www.CapitolAdvisors.org
1
Workshops sponsored by:
www.CapitolAdvisors.org
2
Themes and Thoughts
• Victory lap – debt & ballot measures
• Frames debate – “precariously balanced” versus
“rolling in dough”
• Cautious on spending, loads up on one-time
spending – avoids big ongoing commitments
• Education gets most of general fund revenue growth
• Anticipates strong revenues – but still leaves room
for bigger May Revision
• Budgeting for a downturn, and focusing on long term
liabilities
www.CapitolAdvisors.org
3
Political Backdrop
• New legislators, new leaders, longer terms
• Tax policy and Prop 30 extension debate
- Gov against extension, but not tax reform
- Sen. Hertzberg (former Speaker) takes lead on tax
efforts
• Governor’s political motivation shifts to legacy
– $21 million in the bank for ballot measures
• “Vergara” politics – impact on policy
• Pressure from non-Prop 98 side of budget
• Not an election year…
www.CapitolAdvisors.org
4
Governor’s Overall Budget Proposal
• $113.3 billion GF budget
• $1.22 billion to Rainy Day Fund (balance=$2.8 billion)
• State General Fund expenditures:
–
–
–
–
–
–
–
K-12
Health
Higher Ed
Corrections
Human Services
Natural Resources
Other
41.6%
21.3%
12.4%
9.0%
6.9%
2.3%
6.5%
www.CapitolAdvisors.org
5
State Revenues
• Governor assumes about 4.9% growth in GF revenues
– Personal Income tax
– Sales and Use tax
– Corporation Tax
4.9%
7.4%
5.8%
• Prop 30 revenues helping, but will taper off
– Quarter-cent sales tax increase expires end of 2016
– Personal income tax increase (high-earners) expires end of
2018
• Capital Gains revenue will remain volatile
• Increases in revenue trigger Prop 2 transfer
www.CapitolAdvisors.org
6
State General Fund Revenues
(Billions of Dollars)
$135.00
$125.15
$125.00
$115.00
$113.4
Budget Act
$105.00
Jan Budget
Nov LAO (main)
Nov LAO (slow)
$95.00
2013-14
2014-15
2015-16
2016-17
www.CapitolAdvisors.org
2017-18
2018-19
2019-20
7
Rainy Day Fund
• Rainy Day Fund has multiple components:
– Budget Stabilization Account (BSA)
– Public School System Stabilization Account (Prop 98 Reserve)
– Mechanisms to pay off state debt and/or to pay for state
infrastructure
• Two types of transfers may be made from the General Fund
(GF) to the Rainy Day Fund:
– 1.5% of GF revenues for each fiscal year (Annual Transfer)
– Revenue from personal income tax on capital gains that exceeds
8% of total GF revenues for that fiscal year (Peak Transfer)
www.CapitolAdvisors.org
8
Transfers to the Rainy Day Fund
Annual Transfer
• Half goes to BSA until it reaches 10% of GF revenues (if the BSA
exceeds that cap, these transfers are spent on state infrastructure)
• Half goes to discharge state debt obligations through 2029-30 and is
optional thereafter
Peak Transfer
• Under specified conditions, the portion of the peak transfer that
would have gone to Prop 98 is transferred to the Prop 98 Reserve
• 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 spent on state infrastructure)
www.CapitolAdvisors.org
9
Transfers to the Rainy Day Fund
Total transfer of $2.44 billion from both Annual (1.5% of total
GF) and Peak Transfers (capital gains revenue in 2015-16
projected to be $10.8 billion which is 9.4% of total GF
revenues)
• $1.22 billion to BSA (BSA fund balance of $2.8 billion by end
of 2015)
• $1.22 billion to pay off special fund loans and past Prop 98
liabilities
• No transfer to Prop 98 reserve
– Maintenance Factor not paid off
– Not a Test 1 year
– No trigger of local reserve cap
www.CapitolAdvisors.org
10
California’s Long-Term Liabilities
Debts and Liabilities Eligible for Accelerated Payments Under Proposition 2
(Dollars in Millions)
Outstanding Amount at
Proposed Use of 2015-16
Start of 2015-16
Prop 2 Accelerated Payment
Budgetary Borrowing
Loans from Special Funds
Underfunding of Proposition 98—Settle-Up
Unpaid Mandate Claims for Local
Governments
$3,028
$1,512
$965
$256
$257
$-
$71,773
$49,978
$74,374
$3,371
$530
$$$$$-
$7,633
$14,519
$226,975
$$$1,221
State Retirement Liabilities
State Retiree Health
State Employee Pensions
Teacher Pensions
Judges' Pensions
Deferred payments to CalPERS
University of California Retirement Liabilities
University of California Employee Pensions
University of California Retiree Health
Total
www.CapitolAdvisors.org
11
Budget Act 2015-16
K-12 EDUCATION BUDGET
www.CapitolAdvisors.org
12
K-12 Proposal – Overview
•
•
•
•
•
•
•
•
•
•
•
$65.7 billion for Prop 98 ($58.5 billion for K-12)
