2018 California Budget Passes

Last Thursday the Legislature acted on the 2018 California budget and sent it to the Governor for his signature. There are still some trailer bills that they must pass but the document represents an agreement between the Governor and Legislative leadership. Additionally, the budget agreement covered areas of disagreement between the administration and the legislature. Items that were agreed to prior to the Budget Conference Committee meetings were not highlighted. Though the budget continues to grow, the Governor as in past years, has attempted to keep spending under control.
Additionally, the budget includes the $3.5 billion mandatory transfer to the Budget Stabilization Account, along with a supplemental deposit of $2.6 billion. Essentially placing those dollars into a rainy-day fund.
Total spending is $138.3 billion in general fund revenues. In May, both Houses of the Legislature adopted the Governor’s Proposition 98 number at $78. billion. Proposition 98 funds K-Community College in California. The final budget agreement added $3.67 billion to fund the Governor’s Local Control Funding Formula (LCFF), that is $407 million above the Governor’s May Revision proposal. The budget also proposes an additional $300 million in one-time funding for the state’s lowest performing students. This represents a deal with Assemblywoman Shirley Webber who is carrying legislation to make this funding ongoing for the lowest performing subgroup.
Below are some additional education related issues:

$1 billion in one-time funds, these dollars are discretionary and will add about $168 per ADA.
$150 million in ongoing funds for the California Technical Education Incentive Grant administered by the Department of Education.
$150 mllion in ongoing funds for the Governor’s proposed K-12 CTE program administered by the California Community Colleges.
$14 million in ongoing funds to support the Workforce Pathway Coordinators, K-14 Technical Assistance Providers and the Strong Workforce consortia.
$50 million in one-time funds to address the special education teacher shortage and $25 million to address the overall teacher shortage.
$250,000 for Homeless Student Grants.
$200,000 to redesign the LCAP template.
$200,000 to develop the Budget Summary for Parents intended to improve LCFF transparency.

These represent some of the larger items to come out of the 2018 California budget, there are some other one-time expenditures for school district facilities ($6 million for Sweetwater Unified and $4 million for San Francisco Unified), After School Kids Code Grant Program ($15 million) and there will be some dollars for Suicide Prevention Training.

California Election: Primary Results Come In

Tuesday, Californians went to the polls to vote in the ‘jungle’ primary. There were two notable results from the California primary election that will affect the charter school and education reform community. As I have stated before the races for Governor and Superintendent of Public Instruction (SPI) turned into proxy wars between the reform community and the traditional education establishment. Antonio Villariagosa, who was backed by heavy expenditures from the reformers, came in third in the race for Governor with 13.5% of the vote. That means he will not be in the runoff in November. That race will feature Lt. Governor Gavin Newsom, who received 33.3% of the vote, against John Cox, who received 26.2% of the vote. Since California is a dark blue state, Newsom is expected to prevail in November by double digits. It remains to be seen what the charter school supporters will do now as they placed all of their efforts and hopes on Villariagosa making the run off. They spent almost $30 million on independent expenditure tv adds and mail and used some of that money to directly attack both Newsom and Cox. Their campaign efforts were a flop and left many political experts scratching their heads and questioning their strategy. What will be the next Governor’s view of charter schools and education reform is an open question, but there is no incentive for him to be supportive.
The reformers fared better in the race for SPI. In a four way race their candidate Marshall Tuck lead the way with 37.1% of the vote. The traditional education establishment’s candidate Tony Thurmond came in second with 34.3% of the vote. This sets up a November matchup between the two. Marshall will have the clear advantage because of his higher name identification, as he previously ran for SPI.
Additionally, the Democrats in the State Senate were dealt a serious blow as Senator Josh Newman was recalled for his vote in favor of higher taxes last year. This will put the Democratic two-thirds supermajority in risk in the Senate if they do not pick up an additional seat in November.

Upcoming California Primary Election

On Tuesday, June 5th, Californians will go to the ballot to vote in our Primary Election. There are two major races in the California primary election that will affect the charter school and education reform communities:
• the race for Governor; and
• the race for Superintendent of Public Education.
The race for Governor has turned into a very expensive race that pits education reform groups against the traditional education establishment. The same dynamic is playing out in the race for Superintendent of Public Instruction. To date, education reform supporters have spent over $22 million on both races. The establishment is also spending heavy and I expect the cost for both of the races to exceed $30 when the Primary is over.

