1. Overview of Governor’s January Budget Proposal JUSD January 20, 2015 JUSD January 20, 2015 © 2015 School Services of California, Inc.

2. Themes for the 2015-16 Governor’s Budget Positive economic growth continues and fuels public education spending Proposition 98 continues to receive most of the new money Funding is tight for the non-Proposition 98 side of the State Budget Governor stays the course on the Local Control Funding Formula (LCFF) and the Local Control and Accountability Plan (LCAP) State makes a firm commitment to Adult Education and Career Technical Education (CTE) The Wall of Debt continues to come down and is replaced with the Rainy Day Fund Overall, a very good State Budget for public education 1 © 2015 School Services of California, Inc.

3. Progress Toward LCFF Implementation 2 © 2015 School Services of California, Inc.

4. Proposition 98 Funding © 2015 School Services of California, Inc. Source: Governor’s State Budget Summary, page 6 5

5. Proposition 98 and the Major K-12 Proposals The Governor’s State Budget proposes: $4 billion for LCFF gap closure (EST 32%, 1.58% COLA included) and LCAP implementation $1.1 billion for discretionary one-time uses Common Core implementation Newly adopted ELA/ELD implementation California’s NGSS implementation Expenditures for evolving accountability structure of the LCAP/LCFF $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 competitive CTE incentive grants (three years) $100 million for Internet connectivity and infrastructure 6 Adapted from © 2015 School Services of California, Inc.

6. JUSD Gap Funding 6 $147M (29.56%) Base Grant Base Grant Supplemental/ Concentration $196M Target 2020/21 2014-15 Funding Target Total Gap Base Grant LCFF Dollars Supplemental/ Concentration $127M (12%) Base Grant Supplemental/ Concentration 2013-14 Funding $162M (estimate 32%) Base Grant Supplemental/ Concentration 2015-16 Funding

7. Additional Impacts to School Budgets Increasing employer costs for CalSTRS and CalPERS Grade Span Adjustment – Progress toward 24:1 Additional teachers Additional facilities Additional support staff Categorical Encroachment into LCFF Step and Column costs Career Technical Education Programs Staffing Program implementation costs Enrollment factors (declining/flat) © 2015 School Services of California, Inc.

8. CalSTRS and CalPERS Rate Increases No specific funds are provided for this cost increase The base grant will need to cover increased operating expenses, including employer’s share of CalSTRS and CalPERS increases © 2015 School Services of California, Inc. CalSTRS Rate Increases YearEmployerPre-PEPRA*Employees Post- EPRA* Employees 2014-158.88%8.15% 2015-1610.73%9.20%8.56% 2016-1712.58%10.25%9.205% 2017-1814.43%10.25%9.205% 2018-1916.28%10.25%9.205% 2019-2018.13%10.25%9.205% 2020-2119.10%10.25%9.205% *Public Employees’ Pension Reform Act 12 CalPERS Estimated Rate Increases YearEmployer 2014-1511.771%** 2015-1612.6% 2016-1715.0% 2017-1816.6% 2018-1918.2% 2019-2019.9% 2020-2120.4% **Actual Rate Increase