Transcript California Teachers Association - Vacaville Teachers Association

State of the State Budget
2012-13
Governor’s January Proposal
Presented by
Angela Su, CTA NODD School Finance
http://dl.dropbox.com/u/29390328/Issues12-13statebudget.pptx
Link available until January 24, 2011
January 2012
California State Budget Revenue &
Expenditure Trend
$110,000
$100,000
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
($ in Millions)
www.dof.ca.gov
Revenues
Expenditures
Proposition 98
The Constitutional Guarantee Compared to Actual Funding
California Teachers Association
How We Got Here
California Teachers Association
It’s the Economy…
•
•
•
•
•
Housing Bubble Burst
Financial Market Meltdown
The Great Recession
Sluggish state and national recovery
Very slow job growth (public sector losses
offset private sector gains)
California Teachers Association
It’s the Economy…
• The Economy is the sum
total of human work
– The organization of
money and resources in a
country, region, or
community
– Everyone participates in it
• The purpose of the
economy is to meet the
needs of people
California Teachers Association
…and the Economy is Political
Whose “needs” get met in the current economy?
The existing structure…..
•Enables a few to make lots more money
•Enables those few to pay less taxes
•Has not created, and in fact has reduced, the
number of ‘middle class’ jobs (good wages and
benefits)
•Has caused wages to stagnate
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The Truth About The Economy
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California Teachers Association
Corporate Profits, Personal
Income & Median Wages
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10
Who Pays Taxes in CA Has
Changed Over Time
LAO, Historical State Revenues
California Teachers Association
California Teachers Association
CA K-12 Education Funding
Sources
CA Per Pupil Funding Rank
Has Fallen
5
13
18
Revenue
Limits
20
25
Prop
13
30
30
Prop
98
33
38
41
34
43
47
Ed Week
Where is “Here”?
Overview of the
2012-13 State Education Budget
NEW MONEY, or NOT?
Proposition 98 increase of $4.9 billion
•$2.4 billion deferral repayment = no program funding
increase (deferrals borrow from next year’s P98
funding)
•$2.5 billion “credit” for a deferral whose creation was
avoided (if program funding was increased to meet P98
min, a deferral would have to be made… I couldn’t
make this stuff up)
•Transportation eliminated ($491 million statewide
program funding cut)
California Teachers Association
Governor’s Tax Initiative
• Increase income tax rates on wealthy (2012 2016)
• 1% rate increase married incomes $500,000 $600,000
• 1.5% rate increase incomes $601,000 - $1 million
• 2% rate increase incomes over $1 million
• Increase the state’s sales tax rate by 0.5%
points (2013 - 2016)
2011-12 Budget
In Review
COLA $
• K-12 Districts 2.237%
COLA, but Funded 0%
• Deficit factor = 19.754%,
w/ mid-year cut 19.96%
• Flat funding from 2010-11,
except 0.25% mid-year cut
(about $13/ADA)
Elem $137
HS
$164
Unif $143
2012-13 PROPOSED COLA &
Revenue Limit
• K-12 Districts 3.17% COLA, but Funded
0%, sort of
• Deficit factor = 21.666%
– Deficit factor from DOF doesn’t zero out
COLA
– Avg Increase $37/ADA (0.71%) from funded
2011-12 & $51/ADA (0.97%) increase from
trigger cut funded BRL
• Believe Gov intended flat funding from
2011-12
COLA $
Elem $198
HS
$238
Unif $207
2012-13 K-12 Revenue Limits
Before 2011-12 midyear cut
W/ 2011-12 mid-year
cut
2011-12 Funded BRL
$5,244
$5,231
2011-12 Statutory BRL
$6,535
$6,535
$207
$207
$6,742
$6,742
X 0.78334
X 0.78334
$5,281
$5,281
$5,281 - $5,244 = $37
$5,281 - $5,231 = $51
2012-13 Proj. Unified COLA
2012-13 Statutory BRL
2012-13 Proj. Deficit Factor
2012-13 Funded BRL
Diff. Funded BRL
%Δ Funded BRL
$37 ÷ $5,244 = 0.71% $54 ÷ $5,228 = 0.97%
DOF Deficit (21.666%) creates a slight increase in the BRL year-over-year (with or
without the mid-year BRL cut in 2011-12). It is unlikely this increase will be realized
in the final state budget and most LEAs will likely budget a 0% COLA.