The Governor’s Race

The Governor’s race features Lt. Governor Gavin Newsom, businessman John Cox, former Mayor of Los Angeles Antonio Villaraigosa, Assemblyman Travis Allen and former Superintendent of Public Instruction Delaine Eastin as the leading candidates. Cox and Allen are the Republicans while the others are Democrats. In all of the polls, Gavin has been the consistent leader while Cox and Villaraigosa have jockeyed for second place.
Under California law, the top two candidates advance to the November General Election. With this in mind, interest groups are going all out to support their respective candidate – and Newsom is the favorite candidate of the Teacher’s Union. Villaraigosa has been the recipient of a multi-million dollar television independent expenditure campaign paid for by the education reformers; Cox is self-funding his campaign but has been endorsed by President Trump. If Newsom prevails, the reformers believe he will crack down on charter schools while Villaraigosa is a strong supporter of charter schools.

If you believe in charter schools or education reform Villaraigosa is the candidate to support.

Ironically, Newsom does not have a long education reform record, but with the money that has been spent against him, he will probably be hostile to their interests if elected. Additionally, Newsom has called for a moratorium on charter schools until conflicts of interest and transparency laws are applied to them.

The race for Superintendent of Public Instruction

The race for Superintendent of Public Instruction (SPI) has the same dynamics as the Governor’s race but with only two major candidates running who are both Democrats. Again, it is the reformers vs. the education establishment. Marshall Tuck formerly ran Green Dot Public Charter Schools and Mayor Villaraigosa’s schools in Los Angeles. He has a strong education reform record and ran and lost a very close race against the current SPI, Tom Torlakson, in 2014.
The race has seen both sides spend millions in support of their respective candidate. Tony Thurmond is a two-term Assemblyman from the Oakland/Berkley/Richmond area. He currently serves on the Assembly Education Committee and is a strong supporter of the education establishment. If elected he would pursue efforts that would make it harder for charter schools to operate in California.

As with the Governor’s race if you believe in charter schools or education reform Tuck is the candidate to support.

Please remember to get out and vote at the California Primary Election on June 5th.

2018-2019 California Budget May Revision

On Friday the Governor released his 2018-2019 California budget May Revision. Below are some highlights compiled by our partners at Capitol Advisors.

Overall, the 2018-2019 California budget May Revision contains positive news for California’s economy, General Fund revenues, and Proposition 98 funding. We have known for several months that tax revenues are higher than what was projected in the January budget proposal, but several variables related to the Proposition 98 minimum guarantee formulas indicated that recent increases in tax receipts would not result in significant additional 2018-19 funding for schools. That view is confirmed in the May Revision – however, the fairly strong growth in the Proposition 98 guarantee projected in the January budget proposal is retained in the May Revision. The minimum guarantee for K-14 schools is slightly higher ($68 million) in the May Revision compared to the January proposal, which is good news given recent Legislative Analyst’s Office (LAO) analyses suggesting that the Proposition 98 guarantee might actually end up lower than January estimates.

Highlights of the 2018-19 California Budget May Revision

• $142 billion General Fund resources available
• $137.6 billion General Fund spending (including transfers)
• $17 billion total state budget reserves
• $78.4 billion Proposition 98 Guarantee
• $3.3 billion increase for LCFF (over 2017-18)
• “Full implementation” includes 2.71% COLA
• Proposes an additional $166 million increase to base grants
• $2 billion one-time, discretionary funding (roughly $344 per ADA)
• Retains recognition and funding for county office support role
• No major K-12 policy/funding changes from January

Governor Brown’s Press Conference

Governor Jerry Brown appeared in a good mood as he seemed to ad lib his way through a stack of familiar charts indicating that good budget years are always followed by bad budget years. Governor Brown reminded the audience of Sir Isaac Newton’s observation that “what goes up, must come down,” and with regard to fiscal prudence and the budget surplus he intends to leave his successor, he added, “I’ve said it before and I’ll say it again: let’s not blow it now.”
Consistent with the last several budget proposals from this Administration, Governor Brown focused on the importance of maintaining a large reserve in anticipation of the next recession; significant one-time investments ($2 billion) for state infrastructure; a mixture of ongoing and one-time expenditures for public schools; addressing poverty (including homelessness, health care, child care, etc.); and combatting climate change.
Early comments from leaders in the Legislature are supportive of the Governor’s fiscal approach and are also mostly supportive of his various program and funding proposals.

