BILL ANALYSIS Ó AB 2585 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 2585 (Daly) As Amended August 13, 2014 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |73-0 |(May 8, 2014) |SENATE: |34-0 |(August 19, | | | | | | |2014) | ----------------------------------------------------------------- Original Committee Reference: ED. SUMMARY : Eliminates the dual budget adoption option for school districts and county offices of education (COEs), makes conforming changes, and strikes obsolete language from the Education Code. The Senate amendments fix a Joint Rule 10 problem caused by the enactment of SB 858 (Budget and Fiscal Review Committee), Chapter 32, Statutes of 2014, the education budget trailer bill. EXISTING LAW authorizes school districts and COEs to select to use either a dual budget adoption process or a single budget adoption process for their annual budgets. FISCAL EFFECT : According to the Assembly Appropriations Committee: 1)One-time General Fund (GF) and Federal Fund savings of $100,000 to the California Department of Education (CDE) related to not implementing a software systems upgrade. 2)Estimated annual GF savings of $10,000 to CDE for elimination of workload related to processing dual budget adoption information. 3)Minor state-mandated costs to school districts and COEs for activities related to review and response of conditionally approved or disapproved budget revisions. COMMENTS : All school districts and COEs are required to adopt their annual budgets by July 1 each year. Budgets must be adopted at a public meeting of the governing board. School district budgets are subject to review and approval by their county superintendent of schools, and COE budgets are subject to AB 2585 Page 2 review and approval by the Superintendent of Public Instruction (SPI). The purpose of the review, which must be done by August 15, is to determine if the budget 1) is in compliance with standards and criteria adopted by the State Board of Education (SBE), 2) allows the COE or district to meet its financial obligations for the fiscal year, and 3) is consistent with a financial plan that will enable the COE or district to satisfy its multiyear financial commitments. If a budget is not approved, the SPI or county superintendent of schools must inform the COE or district in writing recommendations for revising the budget and the reasons for the recommendations. The dual budget adoption option allows a district and COE to hold a second public hearing on or before September 8 to formally adopt a revised budget to reflect changes in projected income or expenditures subsequent to July 1 and to respond to recommendations from the SPI or county superintendent of schools, if any. The SPI or county superintendent of schools must conduct a review of the revised budget and either approve or disapprove it by October 8. Districts and COEs that choose the single adoption cycle are subject to the same review and timeline. The difference is that single adoption districts and COEs revise their budgets by September 8 and submit the revisions for review, but do not re-adopt them. Reason for this bill. According to the California Department of Education (CDE), the September 8 dual budget adoption is redundant, because: 1)All districts and COEs routinely revise their budgets throughout the year as more accurate information becomes available. 2)Within 45 days after the state budget is adopted, all districts and COEs must make available for public review any revisions to their budgets to reflect the funding made available by the Budget Act. 3)The budget review process requires all districts and COEs to submit two interim budget reports per year, one as of October 31 and another as of January 31. 4)All districts and COEs can formally revise their budgets as AB 2585 Page 3 often as they choose, without the need to adopt a revised budget to replace the July 1 adopted budget. 5)All budgetary and financial information made available through the dual budget adoption process is available without formally adopting a revised budget. The number of districts and COEs selecting the dual adoption option has declined over the years, and only 13 currently use it. The CDE reports that it spends about $10,000 annually in administrative costs to support this option and will spend an estimated $100,000 (one-time) to include this functionality in a software upgrade that is planned for later this year. Eliminating this option would save this one-time cost as well as the annual $10,000 cost to support it. Analysis Prepared by : Rick Pratt / ED. / (916) 319-2087 FN: 0004712