As the budget process moves ahead, below we’ve outlined some key information and initiatives that impact California charter schools.
This week the California legislative budget subcommittees and the full Assembly and Senate Budget Committees will finish their work reviewing and voting on their respective budget blueprints. Once that process is complete the Joint Budget Conference Committee will begin meeting so the legislative houses can begin to ‘hash out’ the differences between their blueprints and pass one budget through both houses by June 15th. After that Governor Jerry Brown will have 30 days to sign or veto the budget; he can also blue line (or reduce) certain amounts of funding within the budget.
For the education community, including charter school funding, the budget is robust with extra funding. The Assembly has included $3.1 Billion additional dollars for the Local Control Funding Formula (LCFF) while the Senate included $2.979 Billion. Both houses also have included over $1 Billion to pay off the mandate backlog.
For California charter schools specifically, the legislature rejected the Governor’s effort to add $20 Million for Charter School Start Up Grants. The Governor had proposed the money because California did not get approved for the next round of federal dollars for charter school funding. The legislature’s rationale is there is still over $24 Million in federal carryover dollars available for the program and they will take a look at it again next year. They did approve an additional staff person for the California School Finance Authority to work on the Charter School Facility Grant Program. Additionally, the Senate included language that will allow independent study charter schools to store their records electronically. The Assembly did not include that language so it will be a conference item.
Author: Branché Jones
Last week the California Governor Jerry Brown released his May Revision. The Revision amends the budget that he introduced in early January, reflecting the new state revenue projections and any new policy proposals that the administration wants to pursue. The Governor stated that revenues are running $1.9 Billion below projections. As such he is holding firm to his goals of keeping spending down and the budget balanced. This means that he will not support the creation or new programs or the expansion of existing programs. Though Proposition 98 will see a bump specifically: the supplemental and concentration grants in the local control formula will see an increase in the May Revision of $2.9 billion. This will bring implementation of the formula to 96 percent. Additionally, the Governor is continuing his push for a block grant for all early education programs allowing them to be administered by local education authorities. For charter schools specifically the Governor is still including dollars for the charter school start up grants since California no longer qualifies for federal funds. He has also included language in one of the education trailer bills that will allow independent study charter schools to store their records electronically. The legislative budget subcommittees will begin hearing the details of the May Revision this week and forward their recommendations to both houses of the legislature in a few weeks. Then the legislative Joint Budget Conference Committee will begin to hear ‘open’ items with final passage of the budget by June 15th.
Below are links to the Governor’s May Revision and his education trailer bills.
May Revision Budget Summary:
http://www.ebudget.ca.gov/FullBudgetSummary.pdf
Education-related Finance Letters (including related trailer bill language):
http://www.dof.ca.gov/budget/historical/2016-17/may_1_finance_letters/documents/MR%20FL%20Education.pdf
As the year progresses the education community, including charter school leaders, in California is coming face-to-face with two propositions that will appear on the November ballot. Construction and business leaders are pushing a $9 billion school bond while the teachers union is championing a measure to continue the Proposition 30 tax increases that Governor Jerry Brown sponsored several years ago. Several weeks ago the fear was that if both measures appeared on the ballot it could hurt either effort to attract votes but now it appears that voters favor passage of both measures.
The Public Policy Institute of California (PPIC) released a recent survey which showed support for the two initiatives. PPIC tested other subjects as well, including knowledge of the Governor’s Local Control Funding Formula, the Governor’s job approval and other K-12 areas. Below, are some key findings of the survey:
- Although state spending on schools has increased, 61 percent of adults and 60 percent of likely voters say the current level of funding is not enough.
- 64 percent of adults and 62 percent of likely voters favor extending Prop 30 tax increases for 12 years for those making over $250,000 a year to fund education and health care.
- 76 percent of adults and 63 percent of likely voters would vote yes for a state school facilities bond.
- For parcel taxes, less than the two-thirds (62 percent) of likely voters (needs two-thirds vote) would support, and only 52 percent or likely voters would support lowering the two thirds majority threshold.
- 76 percent of adults say state government should fund voluntary preschool programs in CA, and 63 percent of adults would support using the surplus for preschool, while only 34 percent would prefer to pay down the state debt and build up a reserve.