Revenues, General Fund and Budget Reserves

Compared to January, and after accounting for transfers (which include both required (Proposition 2) and discretionary budget reserve and debt payments), the May Revision forecasts General Fund revenues to be higher by almost $2.6 billion in 2017-18 and more than $3.7 billion higher in 2018-19. Most of that increase is from higher personal income tax revenues related mainly to stock market gains through the end of 2017, although a fair amount also comes from higher corporate tax revenues related to new incentives (repatriation of foreign earnings) from federal tax reforms.
Including the prior year balance, the May Revision identifies $142 billion in total resources available for 2018-19, proposes $137.6 billion of spending (including reserve and debt transfers) with an ending fund balance of $4.4 billion.
The Proposition 2 automatic transfers amount to $3.5 billion, with half going to repay state debt and the other half going to the Budget Stabilization Account (BSA or Rainy Day budget reserve). The May Revision retains the January proposal to make a discretionary transfer to fully fund the BSA at 10% of General Fund revenues, which equates to a BSA fund of about $13.8 billion by the end of 2018-19. An additional $3.2 billion proposed for the discretionary reserve for economic uncertainties would leave the state with about $17 billion in General Fund reserves.

Proposition 98 and LCFF Funding

The May Revision calculates the 2018-19 Proposition 98 guarantee to be $78.4 billion, which includes a very small $68 million increase over the January proposal. For those of you following the LAO reports and our prior updates on variables impacting the Proposition 98 guarantee, the slight 2018-19 increase is largely dependent on an assumption of an attendance growth of about 600 students in 2017-18. This has the effect of resetting a Proposition 98 provision providing a one-year delay in accounting for the attendance decrease of about 16,000 students projected for 2018-19 (in other words, the 2018-19 guarantee is not adjusted downward for this loss of attendance – that adjustment will likely be made next year). Additional variables include a shift from Test 3 to Test 2, payment of the remaining maintenance factor and changes in per-capita income growth. We’ll cover all these issues in detail at our May Revision Workshops.
The Proposition 98 guarantees for 2016-17 and 2017-18 are also shifted upwards in the May Revision, resulting in about $660 million of additional funding. The increases of about $730 million over the three-year budget period allow the Governor to provide additional ongoing and one-time resources for K-14 education, including for LCFF and one-time discretionary funding.
The Governor achieves “full implementation” of LCFF as planned in his January proposal, with a few minor adjustments. In the January proposal, LCFF was increased by just over $2.9 billion. A COLA of 2.71% instead of 2.51% requires additional funding of over $150 million, and the Governor proposes a $166 million increase to base funding as well. It is not clear whether the additional base funding is a partial response to the Senate proposal to increase LCFF funding by $1.2 billion, or whether it is simply to achieve the round number of a 3% increase to the formula. In any case, compared to the 2017 Budget Act, LCFF funding is increased by roughly $3.3 billion, so a little more than what was proposed in the January proposal.
As you know, many supporters of public education are reminding the Governor, the Legislature and the public of the severely insufficient level of per-pupil funding in California. While achieving full implementation of the LCFF is a positive outcome, much work needs to be done to ensure our students are provided the educational resources necessary to compete on an equal footing with their peers in other states with respect to entering the workforce or advancing to higher education.

One-Time Discretionary Funding

Consistent with his fiscally conservative approach over the last several budget cycles, the Governor avoids any significant ongoing expenditures other than for LCFF, and again proposes a large one-time funding expediture. The May Revision adds $286 million to the January proposal of $1.8 billion, bringing one-time discretionary funding to just over $2 billion. This comes out to about $344 per ADA for 2018-19, and a total of almost $8 billion in one-time funding over a five year period, a trend that is not likely to continue at this level for much longer. These funds continue to count as an offset to any outstanding mandated costs reimbursement claims by local education agencies (LEAs).

