Legislative Updates Archives

California Charter Schools – Legislative Update

Last week both the California Assembly and Senate Appropriation Committees met to send the last batch of house of origin bills to the Assembly and Senate Floors. Friday, May 23rd was the deadline to hear all fiscal bills in a fiscal committee in their house of origin; for instance Assembly bills in the Assembly and Senate bills in the Senate. There were two bills that were opposed by most charter school groups and would have had negative impacts on charter schools in California. In an anticipated move both measures were opposed by the Appropriation Committees in both houses.
AB 1531 by Assemblyman Chau would have mandated that the charter school authorizer appoint the members of a charter school’s governing board. This bill was sponsored by the California Teachers Association and would have affected every charter school in the state. It essentially would have gutted the charter school law and made all charter schools dependent on their authorizer. The Assembly Appropriations Committee held this measure on its suspense file, killing it for the year.
SB 1317 by Senator Huff would have created new conflict of interest provisions for charter schools. The measure would have also placed limitations on governing board members loaning money or leasing property to their own charter school; violating these provisions would have mandated revocation of the charter school. This measure was sponsored by the California Charter Schools Association. The Senate Appropriations Committee held this measure on its suspense file and like AB 1531 it is dead for the year.
To view these measures go to www.leginfo.ca.gov and place in the bill number.

Below is an overview of the Governor’s May Revision provided by Capital Advisors Group:

