BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 645 (Hancock) - After school programs:  grant amounts
          
           ----------------------------------------------------------------- 
          |                                                                 |
          |                                                                 |
          |                                                                 |
           ----------------------------------------------------------------- 
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Version: April 6, 2015          |Policy Vote: ED. 7 - 1          |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Urgency: No                     |Mandate: No                     |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Hearing Date: April 20, 2015    |Consultant: Mark McKenzie       |
          |                                |                                |
           ----------------------------------------------------------------- 


          This bill meets the criteria for referral to the Suspense File.







          Bill  
          Summary:  SB 645 would appropriate $54 million in 2015-16, and  
          $72 million annually ongoing, adjusted each year by an inflator,  
          from the General Fund to the California Department of Education  
          (CDE) for purposes of the After School Education and Safety  
          (ASES) program.


          Fiscal  
          Impact:  
           General Fund appropriation of $54 million in 2015-16 to  
            augment the existing annual continuous appropriation of $550  
            million from the General Fund for the ASES program.
           General Fund continuous appropriation of $72 million in  
            2016-17 to augment the existing funding for the ASES program.







          SB 645 (Hancock)                                       Page 1 of  
          ?
          
          
           Annual increases in the continuous appropriation for the ASES  
            program thereafter by multiplying the combined appropriations  
            for the program from the prior year ($622 million total for  
            2017-18) by the California Consumer Price Index (CPI).


          Background:  Existing law, as approved by the voters in 2002 (Proposition  
          49), establishes ASES program, consisting of before and after  
          school academic enrichment.  Priority for funding is granted to  
          schools where at least 50% of the students are eligible for free  
          or reduced price meals.  ASES programs receive direct grants,  
          where attendance is projected and grants are funded up-front, in  
          three one-year increments.  The maximum total direct grant  
          awarded annually for an after school program as $112,500 for  
          each regular school year for elementary schools and $150,000 for  
          middle or junior high schools (based on a formula of $7.50 per  
          student per day of attendance, at a maximum of $37.50 per  
          student per week).  The maximum total grant awarded annually for  
          a before school program as $37,500 for each regular school year  
          for elementary schools and $49,000 for middle or junior high  
          schools (based on a formula of $5 per student per day of  
          attendance, at a maximum of $25 per student per week).  A summer  
          grant to operate the program in excess of 180 days or during any  
          combination of summer, intersession, or vacation for a maximum  
          of the lesser of: $7.50 per student per day; 30% of the total  
          grant amount awarded to the school per school year; or,$33,750  
          for elementary schools and $45,000 for middle or junior high  
          schools.
          Existing law continuously appropriates $550 million from the  
          General Fund annually to CDE for the program, and authorizes the  
          department to use 1.5 percent of the funds to cover its  
          administrative costs.  Statutes explicitly authorize the  
          Legislature to appropriate additional funds for the program, but  
          funding has remained at $550 million annually since 2006.


          Existing law increased the minimum wage to $9.00 per hour on  
          July 1, 2014, and will increase the rate to $10.00 per hour on  
          January 1, 2016.  Existing law also requires employers, as of  
          July 1, 2015, to provide at least one hour of paid sick time for  
          every 30 hours worked, or a minimum of three days per year, as  
          specified.










          SB 645 (Hancock)                                       Page 2 of  
          ?
          
          


          Proposed Law:  
            SB 645 would provide a permanent annual increase in funding  
          for the ASES program.  Specifically, this bill would:
                 For the 2015-16 fiscal year, appropriate $54 million  
               from the General Fund to CDE for the ASES program, and  
               require CDE to proportionately adjust the dollar amounts  
               for the ASES base grants and the per student per day rates.


                 For the 2016-17 fiscal year, and each year thereafter,  
               continuously appropriate $72 million from the General Fund  
               to CDE for the ASES program, and require CDE to  
               proportionately adjust the dollar amounts for the ASES base  
               grants and the per student per day rates.


                 Require the Department of Finance (DOF), for the 2017-18  
               fiscal year, and each year thereafter, to adjust the annual  
               appropriation for the entire program ($622 million in  
               2017-18) by the CPI, provided the adjustment does not  
               result in a reduction.


                 For the 2017-18 fiscal year, and each year thereafter,  
               require CDE to adjust the dollar amounts for the ASES base  
               grants and the per student per day rates to reflect any  
               increases in the CPI. 




          Staff  
          Comments:  This bill is intended to provide permanent increased  
          funding for the ASES program to account for increased program  
          costs as a result of minimum wage increases, new requirements  
          for employee sick leave, and other operational costs.  Funding  
          for the program has remained flat since 2006, and staff notes  
          that the Governor's Proposed Budget for 2015-16 does not contain  
          an augmentation for ASES.  
          SB 645 incrementally increases the appropriation over the next  
          two years and provides for an annual inflationary adjustment to  
          the total amount of funds continuously appropriated to the  








          SB 645 (Hancock)                                       Page 3 of  
          ?
          
          
          program beginning in 2017-18.  If the CPI increases by 2.5% over  
          2016-17, total program costs would increase by approximately  
          $15.5 million in the first year the adjustment is effective.   
          Any increases would be compounded into future annual  
          calculations.




          Recommended  
          Amendments:  Staff recommends an amendment to delete the  
          continuous appropriation of the augmented funds provided in the  
          bill from the 2016-17 fiscal year and each fiscal year  
          thereafter, and instead make those augmentations subject to an  
          annual appropriation by the Legislature.  Based upon the plain  
          language of Proposition 49, it appears that the voters' will was  
          to provide permanent ongoing funding of $550 million annually  
          with the authorization for the Legislature to appropriate  
          additional funds.  Keeping any augmentations subject to annual  
          appropriation by the Legislature ensures continued oversight,  
          and allows maximum flexibility for expenditure of limited  
          General Fund resources.


                                      -- END --