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Analysis of the Governor's Proposed Budget for K-12 Education
John E. Deasy, Superintendent
Introduction
This memorandum outlines the major components of the 2004-2005 Governor's
Budget for K-12 education and its possible effects on the Santa Monica-Malibu
Unified School District. As you know, these proposals will be reviewed
by the Legislature in hearings. The members of the Legislature will make
modifications to the Governor's proposal before adoption. The Governor's
proposal will also be modified by the administration during the May Revision
to the budget. In short, many changes are likely before adoption of the
proposal. Of critical note is that this proposal is based on the passage
of the provisions of propositions 57 and 58, which will appear on the
March ballot. If the voters do not pass these propositions, budget will
require MAJOR revision. I will propose a prudent initial course of action
that takes into account the great amount of uncertainty in this year's
budget deliberations.
In addition, we also have some uncertainty in our local revenue picture.
The City of Santa Monica has generously supported the schools in this
last year with a contribution of $5.25 million towards general fund expenditures
and the City of Malibu also supported the schools with a contribution
of $385,000. Neither of these amounts is proposed at this time. Therefore,
additional budget adjustments will be required.
Total K-12 Funding
In his budget, the Governor claims that on a per ADA basis, K-12 education
will increase by over $200 per child. Upon careful examination of the
budget, the total 2004-2005 Proposition 98 support for education will
increase by 1.1% as adjusted for changes in local revenues and ADA growth.
The true level of K-12 Proposition 98 per-pupil funding between what we
were cut this year and what is proposed next year represents an ACTUAL
increase of $5 per ADA. This is the figure upon which we will base our
budget planning process. There are additional monies appropriated in his
proposed budget for various specific educational elements and initiatives;
some in which we participate and others in which we do not. I will outline
these later.
Before a more detailed analysis and statement of implication, the following
is an estimated approximation of the cost to maintain current services
and programs:
1. Maintain salary schedule with no raise $1.25 million
2. Maintain health benefits $ .75 million
3. Maintain staffing levels in categorical programs previously non-funded
$ 1.7 million
Total maintenance of effort $ 3.7 million
These figures are constructed on the following conditions: The governor's
budget is passed as presented and the support of the two cities of Santa
Monica and Malibu are continued in the same amount as this year; no student
growth, same class size, no increase in local general fund support for
special education, no salary enhancements, raises, or COLA for any of
our employees, the elimination of some programs which are eliminated in
the Governor's Budget Proposal, and the maintenance of our current workforce.
Proposition 98
The single most important element of the education proposal is the suspension
of the Proposition 98 guarantee. The Education Coalition reached an agreement
with the Governor prior to the publication of this budget proposal to
suspend Proposition 98 and reduce the guarantee in the budget year by
$2 billion. The other key elements of this agreement are as follows:
1. The 2 billion reduction is an absolute number. In other words the Governor
promised not to increase or decrease this amount during budget deliberations
and there will be no new proposals to fund non-prop. 98 programs with
prop. 98 funds
2. The budget funds a COLA for all programs which have a statutory COLA
only (this includes child development), but not most programs
3. PERS increase will be funded
4. The block grant proposals (discussed later), the additional program
increases for instructional materials (discussed later), equalization
funding (not applicable to us) and deferred maintenance are NOT part of
the agreement!
a. NB, this is where much of the "other" money is located in
the budget proposal!
5. If revenues increase at the May Revise and there are additional prop.
98 funds available for 2004-2005, these funds will be allocated to education
as opposed to increasing the $2 billion reduction. However, if there are
insufficient funds available to fund all of the above commitments, the
reductions will come from the education expenditure side of the budget.
It this happens the $2 billion reduction remains in place.
6. The reduction, or as it is being called these days, the REBASING of
prop.98, is for 1 year only. It is promised that the cut will be paid
back in the future.
Program Increases
While none of the following are "guaranteed" in the agreement
with the Education Coalition, they are in the proposed budget.
Equalization: while money is appropriated for equalization, it
is calculated in a way that posts an increase PRIOR to the proposal of
rolling the additional 2 billion of categorical programs into a district's
revenue limit. We should watch this carefully. It is unlikely to stand
the scrutiny of the Legislature given this construction.
Deferred Maintenance: funding is appropriated; this does not
help the general fund at all.
Instructional Materials: the budget provides an augmentation for
providing incentive funds for districts to purchase 2005 History and Social
Science adoptions. On its surface, this is a simple "get it, spend
it on State approved materials" type item.
However, under careful review, the budget is created so that these monies
are considered PART of the revenue limit, thus, acting as a cut to the
general fund for maintaining previous year's expenditures.
Categorical Programs
This section is a dramatic shift in policy and practice. The budget calls
for the elimination of 22 current categorical education programs and the
shifting of the money for these to the general fund revenue limit for
a school district. Class Size Reduction and Special Education are NOT
included in the proposal. The intent is to provide districts greater flexibility
in the local use of funds. The following is a list of the programs that
are slated for elimination:
Home-to-school transportation
School Improvement
Targeted Instructional Improvement
Instructional Materials Block Grant
School Library Materials
Staff Development Day Buyout
Beginning Teacher Support and Assessment
Intersegmental Staff Development
Bilingual Teacher Training
Math and Reading Professional Development
Peer Assistance and Review
Dropout Prevention
Tenth Grade Counseling
Advanced Placement Support
English Learner Student Assistance
Specialized Secondary School Program Grants
Pupil Residence Verification
Policy Implications and Concerns
The Budget raises a number of concerns and implications based upon these
proposals. I will outline these and ascribe comment where applicable.
