– Marco Nava
Budget proposal mixed news for K-12
Just days after the Legislature returned to Sacramento from the fall interim , Gov . Brown released his 2017-18 January budget proposal , effectively ending speculation of the administration ’ s revenue projections and priorities for the coming year . The following is ACSA ’ s analysis of the education components of the governor ’ s budget proposal .
Overview
Gov . Brown ’ s budget proposes a flatfunded General Fund budget plan of $ 122.5 billion , a 0.2 percent decline from the current fiscal year . As a result , this year ’ s investments in K-12 public education are relatively modest compared to the year-over-year augmentations schools have received since the November 2012 passage of Proposition 30 , the temporary income and sales tax initiative . The budget proposes to fund the Prop . 98 minimum guarantee at $ 73.5 billion , a $ 500 million downward adjustment to the 2016-17 funding levels in an effort to not over-appropriate the minimum guarantee .
As it has become customary in the previous budget proposals , the governor calls for fiscal discipline and restraint , while issuing several warnings of risks to the state ’ s economy . Gov . Brown ’ s budget recognizes the historic volatility and fluctuations in public school finance , largely because of the state ’ s over-reliance on personal income taxes and capital gains from its wealthiest taxpayers . As a result , the governor emphasizes there is a heightened “ uncertainty ” and “ unpredictability ” of our revenue system .
Compared to the 2016 Budget Act signed last June , the administration notes that the state is experiencing a modest deficit as a result of a $ 5.8 billion decline in its revenue forecast for 2015-16 through 2017-18 . Consequently , Gov . Brown ’ s budget seeks to achieve a balance between meeting some of the state ’ s priorities with limited ongoing resources , while recognizing the volatility of the state ’ s predominant revenue stream . This “ boom and bust ” trend in the state ’ s revenues prompted the passage of Prop . 2 by California voters in November 2014 to set aside money in the state ’ s reserve . By the end of 2017-18 , the state ’ s Rainy Day Fund could have a total balance of $ 7.9 billion , or 63 percent of the constitutional goal of having 10 percent of tax revenues in the Rainy Day Fund . Unlike past years , at this point the governor is not proposing any deposits be made to the state ’ s reserves .
Revenues
For those who closely monitor the State Controller ’ s monthly cash report , it is no surprise to see the administration lower its General Fund revenue projections . Since the enactment of the 2016 Budget Act , General Fund revenue from the state ’ s three major revenue sources from 2015-16 through 2017-18 is lower than the projections last summer by $ 5.8 billion , making next year a relatively flat state budget . Over the three year fiscal period , personal income tax is down $ 2.1 billion , sales tax is down $ 1.9 billion , and corporation tax is down $ 1.7 billion . About 69.2 percent of the state budget is comprised of revenues derived from personal income taxes , making this a highly volatile system as a result of the significant reliance on capital gains and on taxes paid by a small portion of the population . As the budget summary states , “ for the 2014 tax year , the top 1 percent of income earners paid 48 percent of personal income tax .”
In forecasting the economic growth over the next few years , the administration indicates the total General Fund revenue from the three largest taxes is expected to grow from $ 113.7 billion in 2015-16 to $ 138.1 billion in 2020-21 . The average year-overyear growth rate for this period is 4 percent .
Prop . 98
The Prop . 98 minimum guarantee is a complex formula that relies on General Fund tax collections , as well as other factors including average daily attendance , population and per capita personal income . Since the General Fund revenue estimates from 2015-16 through 2017-18 have been lower by $ 5.8 billion during this three-year period , Gov . Brown proposes to lower the Prop . 98 minimum guarantee by more than $ 1.8 billion . This includes reductions of $ 506 million to the 2016-17 guarantee and $ 953 million to the 2017-18 guarantee when compared to the 2016 Budget Act projected levels , in an attempt to not over-appropriate above the constitutionally minimum required level . While it is not mentioned in the budget summary , as a result of the lower minimum guarantee , the administration is proposing a one-time , short-term deferral of $ 859 million that would be a portion of the June 2017 apportionment now given to LEAs in addition to their July 2017 apportionment . The shifting of payments into 2017-18 serves to save the state money in the current year to avoid over-appropriating the minimum guarantee .
