Friday, January 13, 2017
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.
State Budget Overview
The Governor released his 2017-18 Budget this week and indicated that after years of revenue growth, it appears that the rate of growth is beginning to slow down.
As a result, the budget proposes to roll back some planned spending increases but protects the administration’s highest priorities including more money for education, an earned income tax credit for working families, the rising minimum wage, the extension of health care to millions, and paying down of our long-term liabilities.
While the Governor warned of slowing revenues last year, the impact to education funding could have been much worse were it not for CSEA members and staff working diligently to ensure that Proposition 55 was passed by the voters in November. With the passage of Proposition 55, the state is able to maintain critical revenues to mitigate the impact of future economic downturns and protect programs affecting students, seniors and working families.
Education Budget Highlights
With respect to education funding, the Proposition 98 guarantee which funds K-14 education, will rise to $73.5 billion for 2017-18. That represents a $2.1 billion increase over the adjusted current year budget. It also includes an additional $744 million for the Local Control Funding Formula for K-12, and over $79 million and $2 million in additional funding for Community Colleges and County Offices of Education, respectively.
- School District Local Control Funding Formula – Proposes an additional $744 million in ongoing spending for the Local Control Funding Formula. Along with funding from previous years, this represents 96 percent of the support to meet the statewide funding levels for the Local Control Funding Formula.
- County Office of Education Local Control Funding Formula – Proposes $2.4 million to support growth and COLA changes for County Offices of Education.
A cost-of-living adjustment (COLA) of 1.48 percent for school districts, County Offices of Education (COEs) and charter schools are provided within the increases for the Local Control Funding Formula. Caution: The amount of discretionary increases in a district budget can be different from this COLA.
- Proposition 39 – Provides $422.9 million to K-12 schools for energy efficiency project grants.
- One-Time Discretionary Funding – Provides $287 million in one-time discretionary funds for school districts, COEs and charter schools. The budget suggests, but does not require, that the funding be used to further the implementation of Common Core standards, professional development and deferred maintenance.
- COLA for Categorical Programs – Provides an increase of $58 million to support a 1.48 percent COLA for categorical programs outside of the LCFF. Those programs include: Special Education, Child Nutrition, Foster Youth, Preschool, American Indian Education Centers, and the American Indian Early Childhood Education Program.
- Career Technical Education Incentive Grants – Proposes $200 million for the final installment of funding for a three-year program on career technical education.
- COLA – Provides $94.1 million for a 1.48% COLA to apportionments and $5.4 million for a 1.48% COLA for specific categorical programs including: Apprenticeship, EOPS, DSPS, and CalWORKs.
- Student Access – Provides $79.3 million for a 1.34% growth in access. These funds will be allocated through the recently revised growth formula.
- Educational Services – Provides $150 million in one-time funding for guided pathways. The intent of the funds will be to support community colleges in leveraging the work the system has done over the past few years as they develop cohesive, integrated pathways to help more students achieve their educational objectives.
- Proposition 39 – Provides $52.3 million to Community Colleges for energy efficiency project grants.
- Increased Operating Expenses – Provides $23.6 million to support increased operating expenses in areas such as employee benefits, facilities, professional development and other general expenses.
Now that the Governor has introduced his budget, the Legislature will begin their review and analysis of those proposals over the next several months to craft a legislative budget. In May, the Governor will issue a revision to these proposals with a better estimate of state revenues.
The Legislature has until June 15th to present their budget to the Governor. Under the requirements of Proposition 25, the Governor must sign the budget by June 30th.
CSEA will continue reviewing the details of the budget to analyze the impact on schools and community colleges.
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.