BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 70
Author: Senate Budget and Fiscal Review Committee
Amended: 3/14/11
Vote: 27 - Urgency
PRIOR SENATE VOTES NOT RELEVANT
ASSEMBLY FLOOR : Not available
SUBJECT : Education budget statutory revisions
SOURCE : Author
DIGEST : This bill makes education- related statutory
revisions consistent with the 2011-12 budget package.
Assembly Amendments delete the prior version of the bill
and insert the current language relating to education
budget statutory revisions.
ANALYSIS : This bill makes the following statutory
revisions affecting K-12 education and higher education as
part of the 2011-12 budget package:
K-12 Education
1. New Inter-Year Payment Deferrals for 2011-12 . Defers
an additional $2.1 billion in payments for K-12 revenue
limits from 2011-12 to 2012-13. More specifically, the
deferral moves $1.3 billion in March 2012 and $763
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million in April 2012 payments to August 2012. The
deferral reduces 2011-12 appropriations, but allows
schools to retain general purpose funds for programs in
2011-12. The deferral continues to allow local
educational agencies (LEAs) facing financial hardship to
continue to receive June apportionment payments
scheduled to be deferred to July.
2. Extends Repayment of 2010-11 Inter-Year Deferrals .
Makes changes to current statute to extend the repayment
period for inter-year deferrals for 2010-11 in order to
meet state cash needs.
3. Revenue Limit Deficit Factors . Establishes county
office of education revenue limit deficit factor of
19.892percent and school district revenue limit deficit
factor of 19.608 percent in 2011-12 to current revenue
limit funding at current levels. Revenue limit deficit
factors keep track of base reductions and foregone
cost-of-living adjustment (COLA) increases in recent
years, so they may be restored in future years when
state funds are available.
4. Suspends COLAs for K-12 Programs . Establishes a zero
percent COLA for K-12 programs - revenue limits and
categorical programs - in 2011-12. While COLA is
estimated at 1.67 percent, it is not funded in 2011-12.
5. Implements "Fair Share" Savings for "Basic Aid
Districts . Applies an 8.921 percent reduction to
categorical programs for Basic Aid districts in 2010-11
and 2011-12. This reduction is commensurate to the base
revenue limit reduction ate for non-Basic Aid school
districts in 2010-11 and 2011-12. States intent that
categorical funding reductions for Basic Aid districts
be restored as base revenue limit reductions are
restored for non-Basic Aid districts. Basic Aid
districts are defined as districts that do not receive
state funding for revenue limits.
6. Provide Funding for Special Education Mental Health
Services . Reappropriates $80.8 million in one-time
Proposition 98 savings to address a funding shortfall
for mental health related services for special education
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students in 2010-11. Funds are appropriated on a
one-time basis based upon the relative costs of services
provided.
7. Reappropriation of Proposition 98 Savings for Selected
Programs . Reappropriates an additional $13.1 million in
one-time Proposition 98 savings to offset other program
adjustments in 2010-11.
8. Restores Federal Funds for Student Data Systems .
Appropriates $2.3 million in available federal funds
that were vetoed form the 2010-11 Budget Act to continue
support for the California Pupil Achievement Data System
(CALPADS). First priority for funding shall be to
support the transfer of knowledge from the CALPADS
contractor to the California Department of Education
(CDE) and other relevant state agencies.
9. Requires CDE to Assist LEAs with Data for School
Accountability Report Card . As a condition of CALPADS
funding, requires the CDE to provide LEA's with data
templates to allow them to comply with the School
Accountability Report Card.
10.Extends Instructional Materials Purchase Flexibility .
Extends for two additional years (through 2014-15) the
suspension of statutory requirements that LEAs buy
newly-adopted instructional materials and that the State
Board of Education adopt new materials.
11.Extends Routine Maintenance Flexibility . Extends for
two additional years (through 2014-15) the suspension of
a statutory requirement that school districts that meet
the facility requirements of the Williams settlement
deposit an amount equal to one percent of their General
Fund expenditures into their deferred maintenance funds,
on the condition that they maintain their facilities in
good repair.
12.Extends Surplus Property Sale Flexibility . Extends for
two additional years (through 2014-15) existing
statutory authority for schools to sell non-state funded
surplus property and use the proceeds for any one-time
general fund purpose.\
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13.Extends Deferred Maintenance Flexibility . Extends for
two additional years (through 2014-15) the suspension of
previously required General Fund set-asides for LEAs
receiving deferred maintenance funds for school
facilities.
14.Extends K-12 Categorical Funding Flexibility . Extends
by two years (through 2014-15) existing categorical
funding flexibility that allows K-12 schools to use
funding for nearly 40 categorical programs for any
educational purpose. Requires school districts to
discuss proposed use of these funds at a public meeting
and to report on how they actually spent the funds.
Requires the CDE to report each year on districts' use
of this flexibility.
15.Extends Relaxation of K-3 Class Size Reduction (CSR)
Program Penalties . Extends for two additional years
(through 2013-14) the relaxation of penalties for school
districts participating in the K-3 CSR incentive program
that exceed the maximum class sizes allowable under the
program.
16.Extends Instructional Time Flexibility . Extends by two
years (through 2014-15) the authority for LEAs to reduce
the number of instructional days by five - from 180 days
to 175 days per year - without losing longer- year
incentive grants.
17.Reduces local Reserve Requirements . Extends for two
additional years (through 2011-12) existing statutory
authority for school districts to reduce their "reserves
for economic uncertainties" to one-third of the amounts
previously required to be held, and requires them to
restore those reserves to the normal levels by the
beginning of 2013-14.