Despite these adjustments , the overall K-14 funding level will continue to grow by a projected $ 2.1 billion in year-to-yeargrowth from the revised 2016-17 guarantee to the projected 2017-18 guarantee . Reflecting the changes noted above to the minimum guarantee , total per-pupil expenditures from all sources are estimated to be $ 14,822 in 2016-17 and $ 15,216 in 2017-18 . Ongoing K-12 Prop . 98 per-pupil expenditures are estimated to be $ 10,910 in 2017-18 , an increase of $ 331 per-pupil over the level provided in 2016-17 , and significantly higher than the $ 7,011 per pupil in 2011-12 . The budget also provides $ 400 million in settle-up payments that will result in one-time resources to schools and community colleges for local investments and priorities .
Local Control Funding Formula
Enacted in June 2013 , the LCFF has provided more than $ 15.7 billion to local educational agencies since its inception . Since much of these increases were provided in recent years ($ 5.9 billion in 2015-16 and $ 2.9 billion in 2016-17 ), the proposed 2017-18 appropriations are modest in comparison .
Specifically , for the fifth year of LCFF implementation , the governor proposes $ 744 million to continue the administration ’ s commitment to fully fund LCFF by 2020-21 . This investment closes an additional 23.67 percent of the remaining LCFF gap , bringing the total formula implementation to 96 percent . It is important to note that the LCFF “ funding target ” of 100 percent is a moving target that will be adjusted whenever a cost-of-living-adjustment is applicable . With that said , the Department of Finance estimates there is less than $ 2.5 billion left to reach full implementation levels . Since Gov . Brown is termed out of office at the end of 2018 , it is likely that he will continue to prioritize ongoing Prop . 98 funds towards LCFF .
The governor ’ s budget proposal also notes the important interplay between the LCFF and the state ’ s new accountability system that emphasizes local accountability , fiscal flexibility and improved student outcomes . The governor notes that the shift toward a multiple measure system gives policymakers the opportunity to create a system that provides a more accurate picture of school performance and the disparities among student groups . For additional information about the new accountability system , visit ACSA ’ s website at www . acsa . org / accountability .
Mandates and one-time funding
The governor ’ s budget , both for general and education purposes , is careful to avoid using one-time revenue to fund ongoing commitments . He proposes one-time funds be appropriated as $ 287 million in discretionary one-time Prop . 98 grants for school districts , charter schools and county offices of education , which will be distributed on the basis of Average Daily Attendance . The Department of Finance ’ s initial estimate translates to approximately $ 48 per ADA . All of these one-time funds will offset any applicable mandate reimbursement claims owed to local educational agencies . With this appropriation , the outstanding mandate debt would be approximately $ 1-1.5 billion for K-12 schools .
The administration intends to hold stakeholder meetings this spring to gather input on the existing special education finance system and get feedback on the recommendations made by the 2015 Statewide Special Education Task Force and included in the Public Policy Institute of California November 2016 report on special education finance . The report found that state special education funding has not kept pace with the increase in students identified with special needs and the costs associated with providing specialized services . It also identified large funding disparities among Special Education Local Planning Areas and recommends the state consider the future role of SELPAs since the current system does not align with LCFF principles .
The administration specified that these stakeholder discussions will be consistent with the LCFF and apply to all students , including students with disabilities and center around the following principles :
• School funding mechanisms should be equitable , transparent , easy to understand , and focused on the needs of students .
• General purpose funding should cover the full range of costs to educate all students .
• School districts should be provided the flexibility to establish goals and design innovative ways of delivering services to all students .
• School districts are responsible for planning and implementing programs that lead to continuous improvement , measured by academic outcomes .
