With higher revenues, Brown to provide $2.8 billion more next year for K-12 schools

Credit: Lillian Mongeau / EdSource

The austere budget that Gov. Jerry Brown proposed in January eased somewhat – at least for schools and community colleges – in the budget revision he released Thursday.

Readjustments in the formula that sets education funding will provide $2.8 billion more in 2017-18 for K-12 schools than they are receiving this year, an increase of 5.4 percent. That’s also about $1.1 billion more than Brown had forecast in January. More revenue also will enable Brown to fulfill the commitment he made last year to add 3,000 state preschool openings and to increase reimbursement rates for preschool providers by 6 percent starting July 1.

In introducing the budget at a press conference Thursday, Brown said that spending on education over the past six years has been “phenomenal” – a product of a tax increase on incomes of the wealthiest Californians and the economic recovery.

Brown is proposing that $1.4 billion in additional K-12 revenue go to the Local Control Funding Formula, the primary source of schools’ general funding and the governor’s priority since the law was passed in 2013. The formula redistributes funding to districts based on their enrollments of low-income students, English learners and foster children. As of next year, the Department of Finance says the formula will be 97 percent funded. Fully funded is defined as the level restoring funding for all schools to at least the prerecession level of 2007, though districts with large numbers of students targeted for extra money are well above that level.

Brown is also proposing about $1 billion in one-time money. Although districts can use the funding however they want, Brown suggested in the budget summary that it go toward implementing the state’s academic standards – Common Core and the Next Generation Science Standards – training teachers and buying textbooks. A bill before the Legislature would restore state funding for districts’ induction programs for new teachers, but Brown’s message said that districts should use one-time money next year for that purpose, too.

Rising expenses will temper the good news on additional ongoing funding. About $1 billion of the new $1.4 billion will be consumed by state-mandated pension expenses next year for CalSTRS, covering teachers and administrators, and CalPERS, covering other school employees.

In last year’s state budget, Brown included grants to universities to shorten the time for aspiring teachers to get a combined bachelor’s degree and teaching certificate and to encourage classified school employees to become teachers. He did not propose additional money for next year to deal with a teacher shortage that’s most acute in the Bay Area and Los Angeles and statewide in science, math, special education and bilingual education. However, in a statement Thursday, Assemblyman Patrick O’Donnell, D-Long Beach, said that the Legislature should commit some of Brown’s one-time funding to the teacher shortage. O’Donnell is sponsoring Assembly Bill 169, at a projected cost of $143 million, which would provide $20,000 grants to teachers in high-needs fields.

The proposed budget includes accounting maneuvers that will both please and frustrate education groups. The extra revenues in the May revision eliminated the need to defer school funding, a delay included in January’s proposal. In doing so, Brown would fund schools by about $600 million more than the guaranteed minimum under Proposition 98, which determines the portion of the General Fund that goes to K-12 schools and community colleges. This would be the first time in more than a decade that funding has exceeded the minimum, according to the Department of Finance.

However, in return, Brown also is proposing to ask the Legislature to suspend for three years an arcane and rarely invoked section of Prop. 98, called the Test 3B Supplemental Appropriation. Doing so could delay some revenue that districts would be entitled to. The budget message doesn’t say how much districts wouldn’t get, but the California School Boards Association objected to the idea.

“The notion of ‘over-appropriation’ for public education at a time when state revenues are still increasing defies the spirit of the Proposition 98 law, and is a step away from where we need to be, not toward it,” school boards association President Susan Henry said in a statement.

The Legislative Analyst’s Office is expected to explain the potential impact in its budget analysis next week.

Proposition 98’s minimum guarantee of funding for schools and community colleges has fluctuated over the years, dropping to a low of $47.3 billion in 2011‑12. Total funding for Proposition 98 next year would rise to $74.6 billion.

The portion for K-12 would increase from $50.8 billion to $53.6 billion. That would translate to an average increase of $4,058 per K-12 student since 2012, according to the budget.

Early education and after-school programs

A one-year delay in increases for child care funding projected in January won’t be necessary after all, so the May revision is restoring that funding as part of the $500 million child care package that was proposed in the 2016-17 budget.

