Turlock Unified School District is optimistic after the release of Gov. Jerry Brown’s proposed 2014-2015 budget, which emphasizes fiscal responsibility through elimination of prior year debt and increasing funds towards education.
“I’m going to stress the word “proposal” simply because that’s what it still is as the first step in the state budget process,” said Lori Decker, assistant superintendent of Financial Services.
Not only does the proposed budget aim to allocate funds to education but Gov. Brown plans to eliminate cash deferrals, a mechanism that allows the state to defer cash payments to districts in order to solve their own fiscal crisis. This would mean school districts would get their money in the appropriate time from the state.
State revenues improved over the projections that were made for the 2013-2014 state budget, which increased the Prop 98 guarantee, or one time state funds, for both 2012-2013 and 2013-2014 school years. The governor proposed that these guarantees as well as $2.7 billion from the budget year be used to eliminate cash deferrals from K-12 education and community colleges.
“Eliminating these cash deferrals does not increase the District’s budget but it does significantly improve cash flow, which is a very welcomed change,” said Decker. “A year ago the governor’s goal was to eliminate cash deferrals by 2016-2017 so in this proposed budget he accomplishes that goal two years earlier than expected.”
Prop 98 requires that a minimum percent age of the state budget be spent on K-12 education and guarantees an annual increase in educational spending. The Prop 98 guarantee is estimated to be at $61.6 billion dollars, which is an increase of $6.3 billion dollars above the 2013-2014 state budget. The majority of those funds is allocated towards the implementation of the Local Control Funding Formula, a new way of receiving funding that places more control in local districts’ hands and which TUSD adopted in June of 2013.
LCFF base grants increase year by year based on the Cost of Living Allowance in the District and TUSD is anticipating a minor increase of .86 percent. Most of the funding will likely go towards gap funding, an amount supplemented by the state to make up the difference between the target revenue and the prior year revenue, until the District reaches full implementation of LCFF. TUSD could see an increase from 11.8 percent in the 2012-2013 school years to 28 percent in gap funding in 2014-2015.
“The governor is proposing legislature to establish a continuous state of appropriation to ensure that full implementation occurs on schedule. The plan would assume that LCFF would be fully funded by 2020-2021,” said Decker. “That would be good for school distributes because it would guarantee that we would in fact receive revenues each year for that implementation.”
Similar to the current school year, the governor’s proposal did not allocate funds to the implementation of Common Core State Standard Implementation and there were also no support issued to the 2014 school facilities bond as the governor seems to be questioning the state’s role in school facility funding.
“He seems to want to push it onto the local governments,” said Decker.
Special Education and Child Nutrition departments both received .86 percent COLA while Transportation and Target Improvement Grant funding will remain frozen as it is in the 2012-2013 funds and won’t be increased by adjustments or other factors in future years.
This is the second year in a row that Brown has prioritized state funds for education and there is anticipated resistance that the state legislature will want to allocate funds to other areas as the proposal undergoes revision. The District will now use the budget proposal as the structure off which to base their next year budget assumptions and tentative budget. The revision of the state budget will be issued in May and the final budget will be issued in June.