2012-13 PROPOSED COE
COLA & Revenue Limit
• County Offices 3.17%
COLA, Funded 0%
• Deficit factor = 22.497%
• Flat funding from 201112
Growth
• Statewide increase of K-12 ADA 0.36%
• Individual District & COE Growth Funded, but
with deficit applied
Basic Aid (Excess Tax)
• For 2011-12 and beyond, SB 70 continues the
Basic Aid “Fair Share” cut to categoricals but
at the rate of 8.92% (of entitlement using the
RL formula) –
• Cut is scheduled to continue each year until
the 2008-09 & 2009-10 RL cuts are restored
– intent of legislature, although will be implemented
annually with legislation
– Look for trailer legislation
Categorical Programs: Tier 1
• No 2012-13 Cuts
• COLA = 0%
• Historically
“Protected
Programs”
• CSR internal
flexibility
Tier 1
After School Programs
AVID (Proposed Elimination)
Child Development
Child Nutrition
Economic Impact Aid + ELL
Home-To-School Transportation
(Proposed Elimination)
K-3 Class Size Reduction
QEIA
Special Education
Categorical Programs: Tier 2
• No 2012-13 Cuts
• COLA = 0%
• No Categorical Flexibility
Tier 2
Adults in Correctional Facilities
K-12 Internet Access
Ag-Voc Ed
Partnership Academies
Apprentice Program
Student Assessment Testing
Charter School Facilities Grant
Year Round Schools (final year $ to
Charter Facilities, then eliminated)
Foster Youth Programs
Categorical Programs:
Tier 3
Admin Training Program
COE Fiscal Oversight
Pupil Retention BG
Adult Education
COE: Williams Audits
Reader Services: Blind
Alternative Tcher Certif
Community Day Schools
ROC/Ps
American Indian ECEC
Community-Based Eng Tutoring
Sanctions
AP Programs
Deferred Maintenance
School and Library Impr BG
Arts and Music Block Grant
Ed Tech
School Safety Block Grant (8-12)
Bilingual Teacher Training
Gifted and Talented
School Safety Competitive Grants
CALHSEE-Inst Supp & Serv
Instructional Materials BG
Specialized Secondary Prog Grants
California Assn Student Councils
International Baccalaureate
Supp Instruction (Summer School)
CalSAFE
Math & Reading Prof Devel
Supp Schl Counseling
Certificated Staff Mentoring
MH CSR 9th Grade
Targeted Instructional Improv BG
Charter School Categorical BG
National Board Cert Incent
Teacher Credentialing BG
Child Oral Health Assessments
PE Teacher Incnt
Teacher Dismissal
Civic Education
Peer Assistance and Review
Class Size Reduction (9th Grade)
Professional Devel BG
Categorical Programs: Tier 3
• No 2012-13 Cuts
• COLA = 0%
• Categorical Flexibility for
“any educational purpose”
– Flexibility for 2008-09 to 2014-15
– Public Hearing – new requirement (AB
189, effective Jan 1, 2012.
– Must meet before budget adoption & identify
program to be closed
Fiscal Flexibility
Flexibility Options
Original Flex
Duration
Extension Passed
2011
Restricted routine maintenance set
2008-09 to 2012-13
aside, reduced from 3% to 1% or 0%
2014-15
Deferred Maintenance Match –
2008-09 to 2012-13
eliminates 0.5% of budget local match
2014-15
Suspends new Instr Materials
2008-09 to 2012-13
requirement & suspends SBE
instructional material adoptions
Reduce Min Requirement for REU
to 1/3 of the regularly recommended 2008-09 to 2012-13
level.
2014-15 & SBE
adopt 2015-16
2013-14 (back to
prior level)
Fiscal Flexibility
Flexibility Options
Original Flex
Duration
Extension Passed
2011
Thru 2009-10 only
2014-15
Option to negotiate 5 day reduction in
2009-10 to 2012-13
student year and instructional minutes
2014-15
Categorical Program Flexibility –
use for any educational purpose
Sell surplus property not purchased
with state funds and use proceeds for
general fund purposes
Until 01/01/2012
Class Size Reduction K-3 Flexibility 2008-09 to 2011-12
Escalating penalties
1/1/2014
2013-14
PROPOSED Weighted Student
Funding Formula
• Provide significant & permanent flexibility
– most state categoricals & revenue limit $
– weighted factors considering costs of educating
specific student populations
– phased in over five years
– coupled with accountability measures
• basis for evaluating & rewarding schools
• include the current quantitative, test-based
accountability measures & locally developed
assessments & qualitative measures of schools.
