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Budget Tracker Says Education Gets the Short End of the Stick – and He Has Numbers That Back Up His Case Michael Hulsizer, a longtime representative of the Kern County Office of Education in Sacramento, is personally convinced that K-14 education has been getting the short end of the stick from California’s governors and legislators for years. Hulsizer has burrowed through budgets past and present, and compiled statistics that support his assertion. During the last few weeks, Hulsizer has been quietly circulating a three-page PowerPoint... Legislature Misses Deadline to Pass Budget Budget Conference Committee Takes Few Actions on Education Funding With little fanfare – and following a pattern that is considered par for the course – the Legislature let the June 15th constitutional deadline to approve a budget lapse with little sense of urgency or necessity. Despite missing the deadline, the Legislature’s two-house budget conference committee did continue to meet this week and made its first pass through the education portion of the Committee’s agenda. While the Committee reviewed the entire agenda, they took very little action and spent a considerable amount of time having agency staff brief the Committee on the specific topics... Schools Make Deep Cuts to Programs Due to Budget Crisis O'Connell Releases Survey Showing Severe School District Budget Reductions California Superintendent of Public Instruction Jack O’Connell last week released the results of a statewide survey of local educational agencies (LEAs) to find out how state budget cuts to public education are affecting them. O’Connell held a news conference in the Natomas Unified School District (in Sacramento County) where all eight elementary school libraries were shut down to close a budget gap. “The survey results make clear that school administrators are making heartrending decisions to balance their dwindling budgets while trying valiantly to keep students’ best interests in mind,” said O’Connell... Education Coalition Rejects May Revision; Supports Assembly Budget Proposal A group of policy experts from The Education Coalition hosted a budget briefing last week to announce their support of the Assembly budget proposal and to oppose the governor’s May Budget Revision, which cuts more than $4.1 billion from California’s schools and students, according to the legislative analyst. The governor’s proposed budget would further reduce revenue limit funding by $1.5 billion. This represents a cut of about $250 per student... Duncan, NEA and AFT Endorse Legislation, But Opposition Could Stall Bill in Congress O'Connell Urges Support of $23 Billion Emergency Federal Education Jobs Fund State and federal education officials are rallying the troops in support of federal legislation that could provide funds to save teacher jobs in local school districts – but the bill is running into opposition from groups worried about the size of the federal budget deficit. State Superintendent of Public Instruction Jack O’Connell is urging California Congressional representatives to support $23 billion in federal education funding proposed by the Keep Our Educators Working Act of 2010... Governor Signs California's Race to the Top Phase 2 Application at Ceremony State Superintendent of Public Instruction Jack O’Connell joined Governor Arnold Schwarzenegger and State Board of Education President Ted Mitchell in Long Beach on Tuesday for a ceremony marking the signing of California’s application for Phase 2 of the federal Race to the Top (RTTT) competition. O’Connell is undoubtedly hoping for a better outcome the second time around. California’s application for the previous round of Race to the Top Phase 1 funding was not awarded any money... Things To Do Soon: Bell Schedules, School Calendars and Instructional Minutes for 2010-11 The school year is just about over for 2009-10, and pretty soon your administrators will be settling into their summer schedule, and probably taking some vacation. But before they take off, make sure they’ve provided you with next year’s bell schedule, school calendar and the calculation of instructional minutes. You’ll need to establish a deadline that allows your own staff enough time to verify the accuracy of the calculation and be able to reach staff if necessary... O'Connell Supports School Funding Lawsuit, While Governor Predicts He Will Prevail State Superintendent of Public Instruction Jack O'Connell last week announced his support of a lawsuit (Robles-Wong, et al. v. California) filed on May 20 against the State of California by students, districts, school boards, and school administrators: "California students are the victims of broken budget promises and a broken school funding system,” O’Connell said. “I applaud this effort to align appropriate funding for our public education with our goal of educating students to master our rigorous academic standards... O'Connell Expresses Disappointment No Federal Grant Money Coming to Support California's New Education Data System State Superintendent of Public Instruction Jack O'Connell expressed disappointment last Friday after California was not named as a winning state in the federal competition for a grant from the Institute for Education Sciences (IES) within the U.S. Department of Education. O’Connell said “California is strongly supportive of President Obama's education reform goals, including improving teacher effectiveness, adopting standards to ensure that all students are ready for college and careers, turning around lowest-performing schools, and strengthening the collection and use of education data... Budget Analysis May Revise Means Tough Budget Negotiations Ahead – Educators Should Remain Vigilant On Friday, May 14, 2010, the Governor Released his 2010-11 May Budget Revision. The governor laid out his plan to close a state budget deficit of $19.1 billion. The following is a brief summary and analysis of the May Revision. What is the May Revision? Historically, the May Revision is an update to the Governor’s January budget proposal. The document is an annual event that marks the “real” start of the budget development process... May Budget Revise Governor Seeks More Budget Cuts, No New Taxes Governor Schwarzenegger released his May Budget Revise on Friday – a proposal that, in the words of his press spokesman, contains “absolutely terrible cuts” for public education and social programs that impact children – and proposes no new taxes. As always, the May Revise contains changes and refinements to the Governor’s January budget proposal. The state’s overall budget shortfall has not changed significantly from the figures that were identified in January... Education Groups Quick to Criticize Funding Cuts in Governor's May Budget Revise Here is a quick summary of reactions on Friday to the Governor’s May Budget Revise from several education groups: State Superintendent of Public Instruction Jack O’Connell said “While we are still working to analyze details of the Governor’s proposal, it appears that the voter-approved guarantee for K-12 education funding does not seem to have been further reduced since the Governor’s January budget proposal... State Receipts Drop Again in April, Erasing Four Months of Modest Improvement Last Friday, State Controller John Chiang released his monthly report covering California’s cash balance, receipts and disbursements in April. The month’s receipts dropped below the Governor’s 2010-11 budget