BRING. GOOD MORNING, EVERYBODY.
THANK YOU SO MUCH FOR BEING HERE
. WE'RE GONNA CALL TO ORDER OUR
ASSEMBLY'S BUDGET SUBCOMITTEE
NUMBER THREE ON EDUCATION
FINANCE FOR TODAY. I AM CHAIRMAN
. UH DAVID ALVAREZ. WE HAVE SOME
MEMBER OF MIKE FONG AND AS A
MEMBER MIUCHI WITH US, WE ARE
GONNA GET STARTED TODAY. UH, WE
HAVE A, UM PRETTY THOROUGH
AGENDA. WE WILL HAVE A HEARING
THAT I ANTICIPATE WILL TAKE US
AT LEAST A COUPLE OF HOURS. UM
SO SIT BACK, RELAX AND ENJOY.
UH, LOOKING FORWARD TO THE
CONVERSATIONS TODAY, BUT REALLY,
PARTICULARLY GLAD AND
APPRECIATIVE THAT OUR STATE
SUPERINTENDENT OF PUBLIC
INSTRUCTION, UH TONY THURMOND IS
HERE AND I ASK HIM IF HE COULD
PLEASE, UH, COME FORWARD AND
SHARE SOME REMARKS. MR THURMOND.
THANK YOU SO MUCH FOR THE WORK
THAT YOU DO ON BEHALF OF ALL OF
OUR STUDENTS. UH, VERY PLEASED
TO HAVE YOU HERE AND THANK YOU
FOR SHARING AN UPDATE ON THE
WORK THAT YOU'RE DOING. WELCOME.
THANK YOU, CHAIRMAN ALVAREZ. UH
IN, UH, GOOD MORNING TO MEMBERS
OF THE COMMITTEE AND STAFF.
THANK YOU AGAIN. STAFF FOR THE
STAFF REPORT. IT WAS VERY
HELPFUL. UH, IN SETTING THE
TERMS. UM I THINK YOU ALL KNOW
WE'RE FACING A TOUGH FINANCIAL
PERIOD WITH REVENUE BEING, UH,
LESS. UM THIS IS NOT THE TIME
FOR A LOT OF EXPENDITURE AND
EDUCATION, HOWEVER, UH, WE
APPRECIATE THAT THIS BUDGET, UM,
CREATES A WAY TO CONTINUE TO
PROVIDE CONSISTENT FUNDING TO
OUR SCHOOLS AND THAT IT DOESN'T
UM, BALANCE CUTS ON THE BACKS OF
EDUCATORS. SO I WANNA
ACKNOWLEDGE OUR GREAT EDUCATORS,
OUR TEACHERS, OUR CLASSIFIED
STAFF, OUR ADMINISTRATORS, UM,
OUR PARENTS AND VOLUNTEERS AND
STUDENTS, FOR ALL THE GREAT WORK
THAT THEY DO, UH, IN SPITE OF,
UH, THE FINANCIAL CHALLENGES,
THERE IS GOOD NEWS. UM THIS IS
THE FIRST YEAR THAT FUNDS WILL
BE FLOWING TO OUR SCHOOLS, UH,
FOR PROP 28 ARTS AND MUSIC
FUNDING. UH, THAT IS INTENDED TO
SUPPLEMENT NOT PLANT. UM WHAT
HAPPENS IN OUR SCHOOLS AND THAT
THIS IS FUNDING THAT CAN BE USED
TO BRING STAFFING, UH, INTO OUR
SCHOOLS. ADDITIONALLY BECAUSE OF
THE INVESTMENTS THAT THIS
INSTITUTION HAS MADE TO OUR
SCHOOLS, I THINK THAT THERE ARE
GREAT RESOURCES TO HELP OUR
SCHOOLS ADDRESS ISSUES AROUND
LEARNING GAPS, UH, NOT THE LEAST
OF WHICH IS $4 BILLION IN
EXPANDED LEARNING THAT OUR
SCHOOL DISTRICTS HAVE, UM, THE
ALMOST $8 BILLION THAT WAS
FUNDED FOR THE LEARNING RECOVERY
BLOCK GRANT AND $4 BILLION FOR
COMMUNITY SCHOOLS AS WE'RE IN A
TIGHTER PERIOD, WE'RE ASKING
SCHOOL DISTRICTS TO FOCUS ON
THOSE DOLLARS AND HOW THEY
MAXIMIZE THE USE OF THOSE
DOLLARS TO NOT THINK OF THEM AS
INDIVIDUAL GRANTS, BUT INSTEAD
AS A FRAMEWORK THAT THEY CAN USE
TOGETHER TO SUPPORT STUDENT
ACHIEVEMENT, AND IN THAT WAY,
WE'D LIKE TO WORK WITH THIS
COMMITTEE AND THE STAFF AND THE
COMMITTEE AND STAFF AND THE
OTHER HOUSES TO CREATE A
STRONGER WAY OF MEASURING IMPACT
AND OUTCOMES FROM THESE GRANTS.
SIMPLE QUESTIONS WE WANT TO ASK.
DO YOU SEE AN IMPROVEMENT IN
TEST SCORES? DO YOU SEE A
DECREASE IN CHRONIC ABSENTEEISM?
DO YOU SEE AN INCREASE IN
GRADUATION RATES? HOW DID YOU
USE THESE FUNDS? AND DID THEY
HELP YOU TO GET TO THOSE PLACES?
AND SO WE THINK THAT, UH, THIS
IS THE IMPORTANT WORK FOR OUR
SCHOOL DISTRICTS TO DO THIS
YEAR. WE'RE IN COMMUNICATION
WITH MANY OF THEM AT THE SAME
TIME. WE THINK THAT IT IS
IMPORTANT FOR US TO PUT A HEAVY
EMPHASIS ON PROVIDING BUS,
PROFESSIONAL DEVELOPMENT AND
TRAINING. FOR THOSE WHO TEACH
MATH AND THOSE WHO TEACH OUR
KIDS TO READ AND YOU WILL SEE
THAT THIS YEAR WE HAVE A BILL
THAT FOCUSES ON HOW WE MAY BE
ABLE TO PROVIDE TRAINING FOR UP
TO 100 AND 60,000 MATH TEACHERS
AND UP TO 100 AND 60,000 STAFF
WHO TEACH OUR CHILDREN TO READ.
UH, WE KNOW THAT LEARNING TO
READ BY THIRD GRADE IS A
CRITICAL BENCHMARK. UM AND THOSE
WHO DON'T LEARN TO READ, UM BY
THIRD GRADE, OFTEN EXPERIENCE
DIFFICULTIES LATER IN LIFE, AND
SO WE'RE CONTINUING ON OUR
FOCUS. UM, IN THIS AREA. OUR
SCHOOLS HAVE ACCESS TO $50
MILLION FOR READING COACHES AND
SPECIALISTS THAT WE BELIEVE IS A
KEY INVESTMENT. UH, TO HELP OUR
STUDENTS. UH, OF COURSE, THERE'S
UNIVERSAL TRANSITIONAL
KINDERGARTEN AND UNIVERSAL MEALS
THAT ROUND OUT GREAT PROGRAMS
THAT WE THINK WILL HELP OUR
SCHOOLS, OF COURSE. AND
NATURALLY, NONE OF THIS WORKS IF
WE DON'T HAVE TEACHERS, UM, TO
BE IN THE CLASSROOM LAST YEAR,
WE SPONSORED A BILL THAT WAS
SIGNED INTO LAW THAT ALLOWS
RETIRED TEACHERS TO SPEND A
LITTLE BIT MORE TIME IN THE
CLASSROOM. UH, WITHOUT HAVING AN
IMPACT ON THEIR PENSIONS. UM
THANK YOU ALL FOR THE SUPPORT OF
THAT LEGISLATION. UM WE ALSO,
UH, SIGNED, UH, AUTHOR SPONSORED
LEGISLATION THAT INCREASES THE
STIPEND FOR THOSE WHO MIGHT
BECOME A TEACHER FROM $25,000 A
YEAR TO $40,000 A YEAR. AND AS
YOU ALL KNOW, WE'VE SECURED, UM,
MONEY ESSENTIALLY FOR A
SCHOLARSHIP FOR ANYONE WHO WANTS
TO BECOME A TEACHER OR A MENTAL
HEALTH CLINICIAN. UH, WE HAVE
$20,000. UH, FOR THOSE
CANDIDATES, AND WHILE THE
DEPARTMENT OF EDUCATION DOESN'T
LEAD RECRUITMENT, UM WE'VE
DEVELOPED A CAMPAIGN TO SUPPORT
SCHOOL DISTRICTS AND THEIR
RECRUITMENT EFFORTS AND TO MAKE
SURE THAT THE WORD GETS OUT
ABOUT THE IMPORTANT GRANTS AND
ANYONE WHO WANTS TO AVAIL
THEMSELVES TO THESE SCHOLARSHIPS
CAN REACH OUT TO US, UM, AT
TEACH IN èC A AT èC Dð E DOT
èC DOT GOV FINALLY, I WOULD
JUST MENTION THAT, UM WE'RE VERY
CONCERNED AND INTERESTED ABOUT
WHAT WE CAN DO TO SUPPORT OUR
STUDENTS IN THE SPACE OF CAREER
TECHNICAL EDUCATION. UM WE'VE
DONE SOME, UH, PRIVATE
FUNDRAISING TO SUPPORT PAID
INTERNSHIPS FOR STUDENTS TO
LEARN ABOUT STEAM CAREERS, AND
WE CAN REPORT MORE ON THAT. AND
I WOULD LIKE TO INVITE THE
MEMBERS OF THE COMMITTEE TO A
SUMMIT THAT WE'LL BE HAVING IN
APRIL ON THE SUBJECT OF
APPRENTICESHIP TRAINING PROGRAMS
. WE'RE INVITING THOSE WHO LEAD
APPRENTICESHIP TRAINING PROGRAMS
IN VARIOUS FIELDS, INCLUDING THE
CONSTRUCTION AND BUILDING TRADES
. UH, SECTOR. UH, FIREFIGHTERS.
EDUCATORS AND OTHERS WHO HAVE,
UM, UH, APPRENTICESHIP TRAINING
PROGRAMS, UH, WILL BE PUTTING ON
A TRAINING FOR ALL 1000 OF OUR
SCHOOL DISTRICTS TO MAKE SURE
THAT THEY'RE TALKING TO OUR
STUDENTS ABOUT THE OPPORTUNITIES
THAT EXIST IN, UH,
APPRENTICESHIP TRAINING PROGRAMS
AND WORKING. UM, IN THIS FIELD,
WE ARE A DEEP BELIEVERS IN
PROMOTING COLLEGE AND CAREER AND
WE WANNA MAKE SURE THAT OUR
STUDENTS KNOW ABOUT ALL
OPPORTUNITIES, INCLUDING, UH,
THE OPPORTUNITY TO WORK IN THE
CONSTRUCTION SECTOR OR UH, AS A
FIREFIGHTER OR IN ANOTHER SECTOR
, WHERE THERE'S AN
APPRENTICESHIP TRAINING PROGRAM
WHERE THEY CAN, UH, EARN A GREAT
LIVING AND HAVE A GREAT LIFE.
YOU'LL HEAR ABOUT SOME OTHER
LEGISLATION THAT WE HAVE THAT
THIS YEAR CALLS FOR ESTABLISHING
A COMPUTER SCIENCE GRADUATION
REQUIREMENT FOR OUR STUDENTS. UM
YOU'LL HEAR US TALKING ABOUT, UM
, A I AND HOW THAT CAN BE A TOOL
FOR PROMOTING WHAT HAPPENS IN
EDUCATION, AND SO DESPITE SOME
OF THE FINANCIAL CHALLENGES THAT
WE ARE WORKING THROUGH, UM, WE
BELIEVE THAT THERE ARE MANY WAYS
THAT WE CONTINUE TO ENGAGE
STUDENTS IN RIGOROUS EDUCATION
THAT PREPARES THEM FOR A BRIGHT
FUTURE HERE IN THE GREAT STATE
OF CALIFORNIA, UH, WITH THAT I
WILL CONCLUDE MY REMARKS AND
HAPPY TO ANSWER ANY QUESTIONS
FOR THE MEMBERS OF THE
COMMITTEE. THANK YOU.
SUPERINTENDENT APPRECIATE AGAIN.
YOU BEING HERE SHARING UH, YOUR.
YOUR UPDATE OF HOW THINGS ARE
GOING. I WANNA PARTICULARLY
THANK YOU FOR YOUR EFFORTS OVER
THE LAST YEAR ON THE INITIATIVES
THAT YOU'VE TAKEN THE LEAD ON
CERTAINLY ON THE LEGISLATION
THAT YOU SPONSORED FOCUS ON
TEACHER PIPELINE FOCUSED ON, UM
STUDENT SUCCESS AND ALSO ON
OPTIONS FOR STUDENTS, UH, IN
INTO THE FUTURE, WITH THE CAREER
TECHNICAL FOCUS THAT YOU HAD I
WANTED TO ALSO, UH, APPRECIATE.
THE WORK THAT YOU'RE DOING WITH
THE DISTRICTS, UH, TO ENSURE
THAT AS YOU SAID THAT THEY'RE
UTILIZING THE FUNDS THAT HAVE
BEEN ALLOCATED AND, UH, YOU USE
THE WORD AS A FRAMEWORK OF WHAT
CAN HAPPEN AND WHAT THEY'RE
DOING. AND UH, AND THAT YOU'RE
HEARING STORIES AND FEEDBACK ON,
UM WHAT THOSE PROGRAMS ARE DOING
IN TERMS OF MAKING A DIFFERENCE
FOR STUDENTS. I THINK ONE OF THE
THINGS WE'D APPRECIATE HEARING
FROM YOU, AS WE GO THROUGH THIS
PROCESS THIS YEAR IS HELPING US
IDENTIFY PARTICULARLY, UM
ANYTHING THAT THAT HAS
DEMONSTRABLE? UH UH UH UH,
RESEARCH OR OR DATA DATA SETS
THAT UNDERSCORE THE SIGNIFICANCE
OF SOME OF THOSE INVESTMENTS AS
WE OBVIOUSLY MAKE, UH, DECISIONS
ON WHICH INVESTMENTS ARE REALLY
CONTINUE TO BE PAYING DIVIDENDS
FOR US, AND THAT WE NEED TO
CONTINUE TO BE FOCUSED ON SO I
LOOK FORWARD TO HEARING FROM YOU
AND YOUR DEPARTMENT AND YOUR
TEAM ON ON SOME OF THOSE
EXAMPLES OF WHAT'S WHAT'S
WORKING WELL, SO THAT WE CAN BE
INFORMED. BETTER INFORMED TO
MAKE THOSE DECISIONS. SO AGAIN.
I THANK YOU. I'LL TURN IT OVER
TO MY COLLEAGUES. FROM MAI.
THANK YOU VERY MUCH. UH UH,
WELCOME BACK, MR SUPERINTENDENT.
UH, I ALWAYS GREAT TO SEE YOU,
UM BACK IN THE CAPITAL. AND UH,
I WANNA THANK YOU. ALSO FOR, UH
YOU KNOW, BEING OUR LEADER FOR
Kò 12 EDUCATION? UH, YOU REALLY?
UM, I WAS JOTTING DOWN. UM ALL
OF THE MAJOR, UH,
ACCOMPLISHMENTS THAT, UH, THAT
WE WORK TOGETHER HAVE BEEN ABLE
TO MAKE. UM YOU KNOW WHETHER
IT'S UH UH, THE COMMUNITY
SCHOOLS WHETHER IT'S FOCUSING ON
LEARNING RECOVERY, WHETHER IT'S
FOCUSING ON, UH, THE INVESTMENTS
IN, UH EXPANDED LEARNING
OPPORTUNITIES. UM WHETHER IT'S
PROPOSITION, 28 WHETHER èC Tð,
UM WE HAVE MADE A TREMENDOUS
STRIDES FORWARD IN RECENT YEARS,
AND SO I THINK, AS YOU STARTED
OFF TALKING ABOUT OUR OUR BIG
CHALLENGE THIS YEAR IS TO
PROTECT THAT PROGRESS AND
PROTECT THAT, UH, TH THOSE
INVESTMENTS. UM AND I VERY MUCH
LOOK FORWARD TO WORKING WITH YOU
TO DO THAT TO YOU. THANK YOU, MR
FANG. THANK YOU SO MUCH. UH, MR
CHAIRMAN AND THANK YOU, MR SUPER
PRETENDER FOR YOUR LEADERSHIP
AND EFFORTS REALLY APPRECIATE
ALL THE UPDATES AND THANK YOU
FOR YOUR LEADERSHIP AND EFFORTS
AROUND APPRENTICESHIP TRAINING
PROGRAMS AS WELL. UH LOOK
FORWARD TO THOSE, UH, ADDITIONAL
MAIN GOING FORWARD, AND THEN THE
WORK AROUND PAID INTERNSHIPS AND
TEAM CAREERS IS SO CRITICAL FOR
NEXT GENERATION LEADERS HERE AND
CALIFORNIA IN OUR STATE. AND
THANKS FOR THE UPDATES ON PROP
28 AND EVERYTHING YOU'RE DOING
AS WELL REALLY APPRECIATE YOUR
LEADERSHIP AND I LOOK FORWARD TO
FUTURE CONVERSATIONS. THANK YOU.
THANK YOU, MR CHAIR. THANK YOU.
YES I WOULD JUST SAY THAT THERE
ARE SOME BEST PRACTICES THAT WE
WILL BE HIGHLIGHTING WITH OUR
FOCUS ON PROFESSIONAL
DEVELOPMENT. ESPECIALLY AROUND
READING. UM WE WERE VERY FOCUSED
ON TRAINING THAT BUILDS ON WHAT
THIS LEGISLATURE HAS DONE TO
SUPPORT THE SIA SCREENING, FOR
EXAMPLE AND AAA DEEP FOCUS ON
THE SCIENCE OF READING, AND, UM,
THE PROFESSIONAL DEVELOPMENT
FUNDING THAT WE SEEK FOR
EDUCATORS REALLY CALLS FOR
LOOKING AT TRAININGS THAT ARE,
AS YOU SAY, BEST PRACTICE.
PROVEN TO HELP DRIVE STUDENT
ACHIEVEMENT. UM AND SO YOU'LL
HEAR US TALK ABOUT, UM, THE
SCIENCE OF READING. YOU'LL HEAR
US TALK ABOUT A BILL THAT WE'RE
WORKING ON RIGHT NOW, UM, THAT
WOULD PROVIDE PERSONAL FINANCE
TRAINING TO OUR STUDENTS SO THEY
CAN LEARN TO AVOID DEBT SO THEY
CAN LEARN HOW HOW MONEY WORKS SO
THEY CAN LEARN HOW TO ENGAGE, UM
IN THIS ECONOMY AND THAT THEY
HAVE, UH, OPPORTUNITIES. UM, TO
BE SUCCESSFUL GOING FORWARD. I
BELIEVE YOU WOULD JUST ONE THING
YOU KNOW, UH, IN ANTICIPATION OF
TODAY'S HEARING, WE REACHED OUT
ABOUT A DOZEN DISTRICTS ALL
ACROSS THE STATE, AND WE'VE
HEARD THE SAME THING FROM ALL OF
THEM. UH MANY OF THEM ARE IN
YOUR DISTRICT AREAS. THEY'RE ALL
GRATEFUL THAT THIS BUDGET
SHIELDS EDUCATION FROM THE KINDS
OF CUTS THAT NORMALLY COME WHEN
THERE'S A REVENUE SHORTFALL. UM
THEY HAVE SAID, IF THERE'S ANY
WAY WHEN REVENUE IS BETTER, OR
IF THERE ARE OPPORTUNITIES IN
THE FUTURE TO, UM TO ENLARGE THE
COLA, UM, THAT THEY WOULD
WELCOME HELP THERE, UM, AS THEY
TRY TO TACKLE HEALTH CARE COSTS
AND JUST COST OF ONGOING, UH,
IMPLEMENTATION AND MANAGING
PROGRAMS. UM THEY CONTINUE TO
FEEL SOME PAIN THERE, AND THEY
ASKED THAT I ARTICULATE THEIR
DESIRE TO SEE NÓ CUTS IN
EDUCATION AND IT AND IF AND WHEN
POSSIBLE, UM, AN INCREASE IN THE
COST OF LIVING ADJUSTMENT FOR
THEM. THANK YOU. UH, I WOULD SAY
THAT, UH, I. I VERY INTERESTED
IN YOUR PERSONAL FINANCE. UM UH,
PRIORITY THAT YOU HAVE AND WOULD
LOVE TO HEAR MORE ABOUT THAT,
UH, SUBSEQUENT CONVERSATION WITH
YOU AND BE SUPPORTIVE OF THOSE
EFFORTS. I THINK THAT'S REALLY
CRITICAL FOR FUTURE. UH, STUDENT
SUCCESS BEYOND THEIR ACADEMIC
CAREER. UM, I WOULD ALSO SAY
THAT I'VE ALSO MET WITH AT THIS
POINT, A GOOD DOZEN
SUPERINTENDENTS. UH ALL OF THE
ONES IN MY DISTRICT AND SOME
BEYOND THAT AND OUR HEARING.
WE'RE HEARING SOME FEEDBACK. UM
DEFINITELY APPRECIATE YOU
CONTINUING TO PROVIDE THAT
FEEDBACK CERTAINLY HEARD THE
SAME AROUND COLA. UM I'VE I'LL
ASK YOU WHAT WHAT I DO WHEN I
TALK TO OUR SUPERINTENDENTS IN
OUR DISTRICTS IS HELP US ALSO
IDENTIFY WHERE THERE NEEDS TO BE
MAYBE MORE FLEXIBILITY WITH WHAT
WE ARE DOING TODAY AND HOW CAN
WE ENSURE THAT THERE? IMPACTS
INTO IN THE CLASSROOM. AND ON
STUDENTS. UM IN A YEAR LIKE THIS
, WHERE THEY, UH IS CERTAINLY
PROBABLY GOING TO BE SOME, UM,
DIFFICULT DECISIONS ABOUT SOME
OF THE PROGRAMMING THAT WE HAVE.
SO I'D ASK YOU TO ALSO PROVIDE
THAT FEEDBACK FOR US BECAUSE
YOU'RE JUST A ONE A GREAT
COMMUNICATOR TO THEM, BUT ALSO,
UH ARE IN A POSITION OF
RECEIVING A REALLY IMPORTANT
INFORMATION FOR THE WORK THAT
THIS COMMITTEE DOES SO ONCE
AGAIN. THANK YOU VERY MUCH.
THANK YOU. WE'RE HAPPY TO WORK
WITH THE COMMITTEE ON ON. UH,
YOUR STATEMENT, MR CHAIRMAN AND
TO CONTINUE FACILITATE
COMMUNICATION BETWEEN DISTRICTS
AND THE MEMBERS OF THE
LEGISLATURE SO THAT WE'RE
WORKING TOGETHER. TO ADDRESS
THEIR NEEDS. I WOULD SUBMIT ALSO
THAT YOU HAVE ACCESS, PROBABLY
TO THE ENTIRE CALIFORNIA
DEPARTMENT OF EDUCATION TODAY
FOR YOUR HEARING. UM WE'RE ALL
INTERESTED IN WHAT YOU'RE DOING,
AND OUR TEAM IS AVAILABLE TO
ANSWER ANY QUESTIONS THROUGHOUT
THE DAY. YOU HAVE OUR OUR BUDGET
CHIEF, MR ME AND HERE AND
SEVERAL OF OUR DIVISION
DIRECTORS AND DEPUTIES WHO ARE
HERE AVAILABLE TO HELP
THROUGHOUT THE HEARING. RIGHT
THANK YOU VERY MUCH. THANK YOU.
THANKS AGAIN AND APPRECIATE YOU
COMING. UH WE'RE GONNA, UH, NOW
BEGIN WITH THE HEARING ON, UM,
ISSUES AS LISTED ON THE AGENDA,
BUT PRIOR TO THAT, I JUST WANTED
TO MAKE SOME PERSONAL COMMENTS.
I THINK, UH, I HAD THE
OPPORTUNITY LAST WEEK WITH OUR
FIRST HEARING IN THIS
SUBCOMITTEE ON HIGHER EDUCATION
TO SHARE SOME PERSONAL
EXPERIENCES OF MINE IN OUR
PUBLIC EDUCATION SYSTEM. UH AT
THE HIGHER ED LEVEL, I'D LIKE TO
TODAY START WITH SHARING SOME OF
MY PERSONAL EXPERIENCES, UH, IN
THE Kò TO 12, PARTICULARLY AS
THE FOCUS TODAY IS ON.
PROPOSITION 98 AND, UM, I JUST
WANTED TO REMIND OF THOSE WHO
WHO DON'T KNOW ABOUT MY JOURNEY.
MY EDUCATIONAL JOURNEY, UH, THAT
I AM A REALLY PROUD, UH, PRODUCT
OF OUR PUBLIC SCHOOL SYSTEM. I
AM THE YOUNGEST OF SIX. I WAS A
MONOLINGUAL SPANISH SPEAKER.
WHEN I FIRST STARTED, I COME
FROM A HOUSEHOLD OF TWO PARENTS
WHO ARE IMMIGRANTS TO THIS
COUNTRY WHO NEVER SPOKE, UH,
ENGLISH. UM VERY, VERY POOR WENT
TO, UH, ONE OF THE CERTAINLY
POOREST SCHOOLS IN IN, UH, IN
SAN DIEGO IN THE BARRIO LOGAN
COMMUNITY, UM HAD SOME AMAZING
EDUCATORS, UH, WAS INVOLVED IN
VARIETY OF PROGRAMS FOR MY Kò Kò
THROUGH 12 EXPERIENCE, INCLUDING
THINGS LIKE AVID PROGRAMS AND
GATE PROGRAMS AND BILINGUAL
PROGRAMS THAT I THINK FOR ME
REALLY WERE IMPORTANT TO LAYING
THE FOUNDATION FOR ME TO BE ABLE
TO BE SUCCESSFUL IN AND GRADUATE
FROM HIGH SCHOOL, WHICH I WAS
THE ONLY ONE IN MY FAMILY OUT OF
SIX. TO DO THAT, UM, AND GO ON
TO COLLEGE. I WOULD NOT HAVE HAD
THOSE OPPORTUNITIES IF IT
WEREN'T FOR OUR EDUCATION
SYSTEM. I NOW HAVE TWO CHILDREN
IN OUR PUBLIC EDUCATION SYSTEM,
ONE OUT OF MIDDLE SCHOOL AND ONE
IN ELEMENTARY SCHOOL DURING MY
TIME AFTER I HAVE WHEN I BEFORE
COMING HERE AND WHEN I WAS JUST,
UH A MEMBER OF THE PUBLIC. I
SERVED ON MY LOCAL P Tð. A UH,
IN VARIOUS ROLES AND CAPACITIES
SPENT A LOT OF TIME WORKING WITH
OUR SCHOOLS AND WITH OUR
ADMINISTRATORS ON A VERY LOCAL
VOLUNTEER BASIS, UH AND I'M JUST
A BIG BELIEVER THAT, UH, THE
OPPORTUNITIES THAT I'VE HAD IN
MY LIFE ONLY HAVE COME BECAUSE
THE RESULT OF THE INVESTMENT IN
HIGHER EDUCATION AND THE
INVESTMENTS THAT WERE MADE IN ME
AND, UM AND THIS THIS ROLE NOW
ALLOWS ME TO REALLY REFLECT ON
THAT, BUT ALSO UH, COME WITH
THAT LIVED EXPERIENCE TO THIS
CONVERSATION. UH I'M NOT AN
EDUCATOR. I'VE NEVER BEEN A
TEACHER, UM, HAVE ASPIRED TO BE
ONE AT ONE POINT, UH,
MATHEMATICS TEACHER, BUT, UH,
BUT HAVE NOT HAD THE HONOR TO DO
THAT, UH, BUT REALLY VALUE THE
WORK THAT ALL OF OUR EDUCATORS
DO OUR STAFF CLASSIFIED STAFF OR
TEACHERS OR ADMINISTRATORS. THE
FOLKS WHO SERVE ON BOARDS OF, UM
A SCHOOL DISTRICTS OR
SUPERINTENDENTS. UM IT IS GOING
TO BE A, UM MORE CHALLENGING
YEAR. WE HAVE TO ACKNOWLEDGE
THAT WE'RE GONNA HAVE SOME
CONVERSATIONS THAT ARE MORE
CHALLENGING THAN CERTAINLY ANY
TIME IN THE NEAR. UH UH, RECENT
MEMORY, AND, UH I JUST WANTED TO
ENSURE THAT EVERYBODY KNOWS THAT
, AT LEAST FOR MYSELF THAT, UH,
THE FOCUS ALWAYS WILL BE ON MORE
STUDENT ACCESS OPPORTUNITIES.
UH, IN OUR Kò 12 SYSTEM,
ENSURING THAT ESPECIALLY THOSE
WHO, UM, WHO HAVE CHALLENGES IN
IN THAT ARE SIMILAR TO MINE.
WHETHER YOU AN ENGLISH LEARNER.
WHETHER YOU'RE LOWER INCOME, UH,
WHETHER YOU WERE FROM A, UM HOME
, UH, FOSTER A CHILD, YOU KNOW,
THOSE ARE ALL? UM INDICATIVE OF
THE INVESTMENTS THAT WE NEED TO
MAKE IN ORDER TO ENSURE THAT
EVERY STUDENT HAS THE
OPPORTUNITIES THAT WE ALL
BELIEVE OUR EDUCATION SYSTEM HAS
. SO THAT WILL ALWAYS BE THE END
GOAL. ALONG THE WAY. WE WILL
HAVE SOME DIFFICULT
CONVERSATIONS ABOUT SOME AMAZING
INVESTMENTS THAT HAVE HAPPENED
OVER THE LAST SEVERAL YEARS. BUT
WE MAKE SURE THAT THOSE
INVESTMENTS ARE PAYING THE
DIVIDENDS THAT WE ALL EXPECT.