Special Education
• 0% COLA on state/local
share
• $12.3 million for
growth
• Est. $465 per unit of growth
ADA
Mandated Cost Reimbursement
 $178 million for Mandate Block
Grant
 Plan to eliminate almost half of all
current K-14 mandates (needs
legislation)
 Plan to create incentives for
schools to continue to comply
with remaining previously
mandated activities
Transitional Kindergarten
• $223.7 million
• Requirement that schools provide transitional
kindergarten in 2012-13
Unemployment Insurance
• Increase of $21.8 million
– fully fund the additional
costs of unemployment
insurance for local school
districts and county offices
of education.
Charter Schools
Streamline and Expand Financial Support for Charter
Schools
•$50.3 million increase charter school categorical
programs for growth
•Enhance Charter School Funding
•Invest in Charter School Facilities
•Improve Charter School Working Capital
•http://www.ebudget.ca.gov/pdf/BudgetSummary/Kth
ru12Education.pdf
Federal Stimulus/Ed Jobs
2010-11
– Last 10% of SFSF now allocated to LEA’s
– “Education Jobs” $1.2 billion to CA
• Over 90% of the final allocation already distributed to
LEA’s
• http://www.cde.ca.gov/fg/fo/r14/edjobfunds10result.
asp
• may be used only for Compensation, benefits and
other expenses, such as support services, necessary to
retain existing employees, to recall or rehire former
employees, and to hire new employees, in order to
provide early childhood, elementary, or secondary
educational and related services where those
employees provide school-level educational and
related services.
Community Colleges 2012-13
• 0% COLA
• No growth
• 0% COLA for categorical funding, but proposes to consolidate funding for
nearly all categorical programs and allow use of the funds for any purpose
– Administration to review the recommendations of the forthcoming Student Success Task
Force report for inclusion in the May Revision
• Ongoing deferrals same as 2011-12 except $209 million to be repaid in
2012-13
• New Mandate block grant ($12.5 million new $) consistent with his K-12
mandate proposal, would eliminate nearly half of existing mandates and
would make remaining mandates optional
– Funding contingent on CCC ‘s continuing to meet the requirements of mandates that are
not eliminated
Mid-Year Cut Trigger
If the Governor’s Tax Initiative does not pass in
November 2012, the following education cuts will occur
on January 1, 2013:
•$4.8 billion from K-14
– $2.3 billion to not repay deferral
– $2.6 billion real program cut (6% RL reduction or
$387/ADA – cost of about 3 weeks instruction)
•$200 million University of California
•$200 million California State University
How Do We Fix our Education
Funding Problem?
Our Union’s
Funding Goals for Education
•
Adequate
– Amount of per pupil funding needed to provide all
students the opportunity for academic success
– CTA goal of the top quartile of the 50 states*
•
Equitable
– Promotes fairness by funding schools and colleges to
meet the individual needs of all students*
– CTA believes in compliance with the Serrano decision to
achieve equalization of educational opportunities*
•
Stable & Reliable
– Avoid “bubbles and “crashes”
*California Teachers Association 2011-12 Organizational Handbook, Policies
Funding Initiate Criteria
• Based on tax fairness – a progressive tax
system – to ensure everyone is paying their
fair share and to and bring stability to our
funding issues
• Include funding for Pre-K through higher
education and other essential public services
• Generate at least $8 billion
• Broad coalition support
• Winnable
Beyond Proposition 98
Although Proposition 98 has established K-14
education funding as a priority in the state
budget, it is clearly not enough to fund an
adequate education for California’s children.
Proposition 98 does not include the CSU & UC
systems, therefore portions of higher
education do not have a constitutional priority
position in the state budget.
Since Proposition 98, we’ve dropped from 30th
to 47th in per pupil spending.