It reinstates $7.9 million to add 2,959 full-day state preschool slots, and increases reimbursement rates by 6 percent for child care providers who contract directly with the state. It now reflects the full 10 percent rate increase outlined in the 2016-17 budget.
The announcement is “requisite news,” and simply honors a previous commitment to increase the number of child care slots, said Ted Lempert, president of Children Now, a nonprofit research and advocacy organization based in Oakland. “It’s great that they are committing to what they committed to last year, but we need more for this critical need,” Lempert said.

Child care advocates like Deborah Kong, interim executive director of the Early Edge Initiative, said she is pleased to see the governor “keep his promise to California’s youngest children.”

“All of the adults who care for our youngest learners need to be fairly compensated and not at poverty-level wages,” Kong said.

Unlike early education, the state’s after-school programs did not receive an increase in the reimbursement rate, even though the programs, serving 859,000 low-income students, have been flat-funded for more than a decade.

“Just as increases in child care funding are needed to address the rising minimum wage, the same holds true for after-school programs,” said Brian Lee, the California director of the nonprofit Fight Crime: Invest in Kids. “New funding is needed to keep after-school programs open and offering the high quality needed to attract students, keep them engaged, and keep them off the streets during the prime time for juvenile crime.”

Higher education

In response to a scathing audit critical of the Office of the University of California President, the budget includes a $50 million set-aside to be withheld until the UC system responds to the auditor’s recommendations, Brown said. But when asked whether UC President Janet Napolitano was the right person for that job, he sidestepped the issue.

“I’m not in the business of opining on my colleagues,” he said. “Most people think she’s doing a pretty good job. That’s certainly the view of the (UC) regents.”

However, he said he believed the university’s salaries were too high and that changes in remuneration should be made.

“I put the $50 million there to hold their feet to the fire,” Brown said.

The budget restores Cal Grants for private colleges and universities if they do more to attract low-income students. But the governor does not plan to restore middle class scholarships and is instead phasing them out as proposed in January, due to limited funds and his desire to maintain a healthy rainy day fund that could help stave off future cuts if a recession hits. Students currently receiving the scholarships will continue to get them until they graduate, but no new students will be added to the program.

Brown also pledged to expand health care coverage for undocumented students, but warned that if President Donald Trump’s dire proposal to repeal the Affordable Care Act is successful, deep, “ugly” cuts in California’s budget would be necessary.

“That’s why we are going to fight it,” he said, blasting Republicans who voted for Trump’s health care bill and turned their backs on constituents who rely on federally funded health care.

“I think they’re making a mistake, and they’re going to have to do penance for it,” he said.

Key budget changes for higher education include:

• Sequestering $50 million in UC funding until the auditor’s recommendations and other UC commitments are implemented, with total higher education funding of $33 billion in 2017-18;
• $150 million for Community Colleges Guided Pathways Program to help improve graduation rates;
• $2 billion for Cal Grants tuition aid for UC and CSU students. This includes $8 million to maintain awards of $9,084 for new students attending private institutions (instead of reducing those to $8,056 per student), contingent on greater efforts to enroll low-income students, ease the transfer process from community colleges and expand online programs;
• Increase of $160 million for community college operating expenses;
• Decrease of $10 million in the Middle Class Scholarship program.

If the Affordable Care Act is repealed, however, Brown said he would have to go back to the drawing board, which could result in massive cuts to child care and higher education.

“That would de-fund the universities,” he said. “The only answer is to fight. We’ve got to stop it.”

When asked whether he would consider additional spending suggested by the Legislature, Brown said that would require cuts in other places.

“There are only so many cookies in the jar,” he said. “If they don’t like one kind, they’ll have to look at another kind. I think the judgments we made are good, but we never know what people will be able to persuade me of.”

Complete budget details are at www.ebudget.ca.gov.

Total state General Fund spending would be $124 billion, up $1.7 billion from this year.

EdSource reporters Ashley Hopkinson and Susan Frey also contributed to this article. 

To get more reports like this one, click here to sign up for EdSource’s no-cost daily email on latest developments in education.