AND SO WE WILL BE TALKING A LOT
ABOUT, UH, WHAT HAS BEEN
DEMONSTRATED SUCCESS? WHAT ARE,
UH, SOME AREAS PERHAPS WHERE WE
NEED TO MAKE SURE THAT WE
IDENTIFY OF THE PROGRAMS ARE
BEING AS SUCCESSFUL AS WE LIKE
THEM TO BE. AND SO THOSE ARE THE
CONVERSATIONS THAT WE'LL BE
HAVING AGAIN ALWAYS FOCUSED ON
ENSURING THAT OUR SCHOOLS HAVE
WHAT THEY NEED TO BE SUCCESSFUL
IN MAKING SURE THAT OUR
STUDENTS, UM, AREN'T IMPACTED AS
A RESULT OF THIS DIFFICULT YEAR,
SO WANTED TO SHARE THAT AS A
PERSONAL STATEMENT AS WE BEGIN
THIS, AND, UH IF EITHER OF MY
COLLEAGUES LIKE TO SHARE
SOMETHING AT THIS MOMENT, I'D
OPEN IT UP OR COULD ALWAYS JUMP
IN ANY TIME. OK? MR MASS. THANK
YOU. I JUST WANTED TO, UH ADD
THAT, UH UM YOU KNOW, I. LIKE TO
SAY THAT I'VE LEARNED THE MOST
IMPORTANT BUDGET DECISIONS WHEN
I WAS ON MY LOCAL SCHOOL BOARD
DURING THE GREAT RECESSION, AND,
UH, YOU KNOW, UH, I, I RAN FOR
THE STATE LEGISLATURE TO FIGHT
FOR, UH, EDUCATION. UM FOR, UH,
STATE FUNDING FOR PUBLIC
EDUCATION, BECAUSE I YOU KNOW, I
AM ALSO A TRUE BELIEVER THAT
NOTHING CHANGES LIVES MORE THAN
PUBLIC EDUCATION. AND SO NOW
THAT, UM YOU KNOW, I I'VE HAD A
PRETTY GOOD RUN. UH, SINCE MY
FIRST ARRIVING THE L THAT YEAR
IN 2012 IN TERMS OF BUDGET YEARS
UH, THIS IS, UM, THE FIRST UH,
OTHER THAN YOU KNOW, THE, UH,
THE EXCEPTIONAL YEAR OF COVID,
UM UH, BUT BUT E EVEN THEN WE'RE
ABLE TO LARGELY PROTECT OUR
INVESTMENTS IN Kò 12 FUNDING. UH
AND SO I LOOK FORWARD TO, UH
WORKING WITH THIS COMMUNITY
WORKING WITH, UH UH, THE
LEGISLATURE, UH, TO FIGHT TO
PROTECT CLASSROOM FUNDING AND TO
FIGHT TO AVOID, UH, LAYOFFS, UH,
AT OUR SCHOOL DISTRICTS. THANK
YOU. THANK YOU. STRONG. THANK
YOU SO MUCH, MR CHAIRMAN, AND
THANK YOU. UM PRO PRODUCT OF
PUBLIC EDUCATION AS WELL. I WENT
TO SCHOOLS AND THE A UNIFIED
SCHOOL DISTRICT AND CASTLE
ELEMENTARY SCHOOL IN THE
COMMUNITY OF CHINATOWN. IT'S A
POWER AND PROMISE OF PUBLIC
EDUCATION THAT IS REALLY BROUGHT
ALL OF US HERE TODAY AND REALLY
APPRECIATE THE COMMENTS MADE
EARLIER BY OUR CHAIRMAN ABOUT
THE POWER AND PROMISE OF PUBLIC
EDUCATION AND PROVINCE OF HIGHER
EDUCATION. MY PARENTS MET AT A
COMMUNITY COLLEGE, UH, LOS
ANGELES CITY COLLEGE IN THE
SUMMER OF 66. I WOULDN'T BE HERE
TODAY. THEY HAD HAD A MET THERE
AND IT'S THEY'RE BOTH THE FIRST
IN THEIR FAMILIES AT 10. COLLEGE
HERE IN THE U S¼, AND THERE WAS
A COMMUNITY COLLEGE THAT BROUGHT
THEM TOGETHER. THAT'S A POWER
AND PROMISE OF HIGHER EDUCATION
OR PUBLIC. UH, Kò 12 EDUCATION.
THAT'S WHAT WE'RE ALL FIGHTING
FOR EACH AND EVERY DAY HERE IN
CALIFORNIA FOR STUDENTS FOR
BETTER CALIFORNIA TO, UH, REALLY
LEAD FROM THAT STANDPOINT, AND
AS WE HEARD FROM MY COLLEAGUES,
IT CAN BE A CHALLENGING BUDGET
BUDGET YEARS FIRST. WELL, I
APPRECIATE THE WORK AND EFFORTS
OF ALL THE TEAM. AND ALL OUR,
UH, CITY AND EVERYONE HERE AND
SO LOOK FORWARD TO THE
CONVERSATIONS WE'RE GONNA HAVE
GOING FORWARD. THANK YOU, MR
CHAIR. THANK YOU. SO AGAIN.
THANK YOU ALL FOR BEING HERE.
WE'RE GONNA GET STARTED WITH OUR
FIRST, UH, PANEL. UH, IF YOU
COULD PLEASE COME FORWARD. WE'RE
GONNA BE REVIEWING DURING THIS,
UH, CONVERSATION. THE
PROPOSITION 98 GUARANTEE.
OVERVIEW AND THE PROPOSALS THAT
ARE BEFORE US, UH BY THE
ADMINISTRATION. SO.
OK SO WE HAVE, UM DEPARTMENT OF
FINANCE. AND THE L, A Ó S¼
OFFICE AND ALSO THE DEPARTMENT
OF ED, UH, HERE FOR ANY OTHER
QUESTIONS THAT MIGHT ARISE, SO
WE'LL START WITH, UH FINANCE
PLACE. UH, THANK YOU, MR CHAIR
MEMBERS ALEX WITH THE DEPARTMENT
OF FINANCE. UH, SO I'M GOING TO
PROVIDE AN OVERVIEW OF THE PROP
98 GUARANTEE, UH, INCLUDING
PROPOSED RESERVE WITHDRAWALS AND
ACCOUNTING PROPOSAL RELATED TO
THE 2023 GUARANTEE. UM AND THEN
OTHER SOLUTIONS AND INVESTMENTS,
UH, IN THE GOVERNOR'S BUDGET FOR
Tð, Kò 212 AND, UH, COMMUNITY
COLLEGES. SO UH, THE GOVERNOR'S
BUDGET FORECASTS THAT THE, UH
PROP 98 AMOUNT FOR 2425 WILL BE
109.1 BILLION. UH, SO 800
MILLION MORE THAN FORECAST AT
THE 2020 THREE BUDGET ACT. UM
ALL BUDGET YEARS DO REMAIN IN
TEST ONE. IN THE THREE YEAR
BUDGET WINDOW. THE GOVERNOR'S
BUDGET SHOWS A DECLINE OF 11
BILLION COMPARED TO THE BUDGET
ACT WITH ABOUT 8 BILLION OF THAT
ATTRIBUTED TO 2220 THREE. THE
BUDGET ALSO PROPOSES STATUTORY
CHANGES TO ADDRESS THE ROUGHLY 8
BILLION DECREASE IN 2220 THREE
TO AVOID IMPACTING EXISTING
SCHOOL BUDGETS. UH, IN THE PAST
YEAR AND SUBSEQUENT YEARS. UH,
WE WILL PROVIDE MORE DETAILS ON
THIS PROPOSAL IN PANEL THREE.
UH, TO FULLY FUND THE LOCAL
CONTROL FUNDING FORMULA. L èC
FF, UH, AND THE STUDENT CENTERED
FUNDING FORMULA. S¼ EFF. THE
GOVERNOR'S BUDGET ALSO INCLUDES
WITHDRAWALS FROM THE RAINY DAY
FUND FOR SCHOOLS OF ROUGHLY 3
BILLION IN 20, THREE 24 AND 2.7
BILLION IN 2425, RESULTING IN A
REVISED ACCOUNT BALANCE OF MORE
THAN THREE 0.8 BILLION IN 2425.
AND THEN AGAIN FOR THIS ONE.
I'LL PROVIDE MORE DETAIL. UH, ON
THIS IN THE NEXT PANEL. UH, SO
DESPITE THE DROP IN THE PROP 98
GUARANTEE LEVEL, UH PER PUPIL
FUNDING IS AT ONE OF ITS HIGHEST
EVER ANNUAL AMOUNTS WITH ABOUT,
UH 17,600 PROP 98 PER STUDENT,
UM, AND OVER 23,500 PER STUDENT,
UH, WHEN ACCOUNTING FOR ALL
FUNDING SOURCES UH, SO TOUCHING
BRIEFLY ON ATTENDANCE. UH THE
PERCENTAGE CHANGE IN AVERAGE
DAILY ATTENDANCE FROM 20 THREE
24 2 2425 IS EXPECTED TO BE A
NEGATIVE 0.03% SO, INDICATING A
SLIGHT DECLINE. UH, A Dð A
CONTINUES TO BE A LOWER SHARE OF
ENROLLMENT THAN BEFORE.
COVID-19. UM, HOWEVER, A
REDUCTION IN COVID-19, UH,
RELATED ABSENCES IS ASSUMED,
STARTING WITH 2223 AND IS
ANTICIPATED, UH, TO CONTINUE.
UH, SO MOVING ON TO THE, UH, RE
BENCH. THE GUARANTEE WAS RE
BENCHED TO REFLECT THE CONTINUED
IMPLEMENTATION OF UNIVERSAL
TRANSITIONAL KINDERGARTEN AND
PROPOSITION 28. UM, SPECIFICALLY
, THE GUARANTEE WAS REVENGED IN
2425 TO INCLUDE AN INCREASE OF,
UH, 938 MILLION FOR PROP 28 AND
ABOUT 1.8 BILLION TO REFLECT
CONTINUED, UH, UNIVERSAL
TRANSITIONAL KINDERGARTEN
IMPLEMENTATION. THE UH, RE BENCH
GUARANTEE INCREASED AS A SHARE
OF GENERAL FUND REVENUES FROM
38.6% TO ABOUT 39.5% UH, SO THE
GOVERNOR'S BUDGET PROPOSES
SEVERAL BUDGETARY ACTIONS,
INCLUDING, UH, SOLUTIONS TO
AVOID NEGATIVELY IMPACTING
SCHOOL FUNDING. UH, DUE TO THE
REVISED GUARANTEE AMOUNTS. GIVEN
THE CURRENT FISCAL OUTLOOK,
THESE SOLUTIONS WERE CAREFULLY
CONSIDERED AND ARE INTENDED TO
MITIGATE DISRUPTION TO EDUCATION
PROGRAMS, UH, BASED ON AVAILABLE
RESOURCES. SO UH, ON THE Kò TO
12 SIDE. THIS INCLUDES AN
ONGOING REDUCTION OF 1.4 BILLION
FOR L èC FF, UH, TO REFLECT
DOWNWARD GROWTH ADJUSTMENTS DUE
TO DECLINE IN ENROLLMENT IN
PRIOR YEARS, AND, UH, THE 0.76%
COST OF LIVING ADJUSTMENT. UH,
AN ONGOING INCREASE OF ROUGHLY
796 MILLION FOR THE L èC FF TO
SUPPORT TRANSITIONAL
KINDERGARTEN EXPANSION IN ADULT
TO STUDENT RATIO REDUCTION. AN
ONGOING INCREASE OF 122.2
MILLION TO SUPPORT THE UNIVERSAL
SCHOOL MEALS PROGRAM. UH AND
THEN AN ONGOING INCREASE OF
ROUGHLY 65 MILLION TO FUND A
0.76% COST OF LIVING ADJUSTMENT.
UH, IN CASE LOAD ADJUSTMENTS FOR
VARIOUS CATEGORICAL PROGRAMS.
UH, FOR SOLUTIONS ON THE Kò 12
SIDE. THIS INCLUDES SAVINGS OF
445 POINT 7,000,001 TIME, UH,
PROP 98 GENERAL FUND FOR THE
CALIFORNIA STATE PRESCHOOL
PROGRAM. UH A RAINY DAY FUND
WITHDRAWAL OF APPROXIMATELY 5
BILLION, UM, AND A ROUGHLY $7
BILLION PAST YEAR ACCOUNTING
SOLUTION, UM, THAT WE WILL, YOU
KNOW, DISCUSS IN THE FOLLOWING
TWO PANELS. UH AND THEN, UH, RE
APPROPRIATION AND REVERSION
FUNDING TOTALING 36.6 MILLION TO
SUPPORT UH, ONGOING L èC FF
COSTS IN 2425. UH, SO ON THE
COMMUNITY COLLEGES SIDE UH, I
THINK MANY OF THE INVESTMENTS ON
YOU KNOW FOR COMMUNITY COLLEGES
WERE OUTLINED IN THE HIGHER
EDUCATION OVERVIEW HEARING. UM
SO I I'LL SKIP THOSE FOR NOW.
AND JUST, UH, TALK BRIEFLY ABOUT
THE SOLUTIONS, UM, SIMILAR TO Kò
TO 12. THESE INCLUDE A RAINY DAY
FUND WITHDRAWAL OF APPROXIMATELY
722 MILLION. UM, AND THEN
ROUGHLY 910 MILLION, UM, IN THE
PAST YEAR, ACCOUNTING SOLUTION.
UM, THAT AGAIN, UM, WILL DISCUSS
IN THE NEXT TWO PANELS. UM SO I
GUESS I'VE I'VE SAID A COUPLE OF
TIMES, YOU KNOW, WE'LL GO INTO
MORE DETAILS ABOUT THE RESERVE
WITHDRAWAL. UM YOU KNOW THE
ACCOUNTING MECHANISM, UH, IN THE
NEXT TWO PANELS? UH OTHERWISE,
UH, THIS CONCLUDES MY REMARKS
FOR THE PROP 98 OVERVIEW AND
THEN HAVING TO TAKE ANY
QUESTIONS AT THE APPROPRIATE
TIME. THANK YOU. THANK YOU.
CHAIR MEMBERS CAN KAN WITH THE
ANALYST'S OFFICE. WE HAVE A
HANDOUT THAT COVERS OUR KEY
POINTS. I THINK THE DEPARTMENT
OF FINANCE GAVE YOU A GOOD
OVERVIEW OF THE PROPOSITION I
GUARANTEE AND THE CHANGES AND
THE KEY INPUTS AND FACTORS FOR A
LITTLE BIT OF HISTORICAL
PERSPECTIVE. UH, THIS REDUCTION
THAT WE'RE TALKING ABOUT IN THE
PRIOR YEAR IS UNPRECEDENTED. THE
STATE HAS NEVER REALLY SEEN
CHANGES IN A YEAR. THAT'S
ALREADY OVER OF MORE THAN A
COUPLE. $100 MILLION, SO A $9.1
BILLION DROP IN 2220 THREE IS
REALLY NEW TERRITORY FOR THE
STATE. UH, THE GOVERNOR'S BUDGET
RECOGNIZES THAT SHORTFALL, BUT
WE THINK REVENUES ARE LIKELY TO
COME AN EVEN LOWER THAN
ANTICIPATED IN 20, THREE 24 AND
2425. IF YOU TURN TO PAGE THREE
OF OUR HANDOUT, UH, THE
GOVERNOR'S BUDGET HAD
ANTICIPATED A STRONG REBOUND IN
TAX COLLECTIONS THIS YEAR, BUT
WE AREN'T SEEING THOSE INCREASES
MATERIALIZE, UH, PERSONAL INCOME
TAX COLLECTIONS IN JANUARY, FOR
EXAMPLE, UH, CAME IN 5 BILLION,
OR 25% BELOW THE LEVEL IN THE
GOVERNOR'S BUDGET. TWO WEEKS
AGO, WE RELEASED OUR LATEST
REVENUE ESTIMATES, AND THEY ARE
15 POINT THREE BILLION BELOW THE
GOVERNOR'S BUDGET LEVEL IN 20,
THREE 24 AND 8.4 BILLION LOWER
IN 2425. UH OUR LOWER ESTIMATES
THAT WE THINK ARE CONSISTENT NOT
ONLY WITH THE RECENT TAX
COLLECTION DATA, BUT ALSO WITH
WEAKNESS AND SOME KEY INDICATORS
THAT ARE IMPORTANT FOR STATE
REVENUE, FOR EXAMPLE, THE STATE
IS SEEING LOWER LEVELS OF
PRIVATE INVESTMENT IN START UP
AND TECHNOLOGY COMPANIES AND
FEWER CALIFORNIA COMPANIES GOING
PUBLIC. AND THESE REVENUE
ESTIMATES ARE IMPORTANT. UM,
BECAUSE IN A SITUATION WHERE
PROPOSITION 98 IS CONTROLLED BY
THIS TEST ONE FORMULA THAT YOU
HEARD ABOUT, UH, THOSE REVENUE
ESTIMATES DIRECTLY AFFECT, UH,
THE PROPOSITION 98 FUNDING
LEVEL. TURNING TO PAGE FOUR OF
OUR HANDOUT. UH, WE ESTIMATE THE
PROPOSITION 98 GUARANTEE IS 5.2
BILLION LOWER THAN THE
GOVERNOR'S BUDGET LEVEL IN 2324
AND 2.5 BILLION LOWER IN 2425.
THOSE REDUCTIONS ACCOUNT FOR OUR
LOWER ESTIMATES OF GENERAL FUND
REVENUE, AS WELL AS A SMALL
OFFSETTING INCREASE IN LOCAL
PROPERTY TAX ESTIMATES. UH, THE
FIGURE AT THE BOTTOM OF THAT
PAGE SHOWS HOW THE GUARANTEE HAS
BEEN CHANGING. UH SO OVER THE
THREE YEARS THAT ARE RELEVANT TO
THIS BUDGET. UH, THE GOVERNOR'S
BUDGET REDUCES THE ESTIMATES OF
THE GUARANTEE BY 14 POINT THREE
BILLION COMPARED TO THE
ESTIMATES FOR EACH OF THOSE
YEARS FROM BACK IN JUNE, AND
UNDER OUR REVENUE ESTIMATES THE
GUARANTEE IS DOWN BY AN
ADDITIONAL 7.7 BILLION ON TOP OF
THAT REDUCTION IN THE GOVERNOR'S
BUDGET. LOWER REVENUE ESTIMATES
ALSO MEAN THE STATE OVERALL IS
FACING MUCH LARGER DEFICIT,
WHICH WE PAY AT 73 BILLION. UH,
SO WHAT WE HAVE HERE IS A
SERIOUS SHORTFALL AND WHAT YOU
WHAT YOU'LL HEAR FROM US, UH AND
THE REST OF THIS HEARING AND IN
THE HEARINGS TO COME IS THAT OF
THE STATE IS GOING TO NEED
SIGNIFICANTLY MORE REDUCTIONS
AND SOLUTIONS TO BALANCE THE
BUDGET BY A TIME IT PASSES THE
FINAL BUDGET AGREEMENT IN JUNE.
I'LL SAVE MY COMMENTS ON SOME OF
THE OTHER PROPOSALS FOR THE NEXT
ISSUE. THANK YOU. UH DO WE HAVE
ANY INITIAL QUESTIONS BY EITHER
MY COLLEAGUES? IF I CAN START AS
YOU MAY GATHER YOUR QUESTIONS,
SO JUST SORT OF TO SET THE
STAGE. FOR THE, UH, SPECIFICS ON
THE NEXT COUPLE OF PANELS. UM,
I'M LOOKING AT PAGE NUMBER FOUR
FOR REFERENCE IN THE LAO'S
REPORT THAT WAS PROVIDED TO US
THIS MORNING. UM, BUT IT'S ALSO
IN THE REPORT THAT WAS PUBLISHED
A COUPLE OF WEEKS AGO. I BELIEVE
AND AGAIN JUST TO SET THE
CONVERSATION. THE ESTIMATES IN
THE UH, REVENUE. UH, ARE
IDENTIFIED HERE IN 2220 THREE.
MAYBE I'LL ASK THIS TO CLARIFY
FROM BOTH FINANCE AND L Ó WE
ARE NOW IN AGREEMENT THAT AS WE
HAVE ALL THE INFORMATION THAT,
UH, THE FIGURE FOR UH PROPER 98.
THE APPROPRIATE FIGURE GIVEN THE
REVENUE IS 98 POINT THREE
BILLION DOLLARS. IS THAT CORRECT
FROM BOTH OF YOU? THAT'S CORRECT
. THERE COULD BE STILL SOME
FINAL CORRECTIONS AND DROPS AND
SOME SMALL CHANGES BY MAY, BUT
BY AND LARGE. THIS IS VERY CLOSE
TO A FINAL NUMBER. OK GOOD.
THANKS FOR SHARING THAT, UH, DO
YOU ANTICIPATE THE SAME MINOR IN
MAY POTENTIAL TRUE UPS AND
CHANGES. UM AS FAR AS ANY
CHANGES, UM TO 2220 THREE, UH,
MOVING FORWARD. YEAH, THOSE ANY.
YOU KNOW ANY, UM I GUESS THE
GOVERNOR'S BUDGET, YOU KNOW,
REFLECTS OUR LATEST FORECAST. SO
ANYTHING YOU KNOW WE WILL
CONTINUE TO, YOU KNOW, CONSIDER
REVENUE MOVING FORWARD TOWARDS
MAY, BUT I THINK IT'S PROBABLY
TOO EARLY FOR US TO COMMENT OR
SPECULATE ON THAT AT THIS POINT.
YES, BUT ME. WOULD YOU AGREE
WITH THE COMMENT FROM THE LAO'S
OFFICE THAT UH, IT WOULD BE
PROBABLY. SMALL NOT FAIRLY
SIGNIFICANT CHANGES FOR THE 2223
PROJECTED NUMBER. I'M TRYING TO
MAKE SURE WE OPERATE WITH THE
SAME FACTS HERE. UM IIII. I
THINK IT'S I THINK IT'S TOO
EARLY FOR US TO BE ABLE TO
NECESSARILY PROVIDE A COMMON,
YOU KNOW, AS FAR AS WHAT THE
NUMBERS LOOK LIKE AT THE MARY
VISION. OK, SO ARE YOU? GIVING
US A WARNING THAT PERHAPS THESE
NUMBERS MIGHT BE LOWER. UH, OR
HIGHER. WE WERE, YOU KNOW, WE'LL
WE'LL WE'LL HAVE AN OPPORTUNITY
TO UPDATE THAT, YOU KNOW, MOVING
FORWARD AT THIS POINT. I THINK
WE'RE STILL COLLECTING. UM YOU
KNOW, REVENUE DATA, UM, FOR
EVERYTHING, BUT I THINK TOO
EARLY FOR US TO COMMENT. OK? I
THINK MAYBE JUST TO ADD SOME
CONTEXT. ONE OF THE, UM,
CHALLENGES WITH REVENUE
FORECASTING IS THE STATE HAS, UH
AND A CRUEL PROCESS WHERE
SOMETIMES THE TAX PAYMENTS THAT
COME IN AT A PARTICULAR POINT OR
ATTRIBUTED BACK TO A DIFFERENT
FISCAL YEAR. AND SO THE
DEPARTMENT OF FINANCE IS REALLY
THE LEAD AGENCY THAT'S
RESPONSIBLE FOR MAKING THOSE
FINAL CALCULATIONS. UM, AND SO
THAT'S SOMETHING THEY'LL BE
DOING, UM, FOR 2220 THREE, UM,
THE LOCK IT DOWN IN MAY. SO I
THINK THEY DEPARTMENT OF FINANCE
IS JUST ACKNOWLEDGING THEY'LL
STILL NEED TO MAKE SOME OF THOSE
ADJUSTMENTS. UM BEFORE WE GET TO
THE FINAL BUDGET. BUT IN THE
PAST BASED ON HISTORICAL
EXPERIENCE, THOSE ARE TYPICALLY,
UH FAIRLY MINOR MINOR CHANGES,
OK? UM, JUST WANTED. LET YOU
KNOW WE'LL PROBABLY, UH, FOLLOW
UP WITH A QUESTION ON WHETHER
YOU AGREE WITH THE ASSESSMENT
THAT IN THE PAST, AT LEAST SO
THAT WE CAN GET A SENSE. THESE
HAVE BEEN MINOR IN NATURE. UM OR
IF WE SHOULD PERHAPS EXPECT
SOMETHING DIFFERENT. UM BECAUSE
THEN AS WE MOVE ON TO 20 THREE,
24 AGAIN, REFERENCING THE SAME
UH, CHART HERE. UH THIS IS WHERE
THE DIFFERENCES START TO REALLY
BE MUCH LARGER. UH, GOVERNOR'S
BUDGET IN JANUARY IS PROJECTING
100 AND 5 BILLION UH, WHICH IS
FOR CURRENT YEAR, WHICH ARE
ADOPTED BUDGET WAS 100 AND
EIGHT. SO THAT'S ALREADY $3
BILLION SHORT FROM THE
GOVERNOR'S PROPOSAL. BUT NOW THE
L Ó, UM, ESTIMATE IS 100
BILLION, WHICH IS NOW UM, ABOUT
$8 BILLION LOWER THAN WAS
BUDGETED. SO UM IS THAT
FACTUALLY WHAT I JUST STATED
FROM BOTH AND GET AN ANSWER FROM
BOTH OF YOU ON THAT. I THINK YOU
HAVE CORRECTLY SUMMARIZED BOTH
OF OUR ESTIMATES OF THE
GUARANTEE, GIVEN OUR CURRENT
BEST ESTIMATES OF REVENUES AND
THE OTHER FACTORS. I'M NOT
ASKING THAT YOU AGREE WITH EACH
OTHER, BECAUSE CLEARLY THERE'S A
DIFFERENCE OF OPINION ON THAT.
BUT IT MIGHT ACCURATELY
REFLECTING WHAT, UM, THE
GOVERNOR'S BUDGET PROPOSES. UH,
YEAH. THE GOVERNOR'S BUDGET FOR
2324 REFLECTS OUR LATEST
FORECAST OF THE GUARANTEE FOR
THAT YEAR. AND JUST TO MAKE IT
EASY, AND YOU'RE GONNA LIKELY
RESPOND THAT FOR 2425. ALSO IT'S
BASED ON THE LATEST FORECAST,
WHICH IS THE JANUARY NUMBERS
FROM THE FINANCE OK? AND THAT,
UM YOU. JUST TO CLARIFY AGAIN
FOR EVERYBODY. DEPARTMENT OF
FINANCE. UH AND THE
ADMINISTRATION WILL NOT. HAVE
ANY UPDATED NUMBERS WHATSOEVER
UNTIL THE MAY REVISION FOR
PROJECTIONS. UH CORRECT. THAT
WILL BE THAT WILL BE OUR NEXT
OPPORTUNITY TO UPDATE OUR
REVENUES AND PROJECTIONS AND,
UH, FROM THE L A Ó S¼
PERSPECTIVE. ARE YOU GONNA
CONTINUE TO FOLLOW THE TRENDS
AND IDENTIFY WHAT'S HAPPENING
FOR US, AT LEAST IN THE
LEGISLATURE TO BE HAVE A BETTER
SENSE OF AT LEAST TRENDS OF
WHAT'S HAPPENING IN A MORE
REGULAR BASIS BEFORE MAY OR ARE
YOU GONNA WAIT UNTIL MAY TO
PROVIDE US WITH MORE
INFORMATION? YES SO WE WILL
CONTINUE TO MONITOR MONITOR THE
TRENDS IF THERE IS SOME KIND OF
DRAMATIC TURNAROUND IN REVENUES,
YOU'LL BE THE FIRST TO KNOW. UM
WE'VE BEEN WATCHING THE FEBRUARY
COLLECTIONS. EXAMPLE THE FINAL
NUMBERS YET, BUT WE HAVEN'T SEEN
ANYTHING IN THAT DATA. SO FAR.
THAT'S MADE US CHANGE OUR
ASSESSMENT FROM WHAT WE HAVE. I
LIKE THE DEPARTMENT OF FINANCE,
UH, WILL ALSO HAVE UPDATED
REVENUE ESTIMATES. UM THE NEXT
ONE OF THE NEXT MAJOR MILESTONES
WILL BE TO SEE HOW THINGS COME
IN IN APRIL. THAT'S REALLY THE
NEXT BIG REVENUE MONTH. AND SO
WE'LL, UH, WE AND THE DEPARTMENT
OF FINANCE BOTH HAVEN'T UPDATED
ESTIMATE. UH, BASED ON HOW THOSE
PAYMENTS COME IN. WELL, YOU
DELIVER US GOOD NEWS TO BE THE
MOST LIKED INDIVIDUAL IN
CALIFORNIA BECAUSE WE LIKE TO
HEAR SOME GOOD NEWS AT SOME
POINT. UM, I THINK I JUST WANTED
TO STATE THAT BECAUSE THERE'S
ONE. THERE'S DIFFERENCES IN
OPINION OF WHERE WE'RE AT, UM I
BELIEVE FROM THE LEGISLATIVE
PERSPECTIVE, THE LEGISLATIVE
ANALYST IS PROVIDING US MORE, UM
IMMEDIATE AND ON THE GROUND
REALITIES OF WHERE THINGS ARE
TRENDING. AND I THINK, UH, WE
NEED TO OPERATE UNDERSTANDING
THAT WHAT THOSE TRENDS ARE TO
MAKE DECISIONS SOONER RATHER
THAN LATER TO AVOID MORE
DIFFICULT DECISIONS FOR OUR
SCHOOLS, AND SO, UM, I JUST
WANTED TO STATE THAT WE'LL GET
MORE INTO THAT IN A SECOND. AS
IT RELATES TO TIER ONE TEST ONE
TEST TWO AND THREE ON PROP 98
YOU BOTH AGAIN TRYING TO SET
SOME SORT OF GROUNDWORK HERE FOR
THIS CONVERSATION. YOU BOTH
AGREE THAT WE CURRENTLY THAT
THAT THE 2022 23 BUDGET. UM,
STILL IS UM. UNDER TEST ONE AS
OUR 2324 AND 25 ARE BUDGET YEAR
AS WELL, ALL THREE YEARS THAT
ARE BEING DISCUSSED HERE ARE
UNDER TEST ONE. YOU WANT TO GO
FIRST? CORRECT? YES. AND YOU
AGREE WITH THAT? YEAH SO LOOKING
AT THE CHART, UM, LIKE THE ONE
AT THE BOTTOM OF THE PAGE FOUR
WITH OUR ESTIMATES, OR THAT
TABLE? YEAH BOTH OF THOSE
CALCULATIONS ARE REFLECT TEST
ONE BEING OPERATIVE. IN THE
CALCULATION OF THOSE NUMBERS.
WHAT WOULD, UH WHAT WOULD CHANGE
THE TEST SCENARIO? WHAT? WHAT
REVENUE I. I GUESS AT THIS POINT
BE A REVENUE DECLINE. UH, WHAT
IS THE AMOUNT OF A REVENUE
DECLINE FOR? UM LET'S JUST TALK
ABOUT 20 THREE 24 BECAUSE I
THINK I CAN OPERATE UNDER THE
ASSUMPTION THAT 2223 WILL BE
VERY SIMILAR. BUT FOR 2324 UH
AND. IF WE SAW REVENUE AT WHAT
NUMBER WOULD WE BE TALKING ABOUT
A DIFFERENT TEST? UM, HAVE YOU
CALCULATED THAT AT DEPARTMENT OF
FINANCE UM, SO FOR 2324 I. I
DON'T KNOW THAT WE HAVE A
SPECIFIC NUMBER. UM HOWEVER, UH,
UNDER OUR MODEL, I THINK IT'S
HIGHLY UNLIKELY. UM THAT, UM,
TEST ONE WOULD FLIP TO TEST TWO
OR TEST THREE IN 20 THREE 24.
UM, I THINK YOU KNOW. WE PUT
SOME NUMBERS INTO THE MODEL,
EVEN SOMETHING LIKE A $25
BILLION DECLINE. UM WOULDN'T YOU
KNOW WOULD NOT FLIP THE TEST.
UM, SO AGAIN, I THINK UH, AS OF
RIGHT NOW, UH, WE SEE THAT AS
HIGHLY UNLIKELY IN 2324. THANK
YOU GAVE ME A BALLPARK FIGURE
WHICH I ACKNOWLEDGE AS A
BALLPARK FIGURE. 25 MILLION IS
THAT JUST TO CLARIFY, THOUGH, IS
THAT BELOW WHAT WE BUDGETED
BEFORE VÀ WHERE YOU ARE, UH,
ANTICIPATING IT NOW, LIKE WHAT
IS THE $25 BILLION CHANGE IN
REVENUE, WHICH REVENUE THAT THAT
WOULD BE A, UH, BASED ON
GOVERNOR'S BUDGET. UM RIGHT.