Other Programs and Issues

Fiscal Transparency

The 2018-2019 California funding May Revision expands upon the January proposal for a budget summary aligning school district expenditures to LCAP strategies. The updated proposal specifies that this information be displayed in a parent-friendly format that includes graphics (when possible) and additional information that explains how supplemental and concentration funds are being used to increase and improve services for eligible students.

County Offices of Education (COEs) and Accountability

The January proposal recognized the important role of COEs in the state’s new accountability system and proposed $55 million in ongoing funds to support their work to provide assistance to school districts under the LCFF/LCAP structure. The January proposal also included a $4 million competitive grant program for eight individual COEs to act as resource and training centers for other COEs.
The May Revision does not propose any changes to the COE funding provided in January, and this funding appears to have support in the Legislature, so we expect this funding to be included in the final budget. There are some minor changes related to funding for the California Collaborative for Educational Excellence (CCEE) and for the Fiscal Crisis and Management Assistance Team (FCMAT).

Proposition 98 and LCFF Technical Adjustments

The Governor also makes a technical proposal related to future funding of the LCFF COLA, and two additional technical proposals related to the Proposition 98 Guarantee, which could result in future impacts on funding for K-12 education. First, the Governor proposes to put the annual cost of living adjustment applied to LCFF base grants on auto-pilot (making them part of the “continuous appropriation”), meaning that there would not have to be a separate action in the annual budget act to fund the LCFF COLA.
The Governor also proposes to move the responsibility for making the final calculation (called “certification”) of the Proposition 98 Guarantee for any given fiscal year to the Department of Finance (DOF), while current law creates a joint responsibility between the Director of DOF and the State Superintendent of Public Instruction. Finally, the Governor proposes to rebench (or recalculate) the Guarantee to include child care expenditures that were used by the state to meet the Guarantee in 2015-16. If expenditures on programs that were previously funded outside of Proposition 98 are counted toward meeting the Guarantee, then the Proposition 98 Guarantee should be expanded to provide for those expenditures. This was not done when funding for full-day State Preschool wraparound services provided by LEAs was brought under Proposition 98 in 2015-16. The Governor’s proposal would resolve this issue.

Career Technical Education (CTE)

As we mentioned in our review of the January budget proposal, the future of CTE funding and support is an ongoing topic of discussion between the Governor and the Legislature. We are currently in the last year of the CTE Incentive Grant Program, which provided $900 million over the past three years to encourage the creation and expansion of high-quality CTE programs. Members of the Legislature have proposed extending and expanding this program, while the Governor in January countered with a $200 million program to establish a K-12 specific component of the Strong Workforce Program administered by the Community College system.
As expected, since no one thought that the Governor would start negotiating with himself, the Governor maintains his proposal to provide $200 million for K-12 CTE through the Strong Workforce Program. He also makes no change to the $12 million in funding for technical assistance.
The 2018-2019 California budget May Revision continues to advance the Governor’s position that the LCFF 9-12 grade-span adjustment (2.6% of the LCFF 9-12 base grant) accounts for the higher cost of delivering CTE at the high school level, and that a separate CTE program is not necessary. CTE advocates and members of the Legislature continue to object to this revised view of how CTE programs have been, and should be, funded.
The Administration does partially respond to some of the criticisms of the January CTE proposal, clarifying:
• Grant decisions for the K-12 component will be made exclusively by the K-12 Selection Committee.
• Requirements that apply to the new K-12 component of the Strong Workforce Program.
• A role for the Technical Assistance Providers established under the California Career Pathways Trust Program, and further clarifying roles and responsibilities of the Workforce Pathway Coordinators.
• Additional resources are available to the consortia for administering the regional grant process, including resources to support the K-12 Selection Committee duties.
Again, as expected, this will be an item of negotiation between the Governor and the Legislature. Most Legislative Members are holding their position that K-12 CTE funding should be administered by the CDE, and flow through to K-12 entities directly without community college intervention. The feeling in the Legislature is that providing that funding through the CTE Incentive Grant is the common-sense way to proceed. The good news remains that the Governor continues to propose the $200 million in ongoing funding for K-12 CTE, rather than eliminating state funding altogether at the conclusion of the current three-year program.

