Basic Aid 101 & Budgeting Presented by Dr. Robert Leri

(Grab coffee and food to stay awake!)

Important Events in California Public School Funding

Who can name the first major event in the 20th century that affected current California public school funding?

1971 Serrano vs. Priest decision (1976, 1978)

What was the second major event…happened in 1978?

Proposition 13

What was the next major event, which is still providing a constitutional guarantee formula for education funding?

Proposition 98 in 1988 and then Proposition 111 in 1990

The birth of basic aid school districts

Finally…what did Governor Brown sign into law with the 2013-14 budget that altered education funding?

The Local Control Funding Formula (for Revenue Limit Districts)

The Local Control Funding Formula (LCFF) Replaces Revenue limit

Provides a base grant for each LEA equivalent to $7,643 per average daily attendance (ADA). The actual base grants would vary based on grade span.

Provides an adjustment of 10.4 percent on the base grant amount for kindergarten through grade three (K–3). As a condition of receiving these funds, the LEA shall progress toward an average class enrollment of no more than 24 pupils in kindergarten through grade three, unless the LEA has collectively bargained an annual alternative average class enrollment in those grades for each school site.

Provides an adjustment of 2.6 percent on the base grant amount for grades nine through twelve.

Provides a supplemental grant equal to 20 percent of the adjusted base grant for targeted disadvantaged students. Targeted students are those classified as English learners (EL), eligible to receive a free or reduced-price meal (FRPM), foster youth, or any combination of these factors (unduplicated count).

Provides a concentration grant equal to 50 percent of the adjusted base grant for targeted students exceeding 55 percent of an LEA’s enrollment.

Provides for additional funding based on an “economic recovery target” to ensure that virtually all districts are at least restored to their 2007–08 state funding levels (adjusted for inflation) and also guarantees a minimum amount of state aid to LEAs.

School District funding

LCFF-Revenue Limit

Where are basic aid districts?

Coastal Regions and Sierra Range including some foothill areas

Basic Aid Funding

Recession-Induced Basic Aid

Staying Basic Aid

Upside of Basic Aid

The benefits of being basic aid include:

The district is funded above its computed revenue (LCFF) limit

Loss in ADA doesn’t hurt – unlike in the many districts with declining enrollment

Fast growth in property taxes yield big increases in revenues

Risks of Basic Aid

The biggest fear is legislation that redistributes school property taxes within a county, thereby taking away the excess property taxes that basic aid districts have

Such a scenario is unlikely, but still possible – and something that we must guard against

Alternatively, there have been proposals to freeze the excess taxes that basic aid districts have at their current levels

Downside of Basic Aid

But being basic aid is not all good news

It is very hard to accurately project property tax growth, making long-term forecasts unreliable

District receives no additional state funding while all LCFF districts do in addition to supplemental and concentration grants

“Categorical Funding” frozen forever at 2012-13 amount (which includes “fair share” reduction amount)

District receives no additional funding when enrollment grows (or is higher than estimated)

Basic aid districts need higher reserves

No “safety net” until you fall back to LCFF

More Downside…

Property taxes don’t always grow

Decrease in new housing units or resale lead to lower assessments and reductions in property taxes – with no additional state aid to offset the loss (unless a district became a LCFF limit district)

District must pay for increases in retirement rates and unemployment insurance costs

Basic aid district must always worry about potential changes in state law

Local Control Funding Formula

We Are Still Required to LCAP

The LCAP is a critical part of the new Local Control Funding Formula (LCFF).

Each school district must engage parents, educators, employees and the community to establish these plans.

The plans will describe the school district’s overall vision for students, annual goals and specific actions the district will take to achieve the vision and goals.

The LCAPs must focus on eight areas identified as state priorities. The plans will also demonstrate how the district’s budget will help achieve the goals, and assess each year how well the strategies in the plan were able to improve outcomes.

Eight State Priorities

1. Providing all students access to fully credentialed teachers, instructional materials that align with state standards, and safe facilities.

2. Implementation of California’s academic standards, including the Common Core State Standards in English language arts and math, Next Generation Science Standards, English language development, history social science, visual and performing arts, health education and physical education standards.

3. Parent involvement and participation, so the local community is engaged in the decision-making process and the educational programs of students.

4. Improving student achievement and outcomes along multiple measures, including test scores, English proficiency and college and career preparedness.

5. Supporting student engagement, including whether students attend school or are chronically absent.

6. Highlighting school climate and connectedness through a variety of factors, such as suspension and expulsion rates and other locally identified means.

7. Ensuring all students have access to classes that prepare them for college and careers, regardless of what school they attend or where they live.

8. Measuring other important student outcomes related to required areas of study, including physical education and the arts.

Fiscal Year 2015-16

Preliminary Budget Planning

February 4, 2015

Budget History- 2013-14 Second Interim

• Prior to Agreements for Staff Compensation • Balanced Budget vs. Employee Recognition • Minimal Reductions • No Staffing Changes

2014-15 First Interim

• Fiscal Impact of Salary Agreements • Increased Fund Balance • Improved Revenues • Deficit Spending Patterns • Conservative Revenue Growth

One-Time Administrative Position (78,722.10)$

Common Core Training Day Overage (28,522.50)$

District Office- HR/Business Reorganization (171,135.00)$

5.0 FTE Certificated Retirement Attrition* (427,837.50)$

Reduce TTEA Salary Schedule to Ongoing 1% increase (163,335.81)$

Temp Positions (100,020.42)$

Materials and Supplies- Undetermined (63,228.00)$

Professional Services (63,228.00)$

Election Expense (45,000.00)$

Total Reductions (1,141,029.33)$

2015-16 Unrestrict GF Deficit (745,661.00)$

2015-16 Reductions Included @ First Interim

*Based on Board staffing goals, certificated staff numbers currently exceed recommended

ratios by 12 teachers.

Additional Attrition Savings for 5 FTE* (102,406.00)$

Staff Replacement Savings (retirees) (132,229.00)$

Transfer of Staff and Operations to other Funds (100,000.00)$

Deparmental Efficiencies (20,000.00)$

Additional Staffing Reductions (53,100.00)$

Total Reductions (407,735.00)$

2015-16 Unrestrict GF Deficit (333,752.00)$

2015-16 New Potential Reductions

*Additional savings realized based on actual salary information. Estimates were initially used at

First Interim

What’s Coming?

• Staffing Ratios • Budget Enhancements and Reductions • Second Interim • New Revenue Information • May Revise

Questions?