WHAT WE PROJECTED THE MINIMUM
GUARANTEE BEING FOR 20 THREE 24.
THAT WOULD BE A $25 BILLION
DECLINE IN CELL GENERAL FUND
REVENUES. OK? LEO. YEAH, SO I
SOME OF THIS IS, UH IT'S HARD TO
GIVE A SIMPLE ANSWER TO THAT
BECAUSE IT DEPENDS ON BOTH ALL
OF THE INPUTS GENERAL FUND
REVENUE ATTENDANCE, PROPERTY TAX
REVENUE AS WELL AS HOW YOU DEAL
WITH THE SITUATION IN 2220 THREE
WHERE THE FUNDING YOU APPROVE,
BUT THIS FUNDING THE STATE
APPROVED IN JUNE IS HIGHER THAN
THAN YOU ESTIMATE OF THE
GUARANTEE. UM, BUT I THINK WE
WOULD. I CONCUR WITH WHAT THE
DEPARTMENT OF FINANCE SAID THAT,
UM IN 20 THREE. 24 SEEMS VERY
UNLIKELY THAT THE STATE WOULD
SWITCH TESTS REGARDLESS OF
WHAT'S HAPPENING WITH GENERAL
FUND REVENUE AGAIN. THAT'S
ASSUMING YOU'RE DOING, UH, YOU
SORT OF ADDRESSING THE THAT 8
BILLION ISSUE IN 2220 THREE
EITHER WITH THE FUNDING MANEUVER
OR WITH OUR ALTERNATIVE OF USING
RESERVES THAT YOU, UM IT'S MORE
OF A POSSIBILITY THAT IT COULD
CHANGE IN 2425 THE STATES
ACTUALLY FAIRLY CLOSE TO THAT
THRESHOLD. YOU COULD SEE A
DIFFERENT TEST BECOME OPERATIVE
THAT YEAR. UM IT'S MORE LIKELY
THAT YOU WOULD SEE A DIFFERENT
TEST BECOME OPERATIVE NOT SO
MUCH BASED ON KIND OF THE
SPECIFIC REVENUE ESTIMATES. BUT
IF YOU SORT OF DIDN'T CHANGE
ANYTHING IN 2220 THREE, UM FOR
EXAMPLE, IN OUR DECEMBER OUTLOOK
, UM WE HAD MODELED THAT
SCENARIO. AND UH, A DIFFERENT
TEST BECAME OPERATIVE IN 20,
THREE 24 AND 2425. BUT AGAIN,
THAT'S UNDER A DIFFERENT SET OF
ECONOMIC ASSUMPTIONS AND A
DIFFERENT SET OF ASSUMPTIONS
ABOUT HOW YOU DEAL WITH THE DROP
IN 2220 THREE. OK, WE'LL GET
INTO THAT. UM, THOSE ARE IT FOR
ME ON THIS PANEL. MR MARS. THANK
YOU. UM. MR. UH, KAN. YOUR
HANDOUT. UM. FIRST TALKS ABOUT.
THE UNPRECEDENTED REDUCTION IN
THE 2022 2023 GUARANTEE. UH,
WHERE YOU TALK ABOUT, UH,
REVENUES FOR 2220 THREE CAME IN
NEARLY $26 BILLION BELOW, UH,
THE JUNE 2023 ESTIMATES. UM AND
THAT, UH, PREVIOUS DROPS TO THE
GUARANTEE IN A PRIORY HAVE BEEN
ONLY A COUPLE OF $100 MILLION
AND SO GONE FROM A COUPLE $100
MILLION TO $26 BILLION SEEMS
KIND OF JUMPS OUT. TO ME. IT IS
IT IS THAT YOU KNOW? PRIMARILY.
ATTRIBUTABLE TO THE DELAY IN TAX
PAYMENT DEADLINES. YES AND JUST
TO CLARIFY SO THE WE'VE SEEN
DROPS IN THE PRIOR YEAR IN
REVENUE OF A COUPLE OF A FEW
BILLION DOLLARS. THE
CORRESPONDING DROPS IN THE
GUARANTEE HAVE BEEN IN THE RANGE
OF A FEW 100 MILLION. UH, BUT,
YES, THIS IS REALLY A STORY
ABOUT, UM, THE DELAY IN THE TAX
PAYMENT DEADLINES BECAUSE
ORDINARILY WE WATCH TAX PAYMENTS
COMING INTO THE STATE TREASURY
AND WE ARE CONSTANTLY ADJUSTING
AND RECALIBRATING OUR ESTIMATES
BASED ON WHETHER THOSE ARE
TRACKING AHEAD OR BEHIND OF
WHERE WE THINK THERE'LL BE. UH,
WE DIDN'T HAVE THAT INFORMATION.
UM WHEN THE BUDGET WAS PASSED,
UH, BACK IN JUNE, UM AND SO WE
WERE AT THAT POINT, THE STATE
WASN'T AWARE OF HOW WEEK. THE
PICTURE REALLY WAS WITH REVENUE.
UH I THINK WHAT WE KIND OF
CONCLUDED FROM THAT EXPERIENCE
IS THAT WE ALWAYS KNEW THE STATE
BUDGET AND STATE REVENUES WERE
PRETTY SENSITIVE TO FEDERAL
DECISIONS ABOUT INTEREST RATES
AND MONETARY POLICY. BUT UNTIL
THOSE PAYMENTS CAME IN, WE
DIDN'T REALLY WE DON'T
UNDERSTAND EXACTLY HOW SENSITIVE
THEY WERE, AND SO THAT SOMETHING
WILL OBVIOUSLY TAKE INTO ACCOUNT
MOVING FORWARD. UM BUT AGAIN, AS
YOU SAID, BECAUSE WE DIDN'T HAVE
THAT DATA AT THE TIME THE BUDGET
WAS PASSED, UH, WASN'T SOMETHING
THE STATE COULD ACCOUNT FOR IN
ITS REVENUE ESTIMATES. ALL
RIGHT. THANK YOU. UM. I. I
WANTED TO GO INTO THE RE BENCH
SPLIT. I DON'T KNOW IF IT'S
APPROPRIATE FOR THIS. UH, OK. UM
SO. ACCORDING TO THE DEPARTMENT
OF FINANCE THE GOVERNOR'S BUDGET
JANUARY BUDGET PROPOSAL IS TO
MAINTAIN THE, UH THE PROPOSITION
98 SPLIT BETWEEN Kò 12 AND
COMMUNITY COLLEGES AT ROUGHLY
89% FOR Kò, 12 AND AROUND 11%
FOR COMMUNITY COLLEGES. UM. HOW
IS HOW DOES THIS MAKE SENSE? UH,
WHEN UM THE WE'RE WE'RE LOOKING
AT TWO. PRIMARY UH, CHANGES IN
THE, UH, PROPOSITION 9098
REVENGE. UM ONE BEING DRIVEN BY.
TRANSITIONAL KINDERGARTEN
ENROLLMENT GROWTH, YOU KNOW IT
LIKE FOCUSING ON TRANSITIONAL
KINDERGARTEN ENROLLMENT GROWTH.
WHY IS IT FUNDING THAT IS BEING
GENERATED BY THE Tð Kò THROUGH
12 GOING TO BE SPLIT WITH? I
MEAN, IT'S IT. IT'S ESSENTIALLY
THE COMMUNITY COLLEGE ARE ARE
GOING TO BE BENEFITING FROM THE,
UH, ENROLLMENT GENERATED BY TK
UH, I. I GUESS THAT WOULD BE A
QUESTION FOR FINANCE. UM SURE.
SO FOR, UH, UNIVERSAL
TRANSITIONAL KINDERGARTEN. UM I
THINK THE STATES APPROACH TO
THIS SPLIT IS CONSISTENT WITH
PRIORY MENTIONS. UM THAT
INCLUDES, UH I THINK IT WAS
ROUGHLY 1.2 BILLION. UM IN 2011
2012 TO REMOVE CHILDCARE
PROGRAMS FROM THE GUARANTEE. UM
AS FAR AS PROP 28 GOES, THIS
ACTUALLY IS NOT SUBJECT TO THE
SPLIT. UM THIS THIS WOULD BE
TAKEN OFF THE TOP BEFORE
COMPUTING THAT, UM, I THINK TO,
YOU KNOW, REMAIN CONSISTENT WITH
THE OF THE VOTERS FOR THIS TO GO
, YOU KNOW, FOR DIRECT PROGRAM
COSTS FOR THAT PROGRAM. SO IN
OTHER WORDS, NEW. UM. ENROLLMENT
FUNDING IS GOING TO GO TO THE.
Tð Kò THROUGH 12. IT'S NOT GONNA
GO TO THE COMMUNITY COLLEGES.
UH, FOR PROPOSITION, 28. RIGHT?
WHAT ABOUT FOR TRANSITIONAL
KINDERGARTEN? UH, FOR
TRANSITIONAL KINDERGARTEN, UM,
THAT WE'RE STILL MAINTAINING THE
SPLIT, UM, CONSISTENT WITH, UM
PRIOR YEAR RE MENTIONS, AND WHY
DOES IT MAKE SENSE THAT WHY? WHY
SHOULDN'T IF Tð Kò IS DRIVING
THE, UH, ENROLLMENT GROWTH AND
THE ENROLLMENT INCREASE IN
ENROLLMENT FUNDING? WHY SHOULD
THE COMMUNITY COLLEGES GET THAT
MONEY? WHY WHY SHOULDN'T IT GO
TO THE Tð Kò, UH, SCHOOLS THAT
ARE INCURRING THE COSTS OF, UH
OF THE INCREASED ENROLLMENT. UH
II. I THINK AS FAR AS THAT GOES
I, I WOULD JUST REITERATE THAT
WE'RE THE YOU KNOW, THE
ADMINISTRATION IS TRYING TO
REMAIN CONSISTENT WITH. UM YOU
KNOW HOW SORT OF VARIOUS REBUS
HAVE BEEN, YOU KNOW, HAVE, UH,
HAPPENED IN THE PAST, OK? I
MEAN, I IT IT IT DOESN'T MAKE
SENSE TO ME, I. I WOULD URGE THE
DEPARTMENT OF FINANCE TO, UH,
CONSIDER THAT THAT IF Tð Kò IS
GOING TO DRIVE. UH, THE
ENROLLMENT UH, WHERE EXPECTING
MANY LARGE, UM. LIE TO
ACCELERATE THEIR NEW Tð Kò
ENROLLMENT, INCLUDING LOS
ANGELES, LONG BEACH, SAN DIEGO
AND FRESNO. OUR BIGGEST SCHOOL
DISTRICTS IN THE STATE. THEY'RE
GONNA BE INCURRING. UH, YOU KNOW
THE NEW COST OF, UM, YOU KNOW,
RAMPING UP THE Tð CAN ROLL. UH
AND II, I THINK THE FUNDING
SHOULD GO TO WHERE THE COSTS ARE
BEING INCURRED. UM AND, UH,
NAMELY THE ART Kò THROUGH 12 LS
IF THEY GENERATING THE
ENROLLMENT SIMILAR TO UH WHAT?
WHAT YOU'RE PROPOSING WITH A
PROPOSITION, 928. AND SO, I. I
JUST WANT TO CLARIFY I. I THINK
I HEARD YOU SAY THAT, UH THAT
YOU'RE TREATING THE PROPOSITION
$28 DIFFERENTLY A YEAR. YOU'RE
GOING TO, UH YOU'RE YOU'RE NOT
GOING TO SPLIT THE PROPOSITION,
28. UM. ARTS FUNDING GROWTH, UH,
WITH THE COMMUNITY COLLEGES.
CORRECT YEAH, THAT THAT AMOUNT
WOULD BE TAKEN OFF THE TOP
BEFORE COMPUTING. THE SPLIT
THERE IT IS. ALL RIGHT. THANK
YOU VERY MUCH. COURSE. THANK
YOU. ALL RIGHT. WE WERE, UH,
THANK YOU ALL WE WERE GONNA MOVE
ON AND DIVE A LITTLE BIT DEEPER
AT THE NEXT PANEL ON PUBLIC
SCHOOL SYSTEM, STABILIZATION
ACCOUNT OVERVIEW AND PROPOSALS.
WE HAVE THE SAME PANELISTS, AND
SO WE'LL START WITH DEPARTMENT
OF FINANCE. ALEX HOPE DEPARTMENT
OF FINANCE. UM SO I WILL COVER
THE, UH, PROPOSAL AND THE
GOVERNOR'S BUDGET RELATED TO THE
PUBLIC SCHOOL SYSTEM
STABILIZATION ACCOUNT. UH, THE
STATE'S PROPOSITION 98 RAINY DAY
FUND FOR SCHOOLS. UM SO DEPOSITS
INTO THE RAINY DAY FUND ARE
REQUIRED WHEN CAPITAL GAINS
REVENUES ARE EQUAL TO 8% OR MORE
OF GENERAL FUND REVENUE. UM THE
2020 THREE BUDGET, UH, BUDGET
ACT PROJECTED A TOTAL BALANCE OF
10.8 BILLION IN THE RAINY DAY
FUND. UM, THE GOVERNOR'S BUDGET
REFLECTS A REVISED DEPOSITS
RIGHT, BASED ON UPDATED, UM
LOWER CAPITAL GAINS REVENUES. UM
SO REVISED DEPOSITS INTO THE, UH
, RAINY DAY FUND OF 339 MILLION
IN 2220, THREE, UH AND 288
MILLION IN 2324. ADDITIONALLY UH
THE GOVERNOR'S BUDGET, UH
INCLUDES A MANDATORY DEPOSIT OF
751 MILLION INTO THE RAINY DAY
FUND IN 2425. UM, SO THE
GOVERNOR'S BUDGET ALSO INCLUDES
DISCRETIONARY WITHDRAWALS FROM
THE RAINY DAY FUND OF ROUGHLY
THREE BILLION IN 2324. UH, AND
2.7 BILLION IN 2425, WHICH WOULD
RESULT IN A BALANCE OF OVER 3.8
BILLION IN 2425. UM SO THESE
DISCRETIONARY WITHDRAWALS WOULD
BE USED TO FUND LOCAL CONTROL
FUNDING FORMULA AND STUDENT
CENTERED FUNDING FORMULA. UH,
COSTS IN THE FISCAL YEARS IN
WHICH, UH, THEY ARE MADE AND
FINALLY THE, UH, REVISED RESERVE
BALANCE OF 5.7 BILLION IN 2324
CONTINUES TO TRIGGER SCHOOL
DISTRICT RESERVE CAP
REQUIREMENTS IN 2425. SO THESE
REQUIREMENTS LIMIT THE AMOUNT OF
FUNDS THAT DISTRICTS MAY
MAINTAIN, UM AS A DISCRETIONARY
RESERVES FROM ONE YEAR TO THE
NEXT. UH, WE DO NOT, HOWEVER,
ANTICIPATE THIS RESTRICTION,
CREATING A SIGNIFICANT HARDSHIP
FOR MOST DISTRICTS. UM. AND
FINALLY JUST TO CONCLUDE THE
ADMINISTRATION DOES NOTE THAT
THE PROPOSED DISCRETIONARY
WITHDRAWALS WOULD REQUIRE THE
DECLARATION OF A FISCAL
EMERGENCY BY THE GOVERNOR THAT
CONCLUDES MY REMARKS AND HAVING
TO TAKE QUESTIONS AT THE
APPROPRIATE TIME. THANK YOU. GO
AHEAD. AGAIN KENAN WITH THE
ANALYST'S OFFICE. WE SHARE THE
ADMINISTRATION'S ASSESSMENT THAT
THIS YEAR IS AN APPROPRIATE TIME
TO MAKE A WITHDRAWAL FROM THE
PROPOSITION. 98 RESERVE. AS YOU
HEARD, THOSE WITHDRAWALS ARE
CONTINGENT UPON, UH AGREEMENT
BETWEEN THE GOVERNOR AND THE
LEGISLATURE. THE DECLARATION OF
BUDGET EMERGENCY, FOLLOWED BY
THE LEGISLATURE, PASSING A
STATUTE AUTHORIZING THE
WITHDRAWAL, AND WE THINK IT'S A
POSITIVE, UH, STEP THAT, UH,
GOVERNOR IS INDICATING HE'S HE'S
OPEN TO MAKING THAT DECLARATION.
UH, WE DO HAVE SOME CONCERNS
ABOUT THE WAY THE WITHDRAWAL
WOULD BE USED. WE SEE THE CORE
PURPOSE OF THE RESERVE,
STABILIZING EXISTING PROGRAMS
AND MAINTAINING SPENDING AT
EXISTING LEVELS AND THE
GOVERNOR'S BUDGET EFFECTIVELY
USES THE RESERVE WITHDRAWAL TO
FREE UP 1.4 BILLION UH, FOR NEW
SPENDING, AND WE'RE CONCERNED
THAT THAT APPROACH SETS UP
LARGER SHORTFALLS NEXT YEAR AND
LEAVES LESS IN THE RESERVE TO
MAINTAIN EXISTING PROGRAMS. WE
REALLY THINK THE MOST COMPELLING
USE OF A RESERVE IS TO ADDRESS A
LARGE, UNEXPECTED SHORTFALL THAT
WOULD BE VERY DISRUPTIVE TO
ADDRESS IN ANY OTHER WAY, AND
THIS IS THE VERY SITUATION THE
STATE IS FACING, WITH THE DROP
IN THE GUARANTEE IN 2223, WE'D
RECOMMEND PUTTING THE RESERVE
WITHDRAWAL TOWARD THAT YEAR
INSTEAD OF USING IT TO SUPPORT
PROGRAMS IN 2324 AND 2425, AND
THAT'S OUR MAIN ALTERNATIVE TO
THE, UH èC SHIFT PROPOSAL
YOU'LL HEAR ABOUT IN THE NEXT
ISSUE. UM OUR APPROACH
ADMITTEDLY DOES MEAN THE STATE
WOULD NEED MORE SOLUTIONS IN
2324, BUT YOU HAVE MORE OPTIONS
FOR ADDRESSING THE SHORTFALL
THAT YEAR THAN YOU HAVE IN 2220
THREE. ONE FINAL NOTE HERE, UH,
THE GOVERNOR'S BUDGET MAKES A
DISCRETIONARY WITHDRAWAL OF 5.7
BILLION LEAVES 3.9 BILLION IN
THE RESERVE. WE UNDERSTAND THE
INTENT HERE, WHICH IS TO
MAINTAIN SOME FUNDING IN THE
RESERVE FOR FUTURE USE IN CASE
THE REVENUE PICTURE IS EVEN
WORSE IN THE FUTURE. UH, BUT IT
IS POSSIBLE DEPENDING ON THE
FINAL REVENUE ESTIMATES, THEY
ADD THE CONSTITUTIONAL FORMULAS
MIGHT REQUIRE THE STATE TO
WITHDRAW SOME OR ALL OF THAT
REMAINING BALANCE, SO SOMETHING
THAT'S SOMETHING WILL ALSO BE
KEEPING YOU APPRISED OF AS WE
UPDATE OUR REVENUE ESTIMATES.
THANK YOU BOTH. QUESTIONS. THANK
YOU. SO, UM. FOR THE L A Ó, UM.
I WANNA MAKE SURE I HEARD YOU,
RIGHT. SO YOU'RE SAYING THAT THE
, UH THE GOVERNOR IS PROPOSING
TO USE THE PROP 98 RESERVES? UH,
NOT TO STABILIZE. THE CUTS GOING
FORWARD OR OR TO MITIGATE THE
CUTS GOING FORWARD, BUT TO UH UH
. SUPPORT NEW, UH, EXPENDITURES.
THAT IS ONE OF OUR CONCERNS.
YES, WE UH, MAKING NEW SPENDING.
I MEAN, THERE'S A MIX OF ONGOING
AND ONE TIME, UH, NEW SPENDING
IN THIS BUDGET, UM THE RESERVE
WITHDRAWAL. ESSENTIALLY FREEZE
UP FUNDING TO MAKE THAT POSSIBLE
. ORDINARILY IN TIGHT TIMES, THE
STATE TRIES TO CONTAIN SPENDING,
UH, RECOGNIZING THAT WHEN IT
FACES A SERIOUS SHORTFALL, IT'S
HARD TO MAINTAIN EXISTING
PROGRAMS AND ADDING NEW SPENDING
MAKES THAT EVEN MORE DIFFICULT.
OK AND, UM, I, I SHOULD HAVE
ASKED THIS FIRST, BUT, UH, YOU
AND ONE OF YOU MAY HAVE SAID
THIS ALREADY. BUT, UH UH, THE
GOVERNOR'S JANUARY BUDGET
PROPOSAL. WHAT PERCENTAGE OF THE
CURRENT PROPOSITION 98 RESERVE
FUND IS BEING PROPOSED TO BE
EXPANDED? OK? UM. AS FAR AS
PERCENTAGE. UM, WE'RE SO IF THEY
GIVE YOU IT'S ABOUT 5.7 BILLION
OUT OF WHAT WAS PROJECTED, UM AT
THE 2020 THREE BUDGET ACT OF
10.8 BILLION, UM, SO AS FAR AS
THE DISCRETIONARY WITHDRAWALS
GO, I GUESS THAT WOULD BE A
LITTLE LESS MORE THAN HALF
PERCENT. YEAH. MORE. YEAH,
SORRY. 55.7 BILLION OUT OF 10.8
BILLION. OK YES, IF I MAY. I
THINK THE TWO NUMBERS TO KEEP IN
MIND ON THE RESERVE ARE THE 5.7
BILLION. THAT'S WHAT'S PROPOSED
FOR WITHDRAWAL UNDER THE
GOVERNOR'S BUDGET, AND THE THREE
0.9 BILLION. THAT'S WHAT'S
REMAINING POTENTIALLY AVAILABLE,
UH, FOR FUTURE USE. 5.7 BILLION.
UH, YOUTH THIS YEAR WILL LEAVE
3.9 BILLION AT THE END OF 2425.
2420 OK? UM. AND UH UH, IT COULD
YOU SUMMARIZE, UH, WHAT NEW
EXPENDITURES ARE BEING PROPOSED
TO, UH UH, FOR YOU KNOW, USING
THE, UH, $5.7 BILLION IN
PROPOSITION 9890 DAY RESERVES.
YES. SO IF YOU LOOK AT PAGE
SEVEN OF OUR HANDOUT, THIS IS A
LIST OF ALL OF THE UH UM.
SOLUTIONS AS WELL AS THE ONGOING
AND ONE TIME INCREASES IF YOU'RE
LOOKING JUST AT THE INCREASES
THERE 784 MILLION IN ONGOING
INCREASES, 599 MILLION AND ONE
TIME SO 1.4 BILLION IN NEW
SPENDING. UM AND I THINK, UH,
THE WAY THE RESERVES ARE USED IS
THAT THEY ARE FREEING UP THE 1.4
BILLION. THAT'S NEEDED TO COVER
THE COST OF THOSE INCREASES. OK,
SO THE BIG ONE IS THE, UH, THE
COLA. THAT'S THE LARGEST ONGOING
YEAH. ALRIGHT, UM WELL, I MEAN,
I, I. I. I WOULD I WOULD THINK
THAT MOST PEOPLE WOULD AGREE
WITH, YOU KNOW THAT THAT THE
BASIC INTENT OF A RAINY DAY FUND
IS TO TRY TO STABILIZE TO TRY TO
AVOID ANY. UH UH, NEW CUTS GOING
FORWARD. UM. BUT, UH, YOU YOU'RE
HIGHLIGHTING THAT. ONE OF THE
BIG EXPENDITURES, UH, IS THE
COLA, WHICH WE KNOW IS CRITICAL
FOR ALL OF OUR SCHOOL DISTRICTS
TO MEET. ALL THE CHALLENGES OF
INFLATION AND WAGE INCREASES, UH
FROM THEIR COLLECTIVE BARGAINING
AGREEMENTS. UM. II I SEE ANOTHER
, UH, BIG TICKET ITEM ON PAGE
SEVEN, WHICH IS THE $500
MILLION.01 TIME FOR THE GREEN.
YEAH. SCHOOL BUS GRANTS. YES,
THAT'S THE LARGEST ONE TIME.
PROPOSAL, OK? UM. YEAH, I. I, UH
I THINK I'M. AS GREEN AS I GET
IN THE LEGISLATURE, BUT, UH, I
I'M I'M I'M CONCERNED THAT YOU
KNOW. I, UM. I WOULD THINK THAT
THERE ARE MORE CORE. UH,
EDUCATION. UM, PRIORITIES. UM
THEN THE, UH. THE GREEN SCHOOL
BUS GRANTS, UH AND SO I WOULD
URGE THE DEPARTMENT OF FINANCE
TO, UH CONSIDER THAT, UM. AND.
LAST. UH UM, FOR NOW, UM, IN IN
IN TERMS OF, UM GOING GOING BACK
TO THE RE BENCHING, UM. WITH TK
AND WITH PROPOSITION 28. JUST SO
THAT I MAKE SURE THAT I
UNDERSTAND IN THE PUBLIC
UNDERSTANDS WHEN WE'RE TALKING
ABOUT RE BENCHING. WE'RE TALKING
ABOUT RATCHETING UP THE PROP 98
GUARANTEE GUARANTEED, UH Tð Kò
THROUGH 12 FUNDING. AND IS THAT
CORRECT? YES, THAT'S CORRECT.
THE, UM I THINK FOR BOTH OF
THOSE, BOTH OF THOSE ISSUES,
THERE'S REALLY TWO THINGS THAT
ARE HAPPENING, WHICH MAKE IT A
LITTLE BIT COMPLICATED, WITH
BOTH THE TK EXPANSION AND
PROPOSITION 28. UH THE STATE IS
ESSENTIALLY CREATING A NEW A NEW
COST BECAUSE IT'S FUNDING A NEW
PROGRAM THAT'S PAID OUT OF
PROPOSITION 98. SO IF THAT'S ALL
THOSE TWO PROPOSALS OR THOSE
THOSE TWO ACTIONS DID THAT WOULD
CROWD OUT FUNDING FOR EXISTING
Kò 12 PROGRAMS. SO TO AVOID THAT
FROM HAPPENING, UH, IN BOTH
PROPOSITION, 28 AND WITH THE TK
EXPANSION, THERE IS A
REQUIREMENT THAT THE STATE
INCREASE THE PROPOSITION 98
GUARANTEE ON A PERMANENT BASIS
BY THE AMOUNT OF THOSE COSTS AND
THAT INCREASE IS INTENDED TO UM,
SUPPORT EXISTING PROGRAMS SO
THAT THERE ISN'T THAT CROWDING
OUT EFFECT. WHAT THE WHAT THE
ISSUE IS, THAT'S BEFORE YOU AND
I THINK WAS, UH, IN YOUR STAFF
AGENDA, AND THAT YOU RAISED IS
WHETHER ALL OF THOSE, UH,
INCREASES IN THE GUARANTEE
SHOULD GO TOWARDS Kò 12
EDUCATION BECAUSE THAT'S WHAT
THE PROGRAMS THAT'S WHERE THE
COSTS ARE OR WHETHER THE STATE
SHOULD SPLIT THAT 89% TO SCHOOLS
AND 11% TO COLLEGES, WHICH IS
WHAT IT'S DONE HISTORICALLY,
WITH THE AVAILABLE PROPOSITION,
98 FUNDING OK? UM BUT BUT II, I
JUST WANNA CLARIFY, UM MY
UNDERSTANDING THAT IF WE'RE
GOING TO BE RATCHETING UP THE
PROPOSITION IDEA, GUARANTEED
FUNDING FOR Kò 12, THEN UM YOU
KNOW, ASSUMING THAT. YOU ARE
CORRECT THAT OUR BUDGET DEFICIT
IS ONLY GETTING WORSE RATHER
THAN BETTER. UM THAT'S JUST
GONNA MEAN WE'RE GONNA HAVE TO
FIND OTHER AREAS OF THE BUDGET
TO CUT IN ORDER TO FUND THE
GUARANTEED. UH, RA RATCHETING UP
OF THE PROPOSITION 98 FUNDING.
YES THAT'S CORRECT. THE STATE IS
INCREASING THE WITH THE WAY
THESE RE BENCHING ADJUSTMENTS OR
ADMINISTERED IS THAT THE STATE
IS INCREASING THE GUARANTEE. UH,
BY A CERTAIN DOLLAR AMOUNT, UM,
AND THEN GROW IT AND THAT GROWS
WITH GENERAL FUND REVENUE OVER
TIME. UM, SO THE FACT THAT THE
REVENUE IS LOWER. UH, IT DOESN'T
MEAN THAT THE STATE HAS A
SMALLER COST TO ADJUST THE
GUARANTEE THAT'S STILL THE SAME
COST, AND IT'S BASED ON THE COST
OF THOSE PROGRAMS, BUT THE
INCREASE FUNDING THAT WOULD COME
FROM THE INCREASED ENROLLMENT IN
TK AND, UH THROUGH PROPOSITION
28. UM. ARE ARE ARE THOSE? YOU
KNOW WHAT WE'VE TRADITIONALLY
HISTORICALLY REFERRED TO AS
CATEGORICAL SPENDING, IN OTHER
WORDS, LIKE, UM IS ARE ARE ARE
SCHOOL DISTRICTS GOING TO BE
RESTRICTED IN SPENDING THE NEW
DOLLARS GENERATED BY
TRANSITIONAL KINDERGARTEN ON
TRANSITIONAL KINDERGARTEN? THEY
AREN'T SPECIFICALLY SUBJECT TO,
UH, A VERY SPECIFIC REQUIREMENT,
BUT THEY THEY DO HAVE TO MEET
SOME STUDENT TEACHER RATIO
REQUIREMENTS AS A CONDITION OF
RECEIVING THAT FUNDING. IN
ADDITION TO THE EXTENT THAT
THOSE STUDENTS ARE ELIGIBLE FOR
A SUPPLEMENTAL AND CONCENTRATION
FUNDING, THEY HAVE TO USE THOSE
THAT PORTION OF THEIR FUNDING TO
INCREASE OR IMPROVE. SERVICES
FOR THOSE STUDENTS, SO IT'S NOT
A VERY SPECIFIC SPENDING
REQUIREMENT WITH PROPOSITION 28.
THERE IS MORE OF A SPECIFIC
REQUIREMENT THAT IT USED BE USED
SPECIFICALLY FOR ARTS, EDUCATION
. AND MOST OF THAT FOR STAFFING.
UH, BUT THE L èC FF IS MORE
FLEXIBLE AS LONG AS THEY MEET
THE BASIC ELIGIBILITY
REQUIREMENTS TO GENERATE THAT
FUNDING. OK, THANK YOU VERY
MUCH. THANK YOU FOR YOUR
QUESTIONS. UM ON THE. SO GIVEN
THE AMOUNT OF RESERVES BEING
USED IN IN IN BOTH OF YOUR, UH
APPROACHES. UH, THIS. ACTUALLY
GET CLARITY ON THE L Ó. ARE YOU
SUGGESTING THAT, UH, FOR THE
2223 SHORTFALL THAT WE UTILIZE
HOW MUCH OF THE RESERVES ALL OF
IT OR IF YOU ADOPTED NÓ OTHER
SOLUTIONS, UH, YOU WOULD NEED TO
USE 8 BILLION IN THE RESERVE TO
ADDRESS THAT YEAR. WE ALSO THINK
THERE ARE SOME OTHER ACTIONS YOU
COULD TAKE THAT COULD GENERATE
SAVINGS. THAT COULD, UH, SHRINK
THAT GAP IN 2220. THREE THERE
ARE SOME SOME UNALLOCATED GRANTS
, FOR EXAMPLE, UH, THAT ARE
ATTRIBUTED TO 2220. THREE IF YOU
REDUCE THOSE THAT WOULD BE
ANOTHER WAY OF ADDRESSING THE 8
BILLION SHORTFALL SO YOU MIGHT
NEED UP TO 8 BILLION, BUT AGAIN,
THAT'S ONLY ASSUMING YOU DON'T
DO ANY OTHER SOLUTIONS WE THINK
WITH SOME OF THE OTHER SOLUTION.
