School Finance Town Hall

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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 RankingsHow 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
Associations 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.
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California School FinanceBefore 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.

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California School FinanceProposition 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.

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California School Finance Revenue Instability

• However, the States most stable funding stream
  (local property taxes) is a victim of Prop 13
  and the impact keeps getting worse

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California School FinanceProposition 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 didnt 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.

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California School FinanceRevenue Limit Mechanism
If school district property taxes didnt provide
enough, the state fills in the rest.
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California School Finance1988 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

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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 CrisisOperating Shortfalls
Expected to Grow

• General Fund (in Billions)

The states 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.

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Impact to OUSD Budget Governors Proposal vs.
New State Budget

• Budget reductions to OUSD budget in 2008-09 under
  the Governors proposal and the new state budget.

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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?

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OUSD BudgetWhat 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).
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OUSD General FundWhat 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
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Unrestricted General Fund 2008-09Allocation by
Site - 269,208,592
Total 2008-09 OUSD General Fund Unrestricted
Allocations 269.2 million
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Restricted General Fund 2008-09Allocation by
Site - 235,671,619
Total 2008-09 OUSD General Fund Restricted
Allocations 235.7 million
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Agenda

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

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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 schools strategic plans
• School Site Council (SSC) oversight of
  categorical funds
• Increased Site-Based Decision Making
• Schools have more control over their budgets

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Unrestricted Revenue 2009-10 Allocations Used
for RBB
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RBB CalculationPer 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.
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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
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Restricted Resource FormulasHow 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