Legislature Passes Budget to Governor



Monday, June 22, 2015

The legislature passed the state’s budget spending plan and several budget trailer bills to the Governor. The spending plan is based on the agreement reached by Governor Jerry Brown, Assembly Speaker Toni Atkins and Senate President pro Tempore Kevin de Leon. The agreement continues to provide significant investment in K-12 and Community Colleges as well as providing slightly more spending for preschool, child care and the California State University System. The budget also implements the first-ever California Earned Income Tax Credit to help the state’s poorest working families. Now that the legislature has passed the state’s budget, they and the Governor will be working in special session to address the state’s transportation needs and financing the state’s Medi-Cal health program.

Highlights of the State Budget Agreement

Major K-12 Education Highlights

  • Local Control Funding Formula (LCFF) – Provides an additional $5.9 billion toward the implementation of the Local Control Funding Formula.
  • One-Time Discretionary Funding (Mandate Backlog) – Provides $3.2 billion in discretionary funding to pay down the mandate cost backlog to school districts, County Offices of Education and charter schools with recommendation to invest in the implementation of Common Core standards.
  • Career Technical Education (CTE) – Provides a total of $900 million over the next three years in one-time Proposition 98 funding to support a transitional CTE Incentive Grant Program. Under the program school districts, county offices of education and charter schools receiving funding from this new transitional program will be required to provide a dollar-for-dollar match, and priority for these state funds will be given to local educational agencies serving low income, English language learners and foster youth students.
  • Teacher Support – Provides $500 million for services for beginning teachers and teachers that have been identified as needing improvement.
  • Preschool/Child Care – Provides $245 million to increase the number of child care and preschool slots and to increase reimbursement rates.
  • Cost-of-Living Adjustment (COLA) Increases – Provides just over $46 million to support a 1.02 percent cost-of-living adjustment for categorical programs that remain outside of the Local Control Funding Formula. Cost-of-living adjustments for school districts, County Offices of Education and charters schools are provided within the increases for the Local Control Funding Formula.

Major Community College Highlights

  • Base Allocation Funding – Provides $266.7 million increase to reflect higher operating expenses.
  • One-Time Discretionary Appropriation (Mandate Backlog) – Provides $603.7 million, an increase of $137 million from the May Revise.
  • Deferred Maintenance and Instructional Materials – Provides $148 million, $48 million of which is attributable to the current fiscal year, without a local match requirement.
  • Student Success – Provides $285 million for the matriculation and creation of educational plans, an $85 million increase from the May Revise. Also provides $155 million for Student Equity Plan implementation.
  • Cost Of Living Adjustment (COLA) – Provides $2.5 million for EOPS, Social Services and CalWORKS.
  • BA Pilot Program – Provides $6 million for implementation of certain campuses providing BA degrees. Professional Development dollars are included.

Adult Education

The Budget provides $500 million for the Adult Education Block Grant.  The grant is established to fund courses in elementary and secondary basic skills, citizenship, English Language Learning courses, programs for adults with disabilities, short term CTE programs and programs for apprentices.

The Superintendent of Public Instruction and the Chancellor of the Community Colleges jointly approve regional consortia, including governance structures and funding allocations, with the advice of the Executive Director of the State Board of Education.

Of the total funding appropriated for this program in the Budget Act of 2015, school district adult education programs will receive maintenance-of-effort funding, capped at $375 million, with the remainder allocated to regional consortia.

The language also specifies that joint powers agencies may participate as adult education consortia members and that older adults may access programs that relate to employment or helping children succeed in elementary and secondary education.

Earned Income Tax Credit (EITC)

The state EITC provides a refundable tax credit for low wage income households. It focuses on households with incomes less than $6,580 if there are no dependents and up to $13,870 if there are three or more dependents. The credit would be available beginning with tax returns filed for wages earned in 2015. It will benefit an estimated 825,000 families and two million individuals. The estimated mean household benefit is $460 per year, with a maximum credit for a household with three or more dependents of approximately $2,600.

What’s next?

Now that the Legislature has passed a budget by the constitutional deadline, the Governor has until June 30 to reduce the budget funding level through his line-item veto (“blue pencil”) power.

Caution: This report is based on a preliminary analysis of the budget.  Some proposals may change as additional details become available.  We will provide you with additional reports on any new and significant findings.

If you wish to comment or would like additional information, please contact the CSEA Governmental Relations Office at (916) 444-0598. Letters can be sent to 1127 11th Street, Suite. 346, Sacramento, CA 95814.