With a deadline looming, Gov. Jerry Brown and legislative leaders have cut a deal for the 2014-15 state budget that, at the governor’s insistence, keeps his revenue projections but still makes room for additional money for the Local Control Funding Formula, early childhood programs, career education partnerships and implementation of the Common Core State Standards.
The governor and top Democrats reached a compromise after Brown agreed to make room for more spending by deferring on “deferrals” – postponing for now repaying about $900 million in late payments to school districts. If state revenues do come in higher next year, as many, including the Legislative Analyst’s Office, are predicting, the first claim on the money would wipe out the delayed payments that have created financial headaches for many districts. Brown had made eliminating deferrals, part of what he calls “the wall of debt,” a priority.
The compromise budget will be in print later Thursday; the Assembly and Senate are scheduled to vote on it Sunday, the constitutional deadline of June 15 for sending a budget to the governor.
Brown’s budget, as he proposed in May, already included increasing funding through the Local Control Funding Formula by $4.5 billion. That would raise per-pupil funding from $7,933 in 2013–14 to $8,717 in 2014–15, nearly 10 percent, according to the Legislative Analyst’s Office. But it didn’t include more for two programs that the Legislature had identified as priorities: an expansion of transitional kindergarten – a program for children who turn 5 in the first few months of the school year – and career education.
Although transitional kindergarten is not getting additional funding, other state-funded early education programs would see a significant boost, for a total new investment of $264 million in 2014–15. A little more than half of that money, $155 million, would come from Proposition 98 to increase the number of slots in California’s State Preschool program, which provides preschool for children from low-income families; raise the rates paid to centers providing state preschool; and improve the facilities and quality of existing programs.
If Brown approves this increase, an additional 11,500 children from low-income homes with working parents would be able to attend California’s State Preschool program. The agreement also repeals the fee for part-day state preschool programs.
The $250 million for California Career Pathways Trust, a competitive grants program, will double this year’s $250 million for what is believed to be the nation’s largest investment to broaden programs giving students hands-on work experience on their path to graduation. The first 39 grants were announced last
Brown included $1.25 billion in the current budget for districts to buy technology and textbooks and to train teachers in the new Common Core standards in English language arts and math. But, coming after years of budget cuts, districts said they needed more money quickly, with the first standardized tests in Common Core scheduled for next spring. Brown has agreed to add $450 million more in 2014–15 –
but indirectly. The extra money technically will reimburse old obligations – programs the state mandated over many years but never paid for. The budget will state that districts should use this money for Common Core purposes. Whether they do will be up to them. Update: Districts can also use the funding to implement the Next Generation Science Standards and the new English Language Development standards.
The extra $250 million that Brown has added to the Local Control Funding Formula will slightly more than cover districts’ extra costs, starting July 1, for teacher and administrator pensions. Districts’ additional annual pension contributions for the next 30 years will start off at $175 million and rise gradually to $3.7 billion more per year in seven years. The extra money is needed because the pension program run by the California State Teachers Retirement System, or CalSTRS, remains $74 billion short of full funding after it lost 40 percent of its assets in the stock market decline in 2008. Teachers and the state will also increase their contributions to CalSTRS to fill in the funding gap, but districts, as the employer, will be responsible for the lion’s share.
“Given that we conceded the governor’s lower revenue forecasts, the Assembly and Senate were persuasive that the Local Control Funding Formula and paying off mandates had a higher priority” than paying off deferrals, said Rick Simpson, deputy chief of staff for Assembly Speaker Toni Atkins.
No compromise on accountability plan
The governor refused to bend on one of the non-budgetary issues that legislators had inserted in the trailer bill, the technical language that accompanies the budget itself. Legislators, at the urging of civil rights and children’s advocates, had proposed requiring that districts explicitly designate money they received under the Local Control Funding Formula for children learning English, low-income children and foster youths. They are the three categories of students that receive supplemental money under the new funding formula. For state auditing purposes, districts currently do not have to detail how they plan to spend that money.
Advocacy groups said requiring districts to be specific would be the first step toward eventually enabling the public to track and compare how districts spend money for high-needs students. But the Department of Finance rejected the idea on the grounds that spending decisions are a local matter – and up to districts to decide how to report them.
However, the trailer bill will require the State Board of Education to update the Legislature by next February on the implementation of the funding formula and the accountability spending plans, called Local Control and Accountability Plans, that districts are in the process of completing. So the issue may come up again next year.
John Fensterwald covers education policy. Contact him and follow him on Twitter @jfenster. Sign up here for a no-cost online subscription to EdSource Today for reports from the largest education reporting team in California. Lillian Mongeau contributed to this article.