Greetings!

 

Last month, Governor Brown released his budget proposal for the 2017/2018 fiscal year. Consistent with the theme of fiscal prudence and responsibility, his budget is built upon conservative revenue estimates and a cautious spending plan in response to economic uncertainty.
  
So, what does this all mean for local schools? What about the passage of Proposition 55? How does the Local Control Funding Formula fit into this equation? This month's issue of our e-newsletter explores all these questions, the mysterious world of school funding, and what we might expect in the year ahead.
  
We encourage you to take a few minutes to learn more about this important topic.

Sincerely, 
Anne Silavs
Superintendent
The Governor's 2017/2018 Budget Proposal
Flat funding for K-12 Education

As expected, Governor Brown took a fiscally conservative approach last month to developing a budget plan for 2017/2018. One reason for caution is that state revenues have been lower than expected this year, which means California has had to trim spending to stay within its budget. Looking ahead, the Governor has proposed a "flat-funded" budget for next year, which means there will be little to no new money. For education, this creates a challenge because our income is not keeping pace with our rising financial obligations. In May, the Governor will have the opportunity to make adjustments to his budget plan should the economic forecast change. However, in response to what we know today, the Cypress School District is proactively forming a budget committee to identify our spending priorities and look for ways to conserve our resources. Our Budget Committee will be comprised of teachers, administrators, classified support staff, and parents. To ensure the district continues to maintain good financial health, we will need to make sure our expenditures do not exceed our total revenues in the coming school year as well as for the next three years.
Voter Passage of Proposition 55
Wasn't This Supposed to Help?

In November, voters passed Proposition 55, which was an extension of the personal income tax increases approved in 2012 with the passage of Proposition 30. These personal income tax increases were levied on Californians who earn $250,000 or more a year. These people are often referred to as the "one percent" because they make up a small percentage of the state's total population. While it might seem perfectly reasonable to expect our wealthiest citizens to pay their fair share, relying upon them too heavily in the absence of other income sources results in inconsistent and unstable state revenue. In simple terms, when the wealthiest citizens have a good year and make a lot of money, California is flush with cash. When they don't have such a good year, or if they leave the state altogether, California doesn't have enough revenue to pay the bills for important programs and services. While educators are very grateful for the passage of Proposition 55 because it does help support schools during the good times, it isn't the state's silver bullet for funding education.
The Local Control Funding Formula
Restoring School Funding to 2007/2008 Levels

While Cypress School District funding comes from a variety of sources - local, state, and federal - about 90 percent of our revenue comes from California. In 2013/2014, Governor Brown changed the way in which schools receive state funds. The new system is called the Local Control Funding Formula (LCFF) and, by 2020/2021, its goal is to restore school funding to the level it was back in the 2007/2008 school year, before the Great Recession.
  
Under LCFF, all districts receive the same amount of money through a Base Grant, which is adjusted by grade level. For example, in 2016/2017, the Base Grant is $7,083 for students in kindergarten through grade three, $7,189 for students in grades four through six, $7,403 for students in grades seven and eight, and $8,578 for students in grades nine through twelve. So, no matter which school district a student attends in California, the Base Grant funds are the same for each grade span. While that might sound simple enough, there's more to the LCFF than just Base Grant funds.
  
Two other significant grants are included in the LCFF, and the amount of money a school district receives from these other two sources varies widely from district to district. For example, school districts receive Supplemental Grant funds for every enrolled English Learner, low income, and foster youth student. In Cypress, we receive Supplemental Grant funds, too, but not as much as other school districts because we do not have large numbers of students in these categories.
  
In addition to the Supplemental Grant, school districts also receive Concentration Grant funds when the number of enrolled English Learner, low income, or foster youth students exceeds 55 percent of the district's total enrollment. In Cypress, we receive zero Concentration Grant dollars because we do not reach this threshold. While we understand that it costs more to educate children with these needs, the difference in student funding across school districts is striking. These vast differences make it challenging to provide the same high quality programs from district to district. To look up the estimated 2016/2017 LCFF per student funding levels for all Orange County school districts, please click here.
So, What's the "Take Away" Message?

School funding in California continues to be a complicated issue. It appears the state's economy may be slowing down, which impacts the extent to which Proposition 55 will generate the revenues needed to support the rising costs of education. While the LCFF has infused school district budgets with greatly needed funds over the past four years, it only restores us to where we were ten years ago. The California Budget and Policy Center ranks our state 41 out of 50 in per-student spending. In summary, the LCFF is a school funding distribution model; it is not an adequate school funding model. So, what would constitute adequate funding in a state with the world's sixth-largest economy, the largest number of children living in poverty, and the highest percentage of English learners in the nation? That's the question that remains to be answered.
BOARD OF TRUSTEES
Candi Kern   .  Sandra Lee   .  Donna McDougall   .  Brian Nakamura   .  Lydia Sondhi, Ph.D.