estimates by $3.6 billion, or 26.4 percent -- reversing the slow progress of several previous months. Through March, the States’ revenues had been tracking more than $2.3 billion ahead of projections ... CDE Posts Budget Tools With Pending Deferrals from State, Cash Flow Management Critical During Coming Year Maintaining sufficient cash balances remains critical. Although we are finally starting to witness positive economic news, school districts and county offices of education will likely face two more years of challenging finances. In addition, a large number of intra and inter-year funding deferrals remain active. It will probably be several more years until most of them are eliminated from statute. The critical determinant will be the health of the state’s cash position... Keeping Perspective The Economic Outlook and Education Funding The recession of the past two years now has an official name. Economists and historians will from now on refer to it as the “Great Recession.” The impact of the downturn has been sweeping. And when all is said and done, it will fundamentally reduce public sector services in a manner that could require over a decade to completely restore. Multi-year Outlook We know when the recession started – the fall of 2007. But has it really ended? That answer is still anybody’s guess... DOF Reports State Revenues Up Again For the third straight month in 2010, state revenues were higher than projected. The Department of Finance (DOF) recently reported in its Finance Bulletin that the state’s General Fund agency cash for March was $670 million above the 2010-11 Governor’s budget forecast. According to DOF, year-to-date revenues were $2.68 billion above estimates. Below is a summary of the DOF March Bulletin. Personal income tax revenues to the General Fund were $132 million above the month’s forecast of $2.252 billion... Palo Alto Unified Among Recipients Feds Awards Grants to Help School Districts Recover from Student Suicides, School Shooting The U.S. Department of Education's Office of Safe and Drug-Free Schools this week awarded three new Project School Emergency Response to Violence (SERV) grants, totaling more than $137,000, to school districts in California, New Mexico and Alabama to assist with ongoing recovery efforts following a series of student suicides and a middle school shooting. Project SERV grants provide funding to school districts and institutions of higher learning that have experienced a traumatic event and need resources to respond to the event and re-establish a safe learning environment... Twelve Districts "Negative," 114 More "Qualified" Budget Crisis Leads to Dramatic Rise in School Districts on Fiscal Early Warning List State Superintendent of Public Instruction Jack O'Connell on Monday announced a 17 percent increase in the number of school districts that may be unable to meet future financial obligations because of the continuing state budget crisis and cuts to public education. “In the first interim status report of the 2009-10 fiscal year, 126 local educational agencies are now on the watch list,” said O’Connell – which is up from the 108 school districts on the watch list reported in June 2009... Budget Analysis Trends and Conditions Behind the Rising Number of Qualified and Negative Districts This week’s report on the significant increase in the number of school districts that may not be able to meet their multiyear financial obligations should come as no surprise to education leaders. What else could have happened when you cut and defer over $17 billion in Proposition 98 funding in as little as two fiscal years? The number school districts receiving qualified or negative budget certifications at the 1st Interim Report jumped 17 percent over last year... State's Revenues Up $219 Million in February For the second month in a row, the State Department of Finance is reporting that State revenues have exceeded the projections contained in the Governor’s 2010-11 budget forecast. DOF reported that State general fund cash was $219 million above the forecasted amount for February. This revenue is in addition to the $1.4 billion in higher than expected revenues reported in January. Year-to-date revenues are almost $2 billion above the State’s forecast... Applications Due in May Secretary Duncan Releases Details for $650 Million "Investing In Innovation" Fund U.S. Secretary of Education Arne Duncan on Tuesday released the Department of Education's final priorities and the grant application for the $650 million Investing in Innovation Fund (i3). The fund is part of the $5 billion investment in school reform in the American Recovery and Reinvestment Act (ARRA). Individual school districts or groups of districts can apply for the i3 grants, and entrepreneurial nonprofits can join with school districts or a consortium of schools to submit applications... California Gets Zilch in Phase One of RTTT Federal Education Secretary Arne Duncan announced Thursday that 15 states and the District of Columbia will advance for Phase One in the Department of Education’s Race to the Top (RTTT) competition – and California is not on the list. The phase 1 finalists are: Colorado, Delaware, District of Columbia, Florida, Georgia, Illinois, Kentucky, Louisiana, Massachusetts, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, and Tennessee... Budget Update/Alert: Planning for and Defending against Targeted Reduction to LEA "Administrative Costs" The following update contains two sets of information related to the governor’s proposed targeted cut to K-adult administrative functions in FY 2010-11. The first focuses on how to plan for such a reduction. The second provides useful information to dispel the myth that California LEAs spend too much on central office administration compared to other functions. Planning for possible revenue limit reductions Last week, School Services of California (SSC) released a report detailing... More Bad News on State Budget Legislators Ponder Deferrals, LAO Warns Governor’s Plan Cuts K-12 Funding There were several new developments on the budget front in Sacramento – most of them discouraging news for financially-battered K-12 school districts. —On Wednesday, the Assembly Budget Committee rushed through legislation (ABX8 5) that would authorize three additional deferrals of apportionments to K-12 districts – totaling up to $2.5 billion in all – with the deferrals affecting apportionments originally due in July 2010 to be deferred by up to 60 days... Tips for Getting Your Position Control System Ready for the New Budget Year As districts are updating and finalizing their budgets for the Second Interim reporting period, it is likely a few districts may have discovered that some of the information in position control may not be accurate – and in fact may need some clean up. Position control is a vital tool used by districts for both internal control purposes and for budgeting purposes. For most districts, salary and benefits account for approximately 85% of their general fund budget... Class Size Reduction Flexibility Revisited While Class Size Reduction (CSR) flexibility contained in the revised 2008-09 State Budget may seem like old news to many, this flexibility is receiving more attention than ever as many districts are now looking to formerly “sacred cows” – including K-3 Class Size Reduction -- to bridge growing budget gaps. Due to increased questions, we wanted to revisit the article published in March 2009 discussing the “new” class size reduction