6 EDCAL January 21, 2019
BUDGET
Continued from page 1
in a new “Working Families Tax Credit”.
• $105 million (on top of $200 million
approved last year) for wildfire prevention.
• $40 million for a second year of free
community college tuition for Californians.
• An adjustment of the state trust fund
reserve rules to extend California’s paid
family leave program beyond the current six
weeks to as long as six months with partial
pay for new parents.
• $140 million to expand Medi-Cal
coverage to young adults between 19 and 25
who are undocumented.
• Subsidized premiums for Californians
who can’t afford health insurance, paid for
by a reinstatement of the Affordable Care
Act penalty, in this state only, for those who
choose not to be covered.
Below are some key components of the
governor’s budget proposal.
K-12 education funding overview
In the budget summary, the Newsom
administration signals key policies and pri-
orities that are aimed at improving student
outcomes, including:
• Ensuring school districts and charter
schools are held accountable for the success
of all students.
• Improving access to data so that par-
ents, teachers, administrators, and policy-
makers can make informed decisions.
• Empowering communities to partner
with local school boards to prioritize the
allocation of resources.
•
Supporting Local Educational
Agencies so they can be fiscally stable and
can target resources to student populations
most in need of support.
•
Encouraging state and Local
Educational Agencies to adopt early edu-
cation and school readiness as priorities,
providing significant investments to yield
exponential returns for students and schools.
To support these goals, Gov. Newsom’s
budget proposes a General Fund budget
plan of $144 billion, a 3.3 percent increase
from the current fiscal year. As a result, this
year’s investments in K-12 public educa-
tion are comparable to the year-over-year
augmentations schools have received since
the November 2016 passage of Prop. 55, the
temporary income taxes.
The budget proposes to fund the Prop.
98 minimum guarantee at $80.7 billion, a
$2.9 billion increase compared to the 2018-
19 funding levels for schools and commu-
nity colleges. This translates to $12,003 in
ongoing K-12 per-pupil expenditures, or an
average increase of $435 per pupil over the
level provided in 2018-19. The Department
of Finance notes this is nearly $5,000
higher in per-pupil expenditure than just
seven years ago.
It is worth noting that the Prop. 98 fund-
ing level for the 2017-18 and 2018-19 fiscal
years declined from the 2018-19 Budget
Act levels by $120.1 million and $525.7
million, respectively, as a result of declining
statewide enrollment. Despite this lower
funding level, the budget proposes to main-
tain a $44 million over-appropriation to the
Prop. 98 minimum guarantee in 2017-18.
As part of the $80.7 billion provided
through the Prop. 98 minimum guarantee,
the budget includes the following proposal
for K-12 public education.
Local Control Funding Formula
Enacted in June 2013, the LCFF targets
were fully funded in the 2018-19 Budget
Act – two years ahead of schedule. As a
result, future state budgets would only
guarantee a Cost-Of-Living-Adjustment
for the LCFF base, supplemental and con-
centration grants. The governor proposes
a $2 billion increase to the LCFF, which
reflects a 3.46 percent COLA. This invest-
ment brings the total amount to $63 billion
towards LCFF in 2019-20.
One-time general funds for pension
liabilities
Unlike past years where Local
Educational Agencies received one-time
discretionary grants that could be used for
any local purpose, this budget proposes
using $3 billion in one-time non-Prop. 98
General Fund to CalSTRS to reduce pen-
sion costs for K-12 schools and community
colleges. Of this amount, a total of $700
million would be provided to buy down the
employer contribution rates in 2019-20 and
2020-21.
Based on current assumptions, employer
contributions would decrease from 18.13
percent to 17.1 percent in 2019-20, and
from 19.1 percent to 18.1 percent in 2020-
21. The remaining $2.3 billion would be
paid toward the school employers’ long-
term unfunded liability, with an estimated
reduction in the out-year contribution rate
of approximately half a percentage point.
This is a shift from the prior administra-
tion, who was unwilling to address the
increased cost pressures school districts are
facing related to rising health care costs and
the higher pension contributions.
Special education
While the 2018-19 Budget Act included
$167 million in one-time investments to
increase the availability of inclusive early
education and care for children 0 to 5 years
old, Gov. Brown resisted calls from educa-
tion groups and members of the Legislature
to address the insufficiency of funding for
special education. Gov. Newsom proposes
$576 million in Prop. 98 funds, of which
$186 million are one-time in nature, to
support expanded special education services
and school readiness supports at LEAs with
high percentages of both students with dis-
abilities and low-income, foster youth and
English learners (unduplicated students
under LCFF).
Eligible LEAs may use these grants to
fund special education and school readiness
services not currently included in an indi-
vidualized education program. This funding
is intended to supplement services for stu-
dents currently receiving special education
services and for preventative services that
may reduce the need for additional services
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in future years. tax revenues.
California state preschool ACSA perspective and what’s next
The budget includes $125 million in
non-Prop. 98 General Fund to expand
the State Preschool Program by increasing
access to subsidized full-day, full-year slots
for low-income 4-year-olds. The goal is to
fund a total of 200,000 slots by 2021-22.
Given the limited capacity of school dis-
tricts, the governor proposes that additional
slots would be provided by not-for-profit
providers.
To allow non-local educational agen-
cy providers to draw down full-day, full-
year reimbursement from a single funding
source, and to provide them with flexibility
to make better use of their contract fund-
ing, the budget shifts $297.1 million Prop.
98 funds for part-day State Preschool pro-
grams at non-local educational agencies to
non-Prop. 98 General Fund.
