statutes,
“impose a real and appreciable impact on students’
fundamental right to equality and…they impose a
disproportionate burden on poor and minority
students”
www.capitoladvisors.org
33
Vergara Decision
• EC 44929.21 – Court found, “both students and teachers
are unfairly, unnecessarily, and for no legally cognizable
reason, disadvantaged by the current Permanent
Employment Statute”
• Dismissal Statutes – Court found, “…the current system
required by the Dismissal Statutes [is] so complex, time
consuming, and expensive as to make an effective,
efficient, yet fair dismissal of grossly ineffective teachers
illusory”
• Layoff Statutes – Court found a disproportionate impact
on poor and minority students
• Decision Not Final – Parties will appeal. Challenged
statutes still in effect for the near future
www.capitoladvisors.org
34
AB 215 - Changes to Existing Process
• Effective January 1, 2015 for cases initiated on this date
and thereafter
• Charges may be served at any time of the year, except for
charges of Unsatisfactory Performance. Eliminates May
15 – September 15 “Blackout Period”
• Evidence of designated sex offenses/child abuse older
than 4 years may be used
• Interim Appeals Process before ALJ when employee is
suspended without pay pending termination
• Hearing must commence within 6 months/completed within
7 months of receipt of demand for hearing eliminates the
standard “Continuance Process”
www.capitoladvisors.org
35
AB 215 - Changes to Existing Process
• Parties can mutually agree to hold hearing before ALJ
instead of three member panel
• Panel members must have three years of experience in
the last ten “in the discipline of the employee”
• Panel cannot reduce recommended discipline to a lesser
penalty
• In lieu of written discovery, parties shall make
“disclosures” under strict deadlines
• Use of depositions significantly limited. (Maximum of 7
hours per employee / total of 5 witnesses, including the
employee)
www.capitoladvisors.org
36
AB 215 - Changes to Existing Process
• For cases based solely on “Egregious Misconduct”
• “Egregious Misconduct” defined: “immoral conduct” as
described in EC 44010 (designated sex offenses), 44011
(designated drug offenses), Penal Code Sections
11165.2 (child neglect)-11165.6 (physical abuse of child)
• Allows for “immediate suspension without pay”
• Hearing Before ALJ only, not panel
• Hearing must commence within 60 days of demand for
hearing
• Only 30 days to conduct discovery
• “Use it or lose it?”
www.capitoladvisors.org
37
Mandates/Common Core
• Provides $450 million to all school districts, county
offices of education, and charter schools to pay down K14 mandates backlog
– $400.5 million for K-12
– $49.5 million for Community Colleges
• All LEAs receive funds regardless of mandate claims
• Intent is for K-12 schools to use “discretionary”
resources to support Common Core implementation
• Could also be used to address STRS rate increases… or
anything else…
• Further evidence that claiming for mandates is fruitless
• Mandate Block Grant compliance is different, simpler
www.capitoladvisors.org
38
Mandate Block Grant
• Adds six additional mandates into the block grant:
–
–
–
–
–
–
Parental involvement
Williams
Developer fees
Charter schools
Uniform complaint
Public contracts
• Budget appropriates $218.2 million for the block grant
• No change to COE and school district rates
– School Districts - $28 per K-8 ADA and $56 per 9-12 ADA
– COEs - additional $1 per countywide ADA
– Charter Schools - $14 per K-8 ADA and $42 per 9-12 ADA
www.capitoladvisors.org
39
Connectivity (K-12 HSN)
• $26.7 million (one-time Prop 98 funding) to
K-12 High Speed Network to provide
technical assistance grants to LEAs in need
of enhancements to hardware or internet
connectivity in order to implement the
Common Core assessments in 2015
– K-12 HSN run out of the Imperial County Office
of Education (in partnership with Butte and
Mendocino COEs)
www.capitoladvisors.org
40
Early Childhood Education Reform
$256 million investment in early learning
•
•
•
•
•
•
•
$70 million for 7,500 new full-year, full-day slots (part-day preschool and wraparound services), beginning on June 15, 2015 another 4,000 slots
$50 million for Early Learning Quality Rating and Improvement System (QRIS)
Block Grant to support local preschool providers’ efforts to implement quality
rating and improvement systems. Grants allocated based on the number of
California State Preschool Program (CSPP) slots within the county or region
$17 million to restore 1,500 slots for ages 0-5 child care programs
$25 million for local planning councils to use for professional development
$10 million to establish the Child Care Facilities Revolving Fund for
purchasing, renovating or repairing preschool facilities
$69 million to increase the Standard Reimbursement Rate five percent and the
Regional Market Rate by an average of nine percent
$15 million to eliminate existing CSPP part-day family fee
www.capitoladvisors.org
41
Early Childhood Education Reform
• Beginning July 1, 2015, requires TK teachers
to be credentialed, and by August 1, 2020 have
a minimum of 24 Early Childhood Education
and/or Child Development units, or comparable
professional experience
• Allows providers to keep an additional 10% in
reserves to be used for professional
development for instructional staff
• Sets income eligibility limits at 70 percent of the
state median income in use for the 2007-08
fiscal year
www.capitoladvisors.org
42
Independent Study Reform
Reforms relax a number of burdensome requirements:
• Allows LEAs to locally negotiate alternative
pupil/teacher ratios
• Permits written agreements to be maintained on file
electronically
• Teachers no longer required to sign and date pupil
work products for the purposes of apportionment
• Beginning in 2015-16, allows LEAs, under certain
conditions, to claim ADA for “course completion”
rather than assignment completion
• Allows LEAs to offer year-long master agreements
(rather than the current semester limitation)
www.capitoladvisors.org
43
CTE/ROCPs
• Issues remain unresolved
• Agricultural Incentive Grants, Supplemental
Secondary Grants, and California Partnership
Academies remain stand-alone categoricals, but
receive no COLA
• Prohibition on redirection of ROCP JPA funds and
MOE requirement on ROCP expenditures remain for