flexibility provision... Sec. Duncan Cites New Direction Federal Education Budget Tops $49 Billion for Discretionary Programs, Up $3.5 Billion President Obama's 2011 education budget signals a new direction for federal K-12 education policy with more competitive funding, more flexibility and a focus on the reforms likely to have the greatest impact on student success, according to Secretary of Education Arne Duncan. All told, the president's budget includes $49.7 billion for the Department of Education's discretionary programs, an increase of $3.5 billion over fiscal year 2010... California's Cash Shortage Returns; Feds Offer $1.5 Billion of $6.9 Billion Sought by Governor The outlook for California’s state budget is once again looking dark and stormy – meaning that school districts are probably well-advised to be prepared for more fiscal turbulence ahead. The first volley of ominous news came out of State Controller John Chiang’s office on January 22, in the form of a letter sent to Governor Arnold Schwarzenegger and several legislative leaders... LAO Rebukes the Governor on Prisons vs. Universities Funding Proposal The Legislative Analyst’s Office recently delivered a tersely written rebuke of Governor Schwarzenegger’s proposal to spend less on prisons than public universities. In a four page policy brief, the LAO derided the Governor’s plan to cap prison spending at 7% of the budget and secure a minimum of 10% for public universities as an “unnecessary, ill-conceived measure that would do serious harm to the budget process.”... Know Your Audience, Be Prepared Tips for Planning an Effective Budget Presentation – For Any Audience Over the course of a CBO or fiscal director’s career, you will probably give dozens – even hundreds – of presentations on budgets and finance, often speaking to different groups. Your presentations may contain the same budget information, but depending on the occasion, your audience may include governing board members, union representatives, district employees, parents, community members and occasionally newspaper reporters. To effectively communicate essential budget information to all stakeholder groups, it is important to remember the following tips... The Governor Attempts to 'Divide and Rule' – At the Wrong Time and Wrong Place The Governor’s recently released budget proposal promises to deliver several so-called “reforms” to public education. But, like much of the proposal, the Governor’s education reform proposals are grounded in faulty assumptions and unclear analysis. The Governor and his advisors appear to be relying on a centuries-old technique of “divide and rule” (harkening back to the Roman Empire) by proposing a potpourri of changes in the hopes of diverting attention away from reality... Governor's January 2010-11 Education Budget Shifts K-12 District Funding in Some Categories Last Friday, Governor Schwarzenegger released his budget proposal for 2010-11. The Governor’s budget attempts to close a $19.9 billion budget deficit. About $6.9 billion of the deficit is in the current budget year (2009-10) and $12.3 billion is attributed to the 2010-11 budget year. The Governor also includes the need to have a $1 billion reserve in the $19.9 billion deficit figure. The chart below outlines the factors contributing to the $19.9 billion two-year deficit and the Governor’s proposed solutions over the same period... Be Aware – Yet Be Wary of the Budget Doom and Gloom Although the Governor announced in his “State of the State” message that he intends to protect education funding in the last budget of his tenure, no one believes that his remarks on Wednesday will be the last word regarding this matter. Many remain skeptical of his pledge, given the track record of this administration over the last seven years. In a state budget debate, “it is not over until it is over” and educators appear to be taking a wait-and-see approach, rather than assuming that events will play out as the Governor has suggested over the next several months... Economic Forecast: The Outlook for K-Adult Education Funding and What to Do Next On Wednesday, the UCLA Anderson School of Management released its quarterly economic forecast. The Anderson Forecast, in combination with several other forecasts, has become a closely-watched barometer for the overall health of our national and state economies. It is widely used by policymakers to formulate budget and revenue projections at the state level. We keep a close eye on international, national, and state economic trends because they directly impact the flow and characteristics of state revenues... Get Your Budget Process Started on the Right Foot; Use a Budget Development Calendar Like any successful project, the key to a successful budget development process is development of a plan and effective execution of the plan elements. The best way to begin development of your budget planning process is by creating a budget development calendar. Designing Your Budget Development Calendar Budget Development Calendars are used to list important dates and events throughout the budget development process, as well as the individuals... Four Models for Federal Funding: Duncan Readies $3.5 Billion in Title I Grants, Applications Now Available, Due by February 8 On Thursday, U.S. Secretary of Education Arne Duncan announced the final requirements for $3.5 billion in Title I School Improvement grants to turn around the nation's lowest performing schools. The applications are now available at http://www.ed.gov/programs/sif/applicant.html and are due into the Department of Education by Feb. 8, 2010. “As a country, we all need to get into the turnaround business,” said Duncan. “Today we are providing $3.5 billion and four models... Work with Your Auditor Reviewing Your Draft Audit Report As the December 15 deadline looms for submission of your annual audit report, you are also busily working on completing your First Interim Budget report, and trying to enjoy some well-deserved holiday time off. However, don’t overlook the importance of a thorough review of your draft audit report. A thorough review of your report can reveal some very important items... ACSA President Charles Weis: "California's Lawmakers Have Got To Do More Than Continually Hold Out a Hat for Federal Grant Funding" Charles Weis, president of the Association of California School Administrators (ACSA) and the leaders of the California Schools Boards Association, California Teachers Association, California School Employees Association and California State PTA joined on Tuesday to blast the $17 billion in statewide budget cuts to public schools over the past two years. Acting as The Education Coalition of California, they released a report chronicling the impact of the cuts from the perspective of students, teachers and administrators... Your District Audit – December 15 Deadline Looms Hope for the Best – Yet Plan for the Worst The time of year has come again for your auditors to arrive and place the finishing touches on your 2008-09 annual district audit. These audits are due to the State Controller’s Office no later than December 15, 2009. Many audit firms will be busily doing field work through the month of November (and possibly later). Your audit firm’s rush to submit multiple audit reports by the December 15 deadline could leave your district with little time to appropriately review and discuss your audit report... Successful Parcel Tax Campaigns Start With Accurate Polling Data and Careful Planning; Los