1. Summary Update 2014-15 Governor’s Budget Federal Funding January 22, 2014 California School Boards Association Dennis Meyers, Assistant Executive Director, Government Relations Andrea Ball, J.D., Legislative Advocate Erika Hoffman, Legislative Advocate

2. Highlights of Governor’s Budget Proposal Hot Topics–issues that Legislature likely to consider during budget process Federal Funding State Budget Timeline Briefing Agenda

3. Economy recovering. Proposition 98 Guarantee up $6 billion above the enacted 2013-14 budget to $61.6 billion K-14. Governor’s Watchword: Prudence. Proposes to pay off state’s Wall of Debt, including K-12 education Proposes $5.6 billion to pay off all K-12 deferrals in 2014-15 Strengthens state’s Rainy Day Fund and creates a Prop 98 Reserve via a Constitutional Amendment to voters in November 2014 Invests $4.5 billion in Local Control Funding Formula (LCFF)  Closes statewide gap to full LCFF funding by 28%  Adds Specialized Secondary Schools & Ag Voc Ed to LCFF 2014-15 Governor’s Budget Key Items

4. LCFF Continuous Appropriation  Not dependent on budget enactment  Intended to assure greater stability  Actual language not yet available Cost of Living Adjustments (COLA) of.86% to: LCFF Special Education, Child Nutrition (not school breakfast), American Indian Education, American Indian Early Childhood Education. Transportation Funds remain add-on to LCFF. No COLA. Maintenance of Effort remains. Key Education Items continued 4

5. 5 Other Payments on Education Wall of Debt Outstanding Mandate Claims to be paid by end of 2017-18  $1.2 billion in 2015-16  $3.2 billion spread across 2016-17 and 2017-18 Emergency Repair Program  $188 million Quality Education Investment Act (QEIA) Proposes $316 million Teacher retirement liabilities: Proposes stakeholder conversations and plan to address outstanding and future teacher retirement liabilities.

6. Will present 5-year plan on state infrastructure  Raises question about appropriate role, if any, for state funding school facilities Transfers $211 million in state bond funds to modernization and new construction Prop 39 Energy Efficiency Project funding of $316 million for K-12 $46 million to fund implementation of AB 484 (Bonilla) – state assessments for Common Core State Standards. 6 Key Education Items

7. Proposes to fund separate Adult Education categorical in 2015-16, working with K-12 and Community Colleges Non-classroom-based independent study – proposes legislation to streamline and expand instructional opportunities 7 Other Education Items

8. Prop 98 Reserve and Rainy Day Fund -- questions about implications for Prop 98. LCFF Continuous Appropriation  LAO recommends against it. State Facilities Bond in 2014 ? Common Core State Standards-- another one-time allocation? Paying off all deferrals in 2014-15? Transportation funding – COLA, equalization 8 CSBA Prognostications – Hot Topics of 2014 in the Budget Process

9. Expanded Transitional Kindergarten a priority for Senate and Assembly Dems LCFF and annual student counts for low- income students in “Provision schools” of the federal school meals program  2013-14 hold harmless  On-going annual certifications 9 CSBA Predictions – hot topics for 2014

10. A $1.1 trillion spending bill is pending on the President’s desk for signature.  It increases spending in most programs nearly to pre-sequestration FY 2013 levels. Education spending wouldn’t quite catch up to pre- sequester levels - but it would come close. The $67 billion in discretionary funding for education comes to roughly $811 million less than the 2012 fiscal year. Congress favored formula funding over competitive grants. 10 Federal Funding

11. Title 1 is funded at $14.4 billion dollars across FY 2014, an increase of $624 million over sequestration. Migrant Education will see a $2 million boost. Homeless education programs will see an increase of about $3.3 million IDEA will increase nearly $500 million over FY 2013 for a total of $11.5 billion Impact Aid will see an increase of nearly $65 million, putting total funding levels at $1.3 billion 11 Federal Funding (continued)

12. CTE grants will see an increase of $53 million in the bill, for an FY 2014 total of $1.12 billion Perkins and Adult Education and Family Literacy Act (AEFLA) programs will be funded at $1.7 billion Head Start will see an increase of $612 million that brings total funding to $8.6 billion A new round of Race to the Top (RTTT) - $250 million in new grant funding from US Department of Ed to states for developing or expanding high-quality preschool programs for four-year-olds under 200 percent of the Federal Poverty Level 12 Federal Funding (continued)

13. Full Budget Committee Overview and Informational Hearings in January and February Budget Trailer Bills by early February Budget Subcommittee Hearings in Spring May Revision -- updated revenue estimates Budget must be passed by the Legislature by Midnight June 15 13 Budget Timeline

14. Please check our website at http://www.csba.org/Advocacy/LegislativeNews /2014.aspx for updates on the budget throughout the year. Thank you!