1. GOVERNOR BROWN’S 2015-2016 BUDGET PROPOSAL January 20, 2015 RAMONA UNIFIED SCHOOL DISTRICT

2. Acknowledgment  Many of the numbers and slides contained in this presentation are from the Governor’s Budget Workshop, presented by School Services of California, Inc., attended by Board members and staff on January 14, 2015, in Ontario, California.

3. Themes for the 2015-2016 Governor’s Budget  Positive economic growth continues, fueling public education spending  Proposition 98 continues to receive much of the new money  However, funding is tight on the non-Proposition side of the State Budget (colleges, state parks, prisons)  Governor stays the course on the Local Control Funding Formula (LCFF) and the Local Control and Accountability Plan (LCAP)  Makes a firm commitment to Adult Education and Career Technical Education  Wall of debt continues to come down

4. The California Economy  Both national and state economics continue to improve  Economic activity is up  Stronger job growth  Lower oil prices provide short-term stimulus  Real estate prices continue to climb  The stock market hits new highs Generates high levels of capital gain potential  As a result, state revenues are strong

5. The Education Budget Proposals  Governor Brown is making education THE priority for the State budget  State revenues are up in current year and moderate growth is projected for 2015-2016  This, in turn, makes the state’s obligation to K-14 increase  An increase in current year Proposition 98 funding of $2.3 billion making a total of $63.2 billion from the adopted levels  $65.7 billion in K-14 Prop. 98 funding for 2015-2016  This is a $2.5 billion increase over 2014-2015 levels

6. The Education Budget Proposals  $1 billion to fully eliminate deferrals  This improves cash flow but gives no additional spending authority to school districts  $4 billion in additional funding for schools to continue the implementation of the LCFF  $1.1 billion for mandated costs reimbursements  $320 million to continue to fund Prop. 39 energy efficiency projects  $500 million for an Adult Education Block Grant  $250 million for one-time CTE incentive grants  $100 million for Internet connectivity and infrastructure

7. Local Control Funding Formula  Budget proposes an increase of $4 billion for continued implementation of the LCFF  This new funding closes the gap between 2014-2015 funding levels and LCFF full implantation targets by 32.19%  Combined with the 29.56% in gap funding for the current year, the new formula would be 60% of the way towards full implementation  2015-2016 LCFF growth provides an average increase in per-pupil funding of 8.7%  Each school district’s funding will vary due to the amount of dollars a LEA is from the target rate and the percentage of students who qualify for the supplemental and concentration grants in that LEA

8. LCFF Review  At full implementation, the LCFF will fund every student at the same base rate (this is the target rate)  Two add-ons for K-3 CSR and for 9-12 CTE  The difference between the target rate and the LEAs current rate is the gap between the two  The LCFF provides two weighting factors  20% for each eligible student (called the supplemental grant, which RUSD’s percentage is approximately 45%)  An additional 50% for eligible students exceeding 55% of total enrollment (called the concentration grant, which RUSD does not receive)

9. What Does This Mean for RUSD?  The Governor’s budget proposal will provide additional revenues above the figures which were projected in the multi-year report during the December meeting  The Gap increase over the First Interim Report projection is 12% or $1 million for 2015-2016 fiscal year The revenues for 2016-2017 increase by $900,000 due to the 2015- 2016 Gap increase  One-Time Mandated Cost Reimbursement dollars Governor is proposing $1.1 billion for education RUSD should receive $900,000 to $1,000,000 Governor is encouraging the dollars to be used for Common Core Implementation However, the dollars are unrestricted so they could be used for any purpose or could be reserved for other expenses in the future

10. What Does This Mean for RUSD?  Adult Education block grant will be given to the local consortia, (which Ramona is part of along with Palomar College), allowing programs serving the highest need populations to have priority of funds  Career Technical Education incentive grant will be given to LEAs working in partnership with other LEAs to offer regional programs This is a matching grant program Intended to accelerate the development of new and expanded high-quality CTE programs

11. What Does This Mean for RUSD?  The two major implications from the Governor’s proposal  Increased dollars for LCFF  One-time dollars for Mandated Reimbursement  Will provide the revenues to turn the qualified First Interim Report into a positive certification at the Second Interim Report  This means Ramona Unified will be able to maintain the State mandated 3% reserve for the current and next two fiscal years

12. The State’s Road to Adoption  This Budget has a long way to go before it becomes law  We must remember these are Governor Brown’s proposals  Different constituents, legislators, and special interests will have their dialog with the Governor  The non-educational side of the budget receives very little new dollars in this proposal  Could Transitional Kindergarten for all four-year olds become a debate again?  There is plenty of room for negotiations before final adoption

13. Ramona’s Next Steps  Staff does not have any recommendations for the Governing Board tonight  Other information is needed, San Diego County Office of Education will give options and directions for 2 nd Interim and budget adoption