The administration anticipates engaging stakeholders in the coming weeks with the goal of concluding stakeholder engagement in time for the May Revise . If the administration were to pursue reforms , it is not expected any modifications to the existing funding structure would occur in 2017-18 as local educational agencies would require additional time to transition .
School facilities
In November , voters passed Prop . 51 to raise $ 9 billion for K-community college school facilities with $ 7 billion allocated to K-12 . Language in Prop . 51 clearly prohibits the Legislature from making any changes to the existing state school building program for projects funded from this bond . Approximately $ 2 billion in unfunded projects at the Office of Public School Construction will likely be the first priority for funding once bonds are sold .
While the Legislature is prohibited from making changes to the program , reforms can still be made through policy and regulation changes . The governor ’ s 2017-18 budget references a 2016 state audit of prior school facilities bond expenditures and lack of transparency for use of these funds . Legislation will be introduced to require facility bond expenditures be included in the annual K-12 Audit Guide . In addition , the administration plans on revising a number of policies and regulations for districts that request funding through the State School Facilities Program . Specifically , the administration will work with the State Allocation Board and Office of Public School Construction to revise policies and regulations to “ implement front-end grant agreements that define basic terms , conditions , and accountability measures for participants that request funding through the School Facilities Program .” Both the audit requirement and changes in policies and regulations will need to be completed prior to the issuance of any school bonds .
Early childhood education
Noting that funding for California ’ s prekindergarten education has historically been spread among a patchwork of programs and funding sources , the governor ’ s budget proposes program flexibilities “ that foster administrative efficiencies and better align child care and early childhood education programs to create a more rational system for both providers and the families they serve .” While additional details will be made available in the budget trailer bill
See BUDGET , page 5
January 23 , 2017 EDCAL 3
ACSA
Equity Corner
Following each presidential election , educators often wonder how the new administration will impact public education . The 2016 election was no exception and based on the early tenor of the incoming administration , public education might well undergo many changes . Although public education is primarily a state and local government function , federal funding and mandates do have an effect . It is important now for public school educators to work even harder to ensure that public education continues to strengthen our democracy and democratic values .
Throughout and following the election cycle , there was a great deal of news about fake news . In President Obama ’ s farewell address , he talked about the threat that fake news poses to our democracy : “ Increasingly we become so secure in our bubbles that we start accepting only information that fits our opinions , instead of basing our opinions on the evidence that is out there .”
We live in an age where we can select and filter the type of news feeds that we receive through social media and online content . The mainstream media and journalism as a profession are supposed to function on the basis of a shared set of facts . It seems that this election highlighted how facts can be overcome by emotion and belief , and people can lack the practice of critical analysis .
Educators have an opportunity to teach students how to discern fake news from legitimate news . Students should be taught how to properly identify fake news . When students learn to identify facts , and receive news from a wide array of genuine news outlets , they can make more informed decisions . An informed citizenry that can think critically is a powerful safeguard for democracy .
There was also a negative tone to the election that seemed to lack empathy for the most vulnerable groups in our society . Empathy is the ability to understand and share the feelings of others and many argue , it includes taking action on behalf of others .
Educators can help students gain and develop a deeper sense of empathy through teaching Social-Emotional Learning strategies and concepts . SEL is instrumental in helping students develop and manage their self-awareness , self-management , social-awareness , decision-making , and social skills . These skills are necessary for the respectful treatment of all people , while ensuring a strong and equitable society .
This is why public education is so important . A high-quality education must include critical-thinking , problem-solving , and inquiry . Students should learn to question why things are the way they are . Through this questioning , they can apply the skills they have learned and potentially begin to solve some of our most persistent , local and global problems .
Martin Luther King , Jr . said , “ The function of education is to teach one to think intensively and to think critically . Intelligence plus character – that is the goal of true education .”
– Marco Nava
Administrative coordinator , LAUSD