Since the beginning of the year, state revenues have continued to flow, raising Gov. Jerry Brown’s state budget for 2018-19 by $3 billion more than he projected in January, according to the revised budget Brown released on Friday. But little of the additional revenue will go to K-12 schools and community colleges because of quirks in the formula that determines K-14 spending.
Funding for K-12 and community colleges for next year will reach a record $78.4 billion under the formula, Proposition 98. While that is only $68 million more than Brown proposed in January, it’s still nearly $2.8 billion — 3.7 percent — above the revised total that the Legislature approved for the current year. K-12 gets the bulk of Prop. 98 funding — about 89 percent — while community colleges receive most of the remainder.
Brown said that since 2011-12, the low point following the recession, Prop. 98 has increased by about two-thirds, increasing the average per-student spending by $4,600. Districts with large proportions of low-income students, foster children and English learners, who benefit from the Local Control Funding Formula for the state’s K-12 school districts, have received substantially more than that.
With customary caution, Brown warned legislators not to count on expanding programs or creating new ones. Revenues could plunge just as quickly as they have risen, and historical cycles point to a recession lurking, he said. “Life is giddy at the peaks but I am not giddy,” Brown said at a press conference.
Brown’s budget for schools reflects his caution. He is proposing about $3 billion more for the Local Control Funding Formula, achieving his goal of restoring for all districts the funding they had, plus inflation, in 2008-09, before the last recession. Brown calls that “full funding” under the funding formula that he championed and the Legislature passed five years ago.
But, reflecting his worry about another recession, Brown is proposing about $2 billion in one-time spending, most of which districts could spend as they choose next year. Senate leaders are proposing instead to convert that into the funding formula as permanent ongoing funding. Much of the negotiations between them and Brown before the final budget deadline of June 15 will focus on whether that would be prudent.
More funding for early childhood ed
The revised budget included more than $108 million in new money for early childhood education. Most of that money — $104 million — is set aside to expand the number of daycare slots for low-income families, and $4 million will provide cost-of-living raises for childcare and preschool workers.
In addition, $11.8 million was made available for training pre-K through 3rd-grade teachers in early math education and expanding math education generally for young students. The revised budget keeps intact a $27 million pilot program from the original January budget that will fund home visits for low-income new parents.
May Revision, May 12, 2018
The budget’s early childhood funding will help low-income families care for their young children, but it’s not nearly enough to address the need, said Kim Pattillo Brownson, vice president of policy and strategy for First 5 LA.
“We’re grateful for the steady investment but it’s insufficient to address the magnitude of the need for infant and toddler care,” she said, noting that in Los Angeles County, 51 percent of families with infants and toddlers qualify for subsidized daycare, but only 6 percent are able to get it because of funding shortfalls.
The initial January budget projected revenues and expenses for 18 months: the last six months of the current year and the year starting in July. The May revision incorporates crucial April income tax receipts, final adjustments for the previous fiscal year and new estimates for the next year. All of the changes combined will raise Prop. 98 $727 million higher than it was in the January budget.
That’s about 10 percent of the $8 billion total increase in the General Fund since the January budget — a far smaller proportion than schools have been used to getting annually during the past six years. That’s because Prop. 98 is governed by its own set of variables and commitments. Following the last recession, when revenue from a new tax increase kicked in, K-12 schools and community colleges initially got almost every dollar of the annual increases as the state began to reimburse them for $11 billion in unfunded obligations that had been accumulating in low-revenue years. With the final repayment of $320 million in 2017-18, K-12 and community colleges will get only about a dime per dollar in 2018-19.
The annual percentage of General Fund increases going to K-14 schools has averaged about 40 cents for every dollar.
Improvements to LCFF
Several proposals may please critics of the Local Control Funding Formula who say it’s difficult to track how districts spend money for low-income students and English learners. Changes include:
- $13.3 million for a “community engagement initiative” to guide districts in communicating more effectively with parents and the public in developing their annual planning and budget document laying out priorities, the Local Control and Accountability Plan.
- $15 million to help districts improve school climate. The budget summary says the money can be used for restorative justice programs, social and emotional learning, bullying prevention and strategies to cope with students’ emotional trauma.
The school climate and the community engagement initiatives will be distributed through competitive grants; the details have not yet been released.
The budget bill will also include language strengthening requirements for spending transparency, expanding on what Brown proposed in January. The administration is preparing a graphic — which each district can populate with its own data — that will guide parents through the LCAP process, according to H.D. Palmer, spokesman for the California Department of Finance.
In a statement Friday, Ryan Smith, executive director of the student advocacy group Education Trust-West, commended Brown for the proposals, which he said “have the potential to significantly increase the capacity of parents, students and other community members to participate in the LCFF process.”
“As these proposals are worked out,” he added, “we urge the governor and Legislature to keep their focus on the millions of students in our schools, and their families, who fought for LCFF and whose engagement is crucial to realizing true local control.”
With regard to higher education, Brown took a carrot-and-stick approach to ensuring that the University of California and the California State University systems do not raise their undergraduate tuition for in-state students. He proposed giving each system $100 million more for deferred maintenance than his January budget did. But he also would punish the universities if they raise tuition: He wants their general fund revenues to be reduced by the millions of dollars any such tuition hike would cost the state’s Cal Grant financial aid program.
The Cal State system already has said it will not raise tuition in 2018-19 for in-state students and UC has postponed a decision on its tuition for at least a month.
The total general fund budget will reach $137.6 billion next year. But rising ongoing expenses for Med-Cal and other programs will eat more than half of that. Brown proposes to spend $2 billion on infrastructure needs — courts, the universities, flood control — and $359 million in one-time money for the homeless and $312 million on mental health.
Legislative leaders have other ideas, however. Senate Budget Committee Chairwoman Holly Mitchell, D-Los Angeles, is proposing to expand a welfare program that offers cash assistance for poor families with children. Leaders in the Assembly are proposing to make health insurance more affordable for low-income families. And, in a statement Friday, Assemblyman Kevin McCarty (D-Sacramento), chair of the Assembly Budget Subcommittee on Education Finance, indicated he’d add more money for early childhood education to the mix.
Brown indicated he might not go along with new permanent spending. Given an economic cycle inevitably heading downward, “we are already overextended,” he said.
Brown also is proposing to place a $2 billion No Place Like Home bond on the November ballot to speed up the construction of housing projects to serve the mentally ill.
EdSource writers Larry Gordon, Carolyn Jones and Mikhail Zinshteyn contributed to this article
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