Gatos Union Superintendent Offers Pointers Last week’s election was a very mixed bag for school districts seeking voter approval of local parcel taxes, trying to offset budget reductions for education from the state. School parcel taxes were approved in several smaller, affluent, suburban communities in Marin County (Larkspur School District and Lagunitas Elementary School District), Alameda County (Albany Unified School District) Contra Costa County (Acalanes Union High School District) and Los Angeles County (Culver City Unified School District)... Duncan Announces Application Requirements for Final $11.5 Billion in ARRA Funding Secretary of Education Arne Duncan announced Monday that application requirements for the final $11.5 billion in State Fiscal Stabilization Funds under the American Recovery and Reinvestment Act (ARRA) of 2009 are now available. In exchange for this unprecedented funding boost, the department is asking states to provide basic information on teacher distribution, the collection and use of data, standards and assessments, and support for struggling schools... Final Version of Race to the Top Application Released, $4.35 Billion in Funding at Stake U.S. Secretary of Education Arne Duncan on Thursday released the final application for more than $4 billion from the Race to the Top Fund, which will reward states that have raised student performance in the past and have the capacity to accelerate achievement gains with innovative reforms. “The president said last week that Race to the Top will require states to take an all-hands-on-deck approach,” Duncan said. “We will award grants to the states that have led the way in reform and will show the way for the rest of the country to follow.”... Parcel Tax Elections Prove To Be A Mixed Bag The November 3 election was a pretty mixed bag for California school districts that went to voters asking for financial support in the form of a local parcel tax supporting education. Parcel tax ballot measures ran up big majorities in some communities, but fell short of a simple majority (much less a two-thirds majority) in others. In general, proposed parcel taxes did well in small districts (with fewer than 10,000 students) and failed in larger districts – and in Tuesday’s results, it appeared that the bigger the district, the poorer the proposed parcel tax did at the polls... State Plans Three Regional Meetings Next Week to Discuss California's RTTT Application The State of California will hold three meetings next week – one in the Los Angeles area, one in the Bay Area, and one in the Central Valley – to discuss California’s proposal for federal Race to the Top (RTTT) funds. These regional events, open to all interested parties, are designed to share a general overview of the requirements in the Race to the Top application as well as open up discussions around the four key areas in the application... Districts Are Spending ARRA Funds – But Some May Be Moving at a Slower Pace Than Expected The State Superintendent of Public Instruction announced on Tuesday that about 28,000 education jobs in prekindergarten through grade twelve were saved by the American Recovery and Reinvestment Act (ARRA) of 2009. The figure was derived from the first quarterly reports submitted to the California Department of Education (CDE) by school districts and other subrecipients of ARRA funds. But a survey by the CDE also found that less than half of the ARRA funds in the three largest categories have actually been expended by California school districts thus far... Duncan Announces Priorities for $650 Million in Federal Grants for "Investing in Innovation" U.S. Secretary of Education Arne Duncan this week announced the Department's priorities for grants under the $650 million Investing in Innovation Fund (i3). The fund, which is part of the historic $5 billion investment in school reform in the American Recovery and Reinvestment Act (ARRA), will support local efforts to start or expand research-based innovative programs that help close the achievement gap and improve outcomes for students. “We're making an unprecedented investment in cutting-edge ideas that will produce the next generation of school reforms,” Duncan said on Tuesday... CPEC Awards $2 Million in Grants to Help Teachers in "High Need" Schools The California Postsecondary Education Commission (CPEC) this week awarded $2 million for innovative grant projects to help small teams of K-12 teachers develop projects that enhance teaching and learning in their classrooms. The funding will flow through the University of California, Los Angeles, and the University of California, Davis, which will each receive three-year grants of $1,010,000 to manage the regional Teacher-Based Reform (T-BAR) Pilot Program. The grants enable university faculty from schools of education and subject matter departments to work with 24 teams of three to five teachers from high-need schools... The Fiscal Outlook for Education: The Challenges of the Next Two Years Public education has certainly taken a beating during the state budget crisis. Average 2009-10 school district revenue limits are 22% lower than in 2007-08. That equates to an average revenue limit loss of $840 per student since 2007-08. That loss in funding becomes even greater when one factors in the 20 percent reduction most categorical programs took in 2008-09 and 2009-10. Average school district revenue limits are at the same levels they were in 2004-05. We have communicated for some time that the fiscal outlook for school districts and county offices remains volatile thru 2011-12... Study Finds Dropouts Drain California Budget by $1.1 Billion Annually in Juvenile Crime Costs Dropouts cost California $1.1 billion annually in juvenile crime costs alone, according to a study released Thursday from the California Dropout Research Project (CDRP) at UC Santa Barbara. The new research also shows that cutting the dropout rate in half would reduce the number of juvenile crimes in California by 30,000 each year. In 2007, California juveniles (ages 10-17) were arrested for one-in-six violent crimes statewide, and over one quarter of all property crimes... $1.3 Billion in Federal Stimulus Funds Expedited Some $1.3 billion in expedited State Fiscal Stabilization Funds (SFSF) will soon be available for California’s school districts, colleges and universities. In May, the U.S. Department of Education provided California $3.2 billion for the first phase of SFSF – representing 67 percent of California’s total $4.9 billion allocation – to help mitigate the effects of budget reductions to education, at least for the next year or so. The second installment of SFSF funds was scheduled to be released to states in December... Schools Won't Lose Funding Because of Wildfires State Superintendent of Public Instruction Jack O'Connell announced on Tuesday that assistance is available for students, schools, and the communities affected by the wildfires in Los Angeles and Placer counties. “Thankfully, we have not heard of any deaths or injuries of students or school staff, nor damage to any school structures,” said O’Connell. “However, I want to assure school districts whose operations have been affected that they will not lose funding if their facilities are closed by wildfires or used as emergency shelters.”... Just Saying No isn't the Answer Last week, we wrote about how the declining economy and resulting budget cuts for public education have affected the priorities in almost every Local Education Agency (LEA). Although fiscal solvency has always been a prime consideration for any school district, we are now in an era when the emphasis on maintaining financial viability (and thus maintaining programs) is more critical than ever before. With scarce resources, the need for tighter control is high, and administrators in local school districts and county offices administration must act with great frugality... American Recovery and Reinvestment Act