$4 billion increase for LCFF (funding 32% of remaining implementation gap)
$1.1 billion one-time discretionary funding (Common Core, prior-year mandates)
$897 million (one-time 2014-15) to eliminate outstanding K-12 deferrals
$500 million for Adult Education Block Grant
$273.4 million (one-time) for the Emergency Repair Program
$250 million (one-time) for CTE incentive grants
$100 million (one-time) for a second-year allocation of Broadband Infrastructure
Improvement Grants – K-12 High Speed Network
$14.8 million (Prop 98) and $18.8 million (non-Prop 98) to support 4,000 State
Preschool slots with full-day wrap around care
$59.5 million for charter school ADA growth
$15.3 million for Special Education ADA growth
www.CapitolAdvisors.org
13
Proposition 98
• It’s a good thing this year… and last
– Constitution requires significant share of revenues to
schools until Maintenance Factor is fully paid
– Settle up funding required to meet the guarantee for prior
years
• Increased funding necessary to meet the minimum
guarantee - $2.3 billion in 2014-15, $400 million in
2013-14
• Test 2 in 2015-16 - guarantee based on prior year plus
adjustment for per capita personal income
• Prop 98 increases for 2013-14, 2014-15 and 2015-16
total $7.8 billion
www.CapitolAdvisors.org
14
Prop 98 Changes Over Time
$80.0
(Billions of Dollars)
$74.5
Budget Act
$72.7
$70.6
Jan. Budget
$70.0
$68.1
Nov. LAO
$65.7 $65.8
$63.2
$60.9
$58.2 $58.3 $58.7
$60.0
$56.6
$55.0
$51.7
$50.0
$49.2
$49.7
$47.2
$40.0
www.CapitolAdvisors.org
15
Inter-Year (Cross-Year) K-12 Deferrals
2014-15
Revenue
Trigger
Funds Used for
Buy-down
2013-14
Budget Act
2014-15
Budget Act
2012-13
$3,655
$1,295
$4,950
2013-14
$242
$2,781
$3,023
2014-15
Total Buy-Down
Since June 2013
Remaining
Deferrals
$3,897
Total
$ 599
$ 897
$ 1,496
$4,675
$ 897
$9,469
$0
(all amounts in millions and rounded)
www.CapitolAdvisors.org
16
LCFF Entitlement Target
• Entitlement Target = Base Grant + GSAs +
Supplemental Grant + Concentration Grant +
Add-ons
• Base Grant per ADA (with annual COLA)
K-3 = $7,122 (up $111)
4-6 = $7,228 (up $112)
7-8 = $7,444 (up $116)
9-12 = $8,625 (up $134)
• GSAs – 10.4% ($741; up $12) per K-3 ADA;
2.6% ($224; up $3) per 9-12 ADA
www.CapitolAdvisors.org
17
LCFF in One Chart
Entitlement Target
2015-16 Funding
TIIG Add-on
Trans. Add-on
32.19% of Remaining Gap
Concentration Grant
Prior Year Gap + ERT Funding
Supplemental Grant
2012-13
“Included”
Categoricals
2012-13 TIIG
2012-13 Trans
9-12 GSA
K-3 GSA
2014-15
Funding
Base Grant
2012-13
Revenue
Limit
(adjusted for
1.58% COLA)
www.CapitolAdvisors.org
18
Stand-Alone Categoricals
•
•
•
•
•
•
•
•
•
•
Proposed for Ongoing Funding (no COLA)
After School Education and Safety Program ($547
million)
Child Nutrition – Breakfast Startup ($1 million)
County Office Fiscal Oversight ($5.3 million)
California School Information Services ($5.8 million)
K-12 Internet Access ($108.3 million)
State Testing Program ($127.8 million)
California Partnership Academies ($21.4 million)
Agricultural Education Incentive Program ($4.1
million)
Specialized Secondary Programs ($4.9 million)
Teacher Dismissal ($30 thousand)
•
•
•
•
•
Proposed for Ongoing Funding
(includes 1.58% COLA)
Special Education ($3.3 billion)
Foster Youth Programs ($15.5 million)
American Indian Education Centers and Early
Childhood Education Programs ($4.7 million)
Child Nutrition ($164.7 million)
State Preschool ($657 million)
Proposed for One-time Funding
• Adults in Correctional Facilities ($15.1 million)
• Emergency Repair Program ($273.4 million)*
* Finishes Williams Settlement obligation
www.CapitolAdvisors.org
19
County Offices of Education
• Governor proposes $109,000 to fund a COLA for those
COEs at their target funding level under LCFF
• Governor proposes to send $20 million of his proposed
$1.1 billion in discretionary funding to COEs (distributed
on the basis of county-wide ADA and the number of
school districts in the county)
– These funds will also directly offset prior-year unreimbursed
state mandate claims
– COEs also will receive their per ADA share
• COE LCFF formula changes still under discussion
www.CapitolAdvisors.org
20
K-3 GSA
• As a condition of receipt of funds (10.4% grade span adjustment), 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; approx. 32% in 2015-16)
• Can locally negotiate alternative ratios and/or alternative transition
• Not waivable by State Board of Education
