Transcript budget forum - Amazon Web Services

BUDGET FORUM
Jeremy Meyers, Superintendent
Robbie Montalbano, Deputy Superintendent
SEPTEMBER 23, 2015
2
2015-16 State Budget
The National Economy
3

The U.S. economy continues to add jobs

280,000 jobs added in May
On average, about 200,000 jobs per month have been
added during the past year
 Professional and business services, leisure and hospitality,
and health care account for most of the gain


Unemployment is still a challenge
© 2015 School Services of California, Inc.
The California Economy
4


The California economy continues to show strength

Added 54,200 jobs in May, outperforming the U.S. average

If the state had added only its proportionate share of jobs based on population, it would
have gained 35,000 jobs
California’s unemployment rate in May was 6.3%, still above the U.S. average


One year ago, the State’s unemployment rate was 7.5%
The State’s housing market continues to strengthen

The statewide median home price in April was $481,800, up 7.4% from April 2014

Residential building permits are up almost 21% for the first four months of 2015,
compared to the same period one year ago
© 2015 School Services of California, Inc.
The California Economy
5


It was a great year for the State’s highest income earners, whose
income and capital gains taxes make up a significant part of the growth
in General Fund revenues
Proposition 30 continues to be a strong and steady source of State
income


$7 billion to $8 billion in combined sales and personal income taxes
Continued concerns

The economic effect of the drought is still unknown

Rising gas prices could hinder domestic consumer spending

Job growth in the innermost California communities still lags way behind the
nation and other areas of the state
© 2015 School Services of California, Inc.
The California Economy
6
© 2015 School Services of California, Inc.
Highlights in the Education Budget
7



The budget includes Prop. 98 funding of $68.4 billion
for 2015-16, an increase of $7.6 billion over the 20142015 budget
Since 2011-12, Prop. 98 funding for K-12 education
has grown more than $18.6 billion
The Prop. 98 maintenance factor will be reduced to
$772 million by the end of 2015-16
Highlights in the Education Budget
8

Funding for the LCFF of $5.994 billion, 2015-16 gap funding 51.52%

Cost of Living Adjustment (COLA) of 1.02% to categorical programs
outside of LCFF

$3.2 billion one-time to pay down past unpaid state mandates
 The funding is unrestricted and may be used by LEAs to meet local
needs as determined by their governing board

Legislative intent is to prioritize funding for investments necessary to support
implementation of Common Core, English Language Development and Next
Generation Science standards
Highlights in the Education Budget
9

Establishes the Career Technical Education (CTE)
Incentive Grant Program

Provides $900 million in one-time Prop. 98 funding over the
next three years to establish new or expanded high-quality
CTE programs


$400 million is provided in 2015-16
Competitive, matching grants
Highlights in the Education Budget
10

Adult Education funding of $500 million


$375 million is provided to School Districts and County
Offices of Education for Adult Education Maintenance of
Effort on the basis of the 2012-13 Maintenance of Effort
certification
Preschool and Child Care received Prop. 98 and nonProp. 98 funding totaling $2.851 billion.
Highlights in the Education Budget
11


$60.1 million directed to Special Education in response to
recommendations from the statewide Special Education
Task Force

$50.1 million is on-going and $10 million is one-time

Does not increase the amount of money allocated through the
AB 602 process
Routine Restricted Maintenance Account (RRMA) now has
extended flexibility delaying full implementation of the 3%
requirement until 2019-20
12
2015-16 EDCOE Budget
Local Control Funding Formula
13

County
Office
LCFF
Funding
LCFF Funding for our organization includes
sources/support for the following major
programs:




Juvenile Hall/Court Schools
Mandatorily expelled students
Community Day Schools
AB 1200 (fiscal oversight) activities and support
to school districts
Other Funded Student Programs
14
Additional
programs
outside of
the LCFF

Preschool

Head Start/Early Head Start

Special Education

Adult Education
Preschool
15



COLA of 1.02%
A 5% increase to the reimbursement rate for State
Preschool and other direct-contracted child care and
development providers
Challenge – with the increase in minimum wage
some families will no longer qualify for subsidized
slots
Head Start/Early Head Start
16


Year two of a five year grant
Flat funded


Possibility of small COLA (less than 1%) if approved in
federal budget in October
Challenge – with the increase in minimum wage
some families will no longer qualify
Special Education
17



SELPA revenues continue to decline as enrollment
declines
Costs are not declining
Deficit factor in 2015-16 of 0.9707

Deficits each year since 2012-13

So far, all have eventually been restored when final property tax
allocations came in

If this does not occur, the deficit will be funded out of special needs
pool for 2015-16
Adult Education
18

The Governor’s 2015-16 budget proposal calls for $500 million
in ongoing Prop. 98 funding for a new Adult Education Block
Grant supporting activities such as:

