Gov. Brown agrees not to hold back money from California schools next year

June 12, 2017

California school districts won’t have to wait an extra year to get nearly $1 billion in one-time funding, as Gov. Jerry Brown proposed last month. And after-school and summer program providers will see their first funding increase in more than a decade, under the terms of the 2017-18 state budget that legislative leaders and the Brown administration negotiated last week.

The Legislature must pass the proposed $126 billion state budget by Thursday to meet a constitutional deadline. Schools and community colleges will get a sizable share of the funding increase. Funding under Proposition 98, the formula that determines K-12 and community colleges’ share of state revenue, will rise $3.1 billion – 4.4 percent – to $74.5 billion. School districts’ share of the increase will be $2.8 billion.

In his revised May budget, Brown proposed giving schools about $600 million more than the minimum funding that Prop. 98 required, but he called for withholding $1 billion in one-time funding until May 2019 to make sure that revenue projected for next year actually comes in. Brown, who has long warned a recession is imminent, said it would be better to wait than to retroactively cut school funding in the middle of the year.

But Assembly and Senate budget negotiators didn’t like that idea any more than education groups, which said that promising then reneging on funding would raise false expectations and set a bad precedent. In the final budget, schools and community colleges will end up with the best of both worlds: Funding that won’t be delayed and that will be about 1 percent above the Prop. 98 minimum guarantee.

If Brown has second thoughts, he will have up to 12 days after the Legislature passes the budget to delete spending for individual budget items.

About half of K-12’s new money will go toward funding the Local Control Funding Formula, which distributes additional money to districts based on their percentages of low-income students and English learners. It has been Brown’s priority since its passage in 2013, and the additional $1.36 billion for next year will raise the formula to 97 percent of full funding. That’s defined as the amount needed to restore funding for all school districts to pre-recession 2007 levels, although most districts, with high numbers of students targeted for extra money, are already funded well above that amount.

For all the relatively good news, most school districts aren’t feeling flush. Mandated pension expenses for hourly workers through CalPERS and teachers and administrators through CalSTRS will rise about $1 billion next year and annually through 2020-21, according to the Legislative Analyst’s Office. Most districts’ share of special education expenses are rising faster than the funding that districts are getting from the state in annual cost of living adjustments.

If the budget proposal is approved, the average funding increase next year will be about $490 per student, but averages are deceiving, because funding under the Local Control Funding Formula is based on proportions of high-needs students and so varies widely from district to district. The per student funding currently is $10,579 per student, according to the Department of Finance. Low-income students and English learners make up 63 percent of the average district.

“There is no question that some districts will be in really difficult financial shape and will need budget cuts to pass a balanced budget for next year or will survive on budget reserves,” said Kevin Gordon, president of Capitol Advisors Group, an education consulting company based in Sacramento.

That’s also why paying the one-time money on time is important, said Edgar Zazueta, senior director of policy and government relations for the Association of California School Administrators. “This is a big win, especially for districts that don’t receive a lot of (supplemental money) under the Local Control Funding Formula,” he said.

Districts will not have total discretion over all of it, however. Negotiators reduce the $1 billion to $876 million to reflect slightly lower revenue estimates and to make room for the reimbursement increases for after-school programs, initiatives to address the state’s teacher shortage and other priorities of legislators and advocacy groups.

They include:

Not funded were $25 million for districts to create teacher residencies, which would have provided a year of full-time mentoring for aspiring teachers, and $25 million for the Golden State Teacher Grant Program, pushed by Assemblyman Patrick O’Donnell, D-Long Beach, who chairs the Assembly Education Committee. It would provide $20,000 in tuition assistance for teachers in training who commit to teach in low-income schools in subject areas with shortages.

“The Legislature should be commended for the incremental steps they took to address the state’s growing teacher shortage, but students in California need more decisive action,” Liz Guillen, director of legislative and community affairs for the nonprofit Public Advocates, wrote in an email. Without more action, “high-need students who are disproportionately affected by under-prepared teachers are unlikely to see significant improvements any time soon.” Public Advocates and other organizations that are part of the LCFF Equity Coalition made their case in a May 31 letter to budget negotiators.

Other one-time funding includes:

Early education

In his revised budget in May, Brown fully restored the $500 million child-care package he committed to last year. He agreed to reinstate $7.9 million to add 2,959 full-day state preschool slots and to increase reimbursement rates for child care providers.

The final budget agreement includes these provisions and addresses two issues that advocates consider critical to make child care more affordable for low-income families.

It will potentially reduce child care expenses for 1.5 million families by expanding the California Earned Income Tax credit, which enables wage earners to keep more of what they earn for a variety of expenses, including child care.

The current tax credit is available only to families with an annual salary of $10,087 or less for one child and $14,161 or less for more than one qualifying child, according to Children’s Defense Fund, a children’s advocacy organization. The new agreement will expand the eligibility limit to $22,300 for all families with dependent children.

The other issue pertains to the eligibility limit for families receiving subsidized child care. Families in California qualify for subsidized child care by meeting income limits based on the state median income. However, California has not increased its income eligibility limit in several years and the limit is based on the state median income from 2005. The budget deal calls for the state Department of Finance to update median income for various family sizes annually. It does not include an increase in the eligibility limit for next year. 

“For over a decade, the eligibility levels for subsidized child care and preschool have been frozen. Updating family eligibility preserves the ability for many minimum wage families to receive the child care parents need to work and their children need to thrive,” said Camille Maben, director of First 5 California.

EdSource reporter Ashley Hopkinson contributed to this article.

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