• In the audit guide for 2014-15:
– 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
21
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 regulations
– 2015-16 gap closure is approx. 32%
– Proportionality (seven step) calculation
– Progress to full implementation?
•
About $10.8 billion for LCFF over first 3 years, roughly $8 billion
more needed based on 2012-13 LCFF calculations
www.CapitolAdvisors.org
22
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/schoolwide basis
Describe how those services are principally 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
23
Impact of LCFF on Negotiations
• Let the LCAP drive the discussion
• Anticipate bargaining units will want to actively participate in LCAP
revisions
• Rules for mandatory and non-mandatory subjects of bargaining have
not changed – base grant funding essentially “on the table”
• Supplemental/Concentration grants are restricted, but there are
acceptable uses related to compensation with proper tie to LCAP
template and compliance with SBE regulations
– Training days
– Extra duty assignments / Extended duty days
– Prepare information regarding hiring/retention status to rebut “attract and
retain” argument
– Additional instructional minutes
– Additional dedicated time for collaboration/refinement of teaching skills
www.CapitolAdvisors.org
24
General Bargaining Strategies
• Be wary of contingency language
• Remember, the Prop 30 sales tax increase expires at
the end of 2016, and the personal income tax increase
expires at the end of 2018
• Don’t give away personnel cost items, when the
District still has language goals to achieve
• Leverage the LCAP process (get parents and community
on board)
• Prepare for demands to bargain the “effects” of LCAP
decisions
www.CapitolAdvisors.org
25
Budget Act 2015-16
OTHER KEY BUDGET ISSUES AND
PROGRAMS
www.CapitolAdvisors.org
26
Local Budget Reserve Cap
• Cap triggered only by transfer to Prop 98 reserve
• Administration and LAO do not anticipate that fiscal
conditions (e.g., maintenance factor payments, Test 1)
will trigger caps of local reserves at any point within
forecast period (through 2018-19)
• Governor heard concerns raised by stakeholders and
will engage in a dialogue over the coming months to
“protect the financial security and health of local
school districts”
www.CapitolAdvisors.org
27
Local Budget Reserve Rules
• Transparency - 2015-16 LEA budgets (adopted or revised) with
reserves in excess of the minimum level recommended by the
SBE shall review and discuss the reserve in a public hearing
• The cap – in a year following a transfer into the Prop 98
Reserve, no 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
• Cap Exemption - The County Superintendent may grant an
exemption from the cap for two consecutive years out of three if
district demonstrates “extraordinary fiscal circumstances”
www.CapitolAdvisors.org
28
CalSTRS “Squeeze”
• This is the second year of a 32 year plan to eliminate the
CalSTRS unfunded liability ($74.4 billion*)
• Does so by increasing contributions from:
– The State (total $20 billion)
– CalSTRS school employees (total $8 billion)
– School employers (total $47 billion)
• Increased costs to LEAs of over $4 billion by 2020-21
• No additional funding to LEAs for this purpose
• Puts pressure on LCFF base funding and ability to meet
proportionality spending requirements
• Note that costs are increasing for CalPERS too
• GASB reporting requirements still hold
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
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
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%
www.CapitolAdvisors.org
32
Negotiating the STRS Increase
• STRS increase should be clearly enunciated in any budget
report, mentioned in presentations, and included in
discussions with the union
• Salary proposals should be made in a total compensation
format, including the increased STRS contribution as a
component
– E.g. “For the 2015-2016 school year, the District proposes an
increase in total compensation equivalent to a ___% increase to
the base salary schedule. This includes a 3.15 % increase to the
base salary schedule, and increase to the health and welfare
benefit cap to $_______ (equivalent to ___% increase to the
base salary schedule) and a 1.85% increase to the District’s STRS
contribution (equivalent to __% increase to the base salary
schedule).”