THAT WILL GET YOU A LITTLE BIT
LATER IN THE PANEL. UH, YOU YOU
WILL. YOU MIGHT NOT NEED THE
WHOLE YOU MIGHT NOT NEED TO
DEFINE THE WHOLE 8 BILLION FROM
THE RESERVE. LET ME UM, JUST TO
MAKE SURE WE'RE TALKING THE SAME
NUMBERS BECAUSE I, UH YOU HAD
SOME QUESTIONS EARLIER ABOUT HOW
MUCH IS THE GOVERNOR'S PROPOSED
BUDGET USING YOU SAID 5.7
BILLION THAT'S CORRECT FROM
FINANCE AND THEN FINANCE
ESTIMATES, LEAVING 3.9 BILLION
IN THE ACCOUNT. UH, YEAH, A
LITTLE OVER 3.8 BILLION, SO WE
HAVE A TOTAL OF WHAT IS THIS 9.8
BILLION CURRENTLY IN THE
ACCOUNT. UH AS PROJECTED AT THE
2023 BUDGET ACT, IT'S 10.8
BILLION, UH, IN THE IN THE RAINY
DAY FUND. OK, WELL, I AM. MY
MATH IS NOW HELP ME ADD UP THE
5.7. THE FIVE THREE 0.9. AND HOW
DOES THAT GET TO 10? SURE SORRY.
YEAH. SO I CAN CLARIFY. UM SO,
UH, ADDITION TO THE
DISCRETIONARY WITHDRAWALS. UM
YOU KNOW, AS AS WE DO EVERY
YEAR, UM, THE DEPOSITS FOR EVERY
YEAR WITHIN THE BUDGET WINDOW
ARE REVISED. UM, YOU KNOW, BASED
ON UPDATED DATA, UM SO THE
REVISED DEPOSITS FOR 2223 AND
2324. I THINK THOSE ARE
RESPECTIVELY. 339 MILLION AND
288 WHILE WHILE THEY'RE STILL
YOU KNOW, TECHNICALLY, DEPOSITS
MONEY GOING IN, UM, THOSE HAVE
BEEN REVISED DOWN. UM, A GOOD SO
I THINK, UM 20 THREE 24 AT THE
23 BUDGET ACT WAS ROUGHLY 1.8
BILLION. UM AND THEN, OR 2220
THREE AND THEN 2324. THIS IS 900
THREE MILLION. SO THOSE I THINK,
EFFECTIVELY BRIDGE THAT, UH, GOT
TO GET TO THE THREE 0.8. WE HAVE
A LOT OF WORD PHRASES WE USE
TRUE UP BENCH RE BENCHING. THIS
IS ESSENTIALLY A SIMILAR
EXERCISE WE'RE DOING WITH SO
AFTER ALL OF THE I GUESS.
BASELINE DREW UP. SUGGEST THAT
WHATEVER YOU WANNA CALL THEM,
BUT THE STATE REALLY HAS TO WORK
WITH IS 9.6 BILLION. THE
GOVERNOR IS WITHDRAWING 5.7
BILLION UNDER HIS DISCRETIONARY
RESERVE WITHDRAWAL PROPOSAL,
LEAVING CLOSE TO 3.9 BILLION FOR
FUTURE USE. OK THANK YOU THAT
CLARIFIES THE NUMBER SO UNDER
BOTH SCENARIOS, THEN DOES THAT
THEN TRIGGER THE CAP FOR THE
DISTRICTS ON THE RESERVES. OR IS
IT DIFFERENT IN EITHER ONE OF
YOUR SCENARIOS? UH I THE FOR OUR
, UM, OUR OUR, YOU KNOW,
INCLUDING THE REVISED DEPOSITS
IN THE DISCRETIONARY WITHDRAWALS
. UM, THOSE ARE ALL INCLUDED,
AND THAT'S STILL, UH, TRIGGERS
THE RESERVE CAPS AND THAT'S
BASED ON THE 2324 NUMBER. 4 24
25. THE SAME IS TRUE. AND YES,
THAT'S CORRECT BECAUSE THE
RESERVE CAP IS TRIGGERED BASED
ON THE BALANCE IN THE PREVIOUS
YEAR, SO BECAUSE THE STATE IS IN
20 THREE, RIGHT 20 THREE 24
RIGHT NOW IT'S ABOVE THAT
THRESHOLD, THE CAP IS WOULD BE
OPERATIVE IN 2425, EVEN IF WE
DID WITHDRAW THE ENTIRE BALANCE
THAT YEAR, THE YEAR AFTER THAT,
THOUGH, IT WOULD NOT AND MAYBE
FOR, UM PRIMARY EDUCATION HERE
AT THE TABLE, TOO. SO I THINK
YOU'D LIKE TO MAYBE GET A CHANCE
TO SAY A FEW WORDS ON UH WHAT
ARE YOU HEARING FROM THE
DISTRICT'S SUPERINTENDENT SHARE
THAT YOU'RE COMMUNICATING WITH
DISTRICTS ON A REGULAR BASIS ON
UM, THE RESPONSE TO THE CAP AND
I'M A LET ME HAVE HAVE YOU
ANSWER THAT ONE, AND THEY HAVE A
FOLLOW UP FOR THAT. UH GOOD
MORNING. DÂN. IRWIN ON BEHALF OF
THE SUPERINTENDENT, UM LARGELY
ANECDOTAL. ACKNOWLEDGE THAT BUT
THAT SINCE THE IMPLEMENTATION OF
THE CAP IN FISCAL YEAR 2223 THAT
LE, A S¼ HAVE BEEN ABLE TO
ADAPT. UM THEY HAVE EITHER
COMMITTED RESERVES FOR SPECIFIC
PURPOSES AND THEREFORE NOT GONNA
FOLLOW IT. UM OR THEY HAVE BEEN,
UH SMALL ENOUGH BECAUSE THERE'S
A 2500 LE A OR A THRESHOLD THAT
IT HASN'T APPLIED TO THEM. OK
ARE YOU, UH, MY FOLLOW UP
ACTUALLY, UH, FITS WELL, WITH
WHAT YOUR RESPONSE WAS, THEN
THIS IS ANECDOTAL WHO WHO IS
ACTUALLY TRACKING THE DATA? UH,
IS THERE UM PORTAL. THAT'S UH,
AVAILABLE PUBLICLY OR ARE THEY
SUBMITTING INFORMATION? HOW ARE
WE? KNOWING FOR SURE THAT
DISTRICTS ARE ADHERING TO THIS.
YOU KNOW, WE HAVE, UH,
ACCOUNTING DATA AVAILABLE
THROUGH THE SACK SYSTEM AND, UM
IT WOULD BE SOMETHING THAT I
WOULD WANT TO PUT IN A MORE USER
FRIENDLY FORMAT FOR YOU, BUT
CERTAINLY SOMETHING WE COULD GET
FOR YOU OK? APPRECIATE THAT. OK,
I THINK WE ARE READY TO MOVE ON
TO THE 01 MORE QUESTION, MR MER.
THANK YOU. I WAS JUST LOOKING AT
THE, UH LAO'S LIST OF UM OF NEW
SPENDING INCREASES WHILE ONGOING
. UM EXPENDITURES. UH, BUT, UH,
DEPARTMENT OF FINANCE? UH, I SEE
A 100 $22 MILLION BEING SPENT
FOR A UNIVERSAL SCHOOL MEALS AND
WHILE I AM, YOU KNOW 100% IN
SUPPORT OF MAKING SURE THAT NÓ
NEEDY CHILD UH, YOU KNOW, GOES
HUNGRY. THEY UH NÓ NÓ NEEDY
CHILD CAN LEARN, YOU KNOW, UH,
WHEN THEY'RE HUNGRY WHEN THEY
DIDN'T HAVE A MEAL THE NIGHT
BEFORE, UM UH OR OR OR OR DURING
THE DAY? UM I'M HEARING FROM MY
SUBURBAN SCHOOL DISTRICTS. YOU
KNOW, KIDS THAT DON'T NEED FREE
MEALS, GETTING FREE MEALS. AND
YOU KNOW, II. I UNDERSTAND THE
ARGUMENT THAT, UM. UH, YOU KNOW,
WE WANT TO, UH UH, ELIMINATE ANY
STIGMA OF, UH OF YOU KNOW. THAT
THE PREVIOUS SYSTEM WAS FOR. UH
UH, YOU KNOW, STUDENTS AND
FAMILIES TO REGISTER AS YOU
KNOW, TO BE IDENTIFIED AS TITLE
ONE STUDENTS AND TO BE ELIGIBLE
FOR THE FREE OR REDUCED LUNCHES.
UM, UH, I. I UNDERSTAND THE
DESIRE TO ELIMINATE THE STIGMA.
BUT IT IT IT IT SEEMS TO ME LIKE
, ESPECIALLY GIVEN THAT YOU KNOW
NEXT TO THE COLA INCREASE OF
$564 MILLION, THE NEXT HIGHEST
ONGOING EXPENDITURE IS UNIVERSAL
SCHOOL MEALS. HAS THE DEPARTMENT
OF FINANCE. I LOVE TO HEAR
ANYTHING THE DEPARTMENT OF
EDUCATION MIGHT HAVE ON ON ON ON
THIS, YOU KNOW, CONSIDERED. WHY
DO WE NEED TO SUBSIDIZE FREE
SCHOOL MEALS FOR KIDS THAT DON'T
NEED IT? SO MELISSA WITH THE
DEPARTMENT OF FINANCE, SO THE
122 MILLION IS NOT, UM AN IN IN
IT IS AN INCREASE, BUT IT'S
BASED ON ACTUAL MEAL COUNTS. SO
UM, SCHOOLS AREN'T PROVIDING
MEALS TO STUDENTS THAT AREN'T
REQUESTING THEM. THEY'RE NOT
PROVIDING EXTRA MEALS THAT ARE
GOING INTO THE TRASH THERE FOR
MEALS FOR STUDENTS THAT REQUEST
A MEAL, SO STUDENTS HAVE ACCESS
TO TWO MEALS. IF THEY WOULD LIKE
A MEAL. IT'S NOT THAT SCHOOLS
ARE PROVIDING TWO MEALS FOR
EVERY STUDENT. IF THAT HELPS
CLARIFY. IT'S PROVIDING MEALS
FOR EVERY STUDENT THAT REQUESTS
A MEAL. YES, BUT I KNOW THAT FOR
EXAMPLE, MY DAUGHTER GETS FREE
MEALS AT HER SCHOOL. SHE DOESN'T
NEED A FREE MEAL AT HER SCHOOL.
UH, WE HAVEN'T. FILL OUT ANY
FORMS TO REQUEST FREE MEALS.
SHE'S GETTING ACCESS TO FREE
MEALS, AND I'M HEARING THIS, UH
YOU KNOW, WITH MANY OF MY
SCHOOLS, AND SO. MY ANECDOTAL
EXPERIENCE OF MY FAMILY DOESN'T
SEEM CONSISTENT WITH, UH, YOUR
STATEMENT. UM MR MARTUCCI. WE
HAVE A FOR HEARING ON THIS ON
MARCH 20TH BECAUSE IT IS OF
INTEREST TO SEVERAL MEMBERS OF
THE LEGISLATURE, AND WE HAVE A
SIMILAR EXPERIENCE IN MY
HOUSEHOLD. UH, WE DO, UM WE DO
LEFTOVERS FOR MEALS IN THE NEXT
DAY, BUT OUR KIDS ALSO GET FREE
MEALS. SO UM, WE ARE GONNA HAVE
A FULL HEARING ON THIS, SO I
WOULD EXPECT DEPARTMENT OF
EDUCATION, CERTAINLY DEPARTMENT
OF FINANCE, AND, UH, OTHERS TO
BE READY FOR A WHOLE HEARING ON
THIS. THANK YOU, UM AND ACTUALLY
GOOD POINT, THOUGH, IT'S NOT
JUST GONNA BE ON SCHOOLS. IT
WILL BE ON ALL OF THE ONGOING
INCREASES THAT ARE BEING SOUGHT
OFF. UH, AFTER IN THIS BUDGET,
UM, THAT THE L A Ó HAS
IDENTIFIED AND THE ONE TIME UM
INCREASES UH, WHICH WE WILL BE
LOOKING AT VERY THOROUGHLY AND
ALSO, I THINK ALREADY ECHOED
ECHOED THE SENTIMENTS OF MY
COLLEAGUE THAT, UM, THERE ARE
SOME REALLY GOOD THINGS THAT, UM
WE WOULD LOVE TO DO IN A YEAR
WHEN THERE'S RESOURCE. THIS IS
NOT THE YEAR THAT APPEARS TO DO
THAT, AND WE GOT TO PROTECT CORE
FUNDING FOR THE CLASSROOM. SO UM
, BUT WE WILL HAVE REALLY IN
DEPTH CONVERSATIONS ABOUT ME. SO
THANK YOU ALL. UH, WE WILL MOVE
ON TO THE NEXT ITEM ON THE
AGENDA. YOU GUYS ARE THE ALL
STARS TODAY YOU GET TO GO AGAIN
FOR PANEL NUMBER THREE
PROPOSITION 98, A CRUEL AND
ACCOUNTING PROPOSAL. AND WE WILL
START WITH DEPARTMENT OF
FINANCE. ALEX SHOW AGAIN.
DEPARTMENT OF FINANCE. UM SO DUE
TO THE, UH, WINTER STORMS IN
2020, THREE, UH, THE INTERNAL
REVENUE SERVICE EXTENDED THE TAX
FILING DEADLINES, UM, FOR THE
2022 TAX YEAR FROM APRIL 15TH
2023 TO NOVEMBER 16TH 2023
BECAUSE OF THESE EXTENSIONS, UH
ACTUAL 2022 TAX DATA WAS NOT
AVAILABLE AT THE TIME THAT THE
2020 THREE BUDGET ACT WAS
ENACTED. UM, SO DUE TO THE LACK
OF ACTUAL DATA, UH, THE
ESTIMATED MINIMUM FUNDING
OBLIGATION FOR 2223 APPROPRIATED
IN THE 2023 BUDGET WAS ROUGHLY 8
BILLION ABOVE THE ACTUAL MINIMUM
FUNDING OBLIGATION. SO UH, THE
GOVERNOR'S BUDGET PROPOSES AN
ACCOUNTING SOLUTION FOR THE 8
BILLION PROP 98 PROBLEM IN 2223.
UH, THE INTENT OF THIS SOLUTION
IS TO AVOID NEGATIVELY IMPACTING
EXISTING SCHOOL BUDGETS. UH AND
IT WOULD NOT REQUIRE, UH, L A TO
RETURN ANY FUNDING. UM, THAT WAS
ALREADY ALLOCATED IN 2223. UM SO
I THINK THIS PROPOSAL CAN BE
UNDERSTOOD AS HAVING THREE MAIN
COMPONENTS. UM FIRST RIGHT,
ACCOUNTING FOR 2223 AT THE STATE
LEVEL. UH, SECOND, ACCOUNTING
FOR 2220 THREE AT THE LOCAL
LEVEL. UH, AND THEN THIRD,
FINALLY SOLVING THIS PROBLEM,
RIGHT? SHOULD TAXES BE DELAYED,
UH, IN A FUTURE YEAR. UH, SO FOR
THE FIRST COMPONENT THE BUDGET
PROPOSES TO RECOGNIZE THE
REDUCED 2223 FUNDING. UH, AT THE
STATE LEVEL BEGINNING IN 2526 IN
EQUAL AMOUNTS. NON PROPOSITION
98 GENERAL FUND FOR FIVE
CONSECUTIVE YEARS, SO THIS WOULD
COME OUT TO ABOUT 1.4 BILLION,
UH, EACH YEAR FOR FIVE YEARS.
UH, FOR Kò 12. UH AND ABOUT, UH,
182 MILLION EACH YEAR FOR FIVE
YEARS, UM, FOR COMMUNITY
COLLEGES. UH, BECAUSE ALL THREE
YEARS, UM IN THE BUDGET WINDOW
ARE IN TEST ONE. THE REDUCTION
IN 2220 THREE, UH, DOES NOT
IMPACT THE GUARANTEE CALCULATION
RIGHT FOR 2324 OR 2425. I DO
THIS PROPOSAL, RIGHT? NÓ
ADDITIONAL CASH ALLOCATIONS WILL
GO TO LOCAL EDUCATIONAL AGENCIES
, UH, OR COMMUNITY COLLEGE
DISTRICTS, UM IN ANY OF THESE
YEARS, AND LE A IS ALSO WILL NOT
HAVE TO RETURN ANY CASH, UH TO
THE STATE. UH, SO FOR THE SECOND
COMPONENT, UM THIS IS THE
LANGUAGE TO ALLOW, UH LE, A S¼
AND COMMUNITY COLLEGES TO
CONTINUE. RECOGNIZING THE EXCESS
CASH RECEIVED IN 2220, THREE,
UM, AS RECEIVED IN THAT FISCAL
YEAR. UH, SO AS NOT TO REQUIRE
THEM TO REOPEN THEIR BOOKS, UH,
TO MAKE ADDITIONAL PRIOR YEAR
ACCOUNTING CHANGES. UM AND THIRD
, FINALLY, UM, RIGHT. SHOULD THE
SPECIFIC SITUATION ARISE IN THE
FUTURE. UM THE PROPOSED LANGUAGE
ALSO PROVIDES A GENERAL
METHODOLOGY TO ACCOUNT FOR
FUNDING APPROPRIATED ABOVE THE
MINIMUM GUARANTEE. UM, IN A
SIMILAR MANNER, AS I JUST
DESCRIBED, UH, PROVIDED THAT
CERTAIN REQUIREMENTS ARE MET. UM
SO JUST TO CONCLUDE, UM THIS
SOLUTION IT IS INTENDED TO
MITIGATE HARM TO SCHOOL
DISTRICTS AND, UH, COMMUNITY
COLLEGES BY USING, UM, YOU KNOW,
ACCOUNTING MECHANISMS AT THE
STATE AND LOCAL LEVELS. UM THIS
PROPOSAL AVOIDS SIGNIFICANT CUTS
TO EDUCATION PROGRAMS. UH,
ALLOWS, UH, SCHOOL DISTRICTS,
UH, COMMUNITY COLLEGES TO KEEP
THEIR PRIOR YEAR BUDGETS INTACT,
UM, AND THEN PROVIDES A
FRAMEWORK RIGHT TO SOLVE THIS
ISSUE. UM, RIGHT IF TAX FILING
EXTENSIONS ARE DELAYED IN FUTURE
YEARS. THAT CONCLUDES MY REMARKS
AND HAPPY TO TAKE ANY QUESTIONS
AT THE APPROPRIATE TIME. YO,
PLEASE. AGAIN KEN, KAN WITH THE
ANALYST'S OFFICE TO PUT THIS
PROPOSAL IN CONTEXT, THE
GOVERNOR'S BUDGET HAS 13.7
BILLION IN REDUCTIONS IN
SOLUTIONS AFFECTING SCHOOLS, AND
THIS IS THE LARGEST ONE. SO
WE'RE TALKING ABOUT 7.1 BILLION
IN PREVIOUS PAYMENTS TO SCHOOLS
AND ANOTHER 910 MILLION IN
COMMUNITY COLLEGE PAYMENTS. WHAT
THIS PROPOSAL INVOLVES. I THINK
AT A PRACTICAL LEVEL IS THE
STATE USING ITS CASH RESOURCES
TO FINANCE PAYMENTS TO SCHOOLS
IN THE PRIOR YEAR, BUT NOT
RECOGNIZING THE FULL BUDGETARY
COST OF THOSE PAYMENTS FOR MANY
YEARS, AND WE HAVE SOME
SIGNIFICANT CONCERNS WITH THIS
PROPOSAL, WHICH ARE OUTLINED ON
PAGE NINE OF YOUR HANDOUT, UH
ONE OF ONE VERY NOTABLE CONCERN
IS THAT THIS WOULD WORSEN FUTURE
STATE BUDGET DEFICITS. THE STATE
UNDER BOTH OUR MULTI YEAR
ESTIMATES, AND THE DEPARTMENT OF
FINANCE'S ESTIMATES, IS LOOKING
AT DEFICITS OF AROUND $30
BILLION PER YEAR. OVER THE NEXT
COUPLE OF YEARS. UH, THIS
PROPOSAL IS CONTRIBUTING AND
WORSENING THOSE AMOUNTS. WE
THINK THIS PROPOSAL IS BAD
FISCAL POLICY. UH, THE STATE
HERE IS EFFECTIVELY CREATING A
NEW TYPE TYPE OF OBLIGATION UPON
ITSELF. THIS PROPOSAL IS
DIFFERENT FROM TRADITIONAL
BORROWING BECAUSE THE STATE IS
NOT PAYING AN EXTERNAL CREDITOR.
BUT EVENTUALLY THE BILL DOES
COME DUE AND THE STATE WILL HAVE
TO REPAY ITSELF WITH ITS FUTURE
REVENUES. WE'RE ALSO VERY
CONCERNED ABOUT THE PRECEDENT.
IF YOU ADOPT THIS PROPOSAL, WE
THINK IT WOULD ADD EVEN MORE
PRESSURE TO THE BUDGET BY
CREATING AN EXPECTATION THAT THE
STATE MIGHT ADOPT SIMILAR
MANEUVERS FOR SCHOOLS OR
POTENTIALLY OTHER PROGRAMS IN
THE FUTURE. AND LASTLY, UH,
WE'RE CONCERNED ABOUT THE
TRANSPARENCY HERE. BECAUSE THE
STATE IS COMMITTING RESOURCES TO
SCHOOLS. IT'S MAKING THESE
PAYMENTS, BUT IT'S DELAYING THE
RECOGNITION OF THAT. UNDERLYING
BUDGETARY COST FOR A VERY LONG
TIME, SO WE'D RECOMMEND
REJECTING THIS PROPOSAL AND
INSTEAD USING RESERVE THRALLS TO
ADDRESS THE SHORTFALL IN THE
PRIOR YEAR. UH, ALSO, UH, SINCE
BECAUSE THIS PROPOSAL IS PART OF
A LARGER CONVERSATION ABOUT HOW
TO ADDRESS THE FOREIGN FUNDING
SHORTFALL, UM WE WERE HOPING TO
SHARE SOME OF THE OTHER. TOOLS
IN THE TOOLBOX, UH, A LITTLE BIT
AS A LEAD IN TO THE NEXT ISSUE.
UM, IF WITH YOUR PERMISSION.
I'LL JUST GO THROUGH THOSE
BRIEFLY AT THIS POINT. UH,
BEFORE I TURN THINGS OVER TO MY
COLLEAGUE YES. PLEASE PROCEED.
UH, SO AS A STARTING POINT FOR
ADDRESSING THE BUDGET SHORTFALL,
WE'D RECOMMEND REJECTING ALL OF
THE NEW SPENDING IN THE
GOVERNOR'S BUDGET, AS WE'VE
ALREADY TALKED ABOUT. THERE'S
1.4 BILLION AND ONE TIME AN
ONGOING INCREASES ALL ON PAGE
SEVEN OF YOUR HANDOUT. IF YOU
WERE TO REJECT THOSE, THE STATE
WOULD HAVE A SMALLER BUDGET
PROBLEM. WE THINK A FEW OF THOSE
MIGHT HAVE MERITS IN FUTURE
YEARS. UM, BUT THEY SEEM UN
UNAFFORDABLE UNDER OUR CURRENT
REVENUE PROJECTIONS. SECOND THE
STATE COULD RESCIND THE 4.5
BILLION IN UNALLOCATED GRANTS.
UH, PAGE 12 OF OUR HANDOUT HAS A
CHART WITH OUR ESTIMATES OF
THOSE FUNDS THAT THE STATE
HASN'T YET DISPERSED. IN MANY OF
THOSE CASES, THE STATE HAS NOT
EVEN RECEIVED APPLICATIONS OR
FINISHED SCORING THEM, UH, WE'D
SUGGEST GOING THROUGH THAT LIST
AND RE SENDING ANY GRANTS THAT
AREN'T TO THE STATE'S VERY
HIGHEST PRIORITY. UH OR THAT
COULD BE PUT UH, PUSHED TO A
FUTURE YEAR. UH THIRD, UH, THE
STATE HAS A FEW PROGRAMS WHERE
IT COULD MAKE TEMPORARY
REDUCTIONS WITH THE IDEA THAT
DISTRICTS COULD CONTINUE
CONTINUE TO OPERATE THE
UNDERLYING ACTIVITIES WITH
UNSPENT CARRY OVER FUNDING. WE
WILL HAVE MORE INFORMATION ON
THIS IN THE NEXT COUPLE OF
WEEKS. UH, BUT TWO PROGRAMS
WHERE I THINK THOSE, UH UNSPENT
FUNDS ARE LIKELY TO EXIST ARE
THE EXPANDED LEARNING
OPPORTUNITIES PROGRAM AND THE
SPECIAL EDUCATION REALLY
INTERVENTION GRANT. FOR THE
STATE HAS PROVIDED SOME
SIGNIFICANT INCREASES TO FIVE
MAJOR PROGRAM AREAS OVER THE
PAST COUPLE OF YEARS. UH, THESE
ARE LISTED ON PAGE 13 OF YOUR
HANDOUT. UH, THEY INCLUDE AGAIN
THE EXPANDED LEARNING
OPPORTUNITIES PROGRAM, UH, STATE
PRESCHOOL, SCHOOL, NUTRITION,
SCHOOL TRANSPORTATION AND
TRANSITIONAL KINDERGARTEN
STAFFING AND THEN ALL OF THOSE
AREAS. WE HAVE SOME SUGGESTIONS
FOR WAYS THE STATE COULD STILL
ACHIEVE MOST OF ITS CORE
OBJECTIVES, BUT AT A SOMEWHAT
LOWER COST. AND THEN LASTLY, UH,
THE STATE PROVIDES ABOUT 1.3
BILLION ANNUALLY TO FUND THREE
ADD ONS TO THE LOCAL CONTROL
FUNDING FORMULA. UH, THESE ARE
ADD-ONS THAT ARE BASED ON THE
SIZE OF PROGRAMS DISTRICTS
OPERATED DECADES AGO. UH RATHER
THAN THE PROGRAMS AND SERVICES
AND STUDENTS THAT DISTRICTS HAVE
TODAY ENDING OR SCALING BACK
THOSE ADD ONS WOULD REDUCE SOME
DISPARITIES IN THE L èC FF AND
PROVIDE ONGOING SAVINGS. UH, SO
THAT I THINK CONCLUDES OUR
COMMENTS ON BOTH. UH UH, THE
ACCOUNTING, UH, SHIFT AS WELL AS
SOME OF THE OTHER WAYS THE STATE
COULD OBTAIN SAVINGS. UH, HAPPY
TO TAKE QUESTIONS ON THOSE AS
WELL AS WHEN YOU GET TO THIS IN
MORE DETAIL, UH, IN THE NEXT
ISSUE. THANK YOU. WE WILL START
WITH QUESTIONS AND JUST TO GET
US GOING ON. I GUESS I'LL I'LL
GO FIRST AND THEN CERTAINLY LOOK
TO MY COLLEAGUES. UH, LET ME
MAYBE AGAIN. I'M TRYING TO JUST
SET SOME FOUNDATION FOR OUR
CONVERSATIONS. I THINK YOU BOTH
AGREE. I THINK THERE'S PROBABLY
AGREEMENT. JUST, UM ACROSS THE
BOARD THAT THE 2220 THREE
SITUATION UM, THOSE FUNDS HAVE
BEEN GIVEN TO THE SCHOOLS TO THE
DISTRICTS. THEY'VE BEEN EXPENDED
OR THEY'VE BEEN, UM, ALLOCATED
IN WAYS THAT AT THIS POINT, UM
ASKING THEM TO PULL THOSE SPENT
FUNDS BACK IS REALLY NOT ONE
PRACTICAL. REALLY UH, FAIR OR
JUSTIFIABLE IN ANY WAY. UM AND
SO BOTH OF YOUR. PERSPECTIVES ON
MOVING FORWARD. UM, ACKNOWLEDGE
THAT, UM AS A AS A MATTER OF
FACT, AT THIS POINT IS THAT
CORRECT? SEE NODDING HEADS FROM
BOTH OF YOU OK? SO, UM, SO THEN
WHAT WE'RE LEFT WITH IS, UM HOW
DO WE ACCOUNT FOR DETERMINE WHAT
THAT MONEY COUNTS TOWARDS WHAT
WHAT IT REALLY IS. AND THE
GOVERNOR IS PROPOSING AN
APPROACH THAT UM IS LOOKING. TO
ACCOUNT THAT THAT MONEY WAS
GIVEN TO SCHOOLS. AND YET UH,
THAT A TOTAL OF ABOUT FIVE.
LITTLE OVER 5 BILLION OVER THE
COURSE OF FOUR YEARS. I BELIEVE
OVER 6 BILLION, I GUESS OVER
FOUR YEARS WOULD BE, UM.
ACCOUNTED ACCOUNTED FOR IN
FUTURE YEARS AS FUNDING THAT
SCHOOL RECEIVE, BUT THAT WOULD
BE REDUCED FROM OTHER GENERAL
FUND EXPENDITURES. AM I
UNDERSTANDING THAT CORRECTLY,
UH, TO OUR LAO'S OFFICE. YES,
THAT'S HOW WE UNDERSTAND THE
PROPOSAL. THE STATES STARTING IN
2526 WOULD GRADUALLY BEGIN. TO
RECOGNIZE THE TRUE BUDGETARY
COST OF THE PAYMENTS THAT
ALREADY PROVIDED IN 2223, AND
THOSE COSTS WILL BE PAID OUT OF
FUTURE STATE REVENUES IN THE NON
PROPOSITION 98 SIDE OF THE
BUDGET. SO ALL THE OTHER FUNDING
THAT THE STATE ALLOCATES WOULD
HAVE THAT AS AN ONGOING IMPACT
FOR A FEW A COUPLE OF YEARS.
