BILL ANALYSIS Ó 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: May 28, 2015 |Consultant: Mark | | |McKenzie/Jillian Kissee | | | | ----------------------------------------------------------------- SUSPENSE FILE. AS AMENDED. 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 (as approved on May 28, 2015): Unknown cost pressure to provide additional funding for the ASES program. 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 SB 645 (Hancock) Page 1 of ? 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. 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. SB 645 (Hancock) Page 2 of ? 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 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. SB 645 (Hancock) Page 3 of ? 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. Committee amendments (as adopted on May 28, 2015): Amendments delete appropriations and CPI adjustments, and make additional funding contingent upon funding provided in the budget. -- END --