BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2585
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 2585 (Daly)
          As Amended  August 13, 2014
          Majority vote
           
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          |ASSEMBLY:  |73-0 |(May 8, 2014)   |SENATE: |34-0 |(August 19,    |
          |           |     |                |        |     |2014)          |
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           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  








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          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  








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            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 


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