Four things you should know about California’s new budget and its impact on OC schools


Last month, Governor Jerry Brown and legislative leaders announced a brand new spending plan for the 2015-16 fiscal year that started July 1.

As is usually the case with state budgets, there are still some details to be worked out, and OCDE is anticipating a number of trailer bills that could impact K-12 education. Still, there’s a lot we do know, and here are four takeaways for schools and districts in Orange County:

1. State revenues have increased substantially, and that’s good news for schools. Buoyed by a strengthened state economy, revenues in California have surged, and the $115.4 billion spending plan for 2015-16 allocates $68.4 billion for schools and community colleges, setting a new record for yearly growth. The budget also earmarks almost $300 million for early childhood education, including 7,000 more preschool slots and 6,800 additional childcare vouchers. Governor Brown’s office has characterized the educational investments as an opportunity to correct historical inequities, particularly as California continues implementation of its new Local Control Funding Formula. Speaking of which …

2. Based on the state’s new funding formula, Orange County’s school districts may receive significantly different amounts. Recall that the LCFF model was designed to channel more resources to students with the greatest needs. So even though it includes a base level of funding by grade level, it also sends more dollars to districts based on the number — and concentration — of English-language learners, low-income students and foster youth. In Orange County, those figures vary significantly from district to district. The end result is that per-student funding may look very different depending on whether you’re in Santa Ana, Irvine, Fountain Valley or Garden Grove.

3. Rising revenue means California is on track to implement its Local Control Funding Formula as planned, with more dollars coming up front. The aforementioned LCFF established target levels of funding for school systems to be reached by the 2020-21 school year. The idea is that from now until then, districts would get annual increases called “gap funding,” referencing the gap between what they currently get and that target amount. When the LCFF was first adopted in 2013-14, K-12 education funding was expected to reach $47 billion this coming year. Now we’re looking at almost $53 billion. That being said …

4. Revenue may be strong now, but there are still plenty of challenges ahead — and lots of unknowns. After a few dismal years, we may be tempted to breathe a sigh of relief at reports of spiking revenue. But our state has hundreds of billions of dollars in existing liabilities, including deferred maintenance on roads and infrastructure, pension benefits and future retiree health care costs for state workers. Also, remember those temporary tax increases that took effect under Proposition 30? They’ll start to expire in 2016, eliminating a key source of state revenue. Shifts in the state and national economies could also impact California’s bottom line.

As always, stay tuned.