"Race to the Top" Details Emerge The federal Department of Education issued priorities, requirements and selection criteria for the new $4.5 billion incentive grant, “Race to the Top,” a key component of the ARRA (American Recovery and Reinvestment Act of 2009) in a July 29 release. Attorneys from the Washington DC-based law firm Brustein and Manasevit reviewed the program during a briefing on Wednesday in Sacramento. The competitive grant is designed to encourage and reward states that are implementing significant education reforms across the ARRA core areas,... Duncan Accelerates $11.3 Billion in ARRA Funds Secretary of Education Arne Duncan announced on Monday that the federal Department of Education will accelerate stimulus spending by making $11.37 billion in Title I, IDEA (Individuals with Disabilities Education Act), and Vocational Rehabilitation (VR) funding, as part of the American Recovery and Reinvestment Act (ARRA), available to states one month early to help save jobs and drive reform. “After accelerating the release of $2.7 billion in Government Services funds earlier this month... How are California School Districts Using Federal Stimulus Dollars? One thing for certain, federal stimulus money from the American Recovery and Reinvestment Act (ARRA) arrived just in time. As bad as the budget situation is for California’s school districts and county offices, one can only imagine what it would have been like without the infusion of one-time ARRA funding. But that also leads to another question – What happens in 2010-11 and 2011-12, when all that one-time money is likely gone? What will happen then if the state’s fiscal condition does not significantly improve?... Governor Signs State Budget, But Financial Crisis in Sacramento Will Likely Continue Governor Arnold Schwarzenegger signed the new state budget into law on Tuesday, amidst political fanfare that the budget included no new taxes. But before the day was out, Democratic legislative leaders were angrily criticizing the line item vetoes that the Governor announced when he put his signature on the budget bills. And over 180 city and county governments, along with the California Redevelopment Association, made it clear that they will soon go to court to block the $2 billion that the state “borrowed”... State Takes Control of King City District, More Districts Teeter on Fiscal Edge State Superintendent of Public Instruction Jack O'Connell appointed Dr. John Bernard on Wednesday as the State Administrator for the King City Joint Union High School District in Monterey County. The state takeover of the district was required by law after the district was granted a $13 million state loan to avoid bankruptcy. “Although a state takeover of any school district is a very serious matter, I encourage everyone to look upon this as an opportunity,” said O'Connell. “Dr. Bernard has the talent and experience and my full support... O'Connell, Chiang Announce State Cash Shortage Will Cause Delay in $4 Billion School Funding Payment State Superintendent of Public Instruction Jack O'Connell and State Controller John Chiang announced on July 10 that a $4 billion payment to schools has been delayed for several weeks as a result of the state's ongoing fiscal crisis. The payment, known as the Principal Apportionment, is the largest annual payment of state funds to California's public education system. Due to the state's ongoing fiscal crisis and cash shortage, the payment scheduled for release on July 10, which is the last payment for the 2008-09 fiscal year, will instead be issued on July 30, 2009... Latest Update on Federal Stimulus Funds The California Department of Education provided an update last week on recent activity relating to the American Recovery and Reinvestment Act, which provides federal stimulus funds: July 2, 2009
Gridlock in Sacramento What Gets Paid . . . And What Doesn't: Local Impacts of California's Budget Crisis In what has become an ongoing nightmare, state budget negotiations are once again deadlocked. How long this latest stalemate will last is anyone’s guess. Deliberations among state leaders continue . . . but this could take awhile. When a stalemate like this occurs, we typically receive inquiries regarding the implications for school district and county office of education program funding, as well as public retirement system funding... How Schools Get Paid: A Brief Tutorial Understanding the possible impacts a budget stalemate can have on schools requires a basic understanding of how education funding is released by the state to school districts and county offices of education. This is not a matter easily understood by the layman observer. As with most education policies, California’s K-14 funding schedule cannot be explained in simple terms . . . in fact, it is as complex as the Proposition 98 formula that drives it. Proposition 98 funding rolls out to Local Education Agencies (LEAs) per an apportionment schedule... Latest Update on Use, Reporting of ARRA Funds Earlier this week, State Superintendent Jack O’Connell and California Department of Education (CDE) officials hosted a conference call for Local Education Agency (LEA) leaders to provide further information and guidance on federal stimulus funds. A full range of information regarding the American Recovery and Reinvestment Act K-12 education funds is available on CDE’s website. After the call, the department provided addresses to the following links that pertain to stimulus dollars: 1. CDE's ARRA Webpage: http://www.cde.ca.gov/ar/... Categorical Flexibility “Flexibility” Really Means . . . Flexibility “Unprecedented” is probably overused as a description for the budgetary events for schools these past several months. But the term is apt, and as events continue to unfold, much of the budgetary and regulatory landscape that we’ve all grown up with in public schools is shifting dramatically. Among the major changes for this year and the foreseeable future is the SBx 3_4 special session legislation that gave school districts huge flexibility in the use of categorical funds to try to cushion the financial blows in the current state budget... New UCLA Economic Forecast: District and County Offices Could Face Rough Financial Times into 2011-12 Earlier this week, the UCLA Anderson Forecast released its second quarterly economic report of 2009. The Anderson Forecast is a widely followed economic forecast for California and the nation. The report upgraded the condition of the national economy, but noted that the patient is still “very sick.” In terms of California’s economy, the UCLA economists noted that “there is nothing happening in California that will help pull the state out of recession in advance of the nation.” For school districts and county offices, this confirms the depressing projections we have been providing over the past year and a half... District Entitlements for State Fiscal Stabilization Funds Detailed by CDE Late last Friday afternoon – at an hour when many K-12 administrators and not a few journalists were taking