Equalization: Under the current law, school district equalization
is based on per pupil calculations on the revenue limit. Those lower than
the state average will qualify for equalization aid. Those higher than
the statewide average do not receive additional state aid. The Governor's
budget provides money for equalization aid PRIOR to the roll-in of categorical
education programs. However, in future years the roll-in will create pressure
to equalize funding based on the adjusted revenue limit. Not all districts
receive an equal amount of categorical funds. Categorical programs tend
to follow students with special needs and students with special needs
are not equally distributed throughout the school districts. Therefore,
school districts that had a low participation level in a program that
will be folded into the revenue limit will appear to be poorer compared
to other districts. Those districts would now be eligible for equalization
aid compared to other districts that have high levels of participation
in these programs. The new aid cycle would be completely shifted towards
districts for which the aid was not intended. This is an example of the
unintended consequences (of which there are many) in this budget construction.
Home to School Transportation: The budget proposes to fold all the
money for this population into the revenue limit. This is one of the largest
categorical programs to be included into the revenue limit shift proposal.
For us, it represents $316,000.00. School districts will not lose any
funding in 2004-2005, but the incentive to cut back or eliminate school
transportation will be great and increasing, because state aid for transportation
will be a permanent part of the revenue limit. Current encroachment and
inequities in transportation spending will become permanent and not be
addressed in any future budgets.
Accountability for Standards-Based Instructional Materials: This
is a new line item and should not be confused with the current Instructional
Materials block grant. The short on this complicated shift and increase
in funding is that any increase is not what it seems. Again, this is what
the Governor touts as increased funding for students in the budget. Aside
from the many complicated problems in the accountability side of the house
(to be resolved later), the new funding for materials and books, which
used to be allocated on enrollment, will now be funded on ADA. Therefore,
this is no assurance there will be enough money for all students to obtain
a standards-based instructional text or new instructional material! A
classic case of where more is less.
Staff Development: There will be no assurance that these funds will be
used for specific training in standards-based instruction. It is as simple
as that. The shift will have serious consequences for all of us as we
have made commitments to closing the achievement gap and raising the achievement
of all students simultaneously under the understanding of reliable and
predictable funding for this dedicated cause. Again, the shift moves from
participation to ADA…thus, less actual funds for actual teachers.
K-12 Programs for other Block Grants (safety and reform): This
one is clear; districts (we are one) that serve high school students will
get substantially less money. We use these important funds (community
policing, at risk intervention, prevention, conflict resolution) to support
many of our successful intervention programs. Clearly, we will not be
able to run these in the future.
English Learner Student Assistance: Same story in this program as the
others; less actual money for actual students; and a real set up for competition
of scarce resources on the backs of already impacted families and youth.
All programs that were ended last year remain suspended. Miller-Unruh
is an example of one such program that effected SMMUSD. However, a new
set of programs are now slated to be discontinued:
Early intervention for school success
School to career
Local arts education
Health start
Academic Improvement and Achievement
Lastly, the budget calls for eliminating excessive salaries for superintendents,
who average more than $203,813 in base salary. This will not affect us.
It also calls for cutting millions in education services for child-care
programs. The plan would eliminate educational services for 13-year old
youth and significantly limit services to 11 and 12 year old youth.
Summary
While not in the education section of the budget, there are draconian
cuts to county and state social and youth services. These will have an
impact on our district. Aside from the deep concern that many of the cuts
were exacted upon the blind, poor, impoverished, unhealthy, and most needy,
many services that students obtained in a county facility will be expected
to be provided by local schools. We are not prepared, funded, nor equipped
to provide these crucial services. I expect our special education department
to come under significant pressure to expand services for youth that we
currently do not provide. This will have a major impact on our budget.
While not part of the K-12 budget proposal, a significant proposal in
the State Budget is the repeal of SB1419. This would allow districts to
contract out for many services and according to the Governor, provide
districts with significant savings. The services that could be considered
in our district would be: grounds, custodial, maintenance, food, and transportation.
In summary, we will be approximately $3.5 million dollars short of maintaining
all current programs and services for the 2004-2005 school year. Be reminded
that we have not replaced the cuts made last year, and that it is not
possible to expect us to do so in the budget preparation. This does NOT
include maintaining any reduction of programs proposed by the Governor
in his budget. We will face reduction in force, and again cut back in
services, to experience a balanced budget. The degree and magnitude of
these events will be seriously affected by the outcome of the March election.
Expecting the bonds to pass leaves us with moderate cuts for next year.
Any loss of current support from other sources of revenue, like the support
we have this year from the cities of Santa Monica and Malibu, will translate
directly into greater cuts in personnel and services for our students.
Support in constructing this document was provided by the following
organizations:
Strategic Education Services
CAASFEP Board
California State Department of Education
School Services of California
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