The following is Capital Advisors Group‘s initial analysis of the Governor’s May Revision with a focus on the K-12 education components and impacts to California charter schools.
Overall State Revenues Continue to Improve – The Governor recognizes the continued growth in the state’s economy by revising his estimate of state revenues to reflect a net increase of $2.4 billion for 2014-15.
The revised revenue estimates reflect a private sector unemployment rate that has returned to pre-recession levels and continued revenue improvements from the top three sources: sales and use tax, personal income tax, and corporation tax.
It will be interesting to see if the Legislative Analysts Office (LAO) agrees with the Governor’s estimates. Some folks are already opining that the estimates may be low. Legislators have remarked in recent days that they are aware the Governor’s prior budget proposals have assumed lower levels of revenue than actually materialized – essentially making the argument that they may not want to be so conservative this time around. Obviously, one of the Governor’s claims to fame is his ability to constrain the Legislature’s tendency to overspend. Given the election year dynamics, we think the Governor is in a good position to continue holding the leash. If that is true, the May Revision doesn’t give the Legislature much to play with in terms of additional funding since the bulk of additional funding in the May Revision is being tapped to expand MediCal – which will be difficult for Democrats to oppose.
If the LAO disagrees with the Governor and opines that the estimates are low, we can expect some lively debate and negotiations over the next month. We expect their analysis in the coming days.
Governor’s Proposition 98 Estimate Reflects Minor Changes – The Governor’s estimate of the changes to the Prop 98 estimates for the prior year, current year, and budget year are minor, but important. Overall, the May Revision reflects a net $242 million increase in the Prop 98 guarantee over three years, as compared to the January proposal. Specifically, the May Revision reflects Prop 98 at the following amounts:
· 2012-13 – $57.8 billion (down $547 million from January)
· 2013-14 – $58.3 billion (up $1.5 billion from January)
· 2014-15 – $60.9 billion (down $700 million from January)
It will be interesting to see if the LAO agrees with the Administration’s estimates of the multi-year Prop 98 estimates.
Rainy Day Fund and Prop 98 Reserve
The Governor’s May Revision proposes a Rainy Day Fund and Proposition 98 Reserve that reflects the compromise that was worked out with legislative leaders. The proposal also includes a component to provide resources to pay down California’s long-term debts.
The General Fund (GF) revenues that will be transferred into the Budget Stabilization Account, the formal name of the Rainy Day Fund, will be calculated in two ways:
1. 1.5% of GF revenues in each fiscal year
2. GF revenues collected as part of the personal income tax on capital gains income, when those revenues exceed 8% of total GF revenues
These transfers will be made until the fund reaches a maximum of 10% of GF revenues.
The revenues transferred in this way will be used in several ways:
Rainy Day Fund
Prop. 98 Reserve
Withdrawal from, or suspension of, the Rainy Day Fund and the Prop. 98 reserve are permitted under limited circumstances if there is a budgetary emergency, a natural disaster or if spending remains at or below the highest level of spending over the last three years, adjusted for inflation and cost-of-living.
Debt Obligations: Between 2015-16 until 2029-30 half of the non-Prop 98 revenues transferred would be used to discharge debt obligations (e.g., Prop. 98 settle up, inter-fund loans, claims for mandated costs prior to 2004-05, and unfunded pension liabilities).
This revised Rainy Day proposal reflects a compromise worked out between Legislature and Governor Brown. Aside from one recent informational hearing held by the Assembly Budget Committee, this deal was largely worked out behind closed doors and has been made public as part of Governor Brown’s May Revision. The proposal is aimed at addressing California’s revenue volatility and inadequate reserves.
The proposal is in bill form in Assembly Constitutional Amendment X2 1 (ACA X2 1), carried by former Speaker John A. Perez; the bill was presented to the Senate Budget Committee on May 14. In that hearing the author indicated that there are further amendments pending on this bill. A more comprehensive analysis of this proposal will follow as soon as those additional amendments are available.
To take effect, the proposal would need to pass the legislature and be passed by the voters. If enacted, it would replace the current Rainy Day Fund (Prop. 58) and amend ACA 4, which is set to go before voters this November.
Fully Paying-Off Inter-Year Deferrals – Consistent with his January Budget proposal, the Governor continues to focus on paying off the state’s debt by the end of 2014-15. However, the mix of the one-time and on-going money is used to pay down these deferrals is changed.
Ambitious STRS Proposal – Easily the most significant K-12 education budget change contained in the May Revision, the Governor proposes to eliminate the unfunded liability associated with the California State Teacher Retirement System (CalSTRS) over the next 32 years; that unfunded liability is estimated by the Administration to be in excess of $74 billion.
As we have expected of any such proposal, the funding proposed to make the system whole comes from three sources:
1. Direct contributions by the state
2. Increased contributions from school employees covered by CalSTRS; and
3. Increased contributions from school employers
Details on each of these three sources are provided below. The Governor’s proposal is aggressive, places more than 60% of the funding burden on employers, and will certainly be the subject of additional discussion in the Legislature.
1) The state will cover approximately $20 billion of the total $74 billion by increasing its contribution rate from the current 3.04% of total employee compensation to 3.45% in 2014-15, 4.89% in 2015-16, and 6.33% in 2016-17 and beyond until the unfunded liability is discharged. This level of contribution from the state reflects the shortfall in CalSTRS funding that existed when a long‑term sustainable funding plan was put in place in 1990. In other words, the state feels that it has an obligation to contribute to the discharge of liabilities incurred prior to 1990, but not of those liabilities incurred after that point in time; the Administration argues that it is particularly not responsible for that portion of the liability created by benefit increases granted in 1998 and after.
The state will also continue to fund a supplemental inflation protection program or COLA in an amount equal to 2.5% percent of total employee compensation.
2) School employee contributions will cover approximately $8 billion of the total $74 billion through increases in the contribution rate. Because of existing statutory protections on employee contribution rates, the Administration is proposing to guarantee the (currently optional) supplemental inflation protection program in exchange for contribution rate increases. That rate is proposed to increase from the current 8% of compensation to 8.15% in 2014-15, 9.2% in 2015-16, and 10.2% in 2016-17 and beyond until the unfunded liability is discharged. These rates will apply to employees who entered the system prior to the 2013 enactment of the California Public Employees’ Pension Reform Act (PEPRA). For those employees who entered the system after the enactment of PEPRA the rate would increase to and be capped at 9.21%.