www.CapitolAdvisors.org
33
Health Care Bargaining Issues
• Under the Affordable Healthcare Act (ACA), a Cadillac Plan is any plan that
costs more than:*
– $10,200 per year for individual coverage
– $27,500 per year for family coverage
– Includes both employee and employer contributions to flexible spending
and health savings accounts, but not including vision and dental benefits if
offered with payment of separate premium
• Trend of increasing health care costs creates possibility that all plans will
be “Cadillac” plans by 2018
– Current average costs of an individual plan is approximately $8,000 and the
average cost of a family plan is approximately $24,000
*May be adjusted if premiums for the Blue Cross Blue Shield Standard Plan offered to federal employees sees premium growth from
2010-2018 in excess of 55%
www.CapitolAdvisors.org
34
Cadillac Plan Penalty
• Beginning in 2018, government will impose a
40% excise tax on premiums that exceed
$10,200/$27,500
• Example – if plan exceeds threshold by
$1,000, the tax would be $400 per plan
• Tax charged to the insurance provider or to
the employer
www.CapitolAdvisors.org
35
ACA Bargaining Issues & Strategies
• Avoid the Cadillac tax
– Separate employer paid dental/vision benefits
•
•
•
•
Don’t negotiate overly specific plan descriptions
Include annual reopener for benefits
Get to tiered, not composite, plans
Negotiate spousal coverage? (U.P.S., Univ. of
Virginia)
• Coverage for employees who work less than 30
hours per week?
www.CapitolAdvisors.org
36
Bargaining Reductions in Hours?
One California District with 173 Classified 6
hour/day employees without health benefits
• Options:
– Do nothing = $1.8 million ACA penalty
– Provide full cap = $2.1 million cost
– Offer bronze plan at employee’s expense = $519,000
potential penalty
– Provide bronze plan at District’s expense = $987,000
cost
– Reduce hours to 5.75 and maintain same salary =
minimal cost
www.CapitolAdvisors.org
37
ACA Incentives/Consequences?
• When employees are eligible for tax subsidies, marketplace could
be a win/win for employees and employers
– For a family of 4, 400% of the federal poverty level = $94,200 - those
making less than this can get federal subsidies
– For a custodian making $35,000/year, the maximum employee
payment under the ACA marketplace is $1,365 for employee only or
$2,778 for a family of four – compare this to how much the employer
is currently paying for the same policies
– Classified unions are seriously eyeing the marketplace option
• If these policies create a long-term shift away from employer
provided healthcare, could result in large increases in taxpayer
subsidized healthcare
www.CapitolAdvisors.org
38
Teacher Preparation
• Governor notes that there is currently no way to verify that
educator preparation programs produce “fully prepared” teachers,
that the Teacher Performance Assessment is outdated and not
aligned to teacher performance standards, and that there is no
assessment to measure if a person is prepared to be a school
principal
• Proposes $5 million over two years to:
– Convene an Accreditation Advisory Panel to provide recommendations
to CTC re streamlining preparation standards
– Enhance data systems related to educator assessments and program
quality, including candidate and employer surveys
• Additional $5 million over two years to update the Teacher
Performance Assessment and develop an Administrator
Performance Assessment
www.CapitolAdvisors.org
39
BTSA
• Governor asserts BTSA is cumbersome and
expensive to operate
• Notes some LEAs no longer provide teacher
induction programs while others charge
beginning teachers to participate, therefore some
teachers struggle to complete induction programs
• Directs CTC to evaluate burden of induction
requirements and consider options to streamline
and reform beginning teacher induction
www.CapitolAdvisors.org
40
Common Core/Mandates
• $1.1 billion in discretionary one-time funds to further “investments in the
implementation of Common Core.”