To see the full results of the poll go to PPIC’s website at www.ppic.org.
Though the election is months away this poll gives a boost to the education community who has shown strong support for the school bond measure (which includes $500 million for California charter schools) and could see overall charter school funding reduced if the Proposition 30 taxes are not extended.
Several initiatives have been filed with the Secretary of State that could affect charter schools. A few weeks ago we gave you a school bond update; there is a school bond that will be on the ballot in November and also there were legislative efforts to place a school bond on the June ballot. The legislative and administrative effort to place a school bond on the June ballot collapsed without either party able to reach agreement on the size of the bond and what would be included in the bond. That leaves only the November school bond measure which totals $9 Billion and includes $500 Million for charter schools. That measure has continued to gain support from the business community, local school districts and elected officials. However, in a major blow the Governor has come out opposed to that bond measure. With the California Teachers Association the Governor has an interest in extending the taxes that were passed in Proposition 30 which is on the November ballot and having other propositions on the ballot will only complicate those efforts. It remains to be seen how this will play out during the year but it will be a lively discussion.
Another measure affecting charter schools has received a summary and title and is out for circulation. If passed it would eliminate all charter schools throughout the state on July 1, 2017 and revert all charter school property and resources purchased with public funds to the local school district. Additionally, all charter schools would either be shut down or revert to traditional public schools. The measure has received a title and summary from the Attorney General and now the proponents have 180 to gather the 365,880 signatures needed to place it on the ballot. We will keep you updated on the signature gathering process as it moves forward. The title of the initiative is the Elimination of Charter Schools Initiative.
To see either initiative in its entirety go to the Attorney General’s website at oag.ca.gov hit the initiative tab on the right hand side and search for either school bonds or charter schools. Then look for the title of the initiative.
One of the big policy fights that has been simmering around the Capitol over the last year is whether to place a school bond on the Primary or General election ballot this year. Education advocates and builders have been consistently saying that the state needs new dollars for school construction and modernization while the administration has been opposed on several fronts.
First, the administration does not want the state to incur new debt, as the Governor has worked hard to reduce the state’s past obligations and get the state back on a sound fiscal track. Second, the administration believes that there should be a new building program because the old state school facility program is not effective. As this tug of war has played out a coalition of builders, education advocates and architects have moved forward and qualified a ballot measure for the general election in November. Fearing that this ballot measure could endanger the prospects of extending the taxes (which will also be on the November ballot) the administration and the California Teachers Association are currently working with legislative staff to craft their own competitive measure that would be placed on the June primary ballot. To get it onto the June ballot the legislature must pass it with a 2/3 vote by February 16th (if they do not find a way to extend the deadline). We will keep you updated as the process moves forward. Below are some points from both proposals:
Bond on the November ballot:
- $9 Billion total
- $3 Billion for K-12 New Construction
- $3 Billion for K-12 Modernization
- $2 Billion for Community Colleges
- $500 Million for Charter Schools
- $500 Million for Career Tech
- Funds under the current state facility program requiring a 50% local match
Current administrative/legislative proposal being drafted:
- Dollar figure has not been set yet (rumored amount $4-5 billion)
- Funds the True Unfunded List ($375 million)
- Changes the state building program only for this bond
- Local match is a sliding scale (33/50/66 percent) based upon a formula of per pupil AV
- A CSFA loan program will be funded if a district is out of local funds
- Authorizes County Offices of Education to issue bonds
- Precludes New Construction dollars for portables or determining district capacity
- Requires a 5 year Master Plan that will feed a formula for eligibility
- Threshold for requiring DSA review increased from $40,000 to $100,000
- Raises bond indebtedness cap
- Accountability would be through an annual audit
- Eligibility based upon 5-year projection allowing a supplemental projection with valid final
subdivision maps - Would establish Charter School apportionment process that parallels that established for
school districts - Includes Community Colleges
Assemblywoman Marie Waldron has introduced AB 1652 on behalf of her constituents in San Diego. AB 1652 attempts to give charter schools with a strong track record a longer renewal period; specifically stating that the first two charter renewals shall be for a period of 5 years and subsequent renewals shall be for a period requested by the charter school not to exceed 15 years. This is a policy change that charter school advocates have requested for a long time. It will provide charter schools greater flexibility and stability over a longer period of time. Including being able to grow and seek facility options knowing that their futures will be secure.