2014-15
• One-time Career Pathways Grant funding
• New $250 million (2014-15) funding to be awarded
• $250 million appropriated in 2013-14 has been awarded, see
http://www.cde.ca.gov/fg/fo/r17/ccpt14result.asp
www.capitoladvisors.org
44
CTE/ROCPs
• Supplemental Report Language
– Dept of Finance shall report to the Legislature regarding
recommendations for the appropriate future treatment of
funding for any former categorical education programs…
– including but not limited to Regional Occupational Centers
and Programs…
– shall address (1) maintenance of effort requirements, (2) the
future treatment of funding within the Local Control Funding
Formula, (3) compliance with state law and regulation, (4)
funding structures and policy changes to minimize disruption
of, and assure continuity and quality of, critical services to
students and school employees
• Expect more discussion
www.capitoladvisors.org
45
Adult Education
• Issues remain unresolved
• MOE requirement on Adult Education expenditures
remains for 2014-15
• Governor says he will have Adult Ed proposal in January
 One-year moratorium on Workforce Investment Act charter schools
• 2013-14 budget provided $25 million for two-year
planning grants to regional consortia of community
colleges and school districts
• Plans to be completed in 2015
• Would include county jails (through categorical program)
www.capitoladvisors.org
46
BTSA
• Remains incorporated into the LCFF
• Requires Alameda County Superintendent of Schools to
withhold $581,540 from Newark Unified School District LCFF
funding, and allocate those funds to four school districts in
Alameda County
• Supplemental Report Language
– Dept. of Finance shall report to the Legislature regarding
recommendations for the appropriate future treatment of funding for
any former categorical programs…
– including but not limited to … Beginning Teacher Support and
Assistance…
– shall address (1) maintenance of effort requirements, (2) the future
treatment of funding within the Local Control Funding Formula, (3)
compliance with state law and regulation, (4) funding structures and
policy changes to minimize disruption of, and assure continuity and
quality of, critical services to students and school employees
www.capitoladvisors.org
47
Child Nutrition
• Reimbursement rate reductions due to funding deficiency
– May and June 2013-14, but possibly restored
– 2014-15 reductions possible later in the year
• COLA increases meals reimbursement rate from $.2229 to
$.2248
• NSLP Special Assistance Alternatives - Provision 2 and 3,
Community Eligibility
– Authorizes LCFF school-wide counts once every four years
or when required by federal law, but requires accounting for
newly enrolled and for disenrolled students
– May use 2014-15 count in place of 2013-14 to calculate
LCFF rolling average unduplicated count
– Current year LCFF undercounts not resolved
www.capitoladvisors.org
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State School Facilities Bond
• Transfers $211 million from existing bond authority from the
CTE, Seismic, High Performance and Overcrowded Relief Grant
Programs to the New Construction and Modernization Programs
• Dedicates $188.1 million of one-time Prop 98 General Fund to
pay down part of the remaining $459.5 million obligation for the
Emergency Repair Program (part of the Williams settlement)
• Politics of 2014 School Bond
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Need is demonstrated
Governor’s concerns
Politics of election year - Water Bond linkage
Ballot timelines
Polling
AB 2235 (Buchanan/Hagman) likely vehicle
• New construction, modernization, charter schools, higher education
• Bond size in discussion
www.capitoladvisors.org
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Proposition 39 – Energy Efficiency
• Budget Act allocates $279 million in 2014-15
– contains reduction of $9 million from 2013-14 level
– Diverts $28 million from grants to revolving loan fund
• Low number of LEA applications minimizes
impact of downward adjustments
• Advocacy focused on:
– 10-week turnaround by CEC is too long
– Only $30 million of $381 million in 2013-14 funds
released by CDE
– Funding beyond first five years
www.capitoladvisors.org
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Proposition 39 – Energy Efficiency
• California Energy Commission (CEC)
Launched New Prop 39 Website
– http://www.energy.ca.gov/efficiency/proposition
39/indes.html
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Prop 39 Fact Sheet
Listing of approved energy expenditure plans
Frequently asked questions (searchable)
Energy expenditure plan handbook
Energy savings calculator
www.capitoladvisors.org
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Proposition 39 – Energy Efficiency
• Two approaches for districts are emerging:
– Turn-key model
– Consulting model
• Prop 39 definition of “sole source”
– Resolved by RFP or competitive process
– Does NOT require bidding or RFP for every separate component of
the project
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Energy expenditure plan and application submittal
Project implementation
Measurement and verification
Project tracking and reporting
Education law firms are helping to validate processes
www.capitoladvisors.org
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Politics of 2014
• Governor’s race all-but decided
• Torlakson faces stiff opposition but is favored to
win
• Controller race – Betty Yee squeaks through to
run-off – it’s hers to lose
• 2/3rds Dem control of Assembly and Senate is
major focus of parties
• New Assembly Minority Leader, Kristin Olsen
(R-Modesto) will join new Assembly Speaker
and Senate Pro Tem
www.capitoladvisors.org
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Budget Related Legislation
• Budget Act of 2014 - SB 852
• Budget Trailer Bills
– Education Omnibus -SB 858
– LCFF SB 859
– Higher Education - SB 860
– STRS SB 864
– School Facilities SB 869
• Rainy Day Fund ACA 1
www.capitoladvisors.org
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Thank You
• We will send you this PowerPoint
• Please feel free to use this content
• Questions? Please contact Rachel Scott at
rachel@capitoladvisors.org or (916) 557-9745
• Please let us know what you think
www.capitoladvisors.org
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