Revised 2017-18 budget suspends appropriations in Proposition 98, withholds release of one-time funds until 2019
The revised 2017-18 budget proposal, despite adding money to the Proposition 98 guarantee for 2017-18 and bringing LCFF to 97 percent of full funding, again takes measures to counteract concerns of “overappropriation” for public education and defies the intent of the Proposition 98 law.
The May Revision contains a proposal to eliminate the originally-proposed $859 million Proposition 98 deferral by suspending Proposition 98 supplemental appropriations through 2021. Additionally, the budget withholds the release of $1 billion in one-time discretionary funds until 2019.
- View the May Revision summary here.
- View comments from CSBA President Susan Henry in today’s press release here.
- View a video analysis of the budget from CSBA's Assistant Executive Director of Governmental Relations, Dennis Meyers here.
Details of the May Revision
Suspension of Proposition 98 Appropriations (Budget Summary, Pg. 16): The proposal in the January budget to defer $859 million in Proposition 98 funds is gone from the May Revision. In its place is a proposal to suspend Proposition 98 Test 3B supplemental appropriations in 2016-17, and from the 2018-19 through 2020-21 budget years. Funding reduced by suspension of these appropriations would be added to the maintenance factor obligation but not made available to LEAs for expenditure until explicitly appropriated in a future Budget Act.
One-time Allocation Not Available Until 2019: The January budget proposed a one-time allocation of $290 million in discretionary funding. In the May Revision, that proposed amount was increased significantly to about $1 billion. However, there is a catch: the proposal includes holding onto that money at the state level until May of 2019, to give the state a cushion should General Fund revenues decline. After that date, a per-pupil allocation would be made based on either the full $1 billion or a lesser amount, should the already proposed-to-be-suspended Proposition 98 guarantee go below the budgeted level. The proposal essentially treats this money like a reserve account.
Proposition 98 Guarantee: The proposed Proposition 98 guarantee comes in at $74.6 billion, an increase of $1.4 billion from the January proposal.
LCFF (Pg. 17): The budget adds $661 million to the $744 million proposed in January for LCFF, for a total investment of $1.4 billion, bringing LCFF to 97 percent of the full funding target; CSBA is appreciative of this investment. The initial LCFF proposal covered a cost-of-living adjustment of 1.48 percent; that figure has been adjusted upward to 1.56 percent.
Special Education (Pg. 18): Following stakeholder meetings held in the spring, the review of special education funding remains on hold, as the budget states intent of the Administration to “spend additional time in the coming months” examining the various funding issues involved.
Facilities (Pg. 19): The budget reiterates the intent of the Administration to delay release of Proposition 51 funds (approved by voters in November) until budget trailer bill language is signed to include facility bond expenditures in the audit guide and to design additional accountability measures. Included in the additional accountability measures is a proposal from the Department of Finance for a 90-plus page document that must be signed as a condition of getting any money from Proposition 51; penalties for violating that document would be retroactive and would come from future apportionments. In light of the multiple immediate facilities needs of LEA’s statewide, CSBA opposes any further obstruction of these voter-approved funds.
PERS/STRS (Pg. 67): The May Revision proposes a one-time $6 billion supplemental payment to CalPERS, aimed at cutting into the system’s $59.5 billion unfunded liability. While the payment is expected to mitigate the state’s contribution rates, the proposal would have no impact on school employer contribution rates, which are projected to more than triple over a 10-year period.
Child Care (Pg. 20): The revised budget proposes to restore investments from the 2016 budget act in child care, which were put on pause in the January proposal:
- Standard Reimbursement: $67.6 million ($43.7 of it from Proposition 98) to restore the 10 percent increase in the reimbursement rate; with another $92.7 million ($60.7 from Proposition 98) to for a 6 percent increase in the State Preschool rate, beginning July 1.
- State Preschool Slots: $7.9 million in Proposition 98 to add 2,959 slots
- CalWORKs: Decrease of $18.1 million for Stage 2 and $12.8 million for Stage 3 (both non-Proposition 98)
Budget negotiations will continue at the Capitol, with both the Senate and Assembly budget committees compiling their respective budget proposals throughout May before convening the Joint Budget Conference Committee in June. The Joint Committee will have a June 15 deadline to finalize its agreement to send to the Governor for his approval prior to the July 1 deadline.
CSBA will oppose suspension of statutory Proposition 98 funding throughout the May and June budget process.