Community Engagement and Improving School Climate

The Administration proposes to $13.3 million in one-time Prop 98 funds to create a Community Engagement Initiative to “help communities and school districts engage more effectively when developing LCAPs.” They also propose $15 million in one-time Prop 98 funds to the Butte and Orange County Offices of Education to be used to contract with a California institution of higher learning to expand the state’s Multi-Tiered System of Support framework to foster positive school climate in both academic and behavioral areas, including but not limited to, positive behavior interventions and support, restorative justice, bullying prevention, social and emotional learning, trauma-informed practice, and cultural competency.

Miscellaneous

While special education, the educator shortage, early learning and child care, and other programs and issues continue to receive a lot of attention in the Legislature and among advocates, the Governor’s May Revision does not include any major new initiatives related to these programs and issues.

California Education Reform: Races Heating Up

As Election Day nears, two races are heating up that could severely impact California education reform efforts. The races represent fights between education reformers and members of the traditional education system. We saw this fight play out four years ago in the race for Superintendent of Public Instruction. In that race, the reformers backed Marshall Tuck, who formerly headed up the Green Dot Public Charter Schools. The traditionalists supported Superintendent of Public Instruction Tom Torlakson in his bid for re-election. The race was decided by about four percentage points and ended up costing $24 million between all of the interests involved.
This year, Torlakson is termed out and cannot run again, but Tuck is back again with heavy reformer support. He will face off against Assemblyman Tony Thurmond, who represents the Oakland/Berkley area and is receiving strong support from the traditionalists. Whoever wins the race will be the next Superintendent of Public Instruction and will be in charge of the Department of Education. For our interests this would be a huge deal and could impact hundreds of charter schools throughout the state; touching everything from charter appeals, SB 740 funding determinations, requests from CDE, facility issues and how statutes are interpreted. I expect both sides to spend large amounts of money on this race but it will seem a tiny amount compared to what will be spent on the Governor’s race.
The Governor’s race pits the same two interests against each other with other groups also joining the fray. The latest polling shows Gavin Newsome with a slight edge but there is plenty of time for that to change. The SurveyUSA poll has Gavin Newsom (D) with 21%, followed by Antonio Villaraigosa (D) at 18%, John Cox (R) at 15%, Travis Allen (R) at 10% and John Chiang (D) at 9%. Several other candidates poll between 1% – 3%.
In California, we have a top-two primary so the top two vote-getters will move on to the November general election. The Republicans are assisting John Cox with numerous efforts because they cannot have two Democrats running on the general election ballot for the state’s top office. They are convinced that would suppress Republican turnout throughout the state and hurt many of their congressional candidates in the general election. The reformers are backing Antonio and have already begun funding independent expenditures that will run adds on his behalf.
Reed Hasting, the CEO of NetFlix has donated $7 million and Eli Broad has kicked in $1.5 million to date. The traditionalists have also declared that they will spend as much money as it takes to back Gavin. They will be joined in this effort by other labor unions who view Gavin as more open to their issues than Antonio. While Mayor of Los Angeles, Villaraigosa led a number of education reform efforts and attempted to take over the Los Angeles Unified School District. He eventually gained control of a group of schools that he used to increase student performance and implement his proposals. Marshall Tuck ran these schools for a period of time. So again, this race will have huge ramifications for California education reform efforts and charter schools.
We will update you again on as election day gets even closer and the race becomes more clear.