AB 1652 will first be heard in the Assembly Education Committee in a few weeks where it will face opposition from traditional public school advocates. Assemblywoman Waldron has reached out to the charter school community and asked that we assist her in her efforts. So when the hearing nears we will post a draft letter of support that you can use to send into the committee members to demonstrate the difference that this piece of legislation will make to the field.
To see AB 1652, go to the California Legislative Information website.
Photo of Assemblywoman Marie Waldron via her assembly website.
This week California Governor Jerry Brown released his proposed budget that invests significantly in K-12 education. The California budget update contains very good news for the education community while also storing away money in a healthy reserve. This begins the budget deliberation process, next the legislature will begin to hold hearings on the various proposals in the budget and the Governor will submit revisions to his budget in May. In this proposed budget the Governor wants to continue to restrain spending and increase budget reserves, and these dire economic predictions support his proposal to add about $3.5 billion to the Rainy Day Fund in 2016-17. This proposal seeks to transfer $2 billion more to the Budget Stabilization Account (BSA) than what is required under Proposition 2, and would bring the BSA total to just over $8 billion.
Continued Growth in K-12 Spending and LCFF Implementation
The Governor estimates that the Proposition 98 guarantee for 2016-17 will be $71.6 billion, which he compares to the pre-recession guarantee of $56.6 billion in 2007-08 and the deep recession guarantee of $47.3 billion in 2011-12. The increase in the guarantee for 2016-17 is sufficient to provide a fourth year investment of about $2.8 billion for LCFF implementation. The Department of Finance calculates that this funding will eliminate about 49% of the remaining LCFF funding gap, and when combined with the roughly $12.8 billion provided over the prior three years, will bring total LCFF implementation to about 95%. The budget proposal also provides a very modest $1.7 million increase to the county office of education LCFF to cover COLA and ADA adjustments.
One-Time Discretionary Funding
Upward adjustments of the Prop. 98 Guarantee in 2014-15 and 2015-16 allow the Governor to again propose an allocation of fully flexible, one-time funding to school districts, county offices and charter schools. The amount proposed for 2016-17 is $1.2 billion, and builds on the $3.6 billion provided over the last two budgets. Note that all of these funds count toward offsetting any mandate reimbursement claims filed by the LEAs receiving the funds.
California School Facilities
The Governor continues to cite “deficiencies” with the existing school facilities program and emphasizes the need for a new state program that is less complex and focuses on districts that have less local capacity to build or modernize schools. He observes that the $9 billion bond proposed for November 2016 does not reform the existing program but, in response to a question at his press conference this morning, did not state that he is currently opposed to that measure. The budget proposal, however, makes fairly clear that he intends to work with the Legislature and stakeholders to provide some sort of alternative to the November school bond measure.
Early Education Block Grant
The Administration proposes to consolidate Prop. 98 funding for the State Preschool Program, transitional kindergarten, and the Preschool Quality Rating and Improvement System Grant into a $1.6 billion Early Education Block Grant. The Governor suggests that the block grant will provide greater local flexibility to address community needs and focus on the most at-risk children. The proposal does not include many specifics, but promises further detail by the May Revision. Many legislators, including Speaker of the Assembly Anthony Rendon, have stated that expanding early education opportunities is their top priority. Stay tuned.
Career Technical Education
The Governor proposes to continue the commitment made in the 2015 Budget Act to provide $900 million in one-time funding over three years for competitive matching grants to support high-quality CTE programs. Funding for 2016-17 will be $300 million.
Proposition 39 Energy Efficiency
The budget proposes $365.4 million to support school district, county office and charter school energy efficiency projects in 2016-17. This is an increase of about $50 million over what was provided last year.
Cost-of-Living Adjustments (COLA)
The COLA is calculated at 0.47%, and the budget proposal includes $22.9 million to provide COLAs to categorical programs that remain outside of the LCFF, including Special Education, Child Nutrition, Foster Youth, Preschool, American Indian Education Centers, and the American Indian Early Childhood Education Program.