a momentary break after attending local graduation ceremonies in their districts – the California Department of Education (CDE) posted a list describing the disposition of some $880 million in State Fiscal Stabilization Fund entitlements, covering more than 1,500 local education agencies (LEAs) in California. The funding entitlements are posted online at State Fiscal Stabilization Fund (SFSF) - American Recovery and Reinvestment Act... Deadline Nears for Districts to Apply for Federal Teacher Quality Partnership Grants The State Superintendent of Public Instruction and the Governor’s Secretary of Education are urging school districts to consider applying for a competitive grant opportunity under the American Recovery and Reinvestment Act now available. “A core reform of the American Recovery and Reinvestment Act (ARRA) is to improve teacher effectiveness and the equitable distribution of qualified teachers for all students,” the Superintendent’s office said in a message this week. “The United States Department of Education is now accepting applications for Teacher Quality Partnership (TQP) Grants... California's Cash Flow Situation Worsens: Educators Should Be On High Alert Earlier this week, State Controller John Chiang released his latest figures on state revenues and projected cash flow. State revenues continue to plummet, with projections that the state will run out of available cash by July 28. Adding fuel to the fire, the governor announced yesterday that he will block all attempts by the State Controller and others to secure a temporary loan for the state. The governor stated that this action would merely give the Legislature a further excuse to delay the budget and put off critical decisions that need to happen now. This news does not bode well for school districts and county offices of education... K-14 Payment Deferrals – What gets paid and when As the state’s fiscal and cash situation has worsened, state government has relied heavily on “interyear” and “intrayear” deferrals to reduce Proposition 98 spending mid-year in response to decreases in the Proposition 98 minimum guarantee. There have now been so many deferrals that it has become difficult to keep track of all of them. However, knowing what is being deferred – and when – remains critical to anticipating a local education agency’s (LEA’s) projected cash flow. The following outlines the interyear and intrayear deferrals that have been approved and proposed as of May 31, 2009... Bracing for Still More Cuts: Education Budget Outlook Grows Dimmer In what has become a nightmare situation for educators, additional developments occurred this week that essentially solidify the likelihood of another round of possible reductions in the state budget, and virtually assure more cuts in 2009-10. These reductions will be in addition to those that were implemented this past February. The size of the cuts The size of these additional reductions are enormous, especially when factored with the total reductions K-adult programs will incur over a two-year period. Last February’s 2008-09 and 2009-10 reductions amounted to over $5.15 billion, or roughly $860 per student... With May 19 Special Election Just Days Away State's 2009-10 Fiscal Situation Worsening Fiscal and political conditions associated with the development of the 2009-10 state budget continue to worsen. These developments undoubtedly pose significant challenges to local education agencies going into the new fiscal year. May 19 ballot measures The Public Policy Institute of California (PPIC) released results of a recent poll on Tuesday indicating that all but one of the six ballot initiatives on the May 19 special election appear to be failing among likely voters... Federal Stimulus Money Reaching Districts Federal stimulus money began flowing to local school districts this week, even as many local school boards were voting on issuing "final" layoff notices to certificated employees, leading up to the May 14 deadline for notification. On Tuesday, State Superintendent of Public Instruction Jack O’Connell released California Department of Education (CDE) calculations of the amount of Title I funds that local educational agencies (LEAs) in California will receive, as well as the amount of Individuals with Disabilities Education Act (IDEA) Part B funds that Special Education Local Plan Areas (SELPAs) will receive under the American Recovery and Reinvestment Act of 2009 (ARRA)... May 4th Application Deadline for Stimulus Funds There's no time for school districts to delay – the deadline for applications from local educational agencies seeking State Fiscal Stabilization Funds (SFSF) under the American Recovery and Reinvestment Act (ARRA) is May 4, 2009 . . . . which is to say "Monday." The online applications were posted on the California Department of Education (CDE) website last week. The CDE press release can be reviewed at this link: ... Advisory on State Fiscal Stabilization Funds Now Available; Money Starts Flowing in May The first installment of a two-part policy advisory on State Fiscal Stabilization Funds (SFSF) is now available from the Association of California School Administrators (ACSA). School districts must apply for SFSF funds no later than May 4, 2009. The first phase of these funds will start flowing to local school districts sometime in mid-May. Dated April 22, the ten-page policy advisory from ACSA offers an overview of the American Recovery and Reinvestment Act (ARRA), with an update on the status of federal stimulus funds for California school districts and higher education... With May 19 Special Election Just Days Away State's 2009-10 Fiscal Situation Worsening Fiscal and political conditions associated with the development of the 2009-10 state budget continue to worsen. These developments undoubtedly pose significant challenges to local education agencies going into the new fiscal year. May 19 ballot measures The Public Policy Institute of California (PPIC) released results of a recent poll on Tuesday indicating that all but one of the six ballot initiatives on the May 19 special election appear to be failing among likely voters... Federal Stimulus Dollars Flowing to Districts Federal stimulus dollars have begun flowing to the state. But Local Educational Agencies (LEAs) are still a few weeks away from getting them in their hands. LEAs will begin receiving these funds in May. There are three primary one-time funding sources in the American Recovery and Reinvestment Act (ARRA): Title I, the Individuals with Disabilities Education Act (IDEA), and the State Fiscal Stabilization Fund (SFSF). The Association of California School Administrators (ACSA) plans to release a detailed analysis of the federal stimulus package in the next few days... Implementing the Budget: Various provisions of the recently enacted 2008-09 mid-year reductions and 2009-10 budget require further clarification and regulatory guidance from California Department of Education (CDE) and the Legislature. As of April 17, such guidance has not been released, but we are told it is forthcoming. The recently adopted budget correction package included sweeping budget reductions along with major program changes. As a result, follow-up legislation (also known as a “clean up” bill, or bills) is required to provide further guidance and clarify various aspects of the budget package... Review all Alternatives to Budget Reductions Budget reductions are always painful — and they almost always have an adverse impact on the