3) School employer contributions will cover approximately $47 billion of the total $74 billion, also through increases in the contribution rate. That rate is proposed to increase from the current 8.25% of compensation to 9.5% in 2014-15, and then will increase by an additional 1.6 percentage points each year until the rate reaches 19.1% in 2010-21; the 19.1% contribution rate will stay in place from that point on. There is no proposal to provide additional resources to school employers in order to fund this increase in costs.
The burden that an increase in the employer contribution rate from 8.25% to 19.1% places on local educational agencies is clear. According to the Department of Finance, the increase from the current rate of 8.25% to 9.5% in 2014-15 will cost districts $350 million, which translates to more than $55 per pupil as a statewide average (note that the impact in different districts may differ according to both the number of covered employees and compensation levels). To provide context for this level of cost increase, recall that the mid-year trigger cuts implemented in late 2011/early 2012 totaled $328 million. Because the first year increase in contribution rate is held at 1.25 percentage points, the budget impact in later years would be even greater.
Independent Study Reform – The Governor makes some edits to his January proposal to reform the state’s Independent Study (IS) law.
In January, the Governor proposed creating a “coursed-based” IS program option for LEAs, essentially allowing schools to claim ADA for students based upon course completion, an alternative to the traditional assignment-based IS. In the May Revision, the Governor removes a requirement from the January proposal that would have required the teacher, under the “course-based” IS option, to meet with students on a weekly basis. Additionally, because the Governor caught flack from the CDE over essentially possible for schools to receive 100% ADA under this option, the Governor revises the proposal to allow LEAs to claim the ADA but also applying the statewide excuses absence rate (so no LEA could receive 100% ADA).
Lastly, the May Revision changes the Governor’s IS reform proposal related to “site-based blended learning” to utilize a universal learning agreement that would apply to all students enrolled in the same course or courses.
The Legislature has opted not to include the IS proposal in the budget process and has instead opted to use SB 1143 (Liu) as the policy vehicle for these discussions. We have been working closely with the Administration and Senator Liu, chair of the Senate Education Committee, as she shepherds the bill through the Legislature. The changes to IS law contained in the bill, if enacted, would be a huge relief to LEAs in the state with students enrolled in IS programs. The most recent version of the bill amended-out the “site-base blended learning” option and instead focused on changes to current IS law and adding the “course-based” IS option. Staff in the Legislature have been resistant to the “site-based blended learning” option. The bill recently passed out of the Senate Education Committee with a bipartisan, unanimous vote.
High-Speed Internet Access For Smarter Balanced Assessments – While the Governor’s proposal does not contain additional one-time funds for Common Core implementation, he does use a little bit of the increased Prop 98 funding ($26.7 million) for a one-time increase in funding for the K-12 High Speed Network; the funding will be used to study broadband access in the state and provide grants to LEAs to expand networks based upon need.
LCFF Low Income Counts – The May Revision proposes some flexibility related the issue of determining, for LCFF purposes, the number of students receiving free or reduced-priced meals at Provision 2 and 3 schools.
The proposed solution is largely consistent with a resolution we have been advocating for since August. It would authorize Provision 2 and 3 schools to establish a base-year eligibility no less than every four years, provided that the school annually updates the count for newly enrolled (or dis-enrolled) students during the intervening years. It would also require the SPI to revise the LEA’s three-year rolling average of unduplicated counts (used to calculate LCFF) using 2014-15 instead of 2013-14, if doing so would increase the LEA’s rolling average.
K-12 Mandate Block Grant – The Governor proposes to increase funding for the block grant by $1.6 million due to increased ADA and adding three additional mandates to the block grant (Parental Involvement, Williams Case Implementation, and Developer Fees). This is in addition to two mandates proposed to be added to the block grant in January.
The Governor wants to pay off the state’s mandate backlog in 2016-17 and 2017-18. He counts this debt in his overall “Wall of Debt.” It is important to remember that the mandate obligations incur interest – making the later payoff is a bad deal for the state, but this means that those LEAs with outstanding claims will actually make some money off the delay if the claims are reimbursed.
Prop 39 Energy Efficiency Programs – The Governor decreases the amount of energy efficiency funding available to K-12 schools by $9 million to reflect a decrease in related revenue.
No Funding for Transitional Kindergarten (TK) – Not surprisingly, the Governor’s proposal does not contain funding for TK. However, we expect this to be a focus in final budget negotiations with the Legislature because Senate Pro Tem Darrell Steinberg is pushing hard for this to be included in his last budget as Senate leader. The lack of significant additional funding in the Prop 98 guarantee will likely hinder Steinberg’s effort.
Additional One-Time Common Core Funds? – Despite continued growth in state revenues, the Administration does not propose to provide another round of one-time funds for Common Core implementation. Some are encouraging a serious conversation about potentially taking two-years to pay off the inter-year deferrals and using some one-time money in 2014-15 for another round of Common Core funding.
What’s Next? – Over the next month, the Legislature will hold their final budget subcommittee hearings and each house will pass a budget bill that will go to the two-house Budget Conference Committee to put together a final budget bill that will ultimately go to the Governor. For every day after June 15 that the Legislature does not send a budget to the Governor, Legislators forfeit pay. We expect an on-time budget.
We expect the Governor, Senate Pro Tem, and Assembly Speaker to begin meeting privately soon. Additionally, because Democrats lack 2/3 control in the Senate, any components of the budget that would require 2/3 votes (The rainy day fund is an example of a 2/3 requirement; however, most parts of the budget impacting education would not require 2/3 vote) will mean Republican support will be necessary and would likely bring Senate Minority Leader Bob Huff (R-Diamond Bar) into the fold. We expect Democrats to do everything in their power to avoid issues that require 2/3 vote.
Thank you to Capital Advisors Group for their permission to distribute the above information.