Any questions on how this may impact your charter school? Let us know at GrowCharters@charterschoolcapital.com
This weekend the Governor vetoed AB 787. The measure would have prevented a charter school from operating as a for-profit or being operated by a for-profit corporation. It was sponsored by the California Teachers Association and targeted a number of charter schools in the state. Additionally, the language was vague and brought in to question contracts that several charter schools have with numerous providers and vendors. The Governor’s veto message was strong and pointed out the ambiguous language in the bill. Once again he has shown himself to be a strong proponent of parent and student choice.
See his veto message below by clicking on the message.
Last week the legislature adjourned for the year, completing the first year of the 2015-2016 legislative session. Friday night saw a flurry of legislative action, both successful and not successful, as both houses wrapped up their work. During the last hours of session a group of moderate Democrats emerged and frustrated their leadership and the administration by refusing to support several key bills. Some of these measures included a major climate change bill, raising the state’s smoking age and new restrictions on e-cigarettes. Additionally, two special sessions that were called by Governor Jerry Brown on transportation and health care stalled out and produced no agreements on either issue. There is some belief that the legislature will use the special session committees to craft some agreement over the legislative break and bring members back to town to vote on them but that seems like a long shot.
For charter schools specifically only one bill reached the Governor’s desk that is concerning, AB 787. The bill by Assemblyman Hernandez would prohibit for-profit companies from operating charter schools in any fashion. Though the bill is only a page long the term operate is not defined in the legislation and it leaves it up to interpretation. The education reform community has come out in strong opposition to the bill and waged a lobbying campaign against it on both the Senate and Assembly Floors. It passed both houses with one Democrat voting against it in the Senate and three Democrats abstaining while all of the Republicans opposed it. In the Assembly it passed with one Democrat voting against it and nine Democrats abstaining so it goes to the Governor without the support of the entire Democratic Caucus. The Governor has until October 11th to sign and veto the measure and we are urging him to veto it.
To see the language in AB 787 go to www.leginfo.ca.gov and put in the bill number.
Last week, the California legislature returned from its month long summer recess and will meet for a few weeks before adjourning the first year of the two year legislative session. This Friday, August 28th, is the last day for the legislative fiscal committees to meet and report out bills. September 11th is the last day the legislature can meet and October 11th is the last day for Governor Brown to veto or sign bills.
The legislature has several major issues facing them before they adjourn. The biggest political fight will be around climate change where three major bills are pending. One is authored by the Speaker of the Assembly, Toni Atkins, and another is authored by the President Pro Tempore of the Senate, Kevin De Leon. This means leadership is pushing the issue and something is going to pass the legislature and make it to the Governor’s desk.
Additionally, there are two special sessions going on parallel to the normal legislative session. The special sessions are on transportation and health care. Transportation seems like the most likely of the two to produce legislation that the Governor will sign because there is bi-partisan agreement around the issue. The only sticking point is how to pay for the work, with Republicans balking at new taxes, so legislators are busy searching for revenue.
The health care special session is more complicated because major changes would require a larger investment of resources and major policy changes. There may not be enough legislative days on the calendar to solve both of the issues.
In terms of California charter schools, there are still several bills that may have a large impact. Here are some short descriptions of them and where they are legislatively:
- AB 709 by Assemblyman Gipson would apply the Brown Act, the Political Reform Act, Public Records Act and Government Code 1090 to charter schools. The bill is currently in the Senate Appropriations Committee on the suspense file.
- AB 787 by Assemblyman Hernandez would prohibit for-profit charter schools in California. It is currently on the Senate Floor.
- AB 943 by Assemblyman Allen would encourage entities assisting charter schools under the California Collaborative for Educational Excellence to have prior experience working with charter schools. It is also on the Assembly Floor awaiting a concurrence vote.
- SB 322 by Senator Leno would prohibit charter school attendance preferences except the sibling and employee preference. It would also mandate that charter schools follow the same expulsion and suspension procedures as school districts. The bill is in the Assembly Appropriations Committee.
- SB 705 by Senator Hill mandates that if a charter school requests a facility from the district or the district approves a charter school facility request the district must post that information on their website. The bill is on the Assembly Floor.
- SB 739 by Senator Pavley would prohibit school districts from approving charter schools outside of their boundaries if they have a negative certification. This bill is in the Assembly Appropriations Committee.
To view any of these bills, go to www.leginfo.ca.gov and type in the bill number.