FOUR YEARS. UM DEPARTMENT OF
FINANCE. IS THAT ACCURATE AS
WELL, I JUST WANNA MAKE SURE I'M
ACCURATE ABOUT UNDERSTANDING THE
PROPOSAL. UH, YES. BEGINNING IN
2526 RIGHT. THOSE AMOUNTS WOULD
START TO BE RECOGNIZED AS NON
PROPOSITION. I, UM, GENERAL FUND
, AND I THINK WHAT I UNDERSTAND
FROM HEARING PRIMARILY YOUR
TESTIMONY TODAY, CAUSE I HAVEN'T
SEEN ANYTHING. UM REALLY TOO
SPECIFIC. UM BEYOND THAT, IS
THAT. YOU WOULD BE ASKING THE
LEGISLATURE TO CREATE A NEW TYPE
OF ACCOUNTING METHOD FOR
PROPOSITION 98. IS THAT WHAT
WE'RE BEING ASKED TO. UM, I
THINK THAT WE WOULD CHARACTERIZE
IT AS JUST ACCOUNTING FOR THIS
FUNDING DIFFERENTLY, RIGHT? SO
MAYBE, LIKE A COST SHIFT. UM
WHICH I THINK IS SOMETHING THAT
YOU KNOW THE STATE IS PERMITTED
TO DO, UM, AS DONE. UM SO YOU
KNOW, RECOGNIZING THAT THE CASH
HAS GONE OUT HAS LEFT THE STATE
GONE TO, YOU KNOW, SCHOOL
DISTRICTS, COMMUNITY COLLEGES,
UM JUST, UH, YOU KNOW, SHIFTING
THE RECOGNITION TO YOU KNOW,
2526 AND MOVING FORWARD. OK, SO
COST SHIFT, BUT WE ARE ASKING TO
TAKE YOU'RE ASKING US TO TAKE?
UH UM SOME SORT OF LEGISLATIVE
ACTION TO ALLOW US TO DO THAT,
BECAUSE THAT'S NOT PERMITTED.
CURRENTLY UH, NÓ. I BELIEVE
THAT'S PERMITTED. OK? UM. SURE.
DO YOU WANT TO PROVIDE COMMENTS?
OUR RESPONSE. SURE JUST JUST
CLARIFYING THAT. YES. THIS IS A
NEW TYPE OF I, I GUESS MANEUVER
OR SHIFT OR PROPOSAL SO THERE
ISN'T THERE ISN'T EXISTING
STATUTE TO AUTHORIZE IT. SO, UM
A. TWO WEEKS AGO. I THINK THE
DEPARTMENT OF FINANCE DID
RELEASE A TRAILER LEGISLATION
THAT THE LEGISLATURE WOULD NEED
TO ADOPT. IN ORDER TO MAKE THIS,
UH, PROPOSAL OPERATIVE. OK, SO
WE ARE BEING ASKED TO TAKE
LEGISLATIVE ACTION TO AUTHORIZE
THIS TO HAPPEN. YES THIS ISN'T
OUR WE DON'T. THIS ISN'T
SOMETHING THAT COULD BE DONE
ADMINISTRATIVELY IT NEEDS IT
NEEDS STATUTE TO AUTHORIZE IT.
SO MAYBE THE WAY I ASK YOU THE
QUESTION WAS, UM WAS DIFFERENTLY
THAN WHAT. WHAT I'M TRYING TO
GET A RESPONSE TO DO YOU HAVE A
DIFFERENT RESPONSE TO MY
QUESTION? UM I JUST REITERATE
WHAT? UH, MY COLLEAGUE FAMILIAR
WOULD SAY RIGHT. SO DOES THIS
PROPOSED TRAIL OF THE LANGUAGE
SO OK, AND, UH HAS IN HAS
DEPARTMENT OF FINANCE. UH,
RECEIVED ANY UH, ANY LEGAL
COUNSEL ON UM THIS AND
POTENTIALLY ITS IMPACT TO THE
CONSTITUTIONAL REQUIREMENT OF
PROPOSITION 98. UM THIS LANGUAGE
HAS BEEN REVIEWED BY OUR OUR
LEGAL TEAM WITHIN THE
DEPARTMENT. OK? UM. I. I DO
WANNA GET TO THE ISSUE OF, UM OF
SOME OF THE PROPOSALS THAT THE L
A Ó HAS PUT FORWARD IN TERMS OF
UM IDEAS TO HELP SOLVE THIS
PROBLEM. UM WE WILL BE GETTING
INTO THOSE. ALSO MORE MORE
DETAILED. UM, AS WE GO ALONG, I
WILL ASK SOME UH, TODAY, BUT I
WANNA SEE IF MY COLLEAGUES WANT
TO JUMP IN NOW AND ASK SOME OF
THEIR QUESTIONS. MR MAUI. UH,
THANK YOU, UM. SO WELL, FIRST OF
ALL, I WANNA. CAN THEN THE
DEPARTMENT OF FINANCE FOR HIS
CREATIVE THINKING. UH AND, UH,
UH, TRYING TO, UH, MINIMIZE THE
CUTS. THE CLASSROOM CUTS. UH
THAT THAT THAT WE KNOW ARE ARE
ARE ARE SO CRITICAL, UM I. I
JUST WANNA MAKE SURE I
UNDERSTAND. UH UH, YOU YOUR
PROPOSAL, SO THE, UH. THE L Ó,
UH, CHARACTERIZES AS ESSENTIALLY
A LOAN FROM FUTURE BUDGETS TO
BACKFILL THE PROPOSITION, 98.
GUARANTEES FOR 2220. THREE AS
WELL AS THE, UM. UH, THE NEXT
TWO BUDGET YEARS. UH, AS I
UNDERSTAND IT. UM. THE
BACKFILLING WOULD BE DONE IS THE
GOVERNOR'S PROPOSAL TO BACKFILL
IT WITH NON PROPOSITION 98
FUNDING. UH CORRECT. THE AMOUNTS
BEING RECOGNIZED IN THE OUT
YEARS WILL BE NON PROPOSITION.
98 OK? AND SO THAT WOULD HAVE
THE EFFECT OF NOT RE BENCHING.
THE PROPOSITION 98. GUARANTEE.
GOING BACKWARDS. UH, SO GOING
BACKWARDS, RIGHT? THE 2220 THREE
AMOUNT WOULD BE PROPOSITION I
WOULD BE REDUCED TO THE ACTUAL,
UM MINIMUM FUNDING LEVEL. UH, I
THINK WE WOULD ALSO NOTE UM, I
THINK IT WAS WE'RE TALKING ABOUT
AT PREVIOUS PANELS. UM, BECAUSE
ALL, UH, YEARS IN THE BUDGET
WINDOW REMAIN IN TEST ONE AND
SPECIFICALLY 2324 THE REDUCTION
IN, UM THE 2220 THREE MINIMUM
GUARANTEE WOULD THEN NOT AFFECT
THE, UM FUNDING LEVEL FOR 2324
AND MOVING FORWARD. SO BECAUSE
OF THE, UH THE. RECOGNIZE
DECLINE IN REVENUES. THE PROP 98
GUARANTEE IS GOING TO BE REDUCED
IN 2223. CORRECT. BUT. SCHOOL
DISTRICTS ARE NOT GOING TO HAVE
TO MAKE ANY CUTS BECAUSE WE'RE
GOING TO ACCOUNT FOR THE DOLLARS
THAT HAVE THAT THAT HAVE ALREADY
BEEN BUDGETED FOR WITH THE BY
TRANSFERRING THE EXPENSE OF 20
TO 20 THREE. TO 22 2025 26 AND
GOING FORWARD. UH CORRECT. YES
AND WE ALSO INCLUDE LANGUAGE FOR
SCHOOL DISTRICTS AND COMMUNITY
COLLEGES. SO THEY DON'T HAVE TO,
YOU KNOW, MAKE ANY ACCOUNTING
CHANGES ON, YOU KNOW, ON THEIR
END. SO THE ASCENT THE. THE YOU
KNOW, ESSENTIALLY ALONE FROM
2526. 2 22 23. IT'S NOT UM. IT'S
NOT GONNA HAVE ANY EFFECT ON THE
GUARANTEE ON THE ON THE PROP 98
GUARANTEE IN 2223. UH CORRECT
THERE, SO THEY'RE RIGHT. SO CASH
IS ALREADY GONE OUT. UM, SO FROM
THAT PERSPECTIVE OR NOT, WE'RE
NOT. YOU KNOW, WE'RE NOT MAKING
ANY ADDITIONAL CASH PAYMENTS. UM
YOU KNOW, IN THE IN THE OUT
YEARS. UM, WE'RE JUST
RECOGNIZING THAT REDUCTION IN
2223 OVER FIVE YEARS IN EQUAL
AMOUNTS BEGIN IN 2526. AND THE
LOAN. FROM 2526. IS NOT GOING TO
IMPACT THE CALCULATION OF THE
PROPOSITION, 98 GUARANTEE AND
2526. UM. CORRECT SO, I. I THINK
I WOULD. I WOULD FIRST ALSO SAY
THAT YOU KNOW, FROM THE
ADMINISTRATION'S PERSPECTIVE. UM
WE DON'T VIEW THIS AS A LOAN. UM
JUST JUST FOR ACCOUNTING FOR
THIS FUNDING. UM YOU KNOW, IN IN
THE OUT YEARS. AH, BUT YES, FOR
2526 FOR ALL THE YEARS IN WHICH
PAYMENTS ARE MADE, UM, THESE
WILL ALL BE CONSIDERED ON TOP OF
THE GUARANTEE. SO THAT WILL NOT
AFFECT. UM THE PROP 98.
CALCULATION RIGHT? IT WON'T GO
TOWARDS THE MINIMUM FUNDING
OBLIGATION. UM AND SO, YOU KNOW,
REGARDLESS OF WHATEVER TEST ANY,
UM, OF THOSE OUT YEARS ARE IN.
UM THIS THESE, YOU KNOW, THESE
AMOUNTS BEING RECOGNIZED WILL
NOT HAVE ANY EFFECT. YES, ON THE
ON THE P 98 GUARANTEE. AND
BECAUSE IT'S THE GOVERNOR IS
PROPOSING TO USE NON PROS
PROPOSITION 98 FUNDING. TO
ACCOUNT FOR THE CASH SHORTFALL
IN 2223. IT'S ESSENTIALLY MORE
EDUCATION DOLLARS. BECAUSE THOSE
. THE ACCOUNTING. UH UH,
MANEUVER IS GONNA HAVE TO BE
MADE UP WITH LIKE IF WE HAVE TO
MAKE CUTS IN 2526, IT'S GONNA BE
IT'S GONNA HAVE TO COME FROM THE
NON Kò 12. UM, PORTION OF THE
BUDGET. UH, THE YEAH. THE AMOUNT
THE AMOUNTS IN 2526 WILL BE NON
PROPOSITION 98. AND I THINK I
WOULD ALSO JUST CLARIFY, RIGHT.
THIS IS NOT GONNA BE LIKE ANY
ADDITIONAL, YOU KNOW PAYMENTS,
UM FROM FROM THE STATE. UM, THIS
IS THIS IS JUST, UM HOW WE'RE
ACCOUNTING FOR IT. UH,
ADDITIONALLY, UM, I THINK I
WOULD SAY FROM FROM THE
ADMINISTRATION'S PERSPECTIVE, UM
IF YOU KNOW SHORT OF èC BACK
FUNDING FROM SCHOOLS, UM WITHOUT
THIS SOLUTION. THIS IS SOMETHING
THAT WE WOULD HAVE TO ACCOUNT
FOR, UM ALL ALL YOU KNOW THE
ENTIRETY OF THE PROBLEM. NON
PROPOSITION 98 GENERAL FUND
WITHIN THE THREE YEAR BUDGET
WINDOW. I. I UNDERSTAND THAT,
BUT BUT I ALSO WANNA MAKE IT
MAKE SURE I UNDERSTAND THAT.
THAT, UH, IF. SINCE WE HAVE TO
PASS A BALANCED BUDGET, THE
LEGISLATURE HAS TO PASS A
BALANCED BUDGET EVERY YEAR THAT
IF WE'RE TAKING DOLLARS FROM
2526 YOU KNOW, TO ACCOUNT FOR
THE SHORTFALL IN 2220 THREE.
THAT'S GONNA BE DOLLARS THAT
WE'RE GONNA HAVE TO CUT FROM THE
NON UH, PROP 98 PORTION OF THE
GENERAL FUND BUDGET. UH YEAH. SO
COME FOR THE NON PROPOSITION. I
DID SIDE OF THE BUDGET. ALL
RIGHT. THANK YOU. SO AGAIN, I
OK? THE INTENT HERE IS PRETTY
CLEAR. IT'S NOT TO CLAW BACK ANY
UH, PRIOR FUNDING, ESPECIALLY,
UH, YOU KNOW, SERVING STUDENTS
IN CLASSROOMS DIRECTLY. I THINK
THERE ARE POTENTIALLY OTHER. UH,
ONE TIME PROGRAMS AND OTHERS
THAT, UM, PERHAPS HAVEN'T BEEN
DEPLOYED OR ENCUMBERED OR REALLY
HAVEN'T BEEN BEEN SPENT. AND SO
WE WANT TO LOOK AT THOSE, BUT TO
TRY AND AT LEAST, UH, SORT OF.
BRING THIS. BRING THIS FOR FULL
CIRCLE ON THE PROP 98 GUARANTEE.
AH, SO THE THOSE. A COST SHIFT
IS THE PHRASE THAT YOU USE THE
COST SHIFT THAT OCCURS IN THE
FUTURE YEARS AND THOSE THOSE
PAYMENTS OF THAT COUGH SHIFT,
UH, THAT THAT OCCURS. UM WHAT
HAPPENS? AND HOW DO YOU HANDLE?
IF IN POTENTIALLY THE. FUTURE
YEARS. WE ARE NOT IN TEST ONE,
AND WE ARE AT A GUARANTEE THAT'S
LESS BECAUSE I HEARD YOU SAY
THAT THEY GUARANTEE WILL NOT BE
TOUCHED OR CHANGED, AND SO WHEN
WE'RE NOT IN TEST ONE, IT'S
GONNA BE THIS WOULD THEN MEAN
THAT IT COULD BE A LOWER AMOUNT
FOR PROP 98. AH SO WITH REGARDS
TO, UM THE OUT YEARS, AMOUNTS
THE OPERATIVE TEST FOR ANY OF
THOSE YEARS, UH, YOU KNOW, WILL
NOT BE AFFECTED AT ALL BY, UH,
THE AMOUNTS BEING RECOGNIZED.
UM, THESE THESE WILL BE ON TOP
OF THE GUARANTEE. UM SO EVEN IF,
UH ANY OF THOSE YEARS WERE
SAYING, LIKE A TEST TWO OR A
TEST THREE THIS. THIS WOULD NOT
AFFECT THE YOU KNOW THE
CALCULATION. UM FROM, YOU KNOW
THE PREVIOUS YEAR, GOING GOING
INTO THAT YEAR. I HAVE A FOLLOW
UP TO THAT, BUT SURE. SO JUST TO
CLARIFY THE WAY WE UNDERSTAND
THE PROPOSAL IS THAT THE 8
BILLION WOULD BE RECLASSIFIED
FOREVERMORE AS A NON PROPOSITION
98 EXPENDITURE SO IT WOULD BE
SOMETHING LIKE, FOR EXAMPLE, YOU
PROVIDES FUNDING FOR SCHOOL
FACILITIES. THE AMOUNT YOU
PROVIDE FOR A FACILITIES HAS NÓ
EFFECT ON THE PROPOSITION 98
GUARANTEE BECAUSE IT'S OUTSIDE
OF IT. THIS PROPOSAL WOULD KIND
OF INTERACT WITH PROPOSITION 98.
SIMILARLY IN THE SENSE THAT IT
WOULD BE COMPLETELY SEPARATE
WOULD BE IT WOULD BE LIKE IT
WOULD BE LIKE AN EXPENDITURE YOU
MAKE FOR ANY OTHER. NON
EDUCATION PROGRAM IN THE STATE
BUDGET NÓ EFFECT ON PROPOSITION
98, REGARDLESS OF WHICH
PROPOSITION. 98 TEST APPLIES
SCHOOLS IN THE FUTURE WOULD
RECEIVE WHATEVER THE PROPOSITION
98 GUARANTEE IS THAT YOU
REGARDLESS OF THESE SPECIFIC.
PAYMENTS AND AGAIN AS THE
DEPARTMENT OF FINANCE SAID THESE
AREN'T ADDITIONAL. CASH
DISBURSEMENTS TO ANY SCHOOLS OR
ANY OTHER ENTITY. IT IS THE
STATE SHOWING UP AND RECOGNIZING
THE UNDERLYING BUDGETARY COST OF
PAYMENTS THAT ALREADY PROVIDED
IN 2223. THEY'RE NOT ADDITIONAL,
BUT THEY DID GO TO SCHOOLS AND
UNDER PROPOSITION 98 FUNDING TO
SCHOOLS. SETS YOUR MINIMUM
GUARANTEE. AND SO GOING FORWARD.
THERE COULD BE AN ISSUE THAT
THAT WAS ACTUALLY THE MINIMUM.
AND THAT WE SHOULDN'T BE GOING
BELOW THAT MINIMUM. AND THAT'S
THE CONCERN. THAT I WOULD HAVE
CAUSE THEN THAT WOULD MEAN
FUTURE CUTS TO SCHOOLS. SO I
LIKE TO HEAR BOTH OF YOUR
RESPONSE TO THAT. YES SO IF THE
STATE WERE TO BE LEGALLY
CHALLENGED OVER THIS, UH, SHIFT
THAT WOULD PROBABLY BE THE
GROUNDS FOR THE CHALLENGE. UM, I
THINK IT'S HARD FOR US TO UH,
SORT OF HANDICAP. THE STATE'S,
UH LEGAL POSITION HERE BECAUSE
THERE ISN'T A SITUATION THAT HAS
A DIRECT PRECEDENT TO THIS IN
THE PAST, THE STATE HASN'T DONE
A SHIFT LIKE DIRECTLY LIKE THIS
PREVIOUSLY. AH, THE STATE. THE
STATE HAS BEEN SUED. WHAT HALF A
DOZEN TIMES? UH, SINCE 1988 OVER
VARIOUS PROPOSITION 98
ADJUSTMENTS WHERE WE'VE UH,
TRIED TO REDEFINE CERTAIN TERMS
OR CHANGE THE CALCULATION. UH,
THE STATES. ONE ABOUT HALF OF
THOSE AND LOST THE OTHER HALF.
UM AND A LOT OF IT COMES DOWN TO
REALLY HOW MUCH, UM, WHEN THE
COURT LOOKS AT THOSE SPECIFIC
PROVISIONS OF THE CONSTITUTION,
ITS ASSESSMENT OF HOW MUCH, UH,
HOW MUCH ROOM FOR THEIR
INTERPRETATION THERE IS AND WHAT
THOSE TERMS MEAN? AND HOW MUCH
DIFFERENCE THEY SHOULD GIVE TO
THE LEGISLATURE IN IMPLEMENTING
THE FORMULA, SO I DO WANT TO
GIVE YOU A CHANCE TO RESPOND TO
THAT AS WELL AND I AND ONE THING
THAT I THINK NEEDS TO BE
ACKNOWLEDGED. I DON'T THINK
ANYBODY NOT THE GOVERNOR, NOT
THE LEGISLATURE. IS IN ANY WAY
TRYING TO DO SOMETHING THAT IN
THE FUTURE REDUCES FUNDING TO
SCHOOLS. SO LET'S JUST BE REALLY
CLEAR ABOUT THAT. I DON'T WANT
THAT TO BE MISINTERPRETED. BUT
I'D LIKE YOU TO GIVE A RESPONSE
TO WHAT I JUST SAID EARLIER. AND
TO WHAT THE L A Ó JUST
MENTIONED. BRITNEY THOMPSON
DEPARTMENT OF FINANCE. CAN YOU
GET THAT CLOSER, PLEASE? BRITNEY
THOMPSON DEPARTMENT OF FINANCE.
WE WOULD JUST NOTE THAT ONE
COMPONENT OF THIS PROPOSAL IS
THAT THE FISCAL YEAR FOLLOWING
THE TAX DELAY HAS TO BE A TEST
ONE YEAR. SO THAT MEANS THAT 20
THREE 24 HAS TO BE A TEST ONE IN
ORDER FOR THIS PROPOSAL TO BE
OPERATIVE, SO THE TEST IN THE IN
THE FOLLOWING YEAR REALLY
WOULDN'T AFFECT THIS PROPOSAL AS
LONG AS 2020 THREE 24 OR ANY
YEAR FOLLOWING THE TAX DELAY
ISN'T A TEST ONE. GET THAT.
THANK YOU FOR THE CLARIFICATION.
BUT IF THERE IS, UM A CHALLENGE
TO THAT UM, WHAT CERTAINTY CAN
YOU PROVIDE TO US THAT UTILIZING
THIS, UH. WHAT WOULD PREVENT US
FROM? UNFORTUNATELY BEING IN A
SITUATION WHERE 98 GUARANTEE IS
LOWERED? I WOULDN'T BE ABLE TO
SPECULATE ON ANY FUTURE LEGAL
CHALLENGES. BUT WHAT I CAN TELL
YOU IS THAT OUR LEGAL TEAM DID
REVIEW THIS PROPOSAL AND DIDN'T
EXPRESS ANY CONCERNS WITH HIS
LEGALITY. UH, WOULD YOU BE, UH,
SHARING SOME OF THAT INFORMATION
WITH THE LEGISLATURE? YOU MEAN
THE ACTUAL TRAILER BILL LANGUAGE
? UH, THE LEGAL OPINION PROVIDED
. I WOULD HAVE TO TAKE THAT BACK
TO MY LEADERSHIP TO SEE IF WE
COULD SHARE THAT. UM DID YOU
CONSIDER INSTEAD OF THE
DEPARTMENT OF FINANCE AND ALSO
REALLY TO THE L A Ó CUZ THERE'S
TWO ALTERNATIVES OF HOW TO
HANDLE THIS 2223 RATHER THAN
UTILIZING RESERVES IN YOUR CASE
TO DO THAT, IN YOUR CASE, DOING
THE COST SHIFT. I'M GLAD WE HAVE
A NAME FOR IT. NOW I CAN REFER
TO IT AS SOMETHING THE COST
SHIFT THAT YOU'RE PROPOSING, UH
RATHER THAN DOING THOSE TWO.
DOING WHAT IS ALLOWED IN A
PROPOSITION 98. AND IT'S VERY
CLEAR IN THE PROPOSITION, WHICH
IS A, UM SUSPENSION OF 98 THAT.
ESSENTIALLY ACCOMPLISHES. I
THINK WHAT YOU'RE STILL TRYING
TO ACCOMPLISH. UM. I I GUESS I
JUST REITERATE. YOU KNOW THIS.
THIS PROPOSAL YOU KNOW, IS MEANT
TO PROVIDE THAT PREDICTABILITY
AND STABILITY TO, UH, YOU KNOW,
SCHOOL DISTRICTS RIGHT AS WE
DEAL WITH THE BUDGET PROBLEM. UM
BUT, UH, YOU KNOW THE SUSPENSION
OF THE PRO 98 GUARANTEE, UM, IS
NOT PART OF THE GOVERNOR'S
BUDGET PROPOSAL. AND IT'S NOT
SOMETHING THAT YOU'VE
CONSIDERED. UM I, I THAT THAT IS
NOT A PART OF THE OF THE
GOVERNOR'S BUDGET PROPOSAL, SO I
DON'T I DON'T KNOW THAT COULD
COMMENT FURTHER ON IT, OK? YES
YEAH, I THINK SO. THE REASON
THAT EVEN IF THE STATE DID
SUSPEND THE PROPOSITION, 98
GUARANTEE IT WOULDN'T.
SUSPENDING THE GUARANTEE DOESN'T
AUTOMATICALLY PROVIDE ANY SORT
OF STATE SAVINGS IF WE, FOR
EXAMPLE, IN THE ISSUE IN 2220,
THREE, ISN'T THAT UH, THE
PROPOSITION 98 GUARANTEE IS TOO
HIGH. IT'S IN THE PROPOSITION 98
GUARANTEE HAS ALREADY DROPPED ON
ITS OWN. THE ISSUE IS THAT THE
FUNDING THE STATE APPROVED IN
JUNE IS NOW 8 BILLION ABOVE THAT
LOWER LEVEL AND JUST SUSPENDING
THE GUARANTEE. DOESN'T DO
ANYTHING TO ADDRESS THAT $8
BILLION DIFFERENCE. SO EVEN IF
THERE WAS A VOTE TO SUSPEND, AND
EVEN IF IT WAS RETROACTIVE TO
2220 THREE IF THAT'S ALL THE
STATE DID, IT WOULD HAVE AN $8
BILLION LARGER PROBLEM IN THE
BUDGET WINDOW. UM WHAT? BOTH OF
OUR, UM. I GUESS APPROACHES A
RECOMMEND APPROACHES HAVE IN
COMMON IS THEY BOTH TRY TO DEAL
WITH THE 8 BILLION BY PRO BY
IDENTIFYING ANOTHER FUND SOURCE
TO PAY FOR THOSE UNDER THE
DEPARTMENT OF FINANCE'S PROPOSAL
THAT FUND SOURCES FUTURE NON
PROPOSITION AND EIGHT GENERAL
FUND REVENUE IS UNDER OUR
ALTERNATIVE. UH, THE FUND SOURCE
IS FUNDS IN THE PROPOSITION, 98
RESERVE AND POTENTIALLY OTHER
SAVINGS YOU IDENTIFY. BUT IT'S
REALLY THOSE SORTS OF THINGS
THAT GET YOU REAL BUDGET
SAVINGS. UH ADDRESS, UH,
SUSPENDING THE PROPOSITION. 98
GUARANTEE BY ITSELF WOULDN'T
PROVIDE THAT. OK, SO LET'S TALK
ABOUT SOME OF THOSE PROPOSALS
THAT THE L A Ó HAS, UH, PUT
BEFORE US. THEY ARE IN THE
SHORTER REPORT PAGE. UH, SORRY.
THE COMMITTEE REPORT PAGE 15.
SURE THEY'RE ON ALL THE
DOCUMENTS, BUT THAT'S THE ONE
I'M REFERENCING TO AT THIS
POINT. UM I'VE SEEN THESE IN
OTHER DOCUMENTS. I'M SURE THAT'S
CONSISTENT. UM, YOU'VE GOT ABOUT
ALMOST $4.5 BILLION WORTH OF ONE
TIME GRANTS THAT YOU BELIEVE CAN
HELP WITH, UM THAT $8 BILLION
PROBLEM IS THAT CORRECT? YES
THAT'S OUR ESTIMATE. AS OF
JANUARY OF HOW HOW MUCH, UH,
GRANT FUNDING THERE IS THAT'S
ALREADY BEEN PAID FOR, UH,
THROUGH PROPOSITION 98, BUT HAS
NOT YET BEEN ALLOCATED OR
AWARDED TO SCHOOLS AND IN YEAR
SO THESE ARE ALL NON AWARDED TO
SCHOOLS. SCHOOLS ARE NOT RELYING
ON THIS FUNDING AT THIS MOMENT.
UH, TO ACCOMPLISH THESE
PROGRAMS. UH, THE ONE I THINK
EXCEPTION TO THAT SOME OF THE
COMMUNITY SCHOOLS GRANT FUNDING
IS PART OF THE MULTIYEAR AWARDS.
AND SO WE HAVE A SPECIFIC, UH,
AMOUNT IN THIS REPORT WHERE WE
SUGGEST, UH, YOU COULD NOT
PROVIDE, UH, YOU COULD DECIDE
NOT TO, UH, CONTINUE AWARDING
NEW GRANTS IN THE PROPOSAL BUT
STILL LEAVE ENOUGH IN THERE TO,
UH, SUSTAIN A MULTI YEAR AWARDS.
ASK YOU ABOUT THAT IN A SECOND.
I JUST WANT TO MAKE SURE WE'RE
AGAIN OPERATING ON SIMILAR FACTS
HERE SO OUTSIDE OF COMMUNITY
SCHOOLS, WHICH WILL GET IT TO IN
A SECOND. ALL THE OTHER PROGRAMS
ARE UNEXPECTED. UM AN ENCUMBERED
. SOME OF THEM HAVEN'T EVEN BEEN
AS YOU STATED OUT, UM, FOR
SCHOOLS TO APPLY FOR THAT IS
YOUR ASSESSMENT. DOES THE
DEPARTMENT OF FINANCE HAVE A
DIFFERENT ASSESSMENT ON THIS? UH
I DON'T THINK WE'VE HAD AN
OPPORTUNITY TO DO LIKE AN IN
DEPTH ANALYSIS. UM ON ANY OF THE
PROPOSALS, UM FROM THE L Ó. I
WOULD ASK YOU THAT YOU DO THAT
FOR, UM, WHEN WE HAVE FUTURE
HEARINGS ON THESE ITEMS. BE ABLE
TO PROVIDE US SOME INFORMATION.
SO THEN LET'S TALK ABOUT
COMMUNITY SCHOOLS BECAUSE THAT'S
THE ONE THAT, UH, YOU IDENTIFIED
AS PARTIALLY PERHAPS IS ALREADY
MOVING FORWARD. UM IN YOUR
REPORT I RECALL AND I DON'T KNOW
WHERE THAT IS. EXACTLY BUT, UM,
ROUGHLY OF THIS $2.5 BILLION
FIGURE. ABOUT HALF OF IT IS
ALREADY OUT IN SOME WAY AND
PLANNED FOR AND SCHOOLS. UM
AGAIN. WE DON'T WANNA INTERRUPT
WHAT THEY'VE GOT PLANNED. UM
ABOUT HALF OF IT IS WHAT YOU
THINK REALLY IS OUT THERE AND
DEFINITELY BE VERY MINDFUL ABOUT
. YEAH SO 11 OPTION THAT WE PUT
ON THE TABLE IS YOU YOU CAN SEE
WE'VE GOT AROUND 2.5 BILLION IN
MORE THAN 2.5 BILLION IN
UNALLOCATED FUNDS FOR THAT GRANT
PROGRAM. ONE OPTION YOU COULD
THINK ABOUT WOULD BE RESCINDING
1 BILLION OF THAT AMOUNT. IF YOU
RESCIND 1 BILLION THAT WOULD
LEAVE ABOUT 1.1 BILLION FOR
PROVIDING IMPLEMENTATION GRANTS
TO ABOUT 400 GRANTEES THAT ARE
CURRENTLY IN THE PLANNING
PROCESS AND ELIGIBLE FOR
IMPLEMENTATION GRANTS, AS WELL
AS MAINTAIN 280 MILLION, UH, FOR
PROVIDING TWO YEAR EXTENSION. TO
CURRENT GRANTEES. SO YOU WOULD
THINK YOU THINK ADDRESS THAT
CONCERN. 11 LAST QUESTION. UM
WELL. I'LL REMEMBER IN A SECOND,
I SAW MR FANG LEANING FORWARD. I
WANT TO GIVE HIM A CHANCE TO ASK
SOME QUESTIONS. THANK YOU SO
MUCH, MR CHAIRMAN AND JUST TO
FOLLOW UP ON THE CHAIR'S POINT
ON THE ON ALLOCATED ONE TIME
GRANTS. UM ON A DUAL ENROLMENT
ACCESS PROGRAMS. I KNOW THAT
NOTICE IS 100 22. A MILLION
DOLLARS OR KNOW THAT IN OUR
COLLEGES, THIS IS ONE OF THE
VERY FEW, UH, GROWTH AREAS IN
ENROLLMENT. SO IS THIS WHAT
WE'RE SAYING HERE IS THAT WE'RE
ESTIMATING THAT THERE'S 100 AND
$22 MILLION IN IMPLEMENTATION
GRANT THAT HAVE NOW GONE OUT.
