BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 847 (Steinberg) Hearing Date: 08/31/2010 Amended: 08/30/2010 Consultant: Dan Troy Policy Vote: NA _________________________________________________________________ ____ BILL SUMMARY: SB 847, an urgency measure, would appropriate over $1.2 billion in federal funds available to the state under the recently enacted federal Education and Medicaid Assistance Jobs Act. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Education Jobs Act $1,201,535 Federal _________________________________________________________________ ____ STAFF COMMENTS: This bill meets the criteria for referral to the Suspense File. The federal government recently enacted the Education Jobs and Medicaid Assistance Act of 2010 (Act), Public Law 111-226, which, in relevant part, appropriates$10 billion nationwide to support education jobs. Per formula, California's share of that funding is $1,201,534,585. This bill would: Make $128,000 available to the Office Planning and Research to oversee the expenditure of the federal dollars. Make $1,500,000 available to the Department of Education for administrative purposes related to implementing the Act. Allocate $1,199,906,585 to local education agencies in an amount calculated to be an equal proportion of the amount calculated for the 2010-11 fiscal year for 1) total school district revenue limits, 2) total county office of education revenue limits, and the 3) the revenue limit portion of charter school operational funding, as appropriate. Distribute a preliminary allocation equal to 90 percent of 2009-10 funding to be made within 14 days of the effective date of this bill or notification to the state of a federal funding award, whichever is later. The bill further specifies that funds received by local education agencies must be expended in a manner consistent with the requirements of the Act and any relevant federal regulations and guidance. These requirements, as detailed in the bill, include compensation, benefits, and other expenses, including support services, that are necessary to retain, existing employees, to recall or rehire former employees, and to hire new employees, where those employees provide school-level educational and related services. The bill further allows local education agencies to use these funds through September 30, 2012. Page 2 SB 847 (Steinberg) The Education Jobs and Medicaid Assistance Act was signed into law on August 10, 2010. The Act includes $16.1 billion in expanded Federal Medical Assistance Percentage (FMAP) funding for the states and $10 billion in education funding provided to the states to support an estimated 160,000 education jobs nationwide. The Act requires that the education funds provided to the states be spent by LEAs to prevent teacher layoffs, that the funding be allocated to LEAs based on a state's primary funding formula as specified in the state's State Fiscal Stabilization Fund (SFSF) application or each districts' relative share of federal Title I funds, that states show that they have met maintainence of effort provisions, and that this funding not be used to supplant state education funding or provide a funding reserve. The U.S. Department of Education (USDOE) estimates that this funding will save approximately 16,500 teacher jobs in California. In order to ensure that states receive funding as quickly as possible, USDOE is streamlining the application process to allow states to submit applications in an expedited manner. Passage of this urgency measure would provide immediate relief to local education agency budgets.