06/25/15

On Wednesday, June 24, 2015, the Governor signed the 2015-16 Budget Act and accompanying trailer bills to implement the budget with very little fanfare.  A negotiated deal between legislative leadership and the Governor was announced last Tuesday, June 16, one day after the Legislature approved its initial budget package.  The Legislature passed modifications to the first budget bill and most of the accompanying trailer bills on Friday, June 19.  The main budget bills are AB 93 and SB 97, and education trailer bills include AB 104, the K-12 omnibus bill, and SB 78, which makes mainly technical adjustments to the Local Control Funding Formula.

The negotiated budget deal includes $115.4 billion in General Fund spending for 2015-16, reflecting the Governor’s more conservative revenue estimate, which is about $2 billion lower than the Legislature’s.  Proposition 98 will receive $68.4 billion in 2015-16, an increase of 12.4% above the funding level adopted in the 2014 Budget Act.  The budget includes an additional $6 billion in 2015-16 for implementing the Local Control Funding Formula (LCFF), bringing LCFF funding to $52 billion, a 13% year-over-year increase.

Key school facilities funding provisions reported previously remain unchanged in the final budget as signed.  Education trailer bill AB 104 does include some additional information on facilities issues, including a significant change to Routine Restricted Maintenance Account (RRMA) contributions described below.  We are also providing additional information regarding water conservation funding as approved in the budget.

Routine Restricted Maintenance

AB 104 establishes a new phase-in for the return of the 3% required contribution to routine restricted maintenance accounts (RRMAs) for districts participating in the School Facility Program.  Districts are now required to contribute to their RRMA at least 2% percent by 2017-18 and at least 3% by 2020-21.  For 2015-16 and 2016-17, districts are required to contribute at minimum the amount that was deposited in the account in the 2014-15 fiscal year.  Additionally, AB 104 specifies that RRMA funds may be used for drought mitigation purposes.

For additional information and specifics regarding contribution requirements, please see a previous C.A.S.H. Register story on this issue: Approved Budget Includes Phase-In of 3% Routine Restricted Maintenance Contribution

School Facilities and Related Funding Provisions

Note that these items remain unchanged from what was previously reported on June 15, 2015.

Proposition 39 – Provides $313.4 million for K-12 grants, to be allocated on a per-ADA basis.

Emergency Repair Program – Provides $273.4 million in one-time Proposition 98 General Fund resources to retire the state’s facilities funding obligation under the terms of the Williams settlement.

Office of Public School Construction Staffing – Decreases Office of Public School Construction staff by 37 positions, some of which are currently filled.  The reductions equate to a savings of $4.47 million.  This is being done to “align administrative resources with the expected workload” for the School Facility Program.

One-Time Funds – Provides $3.2 billion in one-time and settle-up Proposition 98 funds to pay off the K-12 mandates backlog.  Funding will be allocated on a per-ADA basis and is available for discretionary purposes such as implementation of Common Core standards (professional development, teacher training, purchase of instructional materials and technology infrastructure) or for other one-time purposes, such as maintenance and deferred maintenance.

Technology Infrastructure – Includes $50 million in one-time Proposition 98 funds to support Internet connectivity and infrastructure for schools.  The funds will be allocated through the Broadband Infrastructure Improvement Grant (BIIG) program administered by the K-12 High Speed Network.  Any remaining funds available after all reasonable solutions have been funded through the BIIG program may be used to fund under-connected sites upon approval of the Department of Finance.

Charter School Facility Grant Program – Increases funding by $20 million to reflect the estimated cost of meeting a lower enrollment threshold to qualify.

Career Technical Education Incentive Grant Program – Provides one-time Proposition 98 funding in the amounts of $400 million (2015-16), $300 million (2016-17), and $200 million (2017-18) through competitive grants in three sizes based on ADA.  The program includes higher weighting of applicants who establish new programs, serve low-income, English-learner, or foster youth students, have a high drop-out rate, or are located in areas with high unemployment rates.

Drought Response & Water Conservation

The budget includes an additional $1.8 billion in one-time resources for 2015-16 to continue immediate response to the drought, for a total of $3.7 billion over the past two years.  Funds will be used for programs administered primarily by the Water Board and Department of Water Resources with the following purposes:

• Protect and expand local water supplies – $1.5 billion
• Water conservation – $117 million
• Emergency response – $114.9 million

The budget provides additional enforcement authority to local water agencies, allowing them to enforce their own water conservation ordinances and the emergency regulations adopted by the Water Board.  The Water Board is authorized to require consolidation of local water systems in disadvantaged communities when the system fails to provide an adequate supply of safe drinking water.  The budget also provides a CEQA exemption for certain types of water recycling pipeline projects during a declared drought and for the next update of the Building Standards Commission’s building code cycle related to water recycling requirements.

~ Rebekah Cearley