NOT BEEN SOUGHT AFTER OR YES,
THAT'S OUR ESTIMATE. AND I THINK
ONE OF MY COLLEAGUES THE NEXT
PANEL, I THINK WE WILL BE ABLE
TO CONFIRM SOME OF THE DETAILS
ABOUT THAT SPECIFIC PROGRAM AS
WELL. OK? YEAH. THIS IS ONE OF
THE VERY FEW GROWTH AREAS IN OUR
COLLEGES. IT IS SOMETHING THAT I
THINK, UM OF THE INFORMATION OUT
THERE IN TERMS OF THE ACCESS TO
THESE TYPES OF GRANTS, BUT WE
DEFINITELY, UH, DEFINITELY WANT
TO HIGHLIGHT THAT. SO THANK YOU.
THANK YOU FOR POINTING THAT OUT.
I REMEMBERED WHAT I WAS GONNA
ASK. SO GIVEN THAT, UM THERE'S
APPEARS TO BE LOTS OF MONEY. UM,
THAT HASN'T BEEN UM GONE OUT
JUST FOR LACK OF A BETTER TERM.
IT HAS THE ADMINISTRATION
DEPARTMENT OF FINANCE AND
DEPARTMENT OF FINANCE AND -DON'T REALLY KNOW HOW THIS
WORKS. PROVIDE ME SOME INPUT, UM
, REQUESTED THAT DEPARTMENTS
FREEZE SP SPENDING ON PROGRAMS
THAT HAVEN'T BEEN ALREADY
ALLOCATED. UM THAT IS NOT
INCLUDED IN THE GOVERNOR'S
BUDGET PROPOSAL. II. I THINK I,
UM I. I UNDERSTAND THAT I. I
GUESS MY QUESTION IS WHAT? WHAT
IS THE WHAT IS THE PROCESS? IN
ORDER FOR THAT TO BE EFFECTUATED
IT IT WOULD BE A DECISION THAT
GETS MADE. AND THAT DECISION HAS
NOT BEEN MADE. I GUESS IS MY
QUESTION. I I'M NOT. I'M NOT
SURE I KNOW ENOUGH TO BE ABLE TO
SPEAK TO THAT. BUT I COULD
CIRCLE BACK. UM, MANAGEMENT TO
UM, DOES SURE L A Ó OR EVEN THE
DEPARTMENT OF EDUCATION KNOW THE
STATUS OF THAT? SURE SO IN SOME
PREVIOUS DOWNTURNS, THERE HAS
BEEN MORE OF A I GUESS HANDSHAKE
AGREEMENT KIND OF APPEAR IN THE
COMMITTEE OR BETWEEN THE
LEGISLATURE AND THE GOVERNOR AND
USUALLY INVOLVING THE DEPARTMENT
OF EDUCATION IN TIGHT TIMES. UM
BUT IF THERE'S THAT CONSENSUS ON
THAT, THAT'S ALSO SOMETHING. UM,
IF YOU WERE TO ADOPT EARLY
ACTION, FOR EXAMPLE, YOU COULD
PUT A MORATORIUM ON DISPERSEMENT
, UH, FROM THOSE PROGRAMS UNTIL
YOU'VE HAD A CHANCE TO DETERMINE
THE SPECIFIC AMOUNTS. èC Dð. DO
YOU HAVE ANY INFORMATION ON WHAT
YOU'RE BEING ASKED TO DO WITH
SOME OF THESE PROGRAMS THAT YOU
IMPLEMENT. UH, NOT SO MUCH
INFORMATION ON THE HAS FINANCES
YOU DIRECTION ON NOT EXPANDING
PROGRAMS, NOT CONTINUING
PROGRAMS, BUT MORE SO A COMMENT,
UM PARTICULAR COMMUNITY SCHOOLS,
BUT MANY OF THESE PROGRAMS WHEN
THEY WERE IMPLEMENTED. IT WAS
WITH THE INTENT OF MULTIYEAR
AWARDS. UM AND THAT DOES PROVIDE
A CERTAIN LEVEL OF STABILITY TO
PROGRAM APPLICANTS, FOR EXAMPLE,
UH, NATIONAL BOARD CERTIFICATION
GRANTS, IF THAT IS GOING TO TAKE
TIME FOR A TEACHER TO GET THEIR
NATIONAL BOARD CERTIFICATION
THAT MAY NOT BE IN A ONE FISCAL
YEAR SCENARIO, IT MAY REQUIRE A
YEAR OR TWO. AND SO WHILE THESE
ARE NOTED AS UNENCUMBERED
UNALLOCATED AMOUNTS THAT DOES
NOT NECESSARILY INDICATE THAT
THEY ARE UNPLANNED FOUR. SURE I
THINK YOU KNOW, TO THE EXTENT
THAT YOUR DEPARTMENT IS PLANNING
WE'D LIKE TO HEAR WHERE YOU ARE
IN THIS PLANNING STAGES. UH,
BECAUSE AGAIN, THERE IS NÓ
INTENT IN TRYING TO S¼, YOU
KNOW, STYMIE, OR, UH, BLOCK
PROGRESS THAT'S HAPPENING AND
THESE WERE ALL IMPORTANT
INVESTMENTS. THERE'S A REASON
THE LEGISLATURE SUPPORTED THEM.
BUT IN A YEAR LIKE THIS IF THOSE
INVESTMENTS AREN'T ACTUALLY
BEING INVESTED, UH, WE NEED TO
LOOK AT WHAT WHAT IS HAPPENING.
SO, UM THAT'S WHAT WE'RE GONNA
REALLY LOOK TO HEAR FROM FROM
YOU ALL. ON THAT FRONT. IT LOOKS
LIKE YOU WANT TO ASK A QUESTION.
GO AHEAD FOLLOWING ON YOUR LINE
OF QUESTIONING. UH, MR CHAIR, I,
YOU KNOW, AND, UH, FOLLOWING ON
THE COMMENTS FROM THE DEPARTMENT
OF EDUCATION MAINE I, I THINK WE
ALL KNOW THAT YOU KNOW MORE SO
THAN THE DEPARTMENT OF EDUCATION
. IT'S THE SCHOOL DISTRICTS THAT
RELY ON MULTIYEAR FUNDING
COMMITMENTS TO BE ABLE TO PLAN
FOR PROGRAMS AND SO, UM YOU KNOW
, EVEN THOUGH THE DOLLARS MAY
NOT HAVE GONE OUT, I KNOW THAT
THERE ARE MANY SCHOOL DISTRICTS
THAT HAVE BEEN PLANNING FOR, YOU
KNOW, ESPECIALLY FOR THE
COMMUNITY SCHOOLS, UM YOU KNOW,
AS UH, AAA CORE PILLAR OF THIS,
THIS WHOLE CHILD APPROACH THAT
WE'VE BEEN WE'VE BEEN TRYING TO
TAKE. AND SO WHILE I APPRECIATE
UH UH, MR CHAIR YOUR YOU, YOU
KNOW, HOLDING ALL OF OUR
DISTRICTS. ALL OF OUR L, UH, YOU
KNOW, FEEDS THE OF THE FIRE IN
TERMS OF, UH UH, MAKING SURE
THAT THE DOLLARS ARE BEING WELL
SPENT I. I ALSO, UH UH, WOULD
REMIND THIS COMMITTEE THAT YOU
KNOW THE IMPORTANCE OF THE MULTI
YEAR COMMITMENTS IS TO ALLOW
PREDICTABILITY FOR DISTRICTS TO
BE ABLE TO PLAN FOR THESE. UH UH
UM YOU KNOW, I IMPORTANT
PROGRAMS. POINT WILL TAKE IN. I
THINK THE QUESTIONS ARE MORE
AROUND THE UNPLANNED, UH,
PROGRAMS AND, UH, DEFINITELY
DON'T WANT TO, UM, INTERFERE
WITH PROGRESS THAT'S HAPPENING,
BUT, UH, THERE SEEMS TO BE SOME
FUNDING THAT JUST HASN'T EVEN
REALLY BEEN LAND, AND SO, UH, I,
I DOUBT THAT DISTRICTS WERE
PROJECTING FUTURE REVENUE ON
SOMETHING THAT THE STATE HASN'T
ACTUALLY DELIVERED. UM, CAUSE I
THINK DISTRICTS HAVE HAVE
LEARNED OVER THE YEARS NOT TO
REALLY RELY ON ON THAT THOSE
ASSUMPTIONS. SO, UM WE WILL TALK
ABOUT AGAIN MORE ABOUT THESE, UH
UH, BUT FOR NOW, WE WILL MOVE ON
TO ISSUE NUMBER FOUR, WHICH IS
THE LOCAL CONTROL FUNDING
FORMULA AND COLA. AND GONNA GET
A NEW TEAM AT THE TABLE. AND
THANK YOU ALL FOR BEING HERE.
UH, WE WILL BE FOLLOWING UP ON
OUR QUESTIONS, SO YOU'LL HEAR
FROM US. VERY SOON AND LOOK
FORWARD TO HEARING FROM YOU. THE
PANEL WILL PROVIDE AN OVERVIEW.
THIS NEXT PANEL WILL PROVIDE AN
OVERVIEW OF THE LOCAL CONTROL
FUNDING FORMULA. THE L èC FF
FOR PUBLIC SCHOOLS AND THE
GOVERNOR'S BUDGET PROPOSALS FOR
COST OF LIVING ADJUSTMENTS AND
THE FORMULA FOR CATEGORICAL.
PROGRAMS UM, WE HAVE THE
DEPARTMENT OF FINANCE. WE HAVE
THE LEGISLATIVE ANALYST'S OFFICE
AND I'LL TURN IT OVER TO
DEPARTMENT OF FINANCE TO KICK US
OFF. WELCOME. OH, KATIE LERS,
YOU KNOW, DEPARTMENT OF FINANCE.
I'LL BE COVERING THE LOCAL
CONTROL FUNDING FORMULA. AND UM,
I'LL KEEP MY COMMENTS PRETTY
BRIEF. CAN I ASK YOU TO GET A
LITTLE CLOSER TO THE MICROPHONE
SO WE CAN ALL REALLY CAPTURE
YOUR AUDIO? THANK YOU. START
OVER, UM KATIE LAGO MARTINO
DEPARTMENT OF FINANCE. I'LL BE
COVERING THE LOCAL CONTROL
FUNDING FORMULA. UH, MY COMMENTS
WILL BE PRETTY BRIEF, UM, FOR
APPORTIONMENT ON DISTRICTS AND
COUNTIES. SO IN THE BUDGET YEAR,
WE SEE A DECREASE OF ROUGHLY 1.4
BILLION UH, A RESULT OF THE
0.76% COLA ALONG WITH THE, UH,
POPULATION GROWTH ADJUSTMENTS,
AND THIS COMPARES THE BUDGET
YEAR TO THE REVISED CURRENT
YEAR. MOVING ON TO THE COUNTY
OFFICES OF EDUCATION. IN THE
BUDGET YEAR, WE SEE A DECREASE
OF 5 MILLION, WHICH REFLECTS
POPULATION GROWTH CHANGES
APPLICABLE TO THE COUNTY OFFICES
OF EDUCATION. UM L èC FF. AS
WELL AS THE 0.76% COST OF LIVING
ADJUSTMENT. AND I KNOW THAT THIS
HEARING ISN'T FOCUSED ON
TRANSITIONAL KINDERGARTEN, BUT
I'LL BRIEFLY COVER. UM OUR
TRANSITIONAL KINDERGARTEN
NUMBERS FOR L èC FF. SO THE
GOVERNOR'S BUDGET ADJUSTS
TRANSITIONAL KINDERGARTEN
EXPANSION COSTS. UP BY ROUGHLY
635 MILLION IN THE BUDGET YEAR,
REFLECTING REVISED PROGRAM
UPTAKE. UM. TO SUPPORT THE
PROGRAM TO SERVE ALL CHILDREN
TURNING FIVE BETWEEN SEPTEMBER
2ND AND JUNE 2ND. AND AN
INCREASE OF 100 61 MILLION TO
SUPPORT THE ADDITION OF A
CERTIFICATED OR CLASSIFIED STAFF
PERSON IN THE Tð Kò CLASSROOMS
SERVING THESE STUDENTS. THAT
CONCLUDES MY REMARKS. I'M HAPPY
TO TAKE QUESTIONS AT THE
APPROPRIATE TIME. THANK YOU VERY
MUCH. L, A Ó OFFICE. UH, GOOD
MORNING, MR CHAIR MEMBERS,
MICHAEL ALVAREZ WITH THE
LEGISLATIVE ANALYST'S OFFICE.
UH, WE ARE RECOMMENDING
REJECTING THE STATUTORY COST OF
LIVING ADJUSTMENT FOR THE
UPCOMING SCHOOL YEAR OR, UH,
FISCAL YEAR, RATHER UH,
REJECTING THE COLA WOULD, UH,
REDUCE THE ONGOING SHORTFALL BY
ABOUT 628 MILLION AND HELP THE
STATE AVOID COMMITTING ONGOING
SPENDING? TO UM, A SPENDING
LEVEL THAT WOULD HAVE DIFFICULTY
MAINTAINING IN FUTURE YEARS. UH,
AN ADDITIONAL CONSIDERATION IS
THAT, UH, ZEROING OUT THE COLA
FOR THE 2425 SCHOOL YEAR, UH,
WOULD FOLLOW SEVERAL YEARS OF
VERY LARGE INCREASES FOR THE L
èC FF, UH BETWEEN 2019 2023 24.
THE UH THEY INCREASED THEIR èC
FF FUNDING RATES BY ABOUT 30%
PER STUDENT. UM IN ADDITION THAT
THEY COULD EXPLORE CHANGES TO,
UH, OTHER ONGOING L èC FF, UH,
ADD ONS TO GENERATE ADDITIONAL
SAVINGS TO ADDRESS THE ONGOING
SHORTFALL AND, UH, EASE FUTURE
BUDGET PRESSURES. UH SUCH AS THE
TK STAFFING RATIOS ADD ON AS
WELL AS THE ADD ONS THAT, UH, MY
COLLEAGUE CAN COMP IN THE
PREVIOUS PANEL THAT ARE FUNDED
ON HISTORICAL FUNDING FACTORS
RATHER THAN CURRENT STUDENT
DEMOGRAPHICS, AND, UH AND MY
COMMENTS, THEY'RE HAPPY TO
ANSWER ANY QUESTIONS AT THE
APPROPRIATE TIME. THANK YOU.
WILL TURN TO COMMITTEE MEMBERS
FOR QUESTIONS OR COMMENTS. I CAN
START IF YOU ALL, UM I WANT TO
JUMP IN. UM I WANNA FOCUS. UM.
AT LEAST MY FIRST SET OF
QUESTIONS HERE ON THE UH, WHAT
THE L Ó CALLS THE ANTIQUATED,
UH, FACTORS PROGRAMS. THERE'S
THREE IN PARTICULAR THAT YOU
OUTLINE. UM THAT CERTAINLY. CALL
MY ATTENTION IN OUR COMMITTEE
REPORT. THOSE ARE ON PAGE 20. UM
. AND THESE ARE PROGRAMS THAT
EXISTED PRIOR TO THE REFORM TO
SCHOOL FUNDING WITH WHEN LCS LCF
OCCURRED A LITTLE OVER 10 YEARS
AGO. UM AND I'M BECOMING MORE
FAMILIAR WITH THESE, UH,
SPECIFIC FUNDING. UH, FUNDS, I
SHOULD SAY. AND I WANNA JUST GET
CLARITY ON THE FIRST ONE. THE
TARGETED INSTRUCTIONAL
IMPROVEMENT BLOCK GRANTS. UM
THESE ARE. ADD ONS ABOVE AND
BEYOND. WHAT L èC FF CALLS FOR
IN AT THE DIFFERENT DISTRICTS
FOR THEIR FUNDING. THIS PROVIDES
THEM AN ADDITIONAL GRANT. AND,
UM, CAN YOU TELL ME BRIEFLY. I
KNOW THIS GOES BACK TO, UM, AS
YOU STATED IN THE REPORT, UH,
DESEGREGATION PROGRAMS IN THE
EIGHTIES AND UM. SOME OTHER JUST
EQUALIZING FUNDING DURING THE
NINETIES. BUT IN MY
UNDERSTANDING CORRECTLY, THAT OR
OR MAYBE GIVE ME A BETTER
PICTURE OF THIS. ARE WE SEEING
THAT SCHOOL DISTRICTS UNDER L
èC FF NOW? UM. ALL OF THOSE
SCHOOL DISTRICTS HAVE ALREADY
SEEN GROWTH. BUT IN ADDITION TO
THE GROWTH THEY'VE SEEN SINCE
IMPLEMENTATION ARE SEEN AN
ADDITIONAL GROWTH BECAUSE OF
THIS UH, TARGETED INSTRUCTIONAL
BLOCK GRANT. AND THEN THEY'RE
ALSO SEEING COLAS FOR THIS GRANT
IS THAT CAN YOU MAKE SURE THAT
I'M UNDERSTANDING THAT
CORRECTLY? YES, MR CHAIR AS YOU
MAY BE AWARE THERE WAS OVER 50
COR PROGRAMS THAT EXISTED BEFORE
L èC FF. MOST OF THEM ARE
CONSOLIDATED WITHIN THIS, UH,
THE L èC FF RATES NOW, AND, UH,
THERE'S ONLY A FEW THAT KIND OF
WERE, UM, LEFT OVER AND THIS IS
ONE OF THOSE, AND IT REALLY IS
JUST KIND OF A LOCKED IN TIME.
HOW MUCH DID A SCHOOL DISTRICT
OR COUNTY OFFICE SPEND IN THE 19
EIGHTIES OR 19 NINETIES AND THEY
JUST RECEIVED THAT AMOUNT EVERY
SINGLE YEAR. MOVING FORWARD EVER
SINCE THE ADOPTION OF L èC FF,
AND SO IT DOES NOT, UH, INCREASE
BIPOLAR, BUT REGARDLESS OF
WHATEVER, UH, SCHOOL DISTRICT OR
COUNTY OFFICE OR SCHOOL DISTRICT
, L èC FF IS OR RATHER, I
GUESS, UM OTHER SCHOOLS DO NOT
RECEIVE THIS GRANT. IT'S JUST
FOR SCHOOL DISTRICTS. I BELIEVE,
UH, THIS PARTICULAR ONE AND, UM
THEY JUST WOULD RECEIVE THIS. IN
ADDITION TO THEIR UH UH L CFF
ENTITLEMENT. UH, WE REFER TO IT
AS A FIXED ADD ON, SO THEY JUST
RECEIVE WHATEVER, UH, FUNDING
EVERY SINGLE YEAR IS THE SAME
AMOUNT. UM THANK YOU. THAT GIVES
SOME MORE CLAIRE SO NÓ NÓ COLA.
FOR THIS PARTICULAR PROGRAM, UM,
A FIXED AMOUNT, YOU SAID, OR.
HAS IT BEEN GROWING OR HAS IT
BEEN THIS AMOUNT SINCE THEN? IT
HAS BEEN THE SAME AMOUNT FOR
DECADES. YES, OK. UM. TO THE
DEPARTMENT OF EDUCATION. UM ARE
YOU TRACKING THE USE OF THESE
FUNDS? AND HOW IS THAT BEING
TRACKED? AND UM, AND THEN I'LL
GIVE THE L A Ó N AND FINANCE
IF YOU LIKE TO JUMP IN ON SORT
OF GIVING ME A SENSE OF WHAT
DISTRICTS ARE DOING WITH THIS
FUNDING. THAT I AM AWARE OF. WE
ARE NOT TRACKING THE FUNDS. UM
I'M NOT AN EXPERT IN THAT
PARTICULAR AREA, SO I WOULD
DEFER. I'M NOT SURE THAT WE HAVE
SOMEONE IN THE AUDIENCE TODAY
THAT COULD SPEAK WITH MORE
AUTHORITY AND I APOLOGIZE AND
THE DEPARTMENT OF EDUCATION ON
BEHALF OF THE STATE
SUPERINTENDENT PUBLIC IN
CONSTRUCTION. UM SO YEAH, II. I
DON'T I BELIEVE THAT, UM THOSE
FUNDS ALONG WITH OTHER FUNDS
WITHIN THE L èC FF ARE LARGELY
TRACKED IF YOU WILL, AS PART OF
THE L CAP ACCOUNTABILITY
PROCESS, AND PERHAPS LE Ó HAS
MORE INFORMATION. AT THERE AS
WELL. YEAH. DO YOU KNOW ANYTHING
MORE ABOUT HOW THESE ARE BEING
UTILIZED AND THE EFFECTIVENESS
OF THESE FUNDS AND WHAT THEY
WERE INTENDED TO DO? AND ARE
THEY STILL DOING THAT TODAY? SO
EDGAR CAR WITH THE LEGISLATIVE
ANALYST OFFICE. UM UH, AS, UH MR
HERD FROM èC Dð. WE DON'T WE
DON'T HAVE ANY SPECIFIC TRACKING
ON THESE FUNDS. I CAN ONLY SHARE
MY UNDERSTANDING OF, UM WHAT
SOME OF THE PROGRAMS WERE WHEN,
WHEN, UH WHEN L èC FF WAS
CREATED, AND WHEN THERE WERE
CONVERSATIONS AROUND IT, THERE
WERE, UH, HEARINGS THAT WERE
SPECIFICALLY DISCUSSING VARIOUS
PROGRAMS, INCLUDING THIS ONE.
AND UH, IN SOME OF THOSE
HEARINGS. I DO REMEMBER SOME
DISTRICTS TALKING ABOUT USING
THESE FUNDS FOR, UM YOU KNOW
THEY WERE INITIALLY FOR
DESEGREGATION. NOBODY'S DOING
DESEGREGATION ANYMORE. BUT THERE
WERE, FOR EXAMPLE, FOR SOMETIMES
SCHOOL TRANSPORTATION, OR, UH,
FOR EXAMPLE, TO CUT TO COVER
COSTS, MAYBE WITH TRANSPORTATION
OR OTHER THINGS RELATED TO THEIR
MAGNET PROGRAMS, WHICH SOME
SCHOOL DISTRICTS THOUGHT OF AS,
UM AS SORT OF A SIMILAR OR SOME
RELATED TO KIND OF A THE WAYS TO
DESEGREGATE THEIR THEIR, UH,
THEIR SCHOOL DISTRICTS. BUT
AGAIN THAT THAT MIGHT BE SOME OF
THE ACTIVITIES HOW THEY'RE
EXACTLY SPENT RIGHT NOW. WE
DON'T KNOW THAT WAS THAT THESE
ARE CONVERSATIONS FROM A DECADE
AGO WHEN L èC FF WAS
IMPLEMENTED AND THE LANGUAGE
GIVES THEM FLEXIBILITY TO USE
THE FUNDS. HOWEVER, THEY WANT
INTERESTING, UM, TO DEPARTMENT
OF FINANCE. I'LL GIVE YOU A
CHANCE TO JUST, UM, GIVE A
RESPONSE OR A COMMENT ON WHY YOU
THINK THE $855 MILLION FOR THIS
PROGRAM CONTINUES TO BE
IMPORTANT ENOUGH TO CONTINUE TO
KEEP FUNDING AT THIS LEVEL. SURE
LENA GRANT WITH THE DEPARTMENT
OF FINANCE. I WOULD JUST NOTE
THAT WHEN L èC FF WAS AGREED
UPON SOME OF THESE DIFFERENT
GRANTS, LIKE THE MINIMUM STATE
AID AND THE, UM ECONOMIC
RECOVERY TARGETS THAT ARE LISTED
HERE ON PAGE 20, ALONG WITH THE
HOME TO SCHOOL TRANSPORTATION,
WHICH HAS THAT ONE SPECIFICALLY
GOTTEN HER AN INCREASE AT
BELIEVE IT WAS LAST YEAR,
INCLUDING THE REIMBURSEMENT
MECHANISM FOR UP TO 60% OF THOSE
COSTS. BUT SOME OF THESE WERE
PART OF THE AGREEMENT FOR SCHOOL
DISTRICTS TO KIND OF AGREE TO
THE L èC FF TO THAT TRANSITION.
AND SO, UM, LIKE MICHAEL HAD
NOTED, UH, THESE ARE FIXED
AMOUNTS. THEY DON'T CHANGE YEAR
TO YEAR, BUT THEY ARE LUMPED IN
AS PART OF THE REST OF THE L èC
FF, UH THROUGH THE, UH PRINCIPAL
APPORTIONMENT THAT THEY RECEIVE.
SO UM, ACCOUNTABILITY FOR THOSE
CAN MAYBE SOME, UH, L CAPS MIGHT
ACCOUNT FOR HOW THOSE BUT HOW
THOSE MIGHT BE USED. UM BUT I
CAN'T SPEAK TO THE SPECIFICS OF
YOU KNOW, WE HAVEN'T DONE AN
EVALUATION OURSELVES OR ANYTHING
LIKE THAT ON HOW THOSE HOW THOSE
FUNDS HAVE BEEN USED. THANK YOU.
VERY HELPFUL. UM YOUR YOUR
HISTORICAL PERSPECTIVE. UM GIVEN
THAT I THINK WE'RE ALL HERE, UH,
POST. THOSE CONVERSATIONS IS
REALLY USEFUL. I'LL HAVE TO GO
AND, UH, LOOK INTO THAT. BUT
WHAT I DO KNOW ABOUT THE HISTORY
IS THAT L èC FF WAS, UM AND THE
FUNDING ASSOCIATED WITH IT, UH,
WAS INTENDED TO GROW OVER TIME
BECAUSE THERE WAS SORT OF IT WAS
. IT WAS A SMALLER FIGURE, UH,
TO BEGIN WITH, AND THEN
CERTAINLY GREW AND SO I THINK
WHEN THIS FIRST OCCURRED UM, IT
KIND OF REALLY SORT OF MAKES
SENSE BECAUSE THE NUMBER WAS
LOWER, SO HAVING THESE ADD ONS
PROBABLY SUBSTANTIALLY HELP. BUT
NOW WE'VE SORT OF MADE L èC FF
WHOLE IN AGAIN. THOSE ARE MY
TERMS IN WHAT I HAVE READ ABOUT
THE HISTORY. SO, UM WOULD. SORT
OF A AGREE OR HAVE COMMENTS
ABOUT THAT ASSESSMENT TO THE L,
A Ó AND CERTAINLY TO FINANCE
START WITH THE L A Ó. YEAH. I
MEAN, WHETHER YOU HAVE THOUGHTS
ABOUT THAT ASSESSMENT, YES. I
MEAN, I THINK FOR THE I WOULD
SAY FOR THE TIG SPECIFICALLY, I
THINK WE RECOMMENDED PUTTING IT
IN L èC F AND NOT KEEPING IT ON
FROM FROM THE INITIAL, UM, WHEN
IT WAS INITIALLY PROPOSED, UM, I
THINK BUT I THINK TO YOUR POINT,
I THINK EVEN MORE SO. SOME OF
THESE, UH WERE INCLUDED, UM,
PARTICULARLY THE ECONOMIC
RECOVERY TARGET, FOR EXAMPLE, UM
, WAS INTENDED TO GIVE
ASSURANCES TO SOME SCHOOL
DISTRICTS THAT THEY WOULD, UH,
THE FUNDING THAT THEY WOULD
STEVE WANTS L èC FF WAS
IMPLEMENTED WAS GOING TO BE
ESSENTIALLY 2007 8 LEVELS WITH
CALL AGAIN, GIVEN, UH AS MICHAEL
MENTIONED L èC FF RATES HAVE
NOW INCREASED VERY
SUBSTANTIALLY. WE ARE FAR BEYOND
WE THINK THE 2007 8 PLUS COLA.
AND SO WE DO THINK THAT THIS IS
ANOTHER REASON. ANOTHER REASON
TO COME AND REVISIT THESE AND
SEE IF WE NECESSARILY NEED TO
HAVE THESE AND AGAIN AS WE THINK
ABOUT THE STATE NEEDING TO
IDENTIFY SOLUTIONS BECAUSE WE
HAVE A SHORTFALL. UM YOU KNOW,
WE THINK TAKING SOME OF THESE
AND REDUCING OR ELIMINATING
THESE WHEN WE DON'T THINK
NECESSARILY THAT THE NEED IS
THERE AGAIN WOULD BE A BETTER
WAY TO ADDRESS IT THAN SAY,
HAVING TO GO INTO EFFECT. MORE
CORE BASED. I SEE IF A FUNDING
RIGHT RIGHT. UM AND THIS IS ALSO
AN ONGOING SOLUTION, NOT JUST
THE ONE TIME SOLUTION. YES,
THAT'S RIGHT. THAT'S RIGHT. AND
THE MINIMUM STATE AID THAT ONE
THAT ONE DOES GROW SO THE OTHER
TWO ARE FIXED. THE MINIMUM STATE
AID DOES GROW. SO, FOR EXAMPLE,
IF YOU HAVE A SCHOOL DISTRICT,
THEIR PROPERTY TAX GROW A LOT.
THE STATE START SPENDING LESS
GENERAL FUND. IN SOME CASES,
THEN THE MINIMUM STATE. IT MEANS
THE MINIMUM STATE IS CALCULATING
ONLY LOOKING AT STATE AID
GENERAL FUND, AND SO IT COULD BE
THAT A SCHOOL DISTRICT OR A
COUNTY OFFICE IS NOT GETTING
LESS FUNDING OVERALL, BUT THEY
ARE GETTING LESS GENERAL FUND
BECAUSE THEY HAVE A LOT OF
PROPERTY TAX AND THEN THE
MINIMUM STATE AMOUNT GOES UP. SO
THAT ONE DOES HAVE INCREASED
COSTS OVER TIME. YEAH. I THINK
THAT THAT IN MY MIND, UM, WITH
THAT EXCEPTION, THEY'RE THEY'RE
VERY SIMILAR, AND WE NEED TO
APPROACH THEM IN A SIMILAR
FASHION GIVEN TO CHANGE THAT'S
HAPPENED OVER THE LAST 10 YEARS,
SO I'LL JUST PUT THAT ON THE
TABLE FOR US TO FURTHER DISCUSS
IN THE FUTURE. AND, UM, I WANNA
TURN IT OVER TO MY COLLEAGUES TO
ASK SET OF QUESTIONS. MR TUCCI.
MR F, OK? UM. ONE OF THE THINGS
THAT I THINK, UH, WILL BE
CHECKING IN ON, UH, AS WE GO
THROUGH THIS PROCESS IS ON THE
EVALUATION OF ALL PROGRAMS AND
LCF F IS, YOU KNOW A LARGE SCALE
PROGRAM. SO, UM I THINK MAYBE TO
DEPARTMENT OF FINANCE IS, UM ARE
WE. WHAT KIND OF ONGOING
ASSESSMENT OR EVALUATION IS
HAPPENING ON? UM CHANGES IN THE
L èC FF AS IT RELATES TO UM
DIFFERENT PROGRAMS. IS THERE
ANYTHING THAT YOU'D LIKE TO
SHARE WITH US ABOUT WHAT YOU'RE
DOING TO EVALUATE AND ANALYZE
JUST THE FORMULA ITSELF ON AN
ONGOING CONTINUOUS IMPROVEMENT
TYPE OF BASIS. LENA WITH THE
DEPARTMENT OF FINANCE. UM THERE
ARE NUMEROUS CHANGES THAT I
THINK THERE ARE ENUMERATED ON
PAGE. UM 18, OR SOME OF THEM ARE
, UM, THAT HAVE RECENTLY BEEN
ENACTED ON THE LOCAL CONTROL
FUNDING FORMULAS, FOR EXAMPLE,
ACCOUNTING FOR THE L èC, UH,
FOR THE SUPPLEMENTAL AND
CONCENTRATION GRANT CARRYOVER
FUNDS IN THE L èC A, UM
SPECIFICALLY TO INCREASE AND
IMPROVE SERVICES FOR THOSE ELL I
STUDENTS, UM THE CONCENTRATION
GRANT INCREASE IN THE BASE GRANT
INCREASE, UM, THE DECLINING
ENROLLMENT PROTECTIONS. THOSE
ARE VERY RECENT CHANGES. AND SO
IT MAY TAKE SEVERAL YEARS FOR US
TO SEE. UM, WHETHER YOU KNOW THE
ARE INTENDED, THE INTENDED
IMPACT OF THOSE CHANGES CAN BE
FELT AND SEEN, UM, AT THE
DISTRICT LEVEL. UM SOME OF THESE
ARE AS RECENT AS YOU KNOW, UH
THE LAST BUDGET ACT, UM, THE
HOME TO SCHOOL TRANSPORTATION.
