By: Beth Meyerhoff, California State PTA Legislative Advocate 

Each January in California, a new legislative year kicks off with the governor submitting a proposed state budget. This year, the Governor’s Budget proposal includes funding for many PTA priorities. Nevertheless, in a recent statement, California State PTA  noted “While this proposed budget significantly increases investments in California education, it does not address the inadequate base funding of our schools”

On January 24, 2022, more than 100 people joined the California State PTA Legislation Team virtually to learn more from School finance expert Kevin Gordon, president and a co-founding partner of the Capitol Advisors Group. Originally slated to speak during the postponed Legislative Conference, Mr. Gordon’s presentation enabled advocates across the state to participate. Watch the recording now.

Gordon noted that while California lags behind the rest of the country in education spending, the Governor’s proposed budget could close the gap for California in education spending. (See the  proposed budget by clicking here)  A major caveat for local school districts is that some of the proposed budget increase is one-time money and some is restricted. That means that not all districts/schools will see the same increases.

The budget proposal increases state funding for K-12 schools by  $16 billion over the current year, due to the Proposition 98 minimum guarantee, (Here is a basic explanation of Proposition 98 and how state funding and local property taxes are combined to fund schools.) Gordon noted that California schools have never seen this kind of investment in public education before and the nonpartisan Legislative Analyst’s Office (LAO) projects the entire budget to be $10 billion higher than Governor Newsom’s projections, Gordon expects the financial picture to be even stronger in May.

The Budget Recommends New Investments

In his presentation, Gordon identified three key policy areas in which the budget proposes new investments:

• Funding for Early Education
• Ongoing money for a phased-in 3-year rollout for preschool and universal Kindergarten and Transitional Kindergarten (TK).
• $670 million this year, increasing to $2.7 billion. 
• Investment in extended learning
• Permanent, ongoing funding. 
• Funding increased from $1 billion last year to almost $5 billion this year. 
• $4.4 billion for learning and almost $1 billion in one-time funding for the arts and music. The ongoing challenge remains Covid and staffing issues. 
• No opt-out: districts must spend this money on extended learning. 
• Money may not be the issue in supporting extended learning – it may be an issue of capacity.
• Funding for Universal meal programs
• $700 million so that all students can now eat at school and no longer have to apply or qualify for free or reduced priced meals. 
• School districts must apply for the federal program and drain down the maximum under the school meals program, then California will fund the difference.

Some Specific Funding Needs were Not Addressed

Despite the dramatic increase in funding contained in the governor’s proposal, Gordon identified several areas of opportunity that he expects will get legislative attention as the session progresses.

“The budget is not comprehensive enough around school facilities,” he said. General fund money of $3 billion is allocated for school facilities. Gordon believes a state bond of around $10-15 billion is needed to fund the necessary modernization and new construction needs. Local bonds will not raise enough funds. He noted that Assembly Bill 75 (O’Donnell) would fund $10 billion for school facilities. (Link to bill: https://ct3k1.capitoltrack.com/Bills/21Bills/asm/ab_0051-0100/ab_75_97_A_bill.pdf)

In addition, Gordon said an increase in base funding for school districts needs to continue to be a focus. “Focusing on the base makes sure that we are paying attention to all kids. Targeted funds for some do not leave sufficient funds to keep schools open for all.” He also noted that the Cost of Living Allowance (COLA) is 5.3 percent this year to cover increased costs. However, inflation is approximately 7 percent.

PTA Advocates’ Questions Answered

Q: How should supplemental and concentration grants be calculated?
A: Schools are allocated a base grant plus extra funding (supplemental) for certain categories of students plus additional funding (concentration) if the identified students exceed 55% of the student population. The number of students who count for these supplemental and concentration funds was in part determined by the number of applications for free or reduced-price lunch. California needs a new metric to calculate supplemental and concentration grants now that applications for free and reduced meals will no longer be required.

Q: What is the discussion around Average Daily Attendance (ADA) vs. Enrollment to determine local school funding?
A: Schools in California are funded based on their Average Daily Attendance (ADA). There was a drop-off in attendance for most districts in 2021-22, so the state allocated funds based on ADA from 2019-20. School districts that experienced increases in ADA have complained that this is not fair for them. 

Overall, there is long-term declining enrollment in addition to recent, multi-year enrollment declines in most districts due to Covid. Currently, school districts can be funded based on the current year’s ADA or the prior year’s ADA. The governor has proposed several funding scenarios where districts can choose: 1) the current year; 2) the prior year; 3) the average of the past 3 years. Gordon is advocating that districts be able to use enrollment in 2019-20 as an option as well.

State Senator Anthony Portantino proposes a different approach with Senate Bill 830. It would fund school districts based on enrollment, instead of ADA, and create a new categorical program. Under his bill, funding is determined by calculating ADA and then calculating enrollment and the difference is given to districts. Half of the difference is to be used permanently to address truancy. Gordon’s suggestion is to reduce the amount from 50 percent to 10 percent to be used for truancy and once truancy issues are resolved, districts can use the variance for other needs.

Q: What funding is proposed for Special Education and Mental Health?
A: The Governor’s budget proposes $500 million for special education expenses with some changes to a district-centric model rather than a Special Education Local Plan Area (SELPA) model. However, a proposal to collect the federal government’s share of special education is also necessary. 

There is good news in the Governor’s proposed budget as well as areas of opportunity. Increased funding for aging school facilities will address modernization and safety concerns. Raising the base grant for ALL students should remain a high priority in order for California to move from one of the lowest states in the country in education spending to one of the highest.