May Revision
Yesterday morning, Governor Brown released the May Revision to his budget proposal. The success of Proposition 30 continues to propel a balanced state budget that begins to restore prior, deep cuts to public education.
Nonetheless, Department of Finance finds that the national economic outlook is less bright than in January due to recent federal actions such as sequestration. Therefore, the effects of the recent multibillion-dollar boost to state revenues for the 2012-13 fiscal year will be moderated by the Governor’s lower 2013-14 revenue projections. This May Revision budget needs to be considered in a two-year context.
Proposition 98
Relative to his January budget proposal, the Governor provides an additional $2.9 billion to Proposition 98 for the current 2012-13 fiscal year.
For K-12 schools, the Governor proposes to allocate the current year increase as follows—
For community colleges, the Governor proposes to allocate the increase of $180 Million to further reduce late payments to community colleges.
In addition, the Governor projects a Proposition 98 reduction of $941 million for the 2013-14 fiscal year relative to his January budget proposal. However, the administration still has a couple line item augmentations for 2013-14. For example—
For K-12 schools and community colleges alike, the Governor lowers the anticipated deferral payments in 2013-14 fiscal year as a result of the reduced guarantee in that fiscal year.
Early Childhood
While early education programs have been cut deeply in recent years, the Governor again proposes essentially flat funding for childcare and preschool programs in 2013-14. However, there is a modest increase of $1.2 million to cover growth in the state preschool population.
University of California (UC)
The Governor continues to provide UC a total of $2.8 billion in General Fund support, which represents a year over year increase under the condition that tuition not be increased.
Major Policy Issues
Deferrals – When the deferral payments for 2012-13 and 2013-14 in the May Revision are combined with the deferral payments already authorized last July in the 2012-13 Budget Act, the net effect is that the state will set-aside about $5 billion over this two year period to reduce late payments to K-14 districts.
Early Childhood – The May Revision proposes to expand the counties’ financial responsibility over time for CalWORKs‐related childcare programs.
K-12 Schools – The Governor’s centerpiece K-12 proposal continues to be the Local Control Funding Formula. The base grant, as well as the grade span adjustments, supplemental grant and concentration grant percentages, remain the same as in the January proposal. In the May Revision proposal, however, districts can receive supplemental and concentration grant funding for each English learner for up to seven years (rather than only five). This proposal also includes some accountability tools so that districts serve disadvantaged students, and outlines actual consequences for failure to do so.
Adult Education – The Governor has withdrawn his controversial January proposal to realign adult education. Instead, the administration proposes to maintain the status quo in the near term for community colleges and K-12 schools. (For K-12, this includes funding flexibility for districts.) Over the longer term, the Governor would like to encourage greater regional collaboration on adult education between K-12 and community college districts. In 2013-14, $30 million is allocated for planning grants to this end. The Governor projects allocating $500 million in two years to regional consortia on a competitive grant basis, with grants based in part on whether the K-12 district partner maintains its adult education expenditure level at or above its 2012-13 level. There are many elements to this proposal; the two-year timeline for the proposal provides time for thorough consideration.
Community Colleges – The Governor’s May Revision includes retraction of two controversial proposals that would have reduced student access – the 90-unit cap and census date change – but does not change the January online learning proposal that focuses on building capacity within the system. In addition, in the May Revision the Governor chooses to designate new budget year funds for specific purposes – $87.5 million for COLA (1.57%), $89.4 million to restore access (1.63%), and $50 million for the Student Success and Support Program (the old Matriculation program) with an allowance that up to $7 million could be shifted from that amount to develop e-transcript and e-planning tools. No funds are allocated for EOPS, DSPS or part-time faculty categoricals. This funding allocation proposal uses the $197 million in new funds identified in January, as well as the $30 million added to community college programmatic funding the May Revision.
University of California – The May Revision withdraws the Governor’s unit cap proposal for UC following the strong opposition from access advocates. Two important policy proposals that remain the same are the online learning proposal (to increase the number of courses produced within the system) as well as the budget transparency language that was originally proposed by UC-AFT.
Looking Ahead
In closing, this May Revision budget summary is based on the best information available at this moment. The Legislative Analyst’s Office (LAO) report will be released later this week. Legislative budget hearings on the May Revision will start next week on Monday, May 20. And the budget should be finalized within a month.
CFT will continue working to obtain more detail on both the numbers and the policy proposals, as well to advocate for the federation in the final budget stretch.
This report is the product of collaboration between the CFT Legislative and Research Departments.
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