1. Governor’s Proposals for the 2013-14 State Budget and K-12 Education Presented to the TRUSD Board of Trustees January 29, 2013 Presented to the TRUSD Board of Trustees January 29, 2013 Rob Ball Kate Ingersoll Associate SuperintendentExecutive Director Business Support ServicesFiscal Services Rob Ball Kate Ingersoll Associate SuperintendentExecutive Director Business Support ServicesFiscal Services

2. Education Receives More... For the first time in five years - an increase in funding Revenue limit deficit still more than 20% The Governor continues to deal with the “wall of debt” Proposition 98 guarantee could grow at 3.4% to 5.3% rate over the next several years Other forecasts have proven to be overly optimistic Manipulations of Proposition 98 could strangle education funding Glory years funded by highly educated workforce

3. Distribution Method is Different Slightly higher funding – New method of distribution – the LCFF Revenue limits and categorical programs are replaced by base grants and supplemental grants over a phase-in period The stated goal is to focus more resources on California’s most needy students

4. State Budget Reserve Forecast

5. Per-ADA Revenue Volatility

6. Proposition 98 Major Proposition 98 budget changes for K-12 education include: $1.8 billion to reduce interyear deferrals to $5.6 billion $1.6 billion to begin implementation of LCFF for school districts $400.5 million to support energy efficiency projects in schools from Proposition 39 revenues $100 million increase for the K-12 Mandate Block Grant to fund the Science Graduation Requirement and Behavioral Intervention Plan mandates $62.8 million for a 1.65% COLA for selected categorical programs $48.5 million for charter school ADA growth

7. Revenue Limits The Governor’s Budget makes no reference to current law and revenue limit funding There is no direct reference to the statutory COLA Provides a 1.65% COLA for selected categorical programs and sufficient funding to increase support for LEAs by 4.5% under the LCFF There is no reference to the current 22.272% deficit factor Nevertheless, until state law is changed, revenue limits are the means by which state apportionment aid is distributed to LEAs statewide

8. 2013-14 Revenue Limit Factors Statutory COLA District Type 2012-13 3.24% (actual) 2013-14 1.65% (estimated) Elementary$202$106 High School$243$128 Unified$212$111

9. Revenue Limit Deficit Factors

10. Base Revenue Limit After Deficit Factor at TRUSD $5,331

11. Apportionment Deferrals $1.8 billion in 2013-14 to further reverse the interyear K-12 apportionment deferrals that were implemented before and during the economic downturn beginning in 2008-09 During the peak of the downturn, approximately 45% of state aid payments owed to school districts were deferred to the following year This deferral buy down is a one-time expenditure and does not impose a similar cost on the state in subsequent years For 2012-13, the state reduced K-12 deferrals by $2.2 billion At the end of 2013-14, the Governor’s Budget estimates that $5.6 billion in deferrals will remain

12. Governor Brown is again proposing a major overhaul of California’s system of school finance California’s current school finance system is “overly complex, administratively costly, and inequitably distributed” The Governor proposes a sweeping reform of the state’s school finance system with the Local Control Funding Formula (LCFF) Sufficient funding to increase support for LEAs by 4.5% under the LCFF In 2013-14, the deficit factor would remain unchanged at 22.272% Local Control Funding Formula

13. Major LCFF Elements The LCFF would replace revenue limits and most categorical program funding Funding would generally be flexible Elements of the proposed formula A base grant target equal to the undeficited statewide average base revenue limit per ADA – $6,816 (includes the 1.65% COLA) Added funding for K-3 Class-Size Reduction (CSR) and 9-12 Career Technical Education (CTE)

14. Major LCFF Elements Additional funding based on the demographics of the schools, including: English Learner population Pupils eligible for free and reduced-price meals Foster youth These additional amounts will be calculated as 35% of the base grant times the number of eligible students Concentration grant for 35% of the grade span base grant multiplied by the districtwide % eligible students that exceed 50% of total enrollment

15. LCFF Grade Spans FactorsK-34-67-89-12 Grade Span Base Grant per ADA $6,342$6,437$6,628$7,680 Adjustment factors 11.2% CSR -- 2.8% CTE CSR, CTE amounts $710-- $215

16. LCFF and Categorical Programs Other elements of the formula: Special Education, Child Nutrition, QEIA, After School Education and Safety, and other federally mandated programs are not included in the formula Transportation and Targeted Instructional Improvement Grant (TIIG) funding continue as add-ons to the formula for those school districts that currently receive funding through these programs And the funds can be used for any educational purpose Timeline: Phased in over seven years – completed in 2020-21

17. Federal Fiscal Cliff “Fiscal Cliff” put in a much better perspective U.S. tax revenue: $2,170,000,000,000 Federal budget: $3,820,000,000,000 New debt: $1,650,000,000,000 National debt: $14,271,000,000,000 Recent budget cuts: $38,500,000,000 Let’s now remove 8 zeros and pretend it’s a household budget: Annual family income: $21,700 Money the family spent: $38,200 New debt on the credit card: $16,500 Outstanding balance on the credit card: $142,710 Total budget cuts so far: $38.50 Source: Anonymous