students and their learning. They are especially hard when they involve the loss of job and livelihood for employees who serve those students. Therefore, before the administration recommends a reduction in services and a layoff of employees, it must look into all available alternatives and evaluate all options. The public has been generally supportive of educational measures such as an educational parcel tax... Sec. Duncan Releases Applications, Guidelines for Federal Stimulus Funds for Education Education Secretary Arne Duncan announced on Wednesday that $44 billion is available for education under the American Recovery and Reinvestment Act (ARRA) of 2009. Duncan released the application and guidelines for $32.6 billion under the State Stabilization fund, representing two-thirds of the total dollars in that fund. This includes $26.6 billion to save jobs and to improve K-12 and higher education and a separate $6 billion in a Government Services Fund to pay for education, public safety or other government services... Economic Forecasts Indicate More Turbulence, New Challenges on the Horizon Two recently released economic forecasts indicate that California and the nation will remain in significant recession for the foreseeable future. The data points to a widespread contraction of state and national economic output. This will pose significant challenges for school district and county offices of education well into 2010-11. Economic Forecasts Economists with the UC Santa Barbara Economic Forecast Project and the Anderson Forecast at UCLA... Eastin and Thomas Call for Longer School Year, But Part Ways on State Budget Compromise Former State Superintendent of Public Instruction Delaine Eastin got into something of a debate with California’s current Secretary of Education Glen Thomas, as well as education finance consultant Bob Blattner, in a lively discussion on Monday. The occasion was a forum in Davis, organized by the Yolo County School Boards Association. The event drew quite a few notables, including Gavin Payne (Chief Deputy Secretary of Public Instruction), Harold Levine (Dean of the School of Education at UC Davis), and others... Use of One-Time Funds to Generate Long-Term Ongoing Benefits Whether or not one agrees with the causes, logic and rationale of the recently enacted state budget “correction” and federal stimulus packages, the fact remains that they will result in making substantial one-time, uncommitted funds available for local education agency (LEA) governance teams. Through a combination of fund balance sweep ups, categorical flexibility, and expected federal stimulus funding for schools, a large amount of funds will be available for one-time use during the next several years... Recommended Process for Conducting Public Hearings on Categorical Flexibility The recently enacted state budget requires local educational agencies (LEAs) to hold a public hearing prior to the transfer and use of eligible categorical program funds under the new “Tier 3” flexibility options. The education finance trailer bill, SBX3 4 (Chapter 12/2009), adds Education Code Section 42605(c)(2) requiring an LEA governing board to hold such a hearing. Specifically, the governing board, “at a regularly scheduled open public hearing shall take testimony from the public, discuss, and approve or disapprove the proposed use of funding.”... Court Rules for Reimbursement of School Accountability Report Card Costs A California Appellate Court ruled on Monday that a 2005 bill that sought to limit state costs for mandated activities of schools and local government is unconstitutional. The California School Boards Association (CSBA) has been contesting the law, AB 138, since 2006. The bill ordered a Commission on State Mandates to reconsider or eliminate reimbursement to local districts and government agencies for certain Brown Act requirements, for the Mandate Reimbursement Process, and for the School Accountability Report Cart... Class Size Reduction Changes with New Budget While the Adopted State Budget did not provide the level of flexibility in K-3 class size reduction that was originally proposed by the Governor, the Budget Act has significantly modified the penalty structure for K-3 class size reduction, resulting in a fiscally significant programmatic decision for Districts. The revised penalty structure is as follows:... Deferred Maintenance Flexibility; What You Can – or Cannot – Do There have been many questions regarding the flexibility associated with deferred maintenance. Information provided by CDE earlier this week clarifies that prior-year balances for deferred maintenance are not available for “sweep ups” into LEA General Funds. There has been some confusion in the field because deferred maintenance is not listed in Budget Trailer Bill as a program you could not sweep up prior-year balances. However, because prior-year balances for deferred maintenance are placed into Fund 14 restricted accounts... Categorical Flexibility: Update and Outlook The recently adopted State Budget includes the most significant restructuring of K-adult categorical programs in recent history. But this restructuring comes at a high price. Many categorical programs will suffer reductions in funding in 2008-09 and 2009-10. In addition, there will be no statutory COLA (Cost of Living Adjustment) provided to any Proposition 98 categorical program in 2008-09 and 2009-10, further exacerbating the impact of budget reductions. A number of them have been identified to benefit from increased flexibility in the use of the funding they receive... O’Connell Warns California Budget Deadlock May Limit State’s Access to Federal Stimulus Funds State Superintendent Jack O’Connell fielded questions from reporters regarding the state’s Budget “Correction” Package and the federal stimulus bill on Wednesday – a conversation that was slightly surreal, since the Budget “Correction” Package was still bottled up in the California Senate as O’Connell spoke. Ultimately, about 13 hours after O’Connell spoke to reporters, the Senate did pass the budget. But many of his comments to reporters are still of interest to educators: here is a brief summary... Relief Should Be More Than Fiscal – Give Districts More Time On Staffing Decisions The state’s leadership continues to wrangle with thorny issues that have caused the needed compromise on state budget issues to elude them. This delay is causing a number of significant problems and inconveniences for the local school officials. And the issues are not only fiscal. Many problems are procedural . . . which may appear to the lawmakers as trivial. But these problems still have the clear potential of wreaking havoc on the educational systems... $825 Billion Federal Stimulus Plan Moves to Senate As expected, the House of Representatives approved an $800-billion-plus federal stimulus package on Wednesday. The bill, which includes about $140 billion in funding for education, was pushed through by the chamber’s Democratic majority by a large 244-188 margin; the GOP responded by refusing to support the bill, which didn’t get a single Republican vote. For K-12 education, the federal stimulus package includes funding for Title I-A programs (serving low income students), funding for some construction and modernization projects... Federal Bailout Bill Includes Funding for Education A new $825 billion federal stimulus package, backed by Democrats, is working its way through Congress. And the legislation currently includes significant funding for K-12 education programs. The bill has cleared the House Education and Labor Committee, but still has hurdles ahead. Current features of the bill include:
Review Your Categorical Programs When Planning Budget Reductions (Part VII) In this series of articles, the best practices applied in the budget reduction process have been detailed. Instead of merely reporting on the worsening state budget situation, we are proactively identifying issues and sharing strategies that you may find helpful as you continue to seek ways to balance your district’s next year’s budget. Although, in principle, we vigorously oppose any reductions in the state education budget... The Death of AB 1200? In 1991, a landmark bill called AB 1200 was enacted, after the bankruptcy of Richmond school district in 1990. AB 1200 was a way of substituting state fiscal oversight for money. California schools – mired at the bottom of the national ranking of states for in-school spending – were told to keep their finances in order, or face county office and state intervention or takeover. California’s FCMAT (Fiscal Crisis & Management Assistance Team) was the child of AB 1200, a new state agency to keep an eye on districts’ fiscal health. It worked . . until now... Evaluate Contributions from Your Unrestricted General Fund (Part VI) Before the actual amount of needed reductions in the unrestricted general fund is determined with certainty, the contributions from the unrestricted general fund to restricted programs and other funds must be reviewed. Before the board is asked to start approving the elimination of positions that are funded through the general fund, and reductions are proposed affecting educational programs, the stakeholders including the employee groups will want to know that all of the draining from the general fund has been stopped... Reaffirming Your Budget Assumptions (Part V) In the previous articles in this series, we discussed cash flow management, and development of enrollment projections. We also talked about holding conversations with your partners in education such as your employee unions, and communicating with the community and informing the community about budget realities. Now, it is the time to start preparing for real budget reductions. Most of school districts have board-approved budget assumptions in place... Dust Off and Refresh Your Enrollment Projections (Part IV) As you begin your budget deliberation process for the 2009-10 fiscal year and focus on producing a balanced budget, you need to consider revisiting and revising your enrollment projections. When you develop estimates regarding the magnitude and amount if needed budget reductions, you need to make sure that your estimates are as accurate as possible... Tough Times Ahead… So Get Your District Prepared (Part III) As the State considers enacting mid-year budget cuts, school districts need to prepare. Where to start? First things first, develop a budget timeline. Start with the current month, and prepare a timeline of each step the district plans to take in the following months. The most important purpose of the budget timeline is to show your stakeholders that you have a plan... Managing Cash Flow in Tight Fiscal Times (Part II) With Gov. Scharzenegger's proposal this week to trim $2.5 billion in state support for public education, many districts are facing the possibility of unprecedented stress on their already adopted budgets. What should your district monitor as this situation is sorted out in Sacramento? One of the first and best indicators of a school district in serious financial distress is poor cash flow... It's Not Good . . . So Now What? (Part I) By now, all of us have heard the news – and it is not good. Although the size of the projected deficit keeps changing (depending upon who one talks to), one common thread remains. The imbalance in the state budget is substantial. Even the eternally optimistic Governor Schwarzenegger estimates the deficit as high as 10 billion dollars. And we know he is no "economic girlie-man". So when he projects doom and gloom, we must listen... Professional Development Funding for Special Education Teachers State Superintendent of Public Instruction Jack O’Connell announced 27 school districts throughout California will share $26.6 million in Professional Development in Reading for Special Education Teachers Pilot Program grants. Eligible applicants included local education agencies with a great need for special education teacher professional development. The grantees were selected based on the quality of their applications... Things to Watch – The Inconvenient Truth Hundreds of thousands of homeowners across the state have received notices from their local County tax assessors, informing them that their houses are now worth less than last year, and the assessed value has been adjusted downward. Depressing news to hear, even when it wasn’t unexpected. However, those homeowners can take heart in knowing that their property taxes will be lower... Department of Finance Reports Lagging Revenues California’s Department of Finance (DOF) released its monthly cash report for October. And given the recent news about the economy, it comes as no surprise that the DOF’s report indicates that things are slow – a trend that could have implications for future funding of public education. Among the DOF’s findings in the Monthly Cash Report:
Bail Out Bill 'Add On' Among the various tax extensions, the federal bail-out bill passed by Congress earlier this month includes a two-year reauthorization for the Qualified Zone Academy Bonds (QZABs), which can be used by school districts with significant populations of lower income students. The QZAB program allows districts with schools that have at least 35% of their students in free and reduced price lunch programs to borrow money from banks at zero interest to renovate buildings, purchase specific kinds of equipment for energy efficiency, improve curriculum, and to use for professional development... Getting the Most Out of Your District Financial Audit Now that your books are closed, it is time to hear those four words that strike fear into the hearts of many a fiscal director . . . "the auditors are coming." The annual district financial audit represents one of the largest annual professional services contracts that any district makes. Yet many district staffers treat the annual audit like a visit to the doctor – something you do as infrequently as possible, and just hope that you are OK... Put Your Categorical Funding to Work Each year, during the budget development process, the discussion about “flexibility” and use of categorical funds resurfaces. Of course, this rattles those who hold certain categorical programs near and dear to their hearts, and truly believe that any transfer of funds from their favored categorical programs would be detrimental to their cause. Consequently, despite rancorous discussions about the flexible transfers and/or expanded use of categorical funds by the Governor... Isn't It About Time For A Check Up? How is your district doing in comparison to other districts? Are you working for your categorical programs – or are your categorical programs working for you? Do you really know how those funds are being used or if they could be used more effectively? Could your district actually maximize these dollars in a way that may help provide relief to your unrestricted general fund budget?... |
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