1. EADM 284 State Budget Summary

2. Major Changes From May Revision2
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Item
May Revision
State Budget
LCFF Gap Funding
54.84% or
$2.98 billion
54.18% or
$2.94 billion
One-time Discretionary Funds for
$1.41 billion or
$237 per ADA*
$1.28 billion or
$214 per ADA
College Readiness
No specific proposal
$200 million
Preschool
8,877 full-day slots, $100 million (over 4 years)
Classified Teacher Program
$20 million
*Average Daily Attendance (ADA)

3. Proposition 98 Minimum Guarantee3
Proposition 98 Minimum Guarantee
Once again, the Legislature has adopted the Governor’s May Revision estimates for Proposition 98 funding :
$67.2 billion :
$69.1 billion :
$71.9 billion
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4. Proposition 98 Minimum Guarantee4
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The differences between the Legislative Analyst’s Office (LAO) and Administration estimates comes down to assumptions
LAO assumes:
Higher state revenues
Higher local property tax revenues
Source: LAO – Budget: Analysis of the Proposition 98 May Revision Budget Package, May 16, 2016, Page 4

5. 2016-17 Local Control Funding Formula5
Local Control Funding Formula
The Budget Act appropriates $2.942 billion for continued implementation of the LCFF
New funding is estimated to close the gap between funding levels and LCFF full implementation targets by 54.18%
87% of the gap closed in the first four years
Reaching to almost 96% of target funding
No cost-of-living adjustment (COLA) in on the LCFF base grant targets
LCFF growth provides an average increase of about $500 per ADA, divided 50/50 between base and supplemental funding
Remember that individual results will vary widely
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6. 2016-17 LCFF Target Funding Factors14
No COLA for keeps base grant rates at levels
Grade K-3 – 10.4% increase for smaller average class enrollments
Grades 9-12 – 2.6% increase provided for Career Technical Education
Grade Span
Base Grant Per ADA
GSA*
Adjusted Grants
K-3 (10.4%)
$7,083
$737
$7,820
4-6
$7,189 –
7-8
$7,403
9-12 (2.6%)
$8,578
$223
$8,801
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*Grade Span Adjustment (GSA)

7. 2016-17 LCFF Target Funding Factors
Supplemental and concentration grants, based on the Unduplicated Pupil Percentage (UPP), are also unchanged from because no COLA is applied to the LCFF base grants
Grade Span
Adjusted Grants Per ADA
20% Supplemental Grant – Total UPP
50% Concentration Grant – UPP Above 55%
K-3
$7,820
$1,564
$3,910
4-6
$7,189
$1,438
$3,595
7-8
$7,403
$1,481
$3,702
9-12
$8,801
$1,760
$4,401
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8. Headwinds 8 LCFF is now almost 96% fully funded
Since , rapid restoration of and growth in Proposition 98, as well as slow or no ADA growth, has fueled LCFF implementation
The “last mile” may be the hardest
Proposition 30 of 2012 expires, slowing Proposition 98 growth
COLAs are projected to be low over the next few years – in the range of 1% to 3%
The boom years of Proposition 98 growth may be over
Maintenance factor, generated during lean years, has been significantly paid down and was the primary driver of accelerated annual increases
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9. 9
Headwinds
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10. 10
Impact of Proposition 30 3
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11. What Happens With Proposition 30 Expiration?11
What Happens With Proposition 30 Expiration?
EPA funds are 12% of school revenues
What happens if the temporary Proposition 30 tax surcharge on high-income earners isn’t extended?
Current law requires the state General Fund to backfill losses in EPA
What does the revenue pie look like after EPA tax revenues expire?
State share of education revenues goes up
The Department of Finance estimates for LCFF implementation already incorporate the impact of the loss of EPA revenues
No additional adjustments for loss of the EPA revenues are needed for budget forecasts
If the income tax surcharge is extended, then additional revenues may become available through the Proposition 98 minimum guarantee
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12. What Happens With Proposition 30 Expiration?12
What Happens With Proposition 30 Expiration? 3
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13. One-Time Discretionary Funds13
One-Time Discretionary Funds
The Budget Act contains $1.28 billion in one-time discretionary funds distributed on the basis of Second Principal Apportionment ADA, or approximately $214 per ADA
These funds are available for any purpose established by the local board
As in prior years, these funds offset outstanding mandate claims on a dollar-for-dollar basis for those districts with claims
Claims deemed to have been paid by these funds are subject to audit by the State Controller’s Office (SCO)
If the SCO audit disallows a claim, the district would not remit the amount disallowed; the disallowance reduces other outstanding claims
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