Fourth District PTAFourth District PTA

Ron BennettChief Executive Officer

January 23, 2015

Ron BennettChief Executive Officer

January 23, 2015

State Financial Update

2Overall, a Positive Year for EducationOverall, a Positive Year for Education

The 2015-16 State Budget proposed by the Governor would be good news in any year

But particularly coming after such a long and deep recession, this State Budget restores the hopes and dreams of many Californians

The recovery is not complete and won’t be until at least 2021 under the Governor’s planBut the incremental progress is significant – particularly for public education

During the recession, we took more cuts than any other segment of the State Budget

The Governor acknowledges this and is keeping his commitment toward restoration of our losses

After all, temporary losses to public education become permanent impairments on the lives, hopes, and dreams of our children

© 2015 School Services of California, Inc.

3Progress Toward LCFF ImplementationProgress Toward LCFF Implementation

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-210

10

20

30

40

50

60

70

80

90

100

Trend Actual

Full LCFF Im-plementation

2020-21

2015-16 Governor’s State Budget: 58% Cu-mulative Gap Closure

2015-16 Trend Line

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4Proposition 98: The Minimum GuaranteeProposition 98: The Minimum Guarantee

The improving economy has boosted the Proposition 98 minimum funding guarantee

State revenues are up in the current year and moderate growth is projected for 2015-16

In turn, the state’s obligation to K-12 education and community colleges increases

For the current year, the minimum guarantee increases by $2.3 billion to$63.2 billion from the level adopted in the 2014-15 State Budget Act

From this revised level, the Governor’s State Budget proposes a 2015-16 Proposition 98 guarantee of $65.7 billion, an increase of $2.5 billion, or 4.1%

Funding is based on Test 2: (1) the growth in state per-capita personal income, which is projected to rise 2.91%, and (2) the change in K-12 ADA, which is expected to be flat

© 2015 School Services of California, Inc.

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2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 $40.0

$45.0

$50.0

$55.0

$60.0

$65.0

$70.0

$75.0

$56.6

$49.2 $51.7

$49.6 $47.3

$57.9 $58.7

$63.2 $65.7

Budget Restores Investment in Education(Proposition 98 Funding in Billions)

Pro-posed

Proposition 98 FundingProposition 98 Funding

Source: Governor’s State Budget Summary, page 6

© 2015 School Services of California, Inc.

© 2015 School Services of California, Inc.

Proposition 98 and the Major K-12 ProposalsProposition 98 and the Major K-12 Proposals

The Governor’s State Budget proposes:

$4 billion for LCFF gap closure

$1.1 billion for discretionary one-time uses, including Common Core implementation (one time)

$1 billion to eliminate the remaining K-14 apportionment deferrals

$500 million for an Adult Education Block Grant

$273 million for the Emergency Repair Program (one time)

$250 million for one-time CTE incentive grants (each of the next three years)

$198 million additional ADA growth in the current year and a $6.9 million decrease for ADA decline in 2015-16

$100 million for Internet connectivity and infrastructure

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7Commitment to Adult Education,ROC/P, and CTECommitment to Adult Education,ROC/P, and CTE

Adult Education, CTE, and Regional Occupational Center/Program (ROC/P) have been on life support for most of the past seven years

First, inclusion in the list of Tier III programs during the “Great Recession” gave districts flexibility to reduce these programs and use the swept dollars to support other K-12 programs

Districts took advantage of the flexibility and cut 50% of the programs statewide

Then the state folded the dollars for these programs into the LCFF base, but required that districts maintain levels of effort for 2013-14 and 2014-15

The maintenance of effort (MOE) requirement expires in June 2015, with no ongoing dedicated funding source after that

Absent the Governor’s proposed actions, these critical programs would likely be eliminated over time

© 2015 School Services of California, Inc.

© 2015 School Services of California, Inc.

Career Technical EducationCareer Technical Education

The Governor proposes $250 million in each of the next three years for a new transitional CTE Incentive Grant Program, in lieu of continuing the Career Pathways Trust Grant

Priority given to LEAs working in partnerships with other LEAs to offer regional programs

Unlike the Career Pathways Trust Grant, it is a matching grant program

Intended to accelerate the development of new and expanded high-quality CTE programs

Between 2011-12 and 2012-13 CTE enrollment decreased 11.8% statewide*

*CTE State Enrollment Analysis

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© 2015 School Services of California, Inc.

Adult EducationAdult Education

The Governor includes a $500 million block grant for Adult Education in his 2015-16 Budget

This is new money and does not include any portion of the funds previously required as part of the maintenance of effort (MOE) from K-12 schools

The 2013-14 State Budget provided $25 million for two-year Adult Education planning grants to 70 regions for consortia of school districts and community colleges

In 2013-14 and 2014-15, K-12 districts were required to maintain the same level of spending as they had in 2012-13 for Adult Education

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© 2015 School Services of California, Inc.

Adult EducationAdult Education

Each consortium is required to designate an allocation board, which will make recommendations for the distribution of funds

Adult Education programs serving the highest need populations will have priority for funds

Administrative costs will be limited to 5%

Each consortia is required to report to the Chancellor and Superintendent of Public Instruction (SPI) annually on the progress toward goals in the Adult Education Plan

For 2015-16, funding will be provided directly to the K-12 school districts in the same amount as their MOE

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11CalSTRS and CalPERSCalSTRS and CalPERS

The employer contribution costs for both CalSTRS and CalPERS are projected to double over the next several years

CalSTRS – From 8.25% in 2013-14 to 19.1% in 2020-21

CalPERS – From 11.442% in 2013-14 to 20.4% in 2020-21

The 2015-16 State Budget proposal does not address these cost increases for school districts or county offices of education

The Governor does propose allocation increases for the California Community Colleges partly in recognition of increased expenses in the area of retirement benefits

© 2015 School Services of California, Inc.