– New English Language Development (ELD) standards
– Next Generation Science Standards (NGSS)
– “New responsibilities required under the evolving accountability structure of
the [LCFF]”
• $20 million to COEs (per county-wide ADA and number of school districts
in county), remainder goes to school districts, county offices and charter
schools on the basis of ADA ($183 per ADA)
• Funds received will directly offset any unreimbursed state mandate claims,
but all LEAs receive funds regardless of mandate claims
• Governor’s approach favors mandate block grant over claiming
• Mandate Block Grant compliance is different
www.CapitolAdvisors.org
41
Mandate Block Grant
• Budget appropriates $218.3 million for the block grant
• Adds one additional mandate (Pertussis), and $1.6 million,
into the block grant:
• New rates:
– COEs and School Districts - $28.42 per K-8 ADA and $56 per 9-12
ADA
– COEs - additional $1 per countywide ADA
– Charter Schools - $14.21 per K-8 ADA and $42 per 9-12 ADA
– ADA calculated at P-2 in the prior year
– Funding deficiency will lead to proration of per ADA amounts
www.CapitolAdvisors.org
42
School Facilities
• Governor proposes to reduce the state’s role in
school construction – no state bond proposed
• Separate ballot strategy launched
• Governor’s principles:
– Expands local control
– Targets state funds at districts with highest need for
financial assistance
– Augments the Charter School Facility Grant Program
www.CapitolAdvisors.org
43
School Facilities
Governor would expand local control by:
• Increasing caps on local bond indebtedness
• Restructuring developer fees to be one fee for all
districts and capping the fees for specific projects
between the existing level II and III (50 to 100
percent of project costs), subject to local
negotiation
• Expanding allowable uses of Routine Restricted
Maintenance
www.CapitolAdvisors.org
44
School Facilities
Governor plans to target state facility funds for
neediest districts by:
• Limiting eligibility to districts with such low perstudent assessed value they cannot issue bonds at
the local level to meet the need
• Prioritizing funding for health, safety, and
overcrowding projects
• Establishing a sliding scale to determine the state
share of project costs based on local capacity to
finance projects
www.CapitolAdvisors.org
45
School Facilities
• Provides increase of $273 million (one-time)
for Emergency Repair Program
– Retires state’s obligation under Williams
settlement agreement
• Proposes approx. $95 million for State Special
Schools (special education, deaf, blind) over
the next several years
www.CapitolAdvisors.org
46
Proposition 39 – Energy Efficiency
The Budget proposes to allocate the $368 million of energy
efficiency funds available in 2015‐16 as follows:
• $320.1 million and $39.6 million to K‐12 school and
community college districts, respectively, for energy project
grants
• $5.3 million to the California Conservation Corps for
continued technical assistance to K‐12 school districts –
CCC had stopped accepting applications and perhaps now
will reopen that process
• $3 million to the Workforce Investment Board for
continued implementation of the job‐training program
www.CapitolAdvisors.org
47
Proposition 39 – Energy Efficiency
• Two approaches for districts have emerged:
– Turn-key model
– Consulting model
• Prop 39 definition of “sole source”
– Resolved by RFP/Q or competitive process
– Does NOT require bidding or RFP/Q for every separate component of the
project
•
•
•
•
•
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
www.CapitolAdvisors.org
48
48
Proposition 39 – Energy Efficiency
• Challenges districts are experiencing:
–
–
–
–
Meeting SIR
Audit turnaround time & audit comprehensiveness
Limited time & resources to fulfill CEC requirements
Leveraging additional funding sources/grants/rebates
• 3 RFP templates being used by 80% of districts (examples
available for attendees)
• New technologies available to improve SIR’s
www.capitoladvisors.org
www.CapitolAdvisors.org
49
Child Nutrition
• $6.32 million increase in funding to $164.7
million
– $3.76 million added for growth in meal counts
– $2.56 million added to fund 1.58% COLA
• Child Nutrition Breakfast Start-up funding
constant at $1.02 million
– No COLA funding provided
www.CapitolAdvisors.org
50
Early Childhood Programs
•
Transitional Kindergarten
–
–
•
State Preschool
–
–
–
–
•
Increase of $33.5 million for a full-year RMR update
Cost of Living Adjustments
–
–
–
•
$36.6 million for 4,000 slots with full-day wraparound care
These slots open on June 15, 2015 and were added as part of last year’s enacted budget
$3 million reduction for removal of one-time 15-day preschool slots
Net increase of $33.6 million ($14.8 million Prop 98 + $18.8 non-Prop 98)
Regional Market Rate
–
•
No new proposal or discussions on TK
Legislative conversations shift to preschool (AB 47 – McCarty)
$21.5 million to fund 1.58% COLA for capped child care programs
$9.2 million in Prop 98 funding and $12.3 million in non-Prop 98 funding
COLA was suspended for these programs from 2008-09 to 2014-15
CalWORKS
–
–