$350 million for ongoing maintenance of effort of programs

Elementary and secondary basic skills

Citizenship, English as a second language, and Workforce
Preparation for immigrants

Education for adults with disabilities

Career Technical Education and Apprenticeships
Adult Education Block Grant
19

From the $500 million appropriation, LEAs will directly receive
an amount equal to the amount they spent in 2012-13


$53,838 for EDCOE
After those allocations have been made, any remainder of the
$500 million will be allocated to the Adult Education consortia
Career Technical Education (CTE)
20

The Governor’s Budget Proposal includes $250 million for each of the next
three years for a Career Technical Education (CTE) Incentive Grant

The grant is established as a State Education and Workforce Development
Initiative with the goal of providing pupils in kindergarten through grade 12
with the knowledge and skills necessary to transition to employment and
postsecondary education

School districts, County Offices and Charter Schools interested in this
program will need to complete an application for this competitive grant
program

The grant requires a dollar for dollar match and priority for these State funds
will be given to LEAs applying in partnership with other LEAs
CalPERS
21
■
The employer contribution to CalPERS is increasing from 11.771% in
2014-15 to 11.847% in 2015-16
■
Estimates of the resulting future contribution rate increases for
school employers are as follows:
Actual
Projected
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
11.847%
13.05%
16.6%*
18.2%*
19.9%*
20.4%*
*CalPERS provided these estimates in 2014 and has not yet issued revised
estimates
CalSTRS
22
Year
Employer
PrePEPRA*
Employees
PostPEPRA*
Employees
2015-16
10.73%
9.20%
8.56%
2016-17
12.58%
10.25%
9.205%
2017-18
14.43%
10.25%
9.205%
2018-19
16.28%
10.25%
9.205%
2019-20
18.13%
10.25%
9.205%
2020-21
19.10%
10.25%
9.205%
■
Consistent increases up to
final implementation
■
Once the statutory rates
are achieved, CalSTRS will
have the authority to
increase or decrease the
employer and state
contribution rates
Other Factors
23
■
Additional Factors
■
■
■
■
Affordable Care Act
Increase in Minimum Wage
AB 1522 – Healthy Workplace Healthy Families Act
Declining enrollment
% of
2009
change
% of
2010
from PY
change
% of
2011
from PY
change
% of
2012
from PY
change
% of
2013
from PY
change
% of
2014
from PY
change
from PY
EDCOE
1,077
3.5%
1,122
4.2%
1,079
-3.8%
1,029
-4.6%
1,001
-2.6%
985
-1.6%
SELPA
28,408
-1.2%
28,060
-1.2%
27,639
-1.5%
27,232
-1.5%
27,099
-2.0%
26,960
-0.5%
2015-16 Net Position
24
NET POSITION
Income
2014-2015
2nd Interim
Budget
$ 43,243,511
2014-2015
Current
Budget
$ 43,218,596
2015-2016
Proposed
Budget
$ 43,824,357
$
605,761
Expenditures
$ 44,313,066
$ 45,103,540
$ 45,401,099
$
297,559
$ (1,069,555)
$ (1,884,944)
$ (1,576,742)
$
308,202
Beginning Balance
$ 14,216,868
$ 14,216,868
$ 12,331,924
$ (1,884,944)
Ending Balance
$ 13,147,313
$ 12,331,924
$ 10,755,182
$ (1,576,742)
Income Less Expenditures
(see note 1)
Change
2014-2015
2nd Interim
Budget
$ 43,243,511
2014-2015
Current
Budget
$ 43,218,596
2015-2016
Proposed
Budget
$ 43,824,357
Adjust for targeted or restricted revenue
set aside in ending balance reserves
(1,481,463)
(699,130)
(429,222)
269,908
Other Adjustments for one-time income
funding on-going expenses
(23,516)
(67,348)
(67,348)
-
Income
Adjustments
for One-Time
Revenues
and
Expenses
Expenditures
$ 44,313,066
$ 45,103,540
$ 45,401,099
(807,512)
(500,388)
(517,784)
(17,396)
-
(740,121)
(12,504)
727,617
$ 43,505,554
$ 43,863,031
Adjusted Expenditures
Adjusted Income/Expenditure Variance
25
605,761
$ 41,738,532
Other adjustments for one-time
expenditures
$ (1,767,022)
$ (1,410,913)
$ 43,327,787
$
Adjusted Income
Adjust by one-time expenditures funded by
beginning balance reserves
$ 42,452,118
Change
$ 44,870,811
$ (1,543,024)
$
875,669
$
297,559
$ 1,007,780
$ (132,111)
Final Thoughts
26

Many factors impact our budget
US economy, California economy
 State budget
 Enrollment
 Increasing costs
 Negotiated settlements

Questions?
27
Robbie Montalbano [email protected]
Diane Lacombe [email protected]