UM, NUMBER FIVE ON THAT LIST. UM
WE SEE THAT SCHOOLS ARE, OF
COURSE, SUBMITTING THAT FOR
REIMBURSEMENT, SO WE ACCOUNT FOR
IT AS PART OF THE L èC FF IN
TERMS OF ASSESSING HOW EFFECTIVE
THESE PROGRAMS ARE, UM WE DON'T
HAVE YOU KNOW, THE DEPARTMENT OF
FINANCE HASN'T BEEN TRACKING IT
IT THAT WAY. BUT WE THERE ARE,
FOR EXAMPLE, LIKE THE, UM COUNTY
COURT AND COMMUNITY SCHOOLS, UH,
FUNDING THAT WAS PART OF THE L
èC FF AS WELL, YOU KNOW, UM,
FOR THE FOR COUNTIES, UH, THAT
THERE'S AN EVALUATION OF THE L
CAP THAT THAT THAT THE LE Ó IS,
UM, I THINK PROVIDING A REPORT
ON TO THE LEGISLATURE, UH, SOON
AND THERE SO THERE ARE DIFFERENT
DEPENDING ON WHAT YOU WHAT
CHANGES IN THE L èC FF YOU'RE
REFERRING TO? THERE ARE
DIFFERENT KIND OF TRACKS, UM OF
KIND OF TRACKING THE AS THE
EFFECTIVENESS OF THOSE HAPPENING
, UM, FOR THE FUNDING CHANGES. I
THINK THOSE IMPACTS WILL TAKE
TIME. LIKE I SAID TO REALLY
ASSESS WHETHER OR NOT THEY'RE
EFFECTIVE IN APPRECIATE THAT
FEEDBACK. UM I KNOW THE L A Ó
HAS DONE A LOT OF REPORTS ON A
LOT OF THINGS AND CERTAINLY
APPRECIATE ALL THE WORK. ARE
YOU, UH ARE YOU TRACKING SOME OF
THIS AND I? I KNOW WITH SOME,
LIKE J èC èC S¼. YOU'RE
DEFINITELY INVOLVED IN PROVIDING
SOME FOLLOW UP AND REPORTS TO
THE LEGISLATURE. BUT, UM CHAIR
OF OUR EDUCATION COMMITTEE LAST
YEAR, HELD AN OVER LAST WEEK
HELD, UH, A HEARING WHERE WE HAD
SOME RESEARCHERS COME AND REALLY
TALK TO US AND STRESS ON US THE
IMPORTANCE OF EVALUATING OUR
INVESTMENTS AND WHETHER THEY'RE
BEING SUCCESSFUL OR NOT, AND
IT'S CERTAINLY LEFT A BIG, UH,
MARK FOR ME IN THAT CONVERSATION
, UH, CHAIR MERCI THAT WE REALLY
SHOULD. TRY TO INCORPORATE THAT
A LOT MORE IN WHAT WE'RE DOING,
AND SO, UM, ARE YOU IS THERE A
WAY DON'T WANNA ADD MORE WORK TO
ALL THE WORK WE ALREADY PUT ON
YOU, BUT TO SORT OF IDENTIFY S¼
SPECIFICALLY, AT LEAST, YOU KNOW
THE ONES THAT ARE LISTED HERE
THAT ARE THE MORE RECENT ONES.
WHAT ARE WE TRACKING? ARE WE
EVALUATING IT? WHO'S DOING THAT?
UM. DON'T EXPECT YOU TO HAVE AN
ANSWER FOR ALL OF THEM NOW, BUT
I CAN YOU HELP US UNDERSTAND
WHAT WHAT'S BEEN REQUIRED IN
TERMS OF SOME OF THESE PROGRAM
CHANGES OVER THE LAST FEW YEARS.
SO SOME OF THOSE SPECIFICALLY I
THINK THERE HAS NOT BEEN AS MUCH
FORMAL REQUIREMENTS, UH, SORT OF
IN STATUTE THAT SAYS THERE,
THERE'S CERTAIN UH, UH, AGENCIES
THAT NEED TO REPORT BACK, SO
THAT'S DEFINITELY SOMETHING THAT
THE LEGISLATURE CAN EXPLORE OF
TRYING TO ADD ADDITIONAL
REQUIREMENTS TO GET A BETTER
SENSE, SO A LOT OF, UM, AS MS
GRANT SAID, THERE'S A THERE'S A
LOT OF EXTERNAL RESEARCHERS ARE
LOOKING AT THIS ISSUE A LOT.
THERE HAVE BEEN NUMEROUS REPORTS
RELATED TO L èC FF, SO IT'S NOT
LIKE, UH, NOBODY IS SPECIFICALLY
LOOKING AT IT. BUT IN TERMS OF A
STATE DRIVEN THESE ARE THE
SPECIFIC QUESTIONS THAT WE WANT
TO ANSWER. THESE ARE THE THINGS
THAT WE WANT TO MONITOR AND
ONGOING BASIS THAT HAS NOT
HAPPENED AS MUCH. UM I THINK
THAT WHERE THE WHERE THE STATE
HAS IN RECENT YEARS DONE A
LITTLE BIT MORE IS IN A FEW OF
THE GRANT PROGRAMS. THE
COMMUNITY SCHOOLS IS THE ONE
THAT COMES TO MIND TO ME MORE
WHERE THERE IS A MORE SPECIFIC
THERE WAS FUNDING ATTACHED TO
INTERIM REPORT REPORTS AND A
FINAL REPORT. AND SO THAT ONE IS
THE ONE I THINK OF, AS MAYBE THE
MOST ROBUST EVALUATION
COMPONENT. IT'S STILL EARLY. I
DON'T UM, WE HAVEN'T GOTTEN TO
SORT OF LOOKING AT ALL THOSE
REPORTS, BUT THAT IS ONE THAT
THERE THERE. THERE'S A COULD BE
AN OPPORTUNITY TO GET A LITTLE
BIT MORE INFORMATION WITH WITH
SOMETHING LIKE L èC FF, BECAUSE
IT'S SO BIG AND COMPLEX. I THINK
ONE OF THE KEY QUESTIONS IS JUST
WHAT DATA ARE YOU USING? AND
BEING, UH, THOUGHTFUL ABOUT WHAT
ARE THE KINDS OF THINGS WE WANT
TO MEASURE AND THEN SETTING SOME
CLEAR PARAMETERS AROUND ENSURING
THAT WE'RE COLLECTING THE RIGHT
DATA TO ANSWER THOSE QUESTIONS,
BECAUSE A LOT OF TIMES WHEN THE
STATE DOES ISSUE REQUIRE REPORTS
OR EVALUATIONS, OFTENTIMES THE
EXACT INFORMATION THAT SOMEBODY
WOULD NEED TO DO AN ANALYSIS AND
ANSWER THOSE KEY QUESTIONS CAN
BE QUITE CHALLENGING. WELL, I
THINK AGAIN I WAS I WAS VERY
MUCH, UM IMPRESSED BY, UH, THE
RESEARCH THAT WE HAD AT THE
CHAIRMAN'S HEARING LAST WEEK AND
I THINK ON A GOING FORWARD BASIS
AND UNDERSTANDING THAT L èC FF
IS LARGE, AND THERE'S A LOT OF
COMPONENTS TO IT. BUT IF WE'RE
MAKING INTENTIONAL DECISIONS ON
L èC FF CHANGES, I THINK WE
SHOULD BE FOCUSED ON HOW WE'RE
EVALUATING WHETHER THOSE CHANGES
ARE UH, BEING EFFECTIVE. MAYBE
NOT, AND, UM AND THEY WOULD PUT
ON THE TABLE ALSO GOING FOR THAT
, UH, WE SHOULD THINK ABOUT
DOING THAT, EVEN WITH NOT NEW
PROGRAMS, BUT WITH EXISTING
PROGRAMS AND CERTAINLY THE
ROBUST NATURE OF COMMUNITY
SCHOOLS WOULD BE SORT OF IN MY
OPINION, UH, PERHAPS AAA, THE
STANDARD BEARER OF PERHAPS WHAT
WE SHOULD BE, UH, COMPARING
OTHER ASSESSMENTS ON OTHER
PROGRAMS TO AND CERTAINLY WOULD
BE INTERESTED IN DEPARTMENT OF
EDUCATION'S, UH, CAPACITY. UM TO
PARTICIPATE IN THAT AND IN
ADDITION TO AS WE CONTINUE TO
FUN PROGRAMS, WHETHER IT'S NEW
OR EXISTING PROGRAMS THAT WE
LOOK AT. UH WHAT ARE WE DOING TO
SUPPORT THE ASSESSMENTS OF THOSE
PROGRAMS AS PART OF THAT FUNDING
, SO THAT'S SOMETHING I HOPE
THIS COMMITTEE, UH, EMBRACES AS
WE GO FORWARD BECAUSE WE WHILE
WE NOT GET THE INFORMATION FOR
THIS BUDGET YEAR, WE KNOW THAT
THE UH, FUTURE BUDGET YEARS ARE
ALSO. CHALLENGING WITH THE
STRUCTURAL DEFICIT, AND WE WANT
TO MAKE SURE WE'RE MAKING GOOD
DECISIONS OVER THE COURSE OF THE
NEXT FEW YEARS, SO I'M GOING TO
BRING THAT UP. UH, PROBABLY A
FEW TIMES. ALL RIGHT, MISTER
MUCCI. THANK YOU. FIRST OF ALL,
I I'M, UH, LOOKING AT OUR STAFF
ANALYSIS HERE, AND, UH, THERE IS
A. UH A FACTOID THAT THAT'S
HIGHLIGHTED THAT I WANTED TO,
UH, HIGHLIGHT TO COMMEND AND
THANK THE GOVERNOR, UH, IT IT
SHOWS THAT IN THE LAST TWO
BUDGETS UH, WE HAVE INCREASED
THE BASE GRANTS OF THE L èC FF
BY A TOTAL OF 21.8% AND, UM. II
I KNOW THAT THAT'S A CAUSE THAT
I'VE, UH, FOUGHT EVER SINCE. UH,
L èC FF WAS PASSED. UH AND SO I
WANNA THANK THE GOVERNOR FOR
LIFTING ALL BOATS, A RISING TIDE
LIFTING ALL BOATS. UH UH, WITH
THE INCREASE IN IN IN THE BASE
GRANTS CLEARLY, UH, WE'RE WE'RE
NOT TALKING ABOUT RISING TIDES
ANYMORE. BUT UH OR AT LEAST THIS
YEAR, BUT, UM III. I THINK THE,
UH THE YOU KNOW ANY DISTRICT
THAT SAYS THAT, UH THAT THAT
EDUCATION IS NOT A BUDGET
PRIORITY. UH, I THINK THAT'S ONE
CLEAR FACT THAT, UH, THAT WE CAN
THROW RIGHT BACK AT THEM. UM UM,
IN THE ANALYSIS ALSO IS THE
ISSUE OF THE TRANSITIONAL
KINDERGARTEN STAFFING. AND UH,
AND APPARENTLY, UH, THIS IS
REFERRING TO A LÀ Ó. INSTEAD OF
L. A RECOMMENDATION? UM IT IT'S
UH, IT'S AN ISSUE THAT HAS BEEN
BROUGHT TO MY ATTENTION. UH,
THAT, UM BEGINNING IN 2025 2026
SCHOOL DISTRICTS MUST MAINTAIN
AN AVERAGE OF ONE ADULT FOR
EVERY 10 STUDENTS. UH, AND IN
ORDER TO RECEIVE THE Tð Kò
FUNDING. UM. I'M I'M HEARING.
YOU KNOW, NUMBER ONE. I'M I'M UM
, YOU KNOW, A BIG SUPPORTER BIG
CHAMPION OF UNIVERSAL PRE Kò. UM
AND THIS UNIVERSAL TK IS CLEARLY
OUR FIRST STEP. IN THAT
DIRECTION, BEING THE BIGGEST
GAME CHANGER IN TERMS OF CLOSING
THE ACHIEVEMENT GAP. UM BUT
WE'RE HEARING DISTRICTS, UH,
SAYING THAT WE ARE. THEY'RE
THEY'RE HAVING TROUBLE NOT JUST
WITH THE OVERALL TEACHER
SHORTAGE, BUT IN SPECIFICALLY IN
FINDING, YOU KNOW, TEACHERS, UH,
QUALIFIED TO, UH, TO, UH, STAFF
THE TRANSITIONAL KINDERGARTEN
PROGRAMS. UM. WANT TO ASK THE
DEPARTMENT OF FINANCE. UH, IF
THERE ARE ANY DISCUSSIONS, UH,
ANY CONSIDERATION, I KNOW THAT
THIS WAS A HOT TOPIC IN IN
PREVIOUS BUDGETS. UH UH. BUT, UM
GIVEN, UH YOU KNOW OUR CURRENT
BUDGET SITUATION AS WELL AS THE
REALITY OF DISTRICTS FINDING
HAVING A HARD TIME FINDING
ENOUGH TRANSITIONAL KINDERGARTEN
TEACHERS TO MEET THE STAFFING
RATIO, UH, HAS THE DEPARTMENT OF
FINANCE HAD ANY CONSIDERATIONS.
ARE THEY SEEING THE DATA? UH, IN
TERMS OF THIS TEACHER STAFFING
SHORTAGE? UH AND IS THERE ANY
DISCUSSION ABOUT? UM, EVEN A
TEMPORARY, UM ACCOMMODATION OF
THIS CLASSROOM RATIO. LENA GRANT
WITH THE DEPARTMENT OF FINANCE.
I CAN'T SPEAK EXACTLY TO THE
DATA THAT'S BEEN COLLECTED ON
TEACHER STAFFING RATIOS. I THINK
MAYBE SOMEONE ONE OF MY
COLLEAGUES COULD, UM, OPINE ON
THAT. BUT UM, IN TERMS OF OUR
COMMITMENT TO THE STAFFING
RATIOS THAT IS REFLECTED IN THE
BUDGET, AND THAT IS, UM WE HAVE.
WE'RE OBVIOUSLY AWARE OF THE
STAFFING SHORTAGE. WHERE WHERE,
UM HOWEVER, MAINTAINING OUR
COMMITMENT TO THAT STAFFING THAT
1 TO 10 STUDENT RATIO. UM, AND
SO THAT IS WHAT THE BUDGET
CURRENTLY, UH PROPOSES.
CURRENTLY IT'S 1 TO 12 CORRECT,
OK, BUT, UH, STARTING NEXT YEAR.
THE GOAL IS 1 TO 10. ALL RIGHT.
THANK YOU, MR MARCI. YOU DON'T
WANT TO MISS MARCH 20TH BECAUSE
WE'RE ALSO HAVING A Tð Kò. UH NÓ
. YOU'RE AHEAD OF US, UH, MARCH
20TH IS, UH, Tð Kò, AND WE'LL
GET YOUR COMMENTS SPOT ON WHERE
WE HAVE THAT POND AS A
CONVERSATION. UM SO WITH THAT, I
THINK ON THIS PANEL, THANK YOU
ALL APPRECIATE IT. AND WE ARE
MOVING ON TO OUR FINAL. UH,
STATE OF SCHOOL FISCAL HEALTH.
PANEL THERE'S AN INFORMATIONAL
ITEM AND IT'S OUR FINAL ITEM OF
THE DAY. THE FISCAL CRISIS AND
MANAGEMENT ASSISTANCE TEAM. FC
MATT IS CALIFORNIA'S PUBLIC
RESOURCE TO MONITOR AND GUIDE
THE LOCAL EDUCATION AGENCIES.
FISCAL HEALTH. THIS HEARING WILL
PROVIDE F èC MATS ANNUAL
ADDRESS TO THE UP TO UPDATE THE
ASSEMBLY ON THE STATE OF SCHOOL
FISCAL HEALTH. AND WE HAVE A MR
FINE HERE TO PROVIDE US THE
UPDATE. WELCOME AND THANK YOU
VERY MUCH FOR BEING HERE. THANK
YOU, MR CHAIR AND MEMBERS. UH,
GLAD TO BE WITH YOU THIS
MORNING. I'M MICHAEL FINE, CHIEF
EXECUTIVE OFFICER OF THE STATE'S
FISCAL CRISIS AND MANAGEMENT
ASSISTANCE TEAM. BEFORE I START
MY COMMENTS JUST TO FOLLOW UP.
UH MR CHAIR TO ONE OF YOUR
EARLIER QUESTIONS THAT I DON'T
THINK WAS THOROUGHLY ANSWERED
AND HAS TO DO WITH THE RESERVE
CAP THAT'S IN PLACE IN THE
MONITORING OF IT. THAT IS PART
OF THE BUDGET APPROVAL PROCESS.
SO IN STATUTE REQUIRES THE
COUNTY SUPERINTENDENT TO DO THAT
CALCULATION AS PART OF THEIR
APPROVAL. AND IF THEY ARE OVER.
THE CAP. IF YOU WILL. A
DISTRICT'S BUDGET, UH, WAS
ADOPTED OVER THE CAP, THEN THEY
HAVE THE OPPORTUNITY TO REVISE
IT BEFORE THE COUNTY WOULD, UH,
EITHER CONDITIONALLY APPROVE OR
REJECT DISAPPROVE THEIR BUDGET
SO THERE IS MONITORING OF IT.
UM, AND SOME OVERSIGHT, UH, TO
IT AS WELL. UM I'VE GIVEN YOU,
UH, TWO HANDOUTS. ONE AN OUTLINE
THAT I'M JUST GONNA WORK THROUGH
AND THEN WANT A SET OF CHARTS.
I'M GONNA START WITH THE CHARTS
BECAUSE I THINK IT GIVES YOU A
VISUAL LOOK AT, UH, WHERE WE'RE
AT AS A STATE WHERE OUR LE A S¼
ARE SPECIFICALLY OUR SCHOOL
DISTRICTS AND COUNTY OFFICES ARE
AT THIS DOES NOT INCLUDE CHARTER
SCHOOLS. THEY DON'T GO THROUGH
THE SAME EVALUATION AND
REPORTING. UM AND, UH UH,
PROCESS THAT, UM, OUR SCHOOL
DISTRICTS AND OUR COUNTY
SUPERINTENDENTS GO THROUGH.
CHART IS A HISTORICAL LOOK AT,
UM, CERTIFICATIONS AT 1ST AND
2ND INTERIM, SO JUST TO REMIND
YOU, UH, THE CYCLE IS THAT A
SCHOOL DISTRICT ADOPTS ITS
BUDGET BY THE FIRST OF JULY.
COUNTY SUPERINTENDENT REVIEWS
THAT AND BY SEPTEMBER 15TH
EITHER APPROVES, APPROVES
CONDITIONALLY OR DISAPPROVES
THEIR BUDGET AND I'LL TALK ABOUT
THOSE IN JUST A SECOND AND THEN
TWICE DURING THE YEAR. UH THE
SCHOOL DISTRICT IS REQUIRED, UM,
TO UPDATE THEIR BUDGET. WE CALL
THAT FIRST INTERIM SECOND
INTERIM REPORT. MY DATA IS
THROUGH FIRST INTERIM REPORT,
WHICH WAS DECEMBER, THE LAST
UPDATE WOULD HAVE BEEN DECEMBER
JUST PAST DECEMBER OF 23. UM
THIS CHART GIVES YOU HISTORICAL
LOOK AT THE NUMBER OF QUALIFIED
AND NEGATIVES. AND SO AS PART OF
THE INTERIM REPORT PROCESS, THE
LOCAL SCHOOL BOARD UM UH,
CERTIFIES THEIR BUDGET AT THE
INTERIM AS EITHER POSITIVE
MEANING THEY CAN MEET THEIR
OBLIGATIONS IN THE CURRENT YEAR
PLUS TWO SUBSEQUENT YEARS.
QUALIFIED, MEANING THEY MAY NOT
MEET THEIR OBLIGATIONS IN THAT
PERIOD OF TIME OR NEGATIVE,
MEANING THEY WILL NOT MEET THEIR
OBLIGATIONS IN THE CURRENT OR
ONE SUBSEQUENT YEAR. AND SO THIS
CHART SUMMARIZES THERE'S TWO
ENTRIES FOR EACH YEAR EXCEPT THE
CURRENT YEAR ON THE FAR RIGHT,
UH, BECAUSE WE'RE ONLY HALFWAY
THROUGH THE YEAR. UM NOTABLY,
THE LAST COUPLE YEARS HAVE BEEN
OUR LOWEST POINTS OF QUALIFIED
AND NEGATIVE CERTIFICATIONS. UH
IN, UH, SINCE BEFORE THE GREAT
RECESSION. UM, ALMOST 15 YEARS.
16 YEARS THAT BEGAN TO CHANGE IN
DECEMBER. UM AS, UH UH, THINGS
BEGIN TO TIGHTEN UP AND THE
PLANNING AS WE LOOK AS DISTRICTS
LOOK OUT OVER THE NEXT FEW YEARS
FROM A NUMBER OF FACTORS, AND
I'LL DESCRIBE THOSE TO YOU, UM,
LATER, BUT YOU CAN SEE THAT LAST
SPRING, WE HAD THREE NEGATIVE
DISTRICTS AND 10 QUALIFIED
DISTRICTS WERE IN DECEMBER, WE
DOUBLED THE NUMBER OF NEGATIVE
TO SIX AND WE TRIPLED THE NUMBER
OF QUALIFIED TO 31. UM WHEN WE
GET TO SECOND INTERIM, UH WHICH
WE ARE JUST A COUPLE OF WEEKS
AWAY FROM, UM, I EXPECT TO SEE
THE, UH, AT LEAST THE QUALIFIED
NUMBERS INCREASE ONE OF THE
CHARACTERISTICS OF THE OF THESE
31 QUALIFIED, UM, WELL, NOT OF
NOT NECESSARILY OF THESE, BUT OF
MANY DISTRICTS AT FIRST INTERIM
WAS THAT THEY USED A MUCH HIGHER
COLA. UM THAN WHAT IS CURRENTLY
FORECASTED. AND SO THEY WILL
RESET THAT AS THEY APPROACH
THEIR SECOND INTERIM REPORTING,
AND THAT WILL, UM, AS YOU HAVE
ALREADY ASKED SOME QUESTIONS
AROUND AND MADE SOME STATEMENTS
AROUND AND I'M HAPPY TO EXPLORE
THIS FURTHER. UM THE LOWER COLA
IS, UH, IS CERTAINLY A
CONTRIBUTING FACTOR HERE. THERE
WERE NÓ DISAPPROVED BUDGETS THIS
FALL BY COUNTY SUPERINTENDENTS.
UH, WHATEVER CONDITIONAL
APPROVALS WERE ISSUED IN
SEPTEMBER, WHERE ALL RESOLVED BY
THE STATUTORY DEADLINE OF
NOVEMBER, 8TH. WHEN WE LOOK AT
QUALIFIED AND NEGATIVE
CERTIFICATIONS, WE ALSO TAKE A
LITTLE DEEPER. LOOK AT WHAT
THEY'RE CONSECUTIVE
CERTIFICATIONS HAVE BEEN. ARE
THEY ON THE LIST? ONE TIME THEY
CORRECT THEIR SITUATION AND TURN
AROUND OR IS THERE A CONSECUTIVE
STATUS? AND SO THE NEXT CHART ON
PAGE FOUR SLIDE FOUR GIVES YOU A
SENSE FOR THAT MOST OF THE 31.
THIS IS THEIR FIRST CONSECUTIVE
THEIR FIRST TIME ON THE REPORT
RECENTLY. 27 OF THOSE TWO THIS
IS, UH, FOR TWO DISTRICTS. THIS
IS THEIR SECOND CONSECUTIVE FOR
THREE THEIR FIRST CONSECUTIVE
AND THEN WE HAVE ONE DISTRICT
WHERE THIS IS THEIR 13TH,
CONSECUTIVE QUALIFIED STATUS. UM
THE TANGERINE LINE. THAT'S THERE
. UM IS JUST AN INDICATOR THAT
WE AUTOMATICALLY ENGAGE WITH THE
DISTRICT AT THREE. CONSECUTIVE
QUALIFIED. UH, F. I N A DOES.
WE DON'T WAIT FOR THE COUNTY. WE
DON'T WAIT FOR THE DISTRICT TO
REACH OUT TO US FOR ASSISTANCE.
BUT UH SINCE 2018, WE'VE BEEN
AUTOMATICALLY ENGAGING WITH THEM
UNDER THAT CRITERIA. SO FIVE. IT
GIVES YOU A SENSE. THESE ARE
SPREAD OUT ALL OVER THE STATE.
UH, BUT NOTEWORTHY AS I WILL
DESCRIBE LATER, AS MANY OF THESE
ARE SMALLER DISTRICTS. UM AND
WE'LL TALK ABOUT THE TREND THAT
WE SEE WITH OUR SMALLS AND
TINIES. WHEN IT COMES TO
NEGATIVE. UM THE STORY IS MUCH
THE SAME FOR THE SIX. THIS IS
THEIR FIRST NEGATIVE
CERTIFICATION. UH ONE. THIS IS
THEIR SECOND CONSECUTIVE
NEGATIVE AND ONE. THIS IS THEIR
THIRD CONSECUTIVE NEGATIVE. I
WOULD, UH, REMIND THE COMMITTEE
THAT IT IS UNUSUAL TO HAVE A
DISTRICT IN NEGATIVE STATUS.
MORE THAN ONE TIME. UH,
CONSECUTIVELY. THEY DO A PRETTY
GOOD JOB OF TURNING THINGS
AROUND RAPIDLY. THEIR COUNTY
SUPERINTENDENTS INTERVENTION,
OUR INTERVENTION. AND SO WE
DON'T HISTORICALLY SEE TWO AND
THREE CONSECUTIVE. UH, THIS IS A
TREND WHILE WELL, I MAY BE BOLD
HERE IN CALLING IT A TREND. IT'S
AN INDICATION, UH, THAT WE'VE
GOT SOME FOLKS STRUGGLING AND
NOTEWORTHY ON SITE. SEVEN WOULD
BE THE LIST OF THOSE DISTRICTS.
UH, WITH ONE EXCEPTION. UM WELL,
ACTUALLY THERE THERE ARE NÓ
EXCEPTIONS HERE. THESE ARE THESE
ARE SMALL. UM AND TINY DISTRICTS
. UM UH, NOTEWORTHY IS THAT UM,
FIVE OF THE SIX ARE SMALL. THREE
OF THE FIVE HAVE SIX A Dð 1380 A
4088. AND SO YOU APPRECIATE THAT
WHEN YOU HAVE DECLINING
ENROLLMENT IN THAT ENVIRONMENT
OR OTHER FISCAL CONSTRAINTS IN
THAT ENVIRONMENT, THEY HAVE
ALMOST NÓ PLACE TO TURN. THEY
ALREADY ONLY HAVE ONE TEACHER
TEACHING Kò 12 AND THREE IN A
COMBO CLASS, YOU KNOW, WHERE DO
YOU TRIM? COSTS RIGHT IT, UM,
THE PRINCIPAL SLASH
SUPERINTENDENT IS ALSO THE BUS
DRIVER IN THE CUSTODIAN. UM AND
SO ON. IT IS A VERY DIFFICULT
ENVIRONMENT, UH, FOR THEM, AND
SO YOU SEE THEM ON HERE, UM, IN
THIS CASE UM, WE DO HAVE SOME
UNIQUE CIRCUMSTANCES HERE THAT I
THINK ARE IMPORTANT. UM ONE OF
THESE DISTRICTS, UM OK. RUN
UNION IN SHASTA COUNTY. UH, IS A
DISTRICT OF 4080, A UH, WE'VE
DETERMINED, UH, THAT THEY ARE
NOT FOLLOWING THE IMMUNIZATION
STATUTES, AND I MEAN EVEN TO THE
POINT OF SEEKING WAIVERS FROM
THE PARENTS SEEKING WAIVERS OR
SIMPLY IGNORING IT, UM, THAT
MAKES THEIR 88 INELIGIBLE FOR
APPORTIONMENT IN DECEMBER.
THEY'VE DROPPED FROM 40 TO ABOUT
11. AS FAR AS FUNDING A PORTION
PURPOSES. UM, PUBLIC HEALTH IS
WORKING WITH THEM COUNTY
SUPERINTENDENTS WORKING WITH
THEM. WE ARE, UM, TRYING TO WORK
WITH THEM AND ENGAGE WITH THEM.
THAT'S AN UNUSUAL CIRCUMSTANCE.
UM A VERY MUCH AN ANOMALY. UM
BUT, UH UM WORTH NOTING THE WE
HAVE ONE OF THESE DISTRICTS.
GREEN POINT IN HUMBOLDT, UH,
WHICH IS APPROACHING POTENTIALLY
LAP STATION, AND I THINK IT'S
JUST TAKEN THE DISTRICT A LITTLE
BIT OF TIME TO WORK THROUGH
THAT. MENTALLY THAT THAT'S
PROBABLY WHERE THEY NEED TO GO
AND PARTNER WITH ONE OF THEIR
NEIGHBORS, UH, THE OTHERS WERE
FULLY ENGAGED WITH WORKING WITH,
UM THE LAST OR I'M SORRY. UH
SLIDE EIGHT IS ANY DOWNGRADE, SO
IN THOSE CERTIFICATIONS A
POSITIVE QUALIFIED, UM IF THE
COUNTY SUPERINTENDENT DISAGREES.
THEY CAN DOWNGRADE THEM. A
POSITIVE QUALIFIED, QUALIFIED TO
NEGATIVE AND SLIDE EIGHT
DESCRIBES THAT WE ONLY HAVE ONE
OF THOSE SO FAR THIS YEAR AT
FIRST DINNER THAT WOULD BE LIVE
OAK ELEMENTARY SCHOOL DISTRICT
IN SANTA CRUZ COUNTY, WHERE THEY
CERTIFIED QUALIFIED. THE COUNTY
SUPERINTENDENT DOWNGRADED THEM
TO NEGATIVE. THE LAST SLIDE
WOULD BE LACK OF GOING CONCERN
VERY SIMILAR TO A NEGATIVE
CERTIFICATION, EXCEPT THIS IS
INITIATED NOT BY THE SCHOOL
DISTRICT BUT BY THE COUNTY
SUPERINTENDENT. IT CAN BE DONE
AT ANY TIME DURING THE YEAR, NOT
JUST AT FIRST OR SECOND INTERIM,
SO IF THERE ARE, UH, LEADING
INDICATORS IN THE IN A DISTRICT
OF FISCAL DISTRESS THAT THE
COUNTY SUPERINTENDENT DOES NOT
BELIEVE THE DISTRICT IS
ADEQUATELY ADDRESSING. UM THEN
WE HAVE A, UM, A DESIGNATION A
BASIS OF THAT DETERMINATION. AND
THEN A PROGRESSIVE INTERVENTION
PROCESS. UM THAT, UH, IS
FOLLOWED BY THE COUNTY
SUPERINTENDENT. UM AND MOST
DISTRICTS RESPOND VERY WELL TO
THAT. SOME OBVIOUSLY STRUGGLE.