Stage 2 - Decrease of $11.6 million for Stage 2 (stable working families transitioning off cash aid) to
reflect decreased caseload and increased cost per case
Stage 3 – Increase of $38.6 million for Stage 3 (families not receiving cash aid) to reflect increased
caseload and increased cost per case
www.CapitolAdvisors.org
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Federal Child Care
Federal Child Care Development Block Grant
• $14.9 million decrease in federal funding to CA, dropping total federal
funding to $565.2 million
• Federal reauthorization (November 2014) of the block grant will bring
changes over the next few years
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– Annualized licensing inspections
– Health and safety inspections for non-family license-exempt providers
– Increased eligibility
– Additional funding for child care quality activities
– Restructuring of professional development
– Increase program information for families
Governor does not expect the block grant funds to be sufficient to implement
these changes while maintaining the current level of service
www.CapitolAdvisors.org
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Adult Education
• Two year planning period for regional consortia coming to
an end with report by March 1, 2015
• Governor proposes $500 million for new Adult Education
Block Grant to provide:
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Elementary and secondary basic skills
Citizenship and ESL for immigrants
Programs for adults with disabilities
Short-term CTE for occupations with high employment potential
Apprenticeship programs
• First year distribution to school districts equal to 2014-15
MOE
www.CapitolAdvisors.org
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Adult Education
Future distributions through new Regional Consortia structure:
• Funding approved and allocated by SPI and CCC Chancellor
• Regional Allocation Committees plan and allocate funding for direct
instruction, support services, and administration of consortium (admin
capped at 5%)
• Seven Allocation Committee members:
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CCC
K-12 school districts
Adult Ed provider
Local workforce investment boards
County social services
Correctional rehabilitation
Public member
• Far from cooked, more details to come
www.CapitolAdvisors.org
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CTE/ROCPs
• California Partnership Academies, Agricultural Incentive
Grants and Supplemental Secondary Grants remain standalone categorical, but receive no COLAs
• $250 million (Second Round - 2014-15) Career Pathways
Grant proposals in process
• 2-year MOE requirement on ROCP expenditures expired
• New CTE Incentive Grant Program
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Three years of one-time funding - $250 million each year
Provides matching funds – dollar-for-dollar
Districts, COEs, Charter Schools may apply
Priority: regional partnerships running high quality CTE programs
Outcome based accountability to maintain eligibility
www.CapitolAdvisors.org
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Technology Infrastructure
• $100 million (one-time) to K-12 High Speed
Network to support additional investments in
internet connectivity and infrastructure needed
for state assessments
– Governor focused on feedback that many LEAs had to
shut down non-essential access to the Internet in
order to conduct the field test
• K-12 HSN run out of the Imperial County Office of
Education (in partnership with Butte and
Mendocino COEs)
www.CapitolAdvisors.org
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Special Education
• $28.6 million increase in GF funding to $3.3
billion, including:
– $15.3 million added for growth
– $59.1 million added to fund 1.58% COLA
– $45.9 million reduction to reflect increased property
taxes
• Governor appointed a task force to study
potential changes to special education
– Report and recommendations expected this spring
www.CapitolAdvisors.org
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Charter Schools
• Provides increase of $59.5 million to support
charter school ADA growth
• Provides $183 per ADA to charter schools via the
Common Core/mandate funding
• Increases state funding for the Charter School
Facility Grant Program
• Proposes to lower the Charter School Facility
Grant Program free/reduced meal eligibility
threshold from 70% to 55%
www.CapitolAdvisors.org
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What’s Next
• Budget Committees conduct broad overview
• LAO issues detailed review of Governor’s plan –
expect higher revenue forecast
• Budget Subcommittee process
• May Revision – anticipated increases in revenue
and Prop 98 spending
• On time budget in June
• Budget Perspectives Workshops in May & July
www.CapitolAdvisors.org
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Thank You
• We will send you this PowerPoint
• Please feel free to use the content as you wish
• Questions? Please contact:
Barrett Snider at Barrett@capitoladvisors.org
(916) 557-9745
• Please complete feedback survey
www.CapitolAdvisors.org
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