California Charter Schools: Legislative Proposals

April 11th

On April 11th a number of different proposals for California charter schools will be heard in the legislature that could impact charter schools. This is just the first policy committee hearing for these bills and they will next have to pass through a fiscal committee before going to the floor of the Assembly or Senate. Here are the bills and a brief description of each one. The ABs are being heard in the Assembly Education Committee and the SB will be heard in the Senate Education Committee.
AB 1871 by Assemblyman Bonta would require a charter school to provide each needy pupil with one nutritionally adequate free or reduced-price meal during each school day.
AB 2289 by Assemblywoman Weber would create an additional type of excused absence for parenting teens at charter schools and traditional schools.
AB 3167 by Assemblyman O’Donnell would establish the Charter Authorizers Regional Support Network Program, to be administered by the Alameda County Office of Education, as an initiative to expand uniform charter authorizing and oversight practices, as provided. The bill would authorize the Alameda County Office of Education to expend up to $30,000,000, upon appropriation from the General Fund by the Legislature, for purposes of the program. The bill would require the Alameda County Office of Education to, among other things, award grant funds to 11 regional lead county offices of education to be used to improve the quality of school district and county of office of education charter school authorizing activity.
SB 837 by Senator Dodd creates a transitional kindergarten program in California. It phases in all four-year-olds but says by 2022-2023 they should all be attending a transitional kindergarten program at a traditional or charter school.
To view any of these measures go to https://www.legislature.ca.gov and hit the bill link at the top left of the page, then place in the bill number.

Charter School Bills Introduced in the California Legislature

Last Friday was the bill introduction deadline for the California legislature. At the close of business, thousands of bills were ‘placed across the desk.’ Now that the deadline has passed the legislature will begin holding policy hearings on each proposal. After the introduction, the bills can still be amended at several points in the process and several bills were introduced as ‘spot bills.’ Spot bills are bills that have been introduced stating that they will change a section of law but are not fully amended yet.

Below are bills that we identified which could impact charter schools in California:

AB 1743 by Assemblyman Chu would require all public school students to complete a course in college and career preparedness in order to receive a high school diploma.
AB 1871 by Assemblyman Bonta would require a charter school to provide each needy pupil with one nutritional free or reduced-price meal.
AB 2011 by Assemblyman Kiley would exempt non-classroom based charter schools from geographical restrictions for state-mandated purposes.
AB 2082 by Assemblywoman Garcia would prohibit Teach for America teachers from being assigned to any California public school that has at least 40% of its pupils coming from low-income families as defined by the federal Elementary and Secondary Act of 1965.
AB 2289 by Assemblywoman Weber would include as an excused absence, 4 absences per school year to care for a sick child, which a doctor’s note is not required for. The bill would also allow a parenting pupil who expects to give birth up to 6 weeks of parental leave or 8 weeks of parental leave for a caesarian section birth or birth with complications and allow a parenting pupil not giving birth up to 4 weeks of parental leave after birth.
AB 2291 by Assemblyman Chiu would require schools and charter schools to annually provide an online bullying training module, developed by the Department of Education, to certificated school-site employees.
AB 2601 by Assemblywoman Webber would mandate that charter school students in grades 7 -12 receive comprehensive sexual health and HIV prevention education.
AB 2891 by Assemblyman Holden would authorize the governing body of a charter school to enter into a College Career Access partnership with an agreement with the governing board of a community college district.
AB 3058 by Assemblyman O’Donnell would require a charter school to notify the county superintendent of schools of their location, in that county, 60 days prior to commencing operations.
AB 3167 by Assemblyman O’Donnell would require a charter school to reply to inquiries from the Superintendent of Public Instruction within 30 days of the request.
Additionally, AB 2488 by Assemblyman O’Donnell is a school bond measure which includes funds for charter schools and traditional schools and SB 1216 by Senator Glazer is a charter school spot bill that has yet to be amended.

If you have any questions or concerns please do not hesitate to contact me at branchejones@gmail.com.