Universal full-day kindergarten
Building upon the $100 million General
Fund provided in the 2018 Budget Act to
eligible school districts to construct new or
retrofit existing facilities for full-day kin-
dergarten programs, the budget proposes an
additional $750 million one-time non-Prop.
98 General Fund for a similar purpose.
Statewide System of Support
As a result of the increased number of
school districts which were identified to
receive support under the California School
Dashboard, the budget proposes an addi-
tional $20.2 million in Prop. 98 funds for
county offices of education to strengthen
their support for school districts.
School accountability and data
The budget proposes $350,000 one-time
Prop. 98 funds to merge the California
School Dashboard, the LCAP electronic
template, and other school site and school
district reporting tools (including the
School Accountability Report Card) into
a single web-based application to: (1) allow
the public to access a single platform for this
information, (2) streamline these systems,
and (3) eliminate duplicative and outdated
information.
Furthermore, to improve coordination
across educational data systems and bet-
ter track the impacts of state investments
on achieving educational goals, the budget
provides $10 million one-time non-Prop.
98 General Fund to plan for and develop
a longitudinal data system. This proposal
is consistent with one of the key recom-
mendations from the 2018 Getting Down
to Facts Studies 2.0.
K-12 school facilities
As a result of the passage of Prop. 51
in November 2016 to authorize $7 billion
in state general obligation bonds for K-12
schools, the budget proposes approximately
$1.5 billion in bond authority for 2019-20
to support school construction projects.
This amount is $906 million higher over
the prior year.
Cost-Of-Living-Adjustments
The proposed budget includes an increase
of $187 million in Prop. 98 funds to support
a 3.46 percent COLA for the categorical
programs that remain outside of LCFF,
including special education, child nutrition,
foster youth, American Indian Education
Centers, and the American Indian Early
Childhood Education Program. The COLA
for school districts and charter schools are
provided within the increases for LCFF.
Adult education
While not specifically mentioned in the
governor’s budget summary, the budget
continues support for Adult Education with
approximately $500 million in Prop. 98
funds.
Local property tax adjustments
Proposes a decrease of $283 million
in Prop. 98 funds for school districts and
county offices of education in 2018‑19 as a
result of higher offsetting property tax rev-
enues. In addition, a decrease of $1.25 bil-
lion Prop. 98 funds for school districts and
county offices of education in 2019‑20 as a
result of increased offsetting local property
Despite the uncertainty of how the recent
federal tax reform will impact California’s
state revenues, the governor continues to
make investments in public education, both
in terms of supporting LCFF implementa-
tion and paying down past debts.
He is also staying the course in funding
Career Technical Education through a pro-
posed new structure and staying committed
to funding Adult Education. The governor
and his staff have been very clear that he is
not supportive of any initiatives outside of
his own priorities, particularly in light of the
budget constraints.
It is important to remember that this
is just a proposal, and there are more than
six months to go before the 2018-19 state
budget is finalized.
The governor’s proposed budget and,
more specifically, his commitment to fiscal
restraint and resistance to new policy pri-
orities from the Legislature will face both
policy and budget committee scrutiny in the
coming months. Over the next five months
leading up to the constitutional deadline
of June 15, the Legislature will initiate the
formal and public deliberation process to
discuss the governor’s budget proposal and
craft their own alternatives.
In his first year in office, it is unlikely
that the governor will be open to much
movement on the creation of any new pro-
grams and the enactment of universal pre-
school, in particular, could face considerable
resistance from his administration.
Last month, Assembly Budget Chair
Phil Ting unveiled his “Assembly Blueprint
for Responsible Budget Priorities,” which
focuses on strengthening California’s fiscal
health and making responsible investments
in Californians. Assembly member Ting
proposes several budget investments for
2019-20:
Assembly investment priorities
• Build the state reserves to 20 percent
and pay down debts.
• Help schools acclimate to rising retire-
ment costs with infusion of one-time gen-
eral fund monies for the purpose of subsid-
ing school employers’ pension contributions
to CalSTRS or CalPERS over a specified
period.
• Fund infrastructure and deferred
maintenance.
• Address unfunded employee liabilities.
Assembly ongoing funding priorities
• Protect communities from wildfires,
prepare for future disasters and assist in
recovery.
• Continue the Low Performing Student
Block Grant.
• Create new child care slots and con-
tinue CalWORKs grant increases to reduce
poverty.
• Expand early childhood education and
after school programs.
• Bolster UC and CSU enrollment.
• Invest in programs to expand afford-
able housing and prevent homelessness.
• Provide universal access to health care.
The Assembly Democrats have been
anticipating that a change in leadership
with a new governor could result in new
opportunities to discuss additional invest-
ments in childcare and early childhood
education. With this goal in mind, in 2017
Assembly Speaker Anthony Rendon estab-
lished a Blue Ribbon Commission on Early
Care and Education to improve services
for children 0-3, and to develop options for
establishing universal pre-kindergarten for
all 4-year-olds.
While a report with comprehensive rec-
ommendations is expected to be released in
March 2019, the Legislature has started to
promote a legislative package. Assembly Bill
123, authored by Assembly member Kevin
McCarty, would establish the Targeted
Universal Preschool by expanding access to
full-day, full-year preschool for all 4-year-
olds living in high-poverty neighborhoods.
AB 124 proposes to place on the November
2020 ballot a $500 million bond to fund
preschool facility improvements and AB
125 proposes to boost reimbursement rates
for preschool programs that contract with
See BUDGET, page 7