UM, A LITTLE BIT MORE WITH THAT
YOU CAN SEE IN THE CURRENT YEAR.
WE ALREADY HAVE SIX OF THOSE, UM
AND, UH, WE'RE ENGAGED IN EACH
OF THOSE DISTRICTS. MOVING UH,
TO MY OUTLINE, THEN WITH REGARD
TO NEAR TERM IMPACT NEAR TERM
TRENDS IMPACTING SOLVENCY, AND
I'VE MENTIONED A COUPLE OF THESE
FIRST IS DECLINING ENROLLMENT.
UH, NOT NEW TO US. WE'VE BEEN AT
THIS SINCE 405 CERTAINLY
ACCELERATED A GREAT DEAL DURING
THE, UH, PRIME PANDEMIC YEARS.
UM BUT WE ARE CONTINUING. YOU
HEARD, UH, EARLIER TODAY FROM
DEPARTMENT OF FINANCE SOME OF
THEIR ASSUMPTIONS ABOUT
ENROLLMENT GROWTH. UM, UH,
NONETHELESS, IT IS A UM, IT IS A
DECLINE. IT IS BACK TO OUR MORE
NORMAL FORECASTED DECLINE, AS
OPPOSED TO WHAT WE SAW DURING
THE PANDEMIC. UM AND SO, FROM
THAT STANDPOINT, WE'RE
STABILIZING A BIT. UM AS I'VE
ALREADY INDICATED, THOUGH, OUR
SMALL AND TINY DISTRICTS THAT
EXPERIENCED DECLINES HAVE, UM
MORE DIFFICULTY RESPONDING TO
THOSE FISCAL IMPACTS FROM THE
DECLINE. UM UH, SIMPLY BECAUSE
THERE ARE ALREADY SMALL, ALREADY
. VERY TIGHT BUDGETS. UM AND THE
LOSS OF, UM ONE FAMILY OF THREE
CAN ACTUALLY HAVE A FISCAL
IMPACT ON ON THE DISTRICT.
ATTENDANCE YIELD IS BEGINNING TO
RECOVER. FINALLY UH FROM, UH,
THE PANDEMIC. UM IT WILL. IT HAS
BEEN MOVING, UH, THE LAST 18
MONTHS. 24 MONTHS. ACTUALLY YOU
KNOW, IN THE OPPOSITE DIRECTION
FROM DECLINING ENROLLMENT, SO
ENROLLMENT IS GOING DOWN. BUT
ATTENDANCE YIELD COMING OUT OF
THE PANDEMIC WAS STARTING TO
INCH UP. WE'RE SEEING THAT NOW
GET BACK TO A LITTLE BIT MORE
NORMAL. STILL A LITTLE LIGHT. UM
AND SO, UM, AS WE WORK THROUGH
THAT, THE MIDI THE DECLINING A
Dð A MÐI. STRATEGIES THAT THE
LEGISLATURE AND THE
ADMINISTRATION PUT IN PLACE. UH,
DURING THE PANDEMIC. WELL WHILE
THEY REMAIN IN PLACE, THEY WILL
HAVE LESS AND LESS OF AN IMPACT,
BECAUSE, UH, WE'RE MOVING
FURTHER AND FURTHER AWAY FROM
THE ANOMALIES OF THE PANDEMIC
ITSELF. THE OTHER FACTOR AND YOU
ARE WELL AWARE OF THIS WE HAVE.
WE HAD LARGE INVESTMENTS OF ONE
TIME MONEY, UH FROM THE FEDERAL
GOVERNMENT AND THE STATE
GOVERNMENT, BUT PREDOMINANTLY
FROM THE STEP STEP FEDERAL
GOVERNMENT DURING THE PANDEMIC
YEARS. THOSE EXPIRE THE LAST OF
THE THREE, UM, BUCKETS OF FUNDS.
IF YOU WILL, FROM ESSER 12 AND
THREE ALL EXPIRED THIS SEPTEMBER
. WE STILL HAVE DISTRICTS THAT
HAVE STAFF TIED TO THOSE FUNDS.
AND YOU SEE THAT REFLECTED IN AS
YOU LOOK AT THE HEAD. ACROSS THE
STATE, UM IN THE LAST SEVERAL
WEEKS OF LAYOFF NOTICES GOING
OUT TO BOTH CERTIFICATED AND
CLASSIFIED STAFF. A BIG PIECE OF
THAT IS A RESULT OF DECLINING
ENROLLMENT AND SCHOOL DISTRICTS
CATCHING UP TO THEIR DECLINES
OVER THE LAST SEVERAL YEARS.
THEY WERE USING SOME OF THOSE
PANDEMIC FUNDS TO SOFTEN THE
FISCAL IMPACT FROM THOSE
DECLINES. BUT THE SECOND THING
IS THE ACTUAL EXPIRATION OF
THOSE FUNDS AND THE EXHAUSTION
OF THOSE FUNDS COME SEPTEMBER.
UM IT'S A IT'S THIS FEDERAL
FISCAL YEAR, BUT IT IS THE FIRST
QUARTER OF A SCHOOL YEAR AND SO
WE HAVE TO DEAL WITH STAFF THAT
ARE TIED TO, UM THOSE FUNDS
ENDING IN SEPTEMBER. WE HAVE TO
DEAL WITH THEM NOW BY MARCH,
15TH. AND SO THAT IS PUTTING
SOME PRESSURE ON DISTRICTS THEIR
EXIT PLANS IF YOU WILL, FROM
MOVING FROM ONE USE OF ONE TIME
FUNDS TO SUPPORT STAFF AND OTHER
ONGOING PROGRAMS. UM THEY'RE
WORKING THROUGH THAT EXIT PLAN
AND IMPLEMENTING IT AT THIS
POINT IN TIME. UH, YOU'VE ASKED
QUESTIONS ABOUT AND MADE
STATEMENTS ABOUT WHAT YOU'RE
HEARING, UH, FROM YOUR MEMBER
DISTRICTS OR DISTRICTS IN YOUR
IN YOUR, UH, SCHOOL DISTRICTS IN
YOUR HOME DISTRICTS, IF YOU WILL
, UM UH, ABOUT THE COLA. UM YES,
IT'S A LOW COLA THAT WE'RE THAT
HAS BEEN FORECASTED, AND I THINK
WE WILL SEE SOME SLIGHT
IMPROVEMENT HERE WHEN WE GET TO
THE FINAL COLA, BUT IT WILL NOT
BE WHAT DISTRICTS? UM ANTICIPATE
OR HOPE? I CERTAINLY EXPECT IT
TO BE, UM, LESS THAN 1. WHAT'S
NOTABLE HERE THAT I'M SURE
YOU'VE HEARD FROM YOUR
CONSTITUENTS? IS THAT A COAL OF
THAT IN A COAL OF ANYTHING LESS
THAN 4.5, OR 5% FEELS LIKE A
LOCAL CUT? RIGHT IT'S NOT A CUT.
IT'S ACTUALLY AN INCREASE IN
FUNDING, BUT IT FEELS LIKE A
LOCAL CUT BECAUSE IN THE SCHOOL
DISTRICT THE FIXED COSTS IF I
CAN USE THAT TERM DO GO UP EACH
YEAR. UM AND THEY GO UP ON
AVERAGE. 4.5 5% WERE DOING
NOTHING ELSE JUST STAYING IN
BED. UM ON A GIVEN DAY ON THE
FIRST DAY OF SCHOOL, UM, JUST
STAYING IN BED. THOSE COSTS ARE
STILL GONNA BE UP. WE HAVE STAFF
THAT MOVE ACROSS THE COLUMNS.
UM, MOVE DOWN IN THE STEPS. UH,
WE HAVE HEALTH AND WELFARE
INCREASES AND WE HAVE NUMEROUS
OTHER, UM, IN DEED. UM,
TRIGGERED KINDS OF INCREASES AND
SO LOW LOWER COLA FEELS LIKE A
LOCAL, UM, A PINCH OF, UH
FISCALLY. WE STILL HAVE
INFLATIONARY PRESSURES WHY
INFLATION HAS BEEN TAPPED DOWN
SIGNIFICANTLY BY THE ACTIONS OF
THE FEDS. THE REALITY IS THE
COST OF THE PENCIL IS STILL AT
$3 NOT AT ITS OLD $2. IT'S JUST
NOT GOING UP TO THREE 50 SO
DISTRICTS STILL FEEL THE INF
INFLATIONARY PRESSURES ON THE
COST SIDE FROM THE LAST SEVERAL
YEARS. WELL I'VE RAISED THE
IMPACT OF A B 218 REGARDING
SEXUAL ASSAULTS OF MINOR THE
FISCAL IMPACT THE LAST SEVERAL
YEARS. I'VE NOT GONE INTO A LOT
OF DETAIL. IT'S JUST ALWAYS BEEN
ON THAT, UM, ON THE RADAR SCREEN
TO LOOK AHEAD TO, UH, WHEN THIS
LEGISLATION WAS PASSED IN 2018,
THERE WAS A LOT OF CONVERSATION
ABOUT WHAT THE IMPACT WOULD BE.
UM BUT WE DIDN'T HAVE NUMBERS
WE'VE NOW WELL THROUGH. UM UH, A
GOOD HALF OF THIS PROCESS. AND
WE ARE STARTING TO SEE THE
FISCAL IMPLICATIONS TO DISTRICTS
AND THEY ARE SIGNIFICANT. THEY
COME IN THREE WAYS AND I WANT TO
BREAK THOSE DOWN FOR YOU. THE
FIRST IS, UM, OBTAINING
LIABILITY INSURANCE COVERAGE TO
START WITH, UM AND IF YOU'RE
ABLE TO OBTAIN IT, UH THEN WHAT
IS THE COST OF THAT PREMIUM
THOSE PREMIUM COSTS FOR NEXT
YEAR BEING PRICED RIGHT NOW WE
KNOW FROM THE INDUSTRY AND THERE
ARE ONLY A FEW INSURERS THAT
INSURE CALIFORNIA SCHOOL. TO
START WITH UM MOST LET ME BACK
UP MOST CALIFORNIA SCHOOL
DISTRICTS, THEIR PRIMARY RISK
PARTNER IS A RISK POOL. THAT
THEY IN ESSENCE OWN AAA GROUP OF
SCHOOL DISTRICTS. OWNER CONTROL
THAT RISK POOL. THE RISK POOL,
THOUGH, PROVIDES A TIERED SET OF
COVERAGES. WHAT WE CALL A TOWER
OF COVERAGES THINK ABOUT A HIGH
RISE BUILDING OR FIVE FLOOR
OFFICE BUILDING, SUCH AS THE
CAPITOL HERE, AND EACH FLOOR IS
EITHER SELF INSURED, OR WE BUY
COMMERCIAL INSURANCE OBTAINING
INSURANCE FOR EACH OF THOSE
FLOORS. UM THERE ARE A FEW
PROVIDERS TO START WITH, AND THE
PRICE TAG IS GOING UP
SIGNIFICANTLY. WE DO EXPECT
DOUBLE DIGIT INCREASES IN THE
PREMIUMS THE SPRING GOING INTO
NEXT YEAR. THE SECOND THING WHEN
WE DEAL WITH RISK POOLS IS THAT
THEY HAVE TO BE MADE WHOLE AND
AS THE MEMBER DISTRICT THAT PUTS
THE BURDEN ON THE MEMBER
DISTRICT, AND SO IS THE RISK
POOLS FOR INSURED. UM SAM CLAIMS
. UH UH UM SEXUAL ASSAULT OF A
MINOR. UM CLAIMS THE RISK POOL
MAY BE AT RISK IF IT HAS TO DRAW
DOWN ITS RESERVES TO PAY A
CLAIM. FROM A PRIOR YEAR IN SOME
OF THESE GO BACK 3040 YEARS.
THESE CLAIMS THEN THEY DO A
SPECIAL ASSESSMENT AGAINST THEIR
MEMBER DISTRICTS BACK AT THAT
POINT IN TIME. AND THAT SPECIAL
ASSESSMENT IS GENERALLY BASED ON
WHAT THEIR ENROLLMENT WAS BACK
AT THAT POINT IN TIME. SO A
COUPLE OF FACTORS HERE NUMBER
ONE IS ENROLLMENTS DECLINED
SINCE THEN, SO THEIR ASSESSMENT
IS ON A PER STUDENT BASIS IS
ACTUALLY PRETTY HEFTY. UM AND
NUMBER TWO IS THEY NEED TO STAY
WHOLE AS AN AS A RISK POOL. THEY
NEED TO STAY WHOLE. AND SO WE'RE
STARTING TO SEE SPECIAL
ASSESSMENTS IN THE 35 TO $80 PER
A Dð A RANGE. PUT THIS IN
PERSPECTIVE, THE PREMIUM
INCREASES IN THE SPECIAL
ASSESSMENTS WILL EAT UP THE
ENTIRE PER A Dð A COLA FOR NEXT
YEAR. JUST LET THAT SIT WITH
YOU. NOTHING NOTHING ELSE GOES
NEON COVER ANYTHING ELSE EXCEPT
JUST THE LIABILITY COVERAGE
INCREASES BETWEEN THIS YEAR AND
NEXT YEAR. THE THIRD WAY SCHOOL
DISTRICTS ARE IMPACTED IS IN
THIS, UM EMERGING AREA OF
UNINSURED AND UNDERINSURED
CLAIMS. WHEN WE HAVE CLAIMS FROM
3040 YEARS AGO, THEY MAY THAT
MAY PREDATE RISK POOLS. AND THUS
THEY MAY HAVE HAD COMMERCIAL
INSURANCE WITH COMPANIES THAT
ARE NÓ LONGER IN BUSINESS, OR
THAT THEY CAN'T EVEN DETERMINE
30 YEARS LATER, WHO THEIR
INSURANCE COMPANY WAS. UM WE ARE
SEEING JUDGMENTS FROM COURTS
HERE IN CALIFORNIA IN THE 30 TO
A RECENT JUDGMENT OF $137
MILLION IN THE CASE OF THE 137
MILLION IS FOR TWO VICTIMS.
THERE ARE FOUR MORE VICTIMS FROM
THE SAME, UM, A TEACHER, UM,
THAT DATE BACK TO THE EARLY
NINETIES. THERE ARE FOUR MORE
VICTIMS PENDING TRIAL IN THIS IN
THIS ONE INCIDENT. 137 MILLION,
THE JURY REACHED ITS VERDICT AND
JUDGMENT IN TWO HOURS OF
DELIBERATION. THEIR INSURANCE IS
ROUGHLY 15 MILLION. AND SO THAT
120 ROUGHLY MILLION DOLLARS
FALLS DIRECTLY ON THE SCHOOL
DISTRICT. UM AND SO. UM WE NEED
TO BEGIN A CONVERSATION ABOUT
WHAT WE CAN DO LOCALLY, UH, FOR
OUR LOCAL DISTRICTS ABOUT HOW
THEY CAN BEST HANDLE THESE
WITHOUT BACKING UP BECAUSE I
DON'T THINK THERE'S ANYBODY THAT
THAT DOESN'T BELIEVE THE VICTIMS
SHOULD BE COMPENSATED. SO
WITHOUT BACKING UP ON THAT
ASPECT OF IT, HOW DO LOCAL
DISTRICTS MANAGE UNDERINSURED
AND UNINSURED CLAIMS? HOW DID
THE RISK POOLS THAT LOCAL
DISTRICTS BASICALLY OWN AND
CONTROL? UM HOW DO THEY MANAGE?
UM THEIR UM UH, THE IMPACTS TO
THEM SO DIFFERENT THAN MY PRIOR
YEAR'S COMMENTS ABOUT A B 218 IS
WE NOW? HAVE SOME DATA TO LOOK
AT. UM, THAT IS VERY IMPACTFUL.
THE LAST TWO COMMENTS. I HAVE,
UM, ARE BOTH UPBEAT, POSITIVE
COMMENTS AND THAT IS GENERALLY
SPEAKING. OUR DISTRICTS HAVE, UM
, QUITE A BIT OF GENERAL FUND
RESERVE. CERTAINLY MORE SO THAN
ENTERING THE LAST ECONOMIC
DOWNTURN THAT WE FELT GOING INTO
THE GREAT RECESSION. UH, ROUGHLY
8% AT THAT POINT TODAY, THEY'RE
AVERAGING AROUND 22% AND CASH
HOLDINGS IN OUR LOCAL DISTRICTS
ARE ALSO VERY STRONG. THANK YOU,
MR CHAIR. THANK YOU. LET ME TRY
TO QUICKLY, UH, GO THROUGH YOUR
PRESENTATION. ASK A FEW
QUESTIONS ON SLIDE TWO OR OF THE
PRESENTATION. UM, I KNOW THERE'S
PROBABLY THE GOAL. PROBABLY IS
TO BE AT ZERO WITH NEGATIVE OR
QUALIFIED RIGHT. BUT IS THERE
LIKE A WHEN THIS WAS THE THIS
BEGAN IN THE GREAT RECESSION IN
Ó, EIGHT. NÓ THIS DATES BACK
ALL THE WAY TO THE BEGINNING OF
A 1200 SO BACK IN 1992 92, AND
SO WAS THERE EVER DISCUSSION
ABOUT LIKE HOW MUCH IS
MANAGEABLE IF THERE'S IN TERMS
OF THE WORK THAT THAT YOU THE
DISTRICTS HAVE THE COUNTY.
EXCUSE ME HAS TO DO TO MAKE SURE
THAT THEY'RE ABLE TO. YOU KNOW,
THERE'S BEEN INSTANCES WHEN
THESE THE NUMBERS ARE REALLY,
REALLY LARGE. EVEN WITH THE
UNCERTAINTY THIS YEAR, UM THEY
THEY LOOK LIKE THEY'RE GONNA BE
AT THE LOWER END OF THE QUARTILE
IF YOU WILL, UM, SO IS THERE ANY
THING YOU LOOK FOR? TO MAKE SURE
THAT IT'S ALL MANAGEABLE IF YOU
WILL. I THINK, GENERALLY
SPEAKING, CERTAINLY SINCE THE
GREAT RECESSION, THERE'S BEEN NÓ
TROUBLE MANAGING THE UPS AND
DOWNS THAT YOU SEE HERE, BOTH AT
THE COUNTY LEVEL. REMEMBER THESE
ARE DISTRIBUTED OVER 58 COUNTIES
. UM AND SO, UM, THE IMPACT IS
MORE, PROBABLY NOT THE QUALIFIED
BUT MORE THE NEGATIVES. THOSE
REQUIRE MUCH MORE INTENSE WORK.
UM AND WE DO HAVE SOME
CONCENTRATIONS AGAIN. THE
NEGATIVES ARE IN SMALLER, UM
TINY DISTRICTS SO SMALLER AND
TINIER COUNTIES. UM THE LARGER
IMPACT PROBABLY ULTIMATELY BOILS
DOWN TO, UM, UM, OUR AGENCY. UM
AND RIGHT NOW, I, I BELIEVE WE
CAN HANDLE WHAT WE SEE ON ON THE
FORESEEABLE FUTURE. ON SLIDE
THREE. YOU HAVE A IDENTIFY AN
EXCLUSION OF DISAPPROVAL SOLELY
DUE TO THE UNAPPROVED L CAPS.
YEAH. WHAT WHAT DOES THAT THEN?
MEAN TO YOUR OVERALL NUMBERS?
HOW LIKE HOW MANY. IT HAS BEEN
DISAPPROVED AS A RESULT OF L èC
P. IT HAS NÓ IMPACT ON THE
STATUTE PROVIDES FOR A COUNTY
SUPERINTENDENT TO CONDITIONALLY
DISAPPROVE A BUDGET. IF THE CAP
IS NOT APPROVABLE AT AT THE
SEPTEMBER 15TH POINT THEY THEN
ARE GIVEN TILL NOVEMBER. 8TH TO
CORRECT THE ALL CAP GET IT
APPROVED AND THEN THEIR BUDGET
CAN BE APPROVED. SO THIS DATA IS
, IN ESSENCE, AS OF UM, NOVEMBER
8TH, WHICH IS THE STATUTORY
DEADLINE FOR THE APPROVAL OR
DISAPPROVAL, SO THE PROCESS IS
THE EL CAP HAS TO BE APPROVED
BEFORE THE BUDGET. BOTH AT THE
LOCAL LEVEL AND AT THE COUNTY
SUPERINTENDENTS OR èC, Dð E IF
THEY'RE PROVIDING THE OVERSIGHT
OF THE DISTRICT. UM IF THE L CAP
IS UNAPPROVED, THEN THE COUNTY
SUPERINTENDENT OR èC, Dð IS NOT
ALLOWED TO APPROVE THE BUDGET.
ONE HAS TO COME BEFORE THE
OTHER. AND SO THEY THE DISTRICT,
THEN ENGAGES IN WHAT NEEDS TO BE
CORRECTED ON THE L èC P GOES
THROUGH THE PROCESS TO DO THAT,
AND THEN GENERALLY SPEAKING,
THERE'S FEW CHANGES HAVE TO BE
MADE TO THE BUDGET AT THAT POINT
, BUT IT ALLOWS THEM THEN TO
PROCEED WITH THE APPROVAL OF
THAT, OK, MOVING ON TO SLIDE
SEVEN ON THE, UH, NEGATIVE
DISTRICTS THAT YOU TALKED ABOUT
I. I HEARD YOU SAY NUMBERS AND
THAT WILL I. WAS SURPRISED, UM.
YOU. WE HAVE SCHOOL DISTRICTS
WITH 40 STUDENTS. WE HAVE SCHOOL
DISTRICTS WITH SIX STUDENTS
DESPITE STATUTE THAT SAYS, AT
SIX OR BELOW, YOU WOULD LAPSE OR
YOU WOULD MOVE THROUGH THE
DISTRICT ORGANIZATION PROCESS
REORGANIZATION PROCESS. YEAH,
THIS IS A POLICY. DECISION SO I
DON'T WANNA DO NOT INTEND TO PUT
YOU ON THE SPOT, BUT, UH I MEAN,
THAT JUST SEEMS LIKE A ON, UM,
SUSTAINABLE SITUATION. UH, FROM
YOUR PERSPECTIVE. WHAT DO YOU
ARE YOU COMFORTABLE WITH SHARING
ABOUT THAT OPINION OF MINE? WELL
IN IN VERY REMOTE AREAS. I
UNDERSTAND WHY THAT'S THE CASE.
WE HAVE A VERY SMALL COMMUNITY
OUT IN IN, YOU KNOW THE
MOUNTAINS SOMEPLACE, II. I CAN
AND NÓ NÓ NEIGHBORS NÓ SCHOOL
DISTRICT NEIGHBORS AROUND HIM.
THAT STARTS TO MAKE SENSE. RIGHT
UM, IN, UH, COUNTIES LIKE, UH,
LET'S PICK ON SONOMA, WHICH HAS
A NUMBER OF VERY SMALL DISTRICTS
. NOT ALL OF THEM ARE REMOTE.
THEY ARE FAIRLY CLOSE BY. UM BUT
FOR THOSE OF YOU, CERTAINLY, UM
MEMBER WHO IS A FORMER SCHOOL
BOARD MEMBER, GIVING UP YOUR
DISTRICT THROUGH THE THROUGH A
UNIFICATION OR A LAPS OR A
REORGANIZATION TO A NEIGHBORING
DISTRICT IS DIFFICULT. A PART OF
YOUR COMMUNITY IDENTITY IS
AROUND YOUR SCHOOLS. UM YOUR
DISTRICT RIGHT? AND SO THAT'S
DIFFICULT FOR A COMMUNITY TO DO.
UM AND SO THEY CERTAINLY
STRUGGLE WITH THAT. UM THERE IS
GENERALLY SPEAKING, NOT A
FINANCIAL INCENTIVE. TO DO IT
OTHER THAN EFFICIENCY, RIGHT?
SO, BUT THESE SCHOOL DISTRICTS
HAVE A SUPERINTENDENT AND
ADMINISTRATIVE OFFICERS.
GENERALLY SUPERINTEND SLASH
PRINCIPAL OFTEN SLASH CUSTODIAN
SLASH BUS DRIVER THEY DO SLASH
TEACHER. CERTAINLY
SUPERINTENDENT PRINCIPAL TEACHER
MAY BE ALL WRAPPED UP IN ONE,
OK? OK, UM. INTERESTING BUT THEY
DO HAVE A BOARD. THEY WOULD HAVE
TO HAVE A GOVERNING BOARD. UH,
NOW TO YOUR, UM UH, OUTLINE THAT
YOU PROVIDED TO US. UH, YOU
TALKED ABOUT AND I'VE CERTAINLY
HEARD IT FROM EVERY ONE OF THE
SUPERINTENDENTS. I'VE SPOKEN TO
EXPIRATION OF ONE TIME PANDEMIC
RELATED FUNDS, WHETHER IT WAS A
STATE OR FEDERAL AND I KEEP
HEARING. UH PEOPLE SAY THAT YOU
KNOW THAT'S GONNA HAVE SOME
IMPACT, BUT THESE WERE ALL VERY
CLEARLY TEMPORARY IN NATURE, AND
I HEAR YOU SAY THINGS LIKE
LAYOFFS, UM, NOTICES GOING OUT
FOR POSITIONS THAT WERE FUNDED
THROUGH THESE PROGRAMS. WHAT
KIND OF OVERSIGHT WAS DONE
EITHER THROUGH, UM UH, ABS YOU
SAW YOU CALL IT FF èC AND YOU
CALL FC MATT, WHAT DO YOU CALL
THE F MÀ? THANK YOU, UM OR OR
OTHERWISE TO ENSURE THAT THAT
WASN'T THE USE OF THE FUNDS
BECAUSE THAT THAT SETS UP A
SCENARIO THAT, UM SHOULD NOT
HAVE BEEN AN EXPECTATION. SO WE
DON'T PROVIDE THE DIRECT
OVERSIGHT OURSELVES. BUT THE
COUNTY SUPERINTENDENTS DO SO
THIS IS A TOPIC THAT'S BEEN, UM
THOUGH, SOMETHING WE'VE SPOKEN
ABOUT WITH DISTRICTS ON A VERY
ROUTINE BASIS. AND WHEN I SAY
DISTRICTS IN THIS CASE, UM THE
BROAD GROUP OF LE, A S¼, BOTH
SUPERINTENDENTS, CHIEF BUSINESS
OFFICIALS, BOARD MEMBERS IN
EVERY SETTING. UM AND THAT IS
FIRST. OUR NORMAL MANTRA WOULD
BE YOU DON'T USE ONE TIME FUNDS
FOR, UH, WE OFTEN SAY FOR THINGS
THAT EAT MEANING STAFF STAFF
LIKES TO EAT RIGHT. AND SO IT'S
A RECURRING KIND OF THING. YOU
DON'T USE ONE TIME FUNDS.
PROGRAMS OR RECURRING NEEDS.
DURING THE PANDEMIC. WE DIDN'T
SAY THAT WE CHANGED OUR LANGUAGE
A LITTLE BIT AND THAT AND THAT
WAS DRIVEN BY THE SPECIFIC
PURPOSE OF THOSE ONE TIME FUNDS,
AND THAT WAS TO SUPPORT
STUDENTS. DURING A VERY
DIFFICULT TIME AND THE WAY WE
SUPPORT STUDENTS IS THROUGH
STAFF. WE SUPPORT THEM THROUGH
TEACHERS. WE SUPPORT THEM
THROUGH AIDS. WE SUPPORT THEM
THROUGH MENTAL HEALTH. UM AND
BEHAVIOR. UH, INTERVENTION
SPECIALISTS AND COUNSELORS AND
OTHER SERVICES. RIGHT THAT'S HOW
WE DELIVER THOSE SERVICES. AND
SO OUR MANTRA CHANGED A LITTLE
BIT TO SAY. FOR EVERY STAFF
MEMBER USE THESE ONE TIME FUNDS
FOR YOU NEED TO HAVE AN EXIT
PLAN. WHAT IS YOUR PLAN AS THOSE
FUNDS BEGIN TO BE EXHAUSTED OR
EXPIRE. UM WE'VE TALKED THROUGH
THAT THROUGH S¼ R ONE. WE TALK
THROUGH THAT WITH ESSER TWO WAS
IN A LOT OF PRESSURE THERE
RIGHT? BECAUSE YOU HAD TO FOLLOW
ON PROGRAMS YOU HAD OR TWO THAT
COULD COVER PART OF S¼ R. ONE
ONGOING EXPENSES. YOU WE'VE HAD
S¼ OR THREE THAT WOULD COVER
SOME OF THE S¼ R TWO
INVESTMENTS, RIGHT? BUT NOW AT
THE END OF ES, OR THREE COMES
SEPTEMBER IT'S DONE WITH REGARD
TO THE FEDERAL. SOME STATE
PROGRAMS CONTINUE ON SO THE
LEARNING RECOVERY EMERGENCY
BLOCK GRANT CONTINUES ON UNTIL I
BELIEVE IT'S 2027 OR 28 AND SO
ON. SO. UH, THEY'VE KNOWN ABOUT
IT FOR A LONG TIME. MANY
DISTRICTS HAVE BEEN LOOKING AT
THEIR ATTRITION. AND THEY'VE
BEEN TAKING SOME OF THESE ONE
TIME FUNDED POSITIONS AND MOVING
THEM INTO REGULARLY FUNDED
POSITIONS. ATTRITION OF STAFF,
ATTRITION OF STAFF. YES WE'RE
ALSO HAVE AN ENROLLMENT DECLINE.
ENROLL WE HAVE AN ENROLLMENT
DECLINE. YOU YOU MENTIONED TWO
THINGS THAT, UM I'M SURE YOU
HAVE NUANCES FOR BECAUSE YOU
SAID ATTENDANCE IS, UM, NOT BACK
. BUT PLEASE CLARIFY THE
STATEMENT. STARTING THEN ALSO,
WE HAVE DECLINED IN ENROLLMENT.
SO, UM UH, WHERE DO WE ACTUALLY
LAND ON WHERE WE STAND ON THIS?
WELL EVEN EVENTUALLY, SO
HISTORICALLY, ENROLLMENT. AND
AVERAGE DAILY ATTENDANCE TEND TO
MOVE TOGETHER UP DOWN DURING THE
PANDEMIC AND MORE SPECIFICALLY
FOLLOWING THE PANDEMIC, THEY
CROSSED EACH OTHER ENROLLMENT
CONTINUED TO DECREASE. UM IN THE
EARLY DAYS OF THE PANDEMIC, AND
IN THE YEAR AND A HALF FOLLOWING
THE PRIME PANDEMIC YEARS.
ATTENDANCE YIELDS WERE ALSO
DECREASING. WE'VE STARTED TO SEE
ATTENDANCE YIELDS NOW BEGIN TO
INCREASