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News Briefs
A View into the Future after the May 19th Election



 

Governor Proposes Increased Funding for Prop 98 & Continues To Push for an Extension of Taxes in May Revise

On May 16, 2011, Governor Brown unveiled his May Revision to the State Budget. In his presentation of the May Revision, the Governor focused on three key issues: 1) he continued to make the case that even with an increase in new revenue, California still has a significant budgetary shortfall and an extension of the current taxes set to expire is still needed; 2) he committed $3 billion of the new revenues to Proposition 98 and directed them to reduce a small portion of the deferrals; and 3) he intends to stay the course he began in January of ensuring passage of a balanced approach to solving the state’s budget problems.

Overall Perspective

The May Revision to the 2011-12 Budget reflects the following major changes to budget assumptions that were used to build his January budget proposal:

 

  • $6.6 billion in additional state revenue over the current and budget years,
  • $1.2 billion in higher local property tax revenues (which decrease the amount of state General Fund revenue needed to fund K-12 revenue limit apportionments)
  • $3.5 billion in reductions to tax extensions and borrowing proposed in January - made possible by higher state revenues.
  • $3 billion in additional Proposition 98 spending to "buyout" inter-year deferrals and fund the shift or responsibility for providing mental health (AB 3632) services from county mental health agenices and county welfare agencies to school districts.
  • $1 billion in lost Proposition 10 savings to fund child health services due to ongoing litigation
  • $500 million in new funding for the Department of Corrections and the Department of Mental Health to cover prior year unfunded expenditure obligations.

 

Despite the enactment $13.4 billion in adopted spending cuts since January, the Governor’s May Revision calls for an additional $10.8 billion in budget solutions, including $9.321 billion in tax extensions scheduled to expire on June 30. While the Governor continues to demand that these taxes be placed before voters, “as soon as possible” is how he characterized it, his revised budget calls for Republican votes in the Legislature to actually extend the taxes until the statewide election. It is unclear from the budget documents how long the taxes should be extended pending a public vote. Finally, the Governor is using part of the increase in state revenues to offset a loss of the temporary 0.25% increase in personal income taxes for 2011-12, which he now plans to forego until 2012-13, in an attempt to make the tax extension package more acceptable.

K-12 Overview

Highlights of the K-12 education budget adjustments in May Revise includes:

Proposition 98 - If the tax extensions fail, the Prop 98 minimum guarantee would automatically drop about $2 billion, from the $52.4 billion level proposed in the May budget revision, to $50.4 billion. In addition, DOF staff offered that if the taxes failed, K-12 education would be at risk for another $5 billion in cuts, given that, without the tax extension, the state would be unable to fund even that lowered guarantee of $50.4 billion.

DOF staff was queried about whether they had a “Plan B” scenario for education that detailed the deeper cut level. Staff responded that they had discussions regarding how this level of additional cuts to education would be levied, but stopped short of putting together a formal “Plan B” that reflects details of cuts of this magnitude.

COLA/Deficit Factors - The (unfunded) K-12 statutory COLA for 2011-12 is 2.24%. The resultant deficit factors for 2011-12 are 19.754% for school districts, and 20.041% for county offices of education.

Categorical/Other flexibility - No new changes proposed, beyond the additional two-year extension proposed in January.

Buyout of $2.53 billion in K-12 Inter-year Deferrals - The May Revision restores K-12 revenue limit apportionment funding that had been deferred in the March Budget legislation. This augmentation eliminates the most recent enacted deferral of $2.1 billion, and provides an additional $434 million to reduce approximately 25% of the existing February to July deferral.

Shifts costs for all AB 3632 Mental Health Services from Counties to Schools - The May Revision proposes to shift the responsibility for providing mental health services and out-of-home residential services required under federal law from county mental health agencies and county welfare agencies to school districts. This proposal would re-bench the Proposition 98 guarantee and provide an increase of $221.8 million to Proposition 98 to cover program cost. The May Revision also reflects the permanent repeal of the AB 3632 mandate and removes mental health services from the realignment proposal for counties.

In his May Revision briefing material, the Governor acknowledged that the existing approach to delivering mental health services which reimburses county mental health agencies for claims has lacked accountability for program and funding and service delivery. “Shifting the responsibility for mental health services back to schools would lead to greater cost containment and also create a stronger connection between the services provided and student educational outcomes.”

In addition to the proposed $221.8 million of Prop 98 funding designated for AB 3632 students, the May Revision continues to make available $98.6 million in Proposition 63 funds to county mental health agencies on a one-time basis in 2011-12.

School districts can contract with counties to provide services using Proposition 63 funds but schools would be responsible for any costs exceeding this amount. In total, the May Revise proposes $389.4 million from all fund sources, including $69 million in federal funds currently budgeted, for mental health services.

$221.8 million Proposition 98
$ 98.6 million Proposition 63
$ 69 million federal funds


$389.4 million total funding for 2011-12

 

According to the Department of Finance staff, in 2012-13, the administration will phase out the $98.6 million Proposition 63 funds (since they were only intended to be one-time in nature) and will back fill this dollar amount with Proposition 98 funds. This procedure will require the DOF to re-bench the Proposition 98 guarantee a second time in 2012-2013.

County Offices of Education Funding - The administration proposes increases of $14.6 in 2010-111 and $13.9 million in 2011-12 for updates to unemployment insurance, PERS, average daily attendance growth, and deficit factor adjustments.

Child Care and Development Workload Savings - The administration proposes a net $97.l2 million in child care and development program workload savings based upon the following changes:

 

 


AB 18 (Brownley) Moves Toward Simplified School Finance Reform

Assembly Member Julia Brownley (D-Santa Monica) has made it a goal of hers, since first being elected to the Assembly, to reform school funding to make it more simple and equitable and to give school districts and county offices of education more discretion over the use of funds. She is now pushing a major overhaul of revenue limits and categorical program funding in her AB 18. The bill will be heard in the Assembly Education Committee next Wed., May 4. Brownley chairs that committee.  The actual bill language is not yet in print but below is an outline of the concepts of the bill.

Revenue Limits Add-On

Brownley proposes to pull a number of current programs into the revenue limit as add-ons and create two broad-based grants made up of other programs. With respect to revenue limit add-ons, AB 18 proposes to consolidate 25 separate funding items into one per-ADA based funding source that will be intended as discretionary to local educational agencies (LEAs).
The programs proposed to be consolidated as revenue limit add-ons include:

  • Current unemployment insurance add-on
  • Current PERS adjustment add-on
  • Supplemental School Counseling Program
  • Non-special education Home-to-School Transportation
  • Specialized Secondary Program Grants
  • Gifted and Talented Education
  • Education Technology - CTAP
  • Emergency Repair Program
  • Deferred Maintenance
  • Instructional Materials Block Grant
  • Community Day Schools
  • National Board Certification Incentives
  • CA School Age Families Education (CalSAFE)
  • CA High School Exit Exam - Instructional Support & Services
  • Civic Education
  • Tearcher Dismissal Apportionment
  • School Saftey Block Grant (8-12)
  • 9th Grade Class Size Reduction
  • Advanced Placement and International Baccalaureate Programs
  • Pupil Retention Block Grant
  • School and Library Improvement Block Grant
  • School Saftey Consolidated Competitive Grants
  • Arts and Music Block Grant
  • Child Oral Health Assessments
  • Adult Education - Schedule 1

Districts would get the same amount of each of these programs that they have been receiving. Those amounts would be divided by ADA and then added on to the revenue limit. 

Revised Grant for EL and Disadvantaged Students

In addition, the bill calls for consolidating eight programs into a Targeted Pupil Equity Grant, which would be targeted to disadvantaged students and English learners. The programs that would be folded into this grant would be:

  • Supplemental Instruction
  • Economic Impact Aid
  • American Indian Early Childhood Education Centers
  • Adult Education (Schedules 2 & 3 releating to CalWORKS)
  • Charter School Categorical Block Grant
  • New School Categorical Funding
  • Community-Based English Tutoring Program
  • Targeting Instructional Improvement Block Grant
  • Similar to the revenue limit add-ons, a calculation would be made for each LEA on the amount of these programs currently received; then the grant would be provided back to each LEA based on the number of disadvantaged and EL students. These funds would be required to be spent on services to support learning and improved academic performance for these students. The intent is to provide COLA and equalization funding to this grant in future years.

    Quality Instruction Grant

    A third grant is also proposed in the bill.  The grant will be called the Quality Instruction Grant and would include the consolidation of nine programs.  

  • Math and Reading Professional Development
  • Administrator Training Program
  • Bilingual Teacher Training Assistance Program - Schedule 1
  • Teacher Peer Review - Schedule 2
  • K-3 Class Size Reduction
  • Teacher Credentialing Block Grant
  • Professional Development Block Grant
  • Physical Education Teacher Incentive Grants
  • Certificated Staff Mentoring
  • This grant would be allocated on a per-ADA basis with the intent to provide COLA and equalization in future years. The grant is intended for professional development, class size reduction, teacher recruitment, and beginning teacher support.

    Several Major Programs Continue to Stand Alone

    Specific programs that are not included in the consolidations include, among other programs, special education, special education transportation, child nutrition, county office of education fiscal oversight, child development, apprenticeship programs, ROC/Ps, small school bus replacement, after school programs and the charter school facility grant program.

    Is This Really Reform

    It is obvious that AB 18 is going to be controversial as it affects the independence of a wide array of categorical programs.  The implementation of the bill is also designed to coincide with the ending of categorical flexibility.  However, is this reform of categorical flexibility Part II?  The bill is silent on happens to the statutory requirements contained in each program.  Will districts continue to have the maximum flexibility over these programs that they current have or will statutory requirements be reimposed?  The bill also does not repeal any related part of the Education Code.  Finally, the bill continues the current methodology of how schools are funded by maintaining the revenue limit, maintaining approximately 23 existing categorical programs and establishing two new block grants not too dissimilar to the current AB 825 block grants focused on at-risk students and instructional programs/professional development.  


    California High School Exit Examination: 

    Analysis and consideration of Alternative Means to the California High School Exit Exam (CAHSEE)

    Passing the California High School Exit Exam (CAHSEE) has been part of the states graduation requirements beginning with the Graduation Class of 2006.  The issue of a student with disabilities passing the CAHSEE has always been a sensitive one and has gone through varies requirements over the last five years. The big question is where do we stand now?  

    Background

    Beginning with the Graduation Class of 2006, students with disabilities were able to request a waiver of the requirement of passing the CAHSEE if they meet specific requirements (Education Code Section 60851 (c)).  Often the student was unable to receive a waiver from taking the CAHSEE; as a result, the legislature enacted a provision of law (Education Code 60852.4) that allowed certain pupils with disabilities who were unable to receive a waiver, to meet a series of seven criteria to receive an exemption of the CAHSEE requirement.  This exemption sunset on December 31, 2007.  In January 2008, students with disabilities, who did not seek a waiver from taking a CAHSEE, were required to pass the CAHSEE graduation requirement in order to receive a high school diploma. 

    In 2009, as part of the 2009-10 Budget deal, a provision was included that exempts eligible pupils with disabilities from having to pass the CAHSEE graduation requirement in order to receive a high school diploma. 

    Beginning with the 2009-10 school year, an eligible pupil with a disability is not required to pass the high school exit exam as a condition of receiving a diploma of graduation or as a condition of graduation from high school.  This exemption will remain in effect until the State Board of Education (pursuant to Section 60852.1) makes a determination that the “alternative means” by which an eligible pupil with disabilities may demonstrate the same level of academic achievement in the content standards in English language arts or mathematics portions of, or those content standards required for passage of, the high school exit exam are: 1) not feasible or 2) alternative means have been implemented.

    An eligible pupil with a disability is defined as a pupil with an individualized education program (IEP) or a 504 Section plan that indicates the pupil is scheduled to receive a high school diploma, and that the pupil has satisfied or will satisfy all other state and local requirements for the receipt of a high school diploma, on or after July 1, 2009.

    In the mean time, the SPI & SBE where required to establish an Advisory Panel to look at “alternative means” by which an eligible pupil with disabilities may demonstrate the same academic achievement. 

    The evaluation of “alternative means” was a provision that was placed into law via AB 2040 (Nunez, Chapter 666, Statutes of 2008) which required the Superintendent of Public Instruction to convene an advisory panel to look at “alternative means”  by which an eligible pupil with disabilities may demonstrate the same level of academic achievement in the content standards in English language arts or mathematics portions of, or those content standards required for passage of, the high school exit exam are: 1) not feasible or 2) alternative means have been implemented.

    The panel was required to present its options and make its findings to the Superintendent of Public Instruction and the State Board of Education by October 1, 2009.  This provision was extended and at the September 2010 SBE meeting, the CDE presented several options for scale scores on the CST in ELA, grades 9 & 10 and the CST in Algebra 1 and also declared that it is feasible to create alternative means by which eligible students with disabilities may demonstrate the same level of academic achievement required for passage of the CAHSEE.  The SBE adopted emergency regulations and approved commencement of the rulemaking process to adopt permanent regulations extending the date of implementation of alternative means to the CAHSEE for eligible students with disabilities to July 1, 2012.

    SBE approves a pilot study for alternative means to the California High School Exit Examination (CASHEE)

    At the March 2011 SBE meeting, the Board approved the immediate commencement of a pilot study for alternative means to the California High School Exit Examination (CASHEE) for eligible students with disabilities (SWDs). 

    The SBE approved the pilot study, largely based on the recommendations of the Advisory Committee on Special Education (ACSE).  ACSE believes that there are a large number of students with disabilities that have attained the same level of academic achievement as that required for passage of the CASHEE, but have been unable to demonstrate it using traditional means such as standardized tests.  The pilot will include work in both Tier I & Tier II.  The work would involve the development of a plan to improve Tier I (scale scores on test) and design of the collection of evidence described in Tier II.  The pilot study will use the following scale scores in Tier I:

    •  The use of a scale score of 300 for the CST in ELA, grades 9 through 11, and a scale score of 269 for the CST in Algebra I, as an alternative scale score for passage of the ELA and mathematics portions of the CAHSEE.

    • The use of a scale score for the CMA in ELA, grades 9 through 11, and a scale score for the CMA in Algebra I, as an alternative scale score for passage of the ELA and mathematics portions of the CAHSEE.

    We will keep you posted on this important issue.


     


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