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School Finance Town Hall

School Finance Town Hall. Tuesday, April 14, 2009. Agenda. Brief History of California School Finance Status of California State Budget OUSD Budget: Revenues and Expenses RBB: How schools receive resources?. California Education Rankings: How do we compare to other states?.

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School Finance Town Hall

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  1. School Finance Town Hall Tuesday, April 14, 2009

  2. Agenda • Brief History of California School Finance • Status of California State Budget • OUSD Budget: Revenues and Expenses • RBB: How schools receive resources?

  3. California Education Rankings:How do we compare to other states? • Category # Rank • Number of Students (2007-08)1 6,276,486 1st of 51 • Average Teacher Salary (2006-07)1 $63,640 1st of 51 • Spending per K-12 pupil (2005-06)2 $7,571 47th of 51 • Public school revenue (2005-06) $45 28th of 51 • per $1,000 personal income1 • Total school staff to students3 91.5 50th of 51 Note: Numbers in table are based on fall enrollment data. District of Columbia is included among the states. Source #1: National Education Association’s Rankings and Estimates, 2008-09. Source #2: Education Week. Quality Counts. 2009. Source #3: National Center for Education Statistics (NCES) Common Core of Data 2006-07, 1/26/09.

  4. California School Finance:Before Serrano v. Priest Decision (1973) • Funding mechanisms for schools was simple. • Majority of funds were generated via local property taxes • Supplemental funds from the state and federal government • State: Distributed funds equally to districts through one program • Federal: Dollars intended mostly for districts with high-poverty populations (Title I). • State inaction following the Serrano v. Priest decision led to Proposition 13 being put on the ballot in 1978.

  5. California School Finance:Proposition 13 (1978) • Voters amend California Constitution. • Property taxes could be no more than 1% of assessed value • Until 1978, property taxes furnished about two-thirds of all education revenues • Proposition 13 drastically reduced property taxes and prompted a near reversal of the ratio of state to local funds provided to school districts.

  6. However, the State’s most stable funding stream (local property taxes) is a victim of Prop 13 – and the impact keeps getting worse California School Finance: Revenue Instability

  7. California School Finance:Proposition 98 (1988) • Guarantees minimum level of funding to education. • “K-14 shall receive either fixed percent of total state budget or amount received in prior year, whichever is greater” • If school district property taxes didn’t provide enough, the state filled in the rest. • In years of a bad state budget, the minimum guarantee became the ceiling. • Competition within the Proposition 98 part of the state budget – i.e. education fighting education.

  8. California School Finance:Revenue Limit Mechanism If school district property taxes didn’t provide enough, the state fills in the rest.

  9. California School Finance:1988 to Present • Governor and the Legislature “Reforming” California Schools (just a few examples): • 134 categorical programs established in OUSD budget • Statewide class size reduction implemented (K-3) • 180-day instructional time rule established • Williams settlement over teachers, instructional materials, and facilities

  10. Agenda • Brief History of California School Finance • Status of California State Budget • OUSD Budget: Revenues and Expenses • RBB: How schools receive resources?

  11. State Budget Crisis:Operating Shortfalls Expected to Grow General Fund (in Billions) The state’s structural deficit has increased exponentially as state revenues have declined due to worsening economic conditions

  12. New State Budget: 2008-09 • The State Budget enacted on February 20th includes: • It is a 17-month budget that runs through June 2010; • To address budget deficit, package includes $15 billion in expenditure cuts, $14.4 billion in temporary revenues, and $11 billion of borrowing. • Enacted budget is predicated on the passage of several ballot measures that will go to voters on May 19, 2009. • Cuts to education equal $8.6 billion over the next 17 months.

  13. Impact to OUSD Budget: Governor’s Proposal vs. New State Budget Budget reductions to OUSD budget in 2008-09 under the Governor’s proposal and the new state budget.

  14. Steps Taken by OUSD to Mitigate Budget Cuts: Unrestricted Resources

  15. Agenda • Brief History of California School Finance • Status of California State Budget • OUSD Budget: Revenues and Expenses • RBB: How schools receive resources?

  16. OUSD Budget:What funds comprise the OUSD budget? Total 2008-09 OUSD Revenues (All Funds): $515.7 million All Other Funds include: Building Fund (21), Deferred Maintenance (14), State Loan/Special Reserve (17), County School Facilities Fund (35), State School Building Purchase Fund (30), Tax Override Fund (53), Debt Service Fund (56).

  17. OUSD General Fund:What are the sources of revenue? Total 2008-09 OUSD General Fund Revenues: $431.7 million Sources: Distribution: Other Local Revenue: $38,110,175 Federal Revenue: $65,983,532 Restricted: $181,262,898 Other State Revenue: $118,931,922 Revenue Limit (aka ADA): $208,679,539 Unrestricted: $250,442,271

  18. Unrestricted General Fund: 2008-09Allocation by Site - $269,208,592 Total 2008-09 OUSD General Fund Unrestricted Allocations: $269.2 million

  19. Restricted General Fund: 2008-09Allocation by Site - $235,671,619 Total 2008-09 OUSD General Fund Restricted Allocations: $235.7 million

  20. Agenda • Brief History of California School Finance • Status of California State Budget • OUSD Budget: Revenues and Expenses • RBB: How schools receive resources?

  21. Results-Based Budgeting (RBB):Goals and Benefits • Equity • Allocation of funds are based on actual students. This means each school receives money based on an amount per student. • Schools have more control over the direction of their resources • Transparency • Clearer communication of budgeting process to community and parents • Reflects true cost to operate instructional program for schools • Accountability • RBB tied directly to school’s strategic plans • School Site Council (SSC) oversight of categorical funds • Increased Site-Based Decision Making • Schools have more control over their budgets

  22. Unrestricted Revenue: 2009-10 Allocations Used for RBB

  23. RBB Calculation:Per Student Comparison: Basic Program Note #1: Measure G is the newly passed local parcel tax that provides additional funding to the school district annually. Note #2: Lottery – Unrestricted are revenues that the school district receives as a part of the California Lottery. Note #3: Targeted Instructional Improvement Grant (TIIG) is a state restricted resource.

  24. Unrestricted Resource Formulas How do we allocate these resources to schools? School Projected non-Special Day Class (SDC) Enroll • Notes • Utility costs for individual school sites are calculated separately but included in school site budget • Other school-based set-asides such as: certificated long-term subs, classified long-term subs, and involuntary transfers School Projected SDC Enroll X 20% Source: 0910 Projected Students School Avg Daily Attendance (ADA) Source: 0708 P2 ADA to Enroll Ratio (%) Per Student (School Type) Allocation Includes: Elem, Middle, High, Continuation Total School GP Allocation

  25. Restricted Resource Formulas:How do we allocate these resources to schools? Total Available Allocation Source: CDE School non-SDC Students Source: 0910 Projected Students Per Student Allocation Central (15%) / School (85%) Split Total Allocation for School Total non-SDC Students Source: 0910 Projected Students Per Student Allocation

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