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$10

$12

$14

$16

$18

$20

$22

$24

(in B

illio

ns)

2020-21

Added CalSTRS/CalPERS Costs

LCFF Implementation PromiseLCFF Implementation Promise

Promise

$18.5 B

$14.1 B

Actual Purchasing Power

© 2015 School Services of California, Inc.

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$10

$12

$14

$16

$18

$20

$22

$24

(In B

illio

ns)

2020-21 ? ?

Added CalSTRS/CalPERS Costs

Recognizing Higher Retirement CostsRecognizing Higher Retirement Costs

Separate CalSTRS/CalPERS Funding

$22.9 B

Purchasing Power

$18.5 B

© 2015 School Services of California, Inc.

Trigger Capping District ReservesTrigger Capping District Reserves

The enactment of SB 858 (Chapter 32/2014) and Proposition 2 together establish a hard cap on school district reserves if certain conditions are met

Triggering conditions include:

The Proposition 98 maintenance factor must be fully repaid

Proposition 98 must be funded based on Test 1

Proposition 98 is sufficient for enrollment growth and statutory COLA

A deposit must be made into the Proposition 98 reserve when capital gains revenues exceed 8% of General Fund revenues

In defending this controversial budgeting restriction or attempting to ease the growing sense of doom, some have argued that it is highly unlikely that the cap will ever be triggered

THIS CONCLUSION IS WRONG – it may be triggered sooner than we think!

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© 2015 School Services of California, Inc.

15Discretionary FundsDiscretionary Funds

The Governor’s State Budget proposal provides more than $1.1 billion in discretionary one-time Proposition 98 funds, including $20 million for COEs

The allocation amounts to about $180 per ADA for districts

The Governor suggests the one-time funds may be used to further investments in the implementation of Common Core State Standards (CCSS)

Other uses detailed in the proposal are:

To support the implementation of newly adopted English language development and California’s Next Generation Science standards, and

To support expenditures that occur due to the evolving accountability structure of the LCFF

© 2015 School Services of California, Inc.

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Any increase used to fund LCAP strategies for targeted

students

Must negotiate issues within the scope of bargaining

Annual increase to base grant always

available for negotiations

Annual COLA always available for negotiations

Any increase was restricted and not generally available for negotiations

Categorical Programs

Base Revenue Limit

Targeted Funds

Base Grant

Negotiations Under the LCFFNegotiations Under the LCFF

Revenue Limits LCFF

© 2015 School Services of California, Inc.

17The Year in ReviewThe Year in Review

Governor signs AB 97 (Chapter 47/2013) to enact the LCFF

The SBE approves emergency LCFF spending regulations and the LCAP template

LEAs conduct local needs assessment, consult with stakeholders, and prepare a first draft of the LCAP

The first draft of the LCAP is presented to advisory groups for review and comment, revisions are made, and the plan is presented for public comment

July 2013

January2014

Apr-May2014

June2014

Feb-Apr2014

First LCAPs are adopted and submitted to the COEs and the state for approval

© 2015 School Services of California, Inc.

18The Year in ReviewThe Year in Review

Oct2015

Nov2014

Sept2014

July2014

Future

SBE readopts emergency regulations and conditionally approves changes to the permanent regulations and the LCAP template

SBE readopts emergency regulations which include additional revisions to the LCAP template

SBE adopts the permanent LCFF spending regulations and the LCAP template

SBE must adopt an evaluation rubric

© 2015 School Services of California, Inc.

19State Board of Education Updates – Evaluation RubricsState Board of Education Updates – Evaluation Rubrics

E.C. 52064.5 requires the SBE to adopt evaluation rubrics on or beforeOctober 1, 2015

Purpose of Evaluation Rubrics:

Allow LEAs to evaluate their strengths, weaknesses, andareas that require improvement

Assist county superintendentsto identify needs and technical assistance

Assist SSPI to direct interventions when warranted

Provide standards for improvement as it relates to LCFF priorities

EVALUATION

RUBRICS

Student Focused

EquityTransparency

Performance

IdeasIdeas

© 2015 School Services of California, Inc.

20The Continuing Evolution of the LCAPThe Continuing Evolution of the LCAP

Evaluation Rubrics Vision

• Serve as a tool to ensure LEAs are able to align resources with goals

• Align with the LCFF design principles

• Guide reflection andprovide helpful ideas

• Support continuous improvement

• Extend to all strategic planning and implementation efforts

Evaluation Rubrics Concept

• Used as a tool in creating and assessing LCAP goals

• Organized around the three planning categories (Conditions of Learning, Engagement, and Pupil Outcomes)

• Provide an at-a-glance understanding of strengths and needs

• Not intended to be scored or used to rank LEAs

Evaluation Rubrics

Activities

• January SBE Meeting Present the rubrics

concept• March SBE Meeting

Share evaluation rubrics draft

• May SBE Meeting Share examples of tools

and other resources• July SBE Meeting

Present final draft• Sept SBE Meeting

Final SBE approval

© 2015 School Services of California, Inc.

Thank you!