• Governor’s January School Budget Proposal 2015-16

    Local Control Funding Formula (LCFR – The implementation of the LCFF does not affect PGUSD, as we are fully funded from local property taxes, and receive no funding based on the LCFF. School districts with property tax revenues that exceed the formula funding levels will continue to retain their local tax growth, and will receive a minimum state aid allocation that is reduced by the cuts incurred during the recession (the Fair Share) which under the LCFF, are carried forward into future years for these districts.

    This is the third year of a seven-year phase in of the LCFF, which will be fully implemented by 2020-21. The switch to the new funding formula is now 32.19% complete. The new formula will result in elimination of the old Revenue Limit formula along with its deficit factor. Because the Governor’s proposal provides $4.0 billion to implement the LCFF, enrollment-funded school districts are expected to receive an additional 8.7% in funding next year, which is equivalent to $675 per student.

    Federally funded categorical programs such as Child Nutrition and Special Education will remain outside of the new formula. Also, there are provisions in the new formula that call for lower class sizes by the year 2020-21 with grades K-3 targeted to be no higher than an average of 24:1, unless a different class size is agreed upon locally.

    Special Education – The Governor’s budget contains a 1.58% COLA for special education and an additional allocation to fund special education ADA growth. The state is expected to soon reveal recommendations put forward by its 32-member task force that has developed specific goals in the areas of teacher preparation, credentialing, professional development, education delivery models, assessment and accountability, early learning and fiscal issues.

    Deferrals – The proposed budget includes $900 million in funding which will fully reverse previous cash deferrals that have been imposed over the last several years. This funding does not affect PGUSD because we were not subject to cash apportionment deferrals at the time they were imposed.

    Adult Education – The Governor’s proposal states that it still intends to invest in Adult Education programs in 2015-16. The consortia recommendations for revision of Adult Education programs will be completed in 2015. For the 2015-16 fiscal year, Adult Education programs will continue to be funded at their Maintenance of Effort requirement. In future years however, a new funding formula will be developed by each local Adult Education Consortium.

    Mandated Cost Reimbursement – The state has accrued a $5.4 billion debt to school districts, (including PGUSD), for unreimbursed Mandated Costs. The long term plan is to pay back this debt completely by 2017-18. The good news is that, while there was no funding included in last year’s budget, the budget proposal for 2015-16 contains $1.1 billion in Mandated Cost reimbursements. This is one-time discretionary money that is a payment on debt owed to school districts. The state did not provide any funding for Common Core implementation this year, and is recommending that school districts use these debt payments to pay for Common Core expenditures.

    Pupil Transportation – There are no changes proposed to the Pupil Transportation program. The funding continues to be an add-on to the LCFF and no COLA has been applied.

    Prop 39 – The California Clean Energy Jobs Act (Prop 39) was approved by voters in 2012 to support energy efficiency. Proposition 39 funding can be used by school districts to undertake energy efficient measures, including the construction of buildings that use less energy, purchasing energy efficient equipment, and undertaking renewable energy projects. PGUSD is expected to receive approximately $100,000 per year over five years.

    CalSTRS – The Governor’s budget proposal notes that the California State Teacher’s Retirement System (CalSTRS) faces a growing unfunded liability of $80 billion and may exhaust its assets within 30 years. In 2013, CalSTRS presented a report to the Legislature with options for improving the funded status of retirement plans, which would require increases in the contributions from employees, employers, and the state. Employer costs for retirement benefits for both CalSTRS and CalPERS are projected to nearly double over the next several years. The Budget Proposal does not address these cost increases.

    Next Steps – The Governor’s budget proposal marks the beginning of the budget cycle. Between now and May, when the Governor’s May Revision of his budget proposal is issued, the Legislature will have much to say about this budget proposal, and more information will be released. The next report to the PGUSD Board will be made in May once the May Revision has been released. 

    posted to Cedar Street Times on January 17, 2015

    Topics: Front PG News, Schools

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