Overview

This week, the Governor presented his final Californian budget proposal. As he has in the past, the Governor was very cautious about proposing spending on new programs. He also continued to warn about recessions that might be around the corner for Californians. This manifests itself in the budget as an increase in the ‘rainy day’ fund that has been established to protect the state against future economic downturns.
Now that his budget has been introduced, the legislature will begin budget subcommittee hearings on the proposal and then, in early May, the Governor will release the May Revision of his budget to reflect tax receipts and revenue projections. The legislature will then pass a final budget for the Governor’s signature by June 15th. Below are some education highlights from the proposal.
2018-19 Budget Proposal includes:

$135 billion in General Fund revenues
$15 billion total state budget reserves
$78.3 billion Proposition 98 guarantee
$2.9 billion for full implementation of LCFF
$1.8 billion one-time, discretionary funding ($295 per ADA)

For charter schools specifically, the budget proposes an ongoing increase of $28.3 million to the SB 740 Charter School Facility Grant Program. With $112 million in the base, this increase results in about $140 million in ongoing funds in 2018-19.

Proposition 98 and LCFF Implementation

The Department of Finance (DOF) calculates the 2018-19 Proposition 98 guarantee to be $78.3 billion, an increase of $3.8 billion over the 2017-18 Proposition 98 guarantee provided in the 2017 Budget Act. The DOF’s Proposition 98 calculation is a little higher than the $77.8 billion estimate by the LAO in November 2017. Based on revenue growth, the 2017-18 guarantee was increased by $700 million to $75.2 billion, and an additional $3.1 billion was added for 2018-19.
Growth in Proposition 98 allows the Governor to achieve “full implementation” of the Local Control Funding Formula (LCFF) in 2018-19, two years earlier than anticipated when this school funding reform was adopted six years ago. The budget proposes about $2.9 billion to close the remaining LCFF funding gap, including a cost of living adjustment (COLA) of 2.51%. This is welcome news, and schools will now actually receive the LCFF grant amounts (base, supplemental and concentration) calculated by the state rather than merely having those amounts be a “target.”

One-Time Discretionary Funding

Continuing his fiscally conservative approach over the last several years, the Governor avoids any significant on-going expenditures other than for LCFF, and proposes nearly $1.8 billion in discretionary, one-time funding for school districts, county offices, and charter schools. This amounts to about $295 per average daily attendee (ADA). These funds offset any outstanding mandated costs reimbursement claims by local educational agencies.

Special Education and Teachers

Last spring, the DOF held four special education stakeholder discussions, during which stakeholders expressed the need for a number of changes to the current special education system, including: more local transparency and accountability, additional financial support for special education, a shift to a system improving outcomes for students with disabilities, and integrating special education and general education into a cohesive system. However, it appears as if Jerry Brown has decided not to tackle major special education reform in his final year as Governor.
Instead, the Governor proposes $10 million in ongoing Proposition 98 funding for Special Education Local Plan Areas (SELPAs) to work with County Offices of Education (COEs) to provide technical assistance to Local Education Agencies (LEAs) to improve student outcomes. The proposal also places additional requirements on SELPAs, requiring them to complete a SELPA local plan template that aligns their services and resources with the goals in their member districts’ Local Control and Accountability Plan (LCAPs) and to summarize how a SELPA’s planned expenditures and services align with the improved student outcomes strategies include in their SELPA plan.
To help address the state’s need for more special education teachers, the Governor has also provided $50 million for a Teacher Residency Grant Program to support locally sponsored, one-year clinical teacher preparation programs aimed at preparing and retaining special education teachers; and another $50 million for a Local Solutions Grant Program to provide competitive grants to LEAS to support locally identified solutions (new or existing) that address a local need for special education teachers, for a total of $100 million in one-time Proposition 98 funding.

Early Learning and Child Care Access

Aimed at increasing early education and case access for children aged zero to five years old, especially in low-income areas and areas with relatively low access to care, the Governor proposes to create the Inclusive Early Expansion Program. This competitive grant program would be funded using $125 million in one-time Proposition 98 funding and $42.2 million one-time federal Temporary Assistance for Needy Families (TANF) program funding.
In the 2016 Budget Act, the Governor and Legislature entered into a multi-year agreement that included reimbursement rate increases and additional full-day State Preschool slots for the next three years. As part of the third and final year of that agreement, the Governor has provided an approximately 2.8% reimbursement rate increase for providers that contract directly with the California Department of Education and added the scheduled increase of 2,959 full-day slots to the State Preschool Program. The Budget also makes permanent the temporary hold harmless to the 2016 Regional Market Reimbursement Rate Survey for those providers accepting vouchers.