18.Extends Access to Supplemental Grants and Flexibility
for New Schools . Allows new schools that began
operation in 2008-09 through 2011-12 one additional year
beyond 2010-11 to access supplemental categorical block
grant funds that can be used for any education purpose.
The budget bill provides partial funding for this
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purpose in 2011-12.
19.Suspends Funding Provisions for the Emergency Repair
Program . Makes statutory changes conforming to zero
funding for the Emergency Repair Program in the 2011-12
budget bill.
20.Authorizes Proposition 98 Split . Suspends the
statutory division of Proposition 98 funding among K-12
educational agencies, community colleges, and other
state agencies, and instead conforms the division of
funding based upon actual budget appropriations in
2011-12.
21.One-Year Statutory Appropriation for K-3 Class Size
Reduction (CSR) Program . Provides an unspecified amount
of funding for the K-3 CSR program in 2011-12 as
determined by the Superintendent of Public Instruction.
This statutory appropriation is provided in lieu of a
budget act appropriation for this program.
22.Categorical Payment Deferrals . Continues up to $906
million in inter-year categorical payment deferrals form
June to July of 2012. This amount is offset by no more
than $570 million in 2011-12 CSR deferral payments made
in 2012-13. Extends the period of availability of
deferred-13 funds by one month, consistent with the
continuing one-month deferral authorized in this bill.
23.Expands Charter School Revolving Loan Fund .
Appropriates $5 million from the General Fund to augment
the Charter School Revolving Loan Fund, which makes
low-interest, start-up loans of up to $250,000 to new
charter schools in order to meet the purposes of their
charters.
24.Redevelopment Funds - Contingency Language . Requires
the state to adjust the Proposition 98 calculation so
that the any shift in local property taxes previously
received by redevelopment agencies has no effect on the
Proposition 98 minimum guarantee in 2011-12.
25.Income Ceiling Reduction . Effective July 1, 2011,
lowers the maximum allowable income to receive
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subsidized child care to 70 percent of State Median
Income (SMI) from 75 percent. The reduction applies to
all child care, including preschool.
26.11 and 12-Year Olds . Effective July 1, 2011,
deprioritizes child care for 11 and 12-year olds, with
the exception of children who are in child protective
services, at risk of abuse or neglect, homeless,
disabled, or in non-traditional hours of care. Also
prioritizes all and 12-year olds who lost child care for
the waitlists or any open spaces in before and after
school programs, and allows those 11 and 12-year olds to
attend a before or after school program at a school
rather than their own within their district.
27.License-Exempt Provider Rate Reductions . Effective
July 1, 2011, reduces the reimbursement rate for
license-exempt providers from 80 to 60 percent of what
licensed providers are paid.
28.Family Fees . Effective July 1, 2011, increase the
family fee schedule by 10 percent, but continues
existing policy that the family fees cannot exceed 10
percent of the family's total income.
29.Across-the Board Reduction . Allows the CDE to reduce
contracts for all child care programs by 15 percent,
effective July 1, 2011. Also provides prioritization
for disenrollment of children from the program due to
insufficient funding.
30.Administrative Process . Allows the CDE to implement
the changes to child care authorized in this bill
through management bulletins and similar instructions.
Specifies that the child care changes in this bill are
not subject to appeal by the agencies holding child care
contracts.
31.CalWORKS Stage 3 . Provides $60 million from one-time
funds for the April through June 2011 period to fund the
CalWORKS Stage 3 program.
California Community Colleges
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1. Student Fee . Increases the community college student
fee from $26 per unit to $36 per unit.
2. Deferral . Increases community college apportionment
cash deferrals by $129 million. Provides hardship
exemption for districts, with the Department of Finance
approval, that do not have sufficient cash resources to
sustain the deferral.
3. Categorical Flexibility . Extends the community college
categorical flexibility to 2014-15 to be consistent with
K-12 categorical flexibility.
4. Data Sharing . Amends existing student information
privacy statute to allow California Community Colleges
to share student data as permitted under the federal
Family Educational Right and Privacy Act of 1974
(FERPA).
5. Suspends COLAs . Establishes a zero percent COLA for
California Community Colleges for 2011-12. While the
COLA is estimated at 1.67 percent, it is not funded in
2011-12.
University of California (UC) and California State
University (CSU)
1. Budget Reduction Reporting Language . Requires UC and
CSU to provide a preliminary report by June 1, 2011 on
how the segments will address their respective $500
million budget reductions. This preliminary report
requires the segments to consider stakeholder input.
Also requires a final report on September 1, 2012 on how
the budget reductions were actually implemented and an
explanation of how and why those reductions differed
from the June 1, 2011 report.
2. Student Enrollment Language . Requires the UC to enroll
209,977 students during the 2011-12 academic year, which
is the same number UC was required to enroll during the
2010-11 academic year. Requires CSU to enroll 331,716
students during the 2011-12 academic year, which is
8,157 fewer students than CSU was required to enroll
during the 2010-11 academic year.
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California Student aid Commission
1.Income and Asset Verification . Requires that all
returning Cal Grant recipients have their income and
assets verified similarly to new students.'
2.Student Default Standard . Requires all institutions of
higher education, with more than 40 percent undergraduate
students borrowing federal student loans, to maintain
their Three-Year Cohort Default Rate below 24.6 percent
in 2011-12, and 30 percent in 2012-13 and thereafter, in
order to continue meeting eligibility to participate in
the Cal Grant Program for initial awards. Reduces by 20
percent the renewal Cal Grants at institutions with
three-year cohort default rates above 24.6 percent.
Requires the Legislative Analyst's Office to review this
policy and potential alternatives by January 1, 2013, and
report to the policy and fiscal committees of the
Legislature with recommendations.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
CPM:cm 3/15/11 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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