This week California Governor Jerry Brown presented his May Revision, which revises his January budget proposal. It is forecast that the state’s revenues will come in at $2.4 billion more than earlier anticipated. This is positive news for charter school education in California. The major pieces of his May Revision are:

Creation of a larger state rainy day fund (which already has reached agreement with the legislature)
A Proposition 98 reserve
Paying off the deficit in the State Teacher’s Retirement Fund
Expansion of the state’s Medi-Cal program

The May Revise includes total funding of $75.9 billion ($45.1 billion General Fund and $30.8 billion other funds) for all K-12 programs. Specifically, the revise continues the changes outlined in the Governor’s January budget proposal by maintaining the additional $4.5 billion proposed for implementation of the Local Control Funding Formula (LCFF), creation of a Proposition 98 reserve and focusing on eliminating inter-year deferrals. He is also proposing to create a K-12 High Speed Network to study Internet connectivity and infrastructure and allocate grant funding to those school districts with the greatest need. This will aid in meeting technology requirements associated with Common Core implementation and adaptive testing. The revise contains $26.7 million for this program. It also proposes a fix for an issue that some schools participating in Provision 2 and 3 of the National Schools Lunch Program are having with the implementation of LCFF. Additionally, there is good news for charter schools with independent study programs as the Governor modifies his January proposal by:

Eliminating the requirement that teachers and students meet weekly to assess if a student is making satisfactory grades
Provides schools the opportunity to offer site-based blended learning, utilizing a universal learning agreement for all students enrolled in the same course or courses
Funds students enrolled in course-based indpendent study programs on the basis of average daily attendance, and not enrollment, and applying the statewide excused absence rate to average daily attendance claimed by local education agencies

To review the entire May Revision go to www.dof.ca.gov and click the link for 2014-2015 May Revision. We’ll be posting additional updates and information on the Governor’s revision and additional budget and legislative information as it becomes available, so check back or subscribe to our blog for ongoing posts on this topic and others relevant to charter schools.