On August 21^st, the legislature will reconvene from summer recess and make one final push to put legislation on the Governor’s desk. Once they’re back they will have until September 15th to act on all remaining legislation before they adjourn for Interim Recess. After adjournment, the Governor will have until October 15th to sign or veto all legislation, with legislation that he signs becoming law on January 1, 2018 unless the measure has an urgency clause in it. The legislature will then reconvene on January 3, 2018 to begin the second year of the 2017-18 legislative session.
When the legislature does return there will be two bills left that could impact California’s charter schools. The measures are AB 318 by Assemblywoman Anna Caballero and AB 1217 by Assemblyman Raul Bocanegra; they will both be heard in the Senate Appropriations Committee before heading to the Senate Floor for a vote if they pass out of committee.
AB 318 would require all independent study programs in the state to implement a policy that has a teacher interact with each student bi-weekly either in person or by a visual aid. This measure has strong opposition from the California Consortium for Independent Study and charter school groups. It originated from a student tragedy in Monterey County and it is sponsored by the Monterey County Office of Education. Though the bill has stiff opposition it has steadily moved through the legislature. If it passes the Senate Appropriations Committee it will head to the Senate Floor and then back to the Assembly Floor for a concurrence vote on the amendments that were taken in the Senate.
AB 1217 would create a statewide STEM school based in Los Angeles, however the measure would provide charter school funding through the charter school statute and would provide a facility for the school through the SB 740 charter school facility grant program. 1217 is a typical “gut and amend” meaning that it was created and first appeared in print in its current form on July 19th. The legislation did not exist in print until then and there were no hearings on the measure before it was amended. Though the measure does not directly impact charter schools it is alarming that they are utilizing the charter school statutes to create the school though it is not considered a charter school. This should raise questions about how the charter school statutes may be utilized in the future. Similar to AB 318, if this measure passes the Senate Appropriations Committee it will head to the Senate Floor and then back to the Assembly for final action.
To view these measures go to legislature.ca.gov hit the bill information link on the top left of the page and put in the bill number.

The California Legislature has passed the budget and education trailer bill on to the Governor Brown fulfilling their constitutional mandate to pass it by June 15th. Similar to the past several years, the education community will see robust funding and one-time dollars that can be spent to augment their programs. Now that the measures are on his desk, the Governor will have 30 days to sign or veto them.
The budget was passing along without much fanfare until SB 96 was presented in the State Assembly. Though it is a trailer bill, the measure contains provisions that could make the ongoing recall of Senator Josh Newman of Orange County harder to complete by changing the statutes that govern the state’s recall process. After voting for the transportation tax Senator Newman was targeted by his opponents who began the recall process in his district. SB 96 would alter the process while the recall is ongoing. Though it is has nothing to do with educational policy it makes for great Capitol intrigue.
Much of the funding and policy changes for California’s educational process are contained in the education trailer bill. Below are some of the major highlights:

Provides $1.362 billion for continued implementation of the Local Control Funding Formula to LEAs and charter schools.
Provides $876.6 million in discretionary one-time dollars to LEAs on a per ADA basis.
Increases the maximum charter school grant under the Charter School Facilities Grant Program (SB 740) from $750 per ADA our up to 75 percent of a school’s annual rent and lease costs to $1,117 per ADA or up to 75 percent of its annual rent and lease costs. The bill also applies a cost-of-living adjustments for future years.
Replaces the authority for the Superintendent of Public Instruction to assign the CCEE to assist a charter school, with authority for the CCEE to assist the school after consulting with the Superintendent.
Provides $25 million in one-time dollars to the CTC to fund a second cohort of the California Classified School Employee Teacher Credentialing Program.
Provides $10 million in one-time dollars to allocate to school districts impacted by refugees.
Extends the District of Choice program, with some limitations, through 2022-2023.
Extends the date that LEAs can encumber funds received under Proposition 39 for clean energy projects by one year, until June 30, 2019.
Provides $7 million in ongoing dollars to county offices of education to fund their work on LCAPs.
Updates the standard reimbursement rate and the regional market rate to increase funding for child care providers.