School Funding (2009 Averages)
Quality Counts 2012 & www.cde.ca.gov
How to Increase Funding
• Bigger piece of the pie - Improve the relative priority in the
State Budget
state budget
– Proposition 98 (Been there, done that)
– CSU & UC systems not included
Local
– Other important state programs, including
social Property
services
may
NonProp
Local
be just as important for student success Prop
Taxes, 23%
Lottery, 2%
Property
• Grow the Pie
– Expand the revenue base
•
•
•
•
Non98,
Prop
40%
98
60%
98
40%
98,
60%
Taxes,Prop
23%
Economic development
Expanding who pays taxes or what items/services are taxed
Increase tax rates
Closing Loopholes
State, 60%
State, 60%
Lottery, 2%
Misc
Misc
Local,
Local,
6%
6%
Federal, 10%
Federal,
10%
Possible Tax Solutions…
•
•
•
•
•
•
•
Return top Income Tax brackets to 11% ($4B)
Return VLF to 2% ($2B -$4B)
Broaden Sales Tax ($2B+)
Oil Severance Tax @ 9.9% ($1B+)
Close Corp Prop Tax Loopholes ($2B+)
Increase Alcohol & Tobacco Taxes ($2.4B)
Eliminate Corp Tax Loopholes from 2009-10
Budget Agreement ($1.7B+)
• Others? (Nov 2012)
Current Initiatives
• The Schools & Local Public Safety Protection
Act of 2012 (Gov, $4.8 - $6.9 B annually)
• Our Children, Our Future Local School Funding
Act (Advancement Project – Molly Munger, $10 B annually)
– Raise Income tax 0.4% to 2.2% based on income
– 1st 4 yrs 60% to K-12, 10% ECE, 30% reduce state debt
after, 85% to K-12, 15% ECE
– Funds must be used at school sites not district
– Prohibits use for personnel salary increases beyond what
was in place Novemeber1, 2012
– Considerable reporting requirements
Current Initiatives
• Millionaires Tax to Restore Funding for
Education and Essential Services Act of 2012
(Courage Campaign & CFT, $6 B)
– Raise income tax 3% on incomes > $1 M to $2 M,
5% over $2 M
– 3/5 to education, 2/5 to local gov’t for public
safety and infrastructure
• 60% for education, 25% children & senior services, 10%
public safety, 4.9% roads & bridges, 0.1% admin
Current Initiatives
• Protect Homeowners and Close Corporate Tax
Loopholes Act ($4.5 B, $2 B inc Prop 98)
– assess commercial property @ market value
• 90% of revenue to General Fund
• remaining 10% would be distributed among cities,
counties, special districts, school districts, and
community college districts as under current law
– doubles the homeowner's property tax exemption
as well as the renter's tax credit and exempts from
taxation the first $1 million of value of business
personal property
Possible Economic Solutions…
• “Fix it” ideas not as easy to come
by
• The “Newer” Deal = Massive
public investment in infrastructure
(federal level)
• Investment in public education for
a better educated workforce (long
term)
• Support small business
• Other ???
Economic Prosperity & Funding
Education
•
Prosperity for large corporations does not
necessarily translate to prosperity for the
vast majority of the people in America
•
Economic Expansion is important and
necessary and will ultimately increase public
funds and by extension, school funding, but
only if the economic expansion includes
improvements for all (including working
people) who pay taxes
•
Education Funding is a key ingredient in
improving education and thus the value of
human capital which can help economic
expansion
Prosperity
Economic
Expansion
Education
Funding
Taxes, Economic Development &
Education Funding
Taxes
Economy
Education
Funding
• More Education
Funding
• More tax revenue
– Expand base
– Alter structure
• Economic
development expands
tax base
– Education Funding has
a high rate of
economic return
How are we going to reach the goal of
education funding in the top quartile
of the fifty states?
1. Educate CTA Members on
– The relationships between
•
•
•
•
The Education Funding System
Tax Fairness Ideals
Economic Development and Expansion
Revitalize the Working Class
The End of the American Dream?
Educate, Agitate, Organize
www.cta.org
Check back for information
about tax fairness and
economic development in
California and the how to fund
schools beyond Proposition
98.
www.cbp.org California Budget Project
www.edsource.org EdSource
www.ppic.org Public Policy Institute of CA
www.caltaxreform.org CA Tax Reform Assn