EdSource reported in an article earlier this week that the California Charter Schools Association (CCSA) is continuing it’s efforts to recommend closure of under-performing charter schools across the state with it’s criticism of the San Jose school district for approving two new campuses for a local charter school.
Branche Jones, a legislative advocate who works with numerous California charter schools, explained that CCSA is using a metric based on an accountability system that no longer exists. Last year the California legislature suspended the API system because it was deemed outdated and does not conform with the Common Core standards. Currently, the SBE is developing a new set of assessments and accountability system.
“The standards CCSA is following is not the current statute, so when charters are up for renewal they are not trying to meet CCSA’s metrics, they are conforming with the state statute,” said Jones. “As a statewide advocacy organization, CCSA should be helping their members improve their academic achievement.”
According to Jones, CCSA tried to implement their own accountability system through legislation several years ago and were unsuccessful. The EdSource article highlights pushback from both charter schools, school districts and superintendents against CCSA’s efforts.
EdSource Article: Charter Schools Association Continues Push To Weed Out Low-Scoring Schools, by John Fensterwald
“Upping its campaign to root out what it views as its lowest performing schools, the California Charter Schools Association last week criticized a San Jose school district for allowing a charter school to open two more campuses next year…” Read More.

BUDGET PROPOSAL POSITIVE BUT MAY CLASH WITH LEGISLATIVE PRIORITIES
Last week California Governor Jerry Brown released his proposed budget for the year. With revenues rising and the state finally coming out of years of deficit spending the Governor has decided to increase his spending on education. The Proposition 98 guarantee will be funded at $61.6 Billion which is an increase of $6.3 Billion over the 2013 Budget Act level. Additionally, the Governor is proposing:

An additional $6.4 Billion in spending to eliminate all of the education deferrals that have been in place.
$4.5 Billion in funding to implement his Local Control Funding Formula and
$46.5 Million to implement the Common Core standards.
An increase of $25.9 million Proposition 98 General Fund for county offices of education LCFF in 2014-15.
An increase of $74.3 million Proposition 98 General Fund to support projected charter school growth.
A decrease of $2.2 million Proposition 98 General Fund to reflect a decline in Special Education ADA.
Cost-of-Living Adjustment increases of $33.3 million to support a 0.86 COLA for categorical programs that remain outside the LCFF, including Special Education, Child Nutrition, American Indian Education Centers, and the American Indian Early Childhood Education Program. COLAs for school districts and county offices of education are provided within LCFF increases.

All of this additional funding is a very positive sign for the education community but it does set up a battle of priorities between the Governor and the legislature. The legislature, while they will probably support much of this new funding, has its own set of principles that it has publicized. The Democratic members of the State Assembly put out their own budget blueprint last month that included a variety of new spending and program expansions. The Senate leadership has been clear that it would like to use the state’s new revenues to increase access to early learning programs in California. The President Pro Tempore of the Senate, Darrell Steinberg, has already introduced legislation (SB 837) that would establish transitional kindergarten programs for all children in the state. Additionally, early education advocates are preparing legislation that would establish universal preschool in the state as well. While not commenting on the proposals the Governor did say in his budget press conference that it would not be fiscally prudent to establish new programs in the state simply because revenue projections are up. This will set up a tug of war between the Governor and legislative leaders that may not resolve until a final budget is adopted in June.
To learn more about the Governor’s proposals and other California state updates may impact your charter school, register for a free webinar hosted by Charter School Capital on Tuesday, January 21st at 9:00 a.m. PST. Register now.

The California Department of Education is requesting that all data files be submitted no later than Wednesday, January 15th in order to meet the statutory deadline for the 2013-14 First Principal Apportionment. Please see the information below for details on files needed for submission. Additional information can be found on the CDE website.
From the CDE website:
Wednesday, January 15, 2014 is the due date for the following data files:

2013-14 P-1 Attendance
2013-14 P-1 Necessary Small Schools Funding Selections and Certifications
2013-14 P-1 SELPA ADA
2013-14 P-1 Special Education Tax Allocations
2013-14 P-1 LEA Special Education Infant Data
2013-14 P-1 Revenue Limit ADA Adjustments

Note: It is important that we receive the files by the due date in order to process the 2013-14 First Principal Apportionment by the statutory deadline. If you have any questions, or need assistance, please contact our office by phone at 916-324-4541 or by e-mail at PASE@cde.ca.gov.

Increases in available charter school funding and changes in lease aid may impact your charter school.

Lease aid for fiscal year 2014 and beyond has been impacted with the Minnesota Department of Education’s new requirement that charter schools include an “escape clause” in leases, both new and by amendment to existing leases. The intention of this change is to prevent landlords from participating in charter school close down funding allocations in the instance that a school is either terminated or does not receive renewal. There is concern within the commercial real estate community that this change may jeopardize charter schools’ entitlement to lease aid. There are currently efforts being made to reverse the decision to include this clause in charter school leases but at this time, the outcome is uncertain.
Finally, the Minnesota Department of Education has received approximately $20M in funds for dispersal to high-performing schools currently serving increased percentages of free and reduced lunch-eligible students. The application process for these grants is scheduled to begin as early as November 1st. Application forms can be accessed on MDE’s site.
We’ll continue to share additional information in support of Minnesota charter schools, charter school working capital financing and identify opportunities for charter school facilities funding.
We would like to hear from you. Please share your thoughts by commenting below. And, make sure to register for our blog to stay up to date on relevant information. Follow us on Facebook, LinkedIn and Twitter as well.

To Test or Not to Test: That is The Question

Last week, California Governor Jerry Brown signed bill AB 484 brought forth by Assemblywoman Susan Bonilla. AB 484 would essentially end standardized testing as it currently exists in California. The measure could potentially eliminate Academic Performance Index (API) scores and current assessments for the next two years with an option for the State Board of Education to extend the measure to three years. This would occur as the State Board of Education (SBE) and California Department of Education (CDE) begin creating new assessments and performance standards that include the new common core standards.
AB 484 would also provide Local Educational Agencies (LEAs) the opportunity to administer only one of the two common tests (language arts or math); both tests would not need to be administered until the new assessments are created. During this two to three year period, no new API scores will be generated so schools will either use their most recent API score or the average of their last three API scores, whichever is higher. At this time, the potential impact this may have on charter schools facing renewal or revocation is unknown. Additionally, it is unclear how the provisions of AB 484 will work with the school accountability measures that are part of the new Local Control Funding Formula.
This proposal created a firestorm in the Capitol during the last days of the legislative session and forced a response from Arnie Duncan, the US Secretary of Education. Mr. Duncan threatened the state’s future federal funding (and any waivers that the state is seeking from the Federal Government) and expressed anger at the language in AB 484, though he later retracted some of his comments.
It remains to be seen what the ramifications to California charter schools will be as a result of the signing of this new bill. Charter School Capital will continue to provide updates on this policy change in the state of California.
Be sure to register for our blog to receive future updates. To view AB 484 visit www.leginfo.ca.gov and enter in bill number AB 484 when prompted.

The California Legislature has adopted a budget and passed it, along with the trailer bills, to the Governor for his signature. The Governor won the fight over changing how schools are funded in California as a form of his Local Control Funding Formula was adopted but the education trailer bill created new accountability for charter schools. This accountability also comes with removal of a charter schools ability to appeal certain revocations. While the California State Board of Education will have to work out the process through regulations; California charter school policy has taken a step backwards as the language will allow charter school authorizers new ways to show their hostility to charters under their jurisdiction. Below is a short outline of the accountability measures that were adopted for charter schools, as you can see the consequences can be devastating.
A charter school petition will be required to include a description of the school’s annual goals for academic achievement for all students and each subgroup of students. These goals will have to be updated each year by July 1^st beginning in 2015 and will also have to identify specific actions that will be taken to meet these goals using a template created by the State Board of Education that will include:

A review of the progress toward the goals included in the charter, an assessment of the effectiveness of the specific actions described in the charter toward achieving the goals and a description of changes to the actions that the charter school will make as a result of the review and assessment.
A listing and description of the expenditures for the fiscal year implementing the specific actions included in the charter as a result of the reviews and assessment.

Charter schools will also be required to consult with teachers, principals, other staff, parents, and pupils in the annual update. The State Board of Education is also authorized to revoke any charter, whether it is the authorizer or not, if it finds the charter school failed to improve pupil outcomes across multiple state and local priorities.
Additionally, there are interventions if a charter school fails to improve pupil outcomes for pupil subgroups in regards to more than one state or local priority in three out of four consecutive school years:

The chartering authority shall provide technical assistance to the charter school, using the rubric created by the State Board of Education.
The Superintendent of Public Instruction may assign, at the request of the chartering authority and approval of the State Board, newly created California Collaborative for Educational Excellence to provide technical assistance to the charter school.

The language also requires a chartering authority to consider the revocation of any charter school to which the California Collaborative for Educational Excellence has provided advice and assistance and has made either of following findings:
1. The charter school has failed to implement, or is unable to implement their recommendations.
2. The inadequate performance of the charter school is either so persistent or so acute as to require revocation.
A charter school is not allowed to appeal a revocation under this section of new law.
This creates terrible policy for California charter schools and their supporters. You should call the Governor’s office and urge him to reject this language which is contained in Assembly Bill 97. To view the entire bill go to www.leginfo.ca.gov and put in the bill number. You can call the Governor’s office at (916) 445-2841.

Monday night, June 10th, the conference committee closed out the open items in the budget negotiations. The legislature and the California Governor have reached agreement on a budget deal and while we are still waiting for the language to actually appear for the education trailer bill (and other issue area trailer bills), it is very important that we see the actual trailer bill language because that will be the language that fully implements this agreement but here is a summary of the deal.
Proposition 98 will be funded at levels similar to the Governor’s May Revision, with minor adjustments – $15 million less in the current year and $22 million higher in 2013–14. The compromise spends virtually the same on deferral buy down in the current year, but spends $650 million less than the Governor proposed for 2013-14. There will also be $1.25 billion in the budget for the implementation of common core standards. The federal sequestration cuts to special education are not going to be backfilled but the budget does spend $30 million for equalization. Proposition 39 funds will be used for K-14 schools only. The pending language should revolve around a poverty-weighted allotment of Prop 39 funds to each school district and community college district based on their average daily attendance (ADA). Charter schools should be included in these allotments. You would be responsible for submitting applications for energy saving projects based on criteria established by the California Energy Commission and to have those applications approved before receiving funds. A small amount of funds will be provided for the Workforce Investment Board ($3 Million) for Veterans and at-risk youth focused on energy related projects. Additionally, the requirement that LEAs give charter schools first priority on sale or lease of surplus property will be extended until 2016.
The Governor also won on his effort to change the way that schools are funded in California. Though he compromised with the legislature his Local Control Funding Formula will be implemented with changes to proposed funding levels and the supplemental and concentration grants. There will be $2.1 billion to implement the plan, roughly $214 million more than the Governor proposed. The Administration says the compromise spends 84% of the funds on the Base Grant and 16% on the Supplemental and Concentration Grants.
Here are the highlights of the plan:

Increases target per-pupil Base Grant by $537 above the May Revision.
The portion of the overall formula that is devoted to Base Grants is 84% (May Revision was 80%).
The compromise provides additional funding for an “economic recovery payment” to ensure that virtually all districts get back to their 2007-08 state funding levels, adjusted for inflation. (Because of some anomalies, a small number of very small school districts would not get back to the 2007-08 levels.)
Districts and charter schools would receive an additional 20 percent of the Base Grant for low income and English learner students.
While the Supplement Grant rate is reduced from the May Revision level (35% of the base rate), the Supplemental Grant rate is calculated on the much higher Base Grant. Thus, there is very little difference between the lower Base Grant/higher Supplemental Grant approach vs. and higher Base Grant/lower Supplement approach.
Districts and charter schools would qualify for additional concentration funding if 55% of their students are low income and English learners. (May Revision threshold was 50 percent.)
The Concentration Grant rate would be at 50% of the Base Grant for each low income and English learner student above the 55 percent threshold.
Full implementation is estimated to take eight years.
There are also ‘hold harmless’ provisions so no district or charter school receives lower funding in the budget year than they currently do.

These are the highlights and what is available today. We are all waiting for the actual language to be released so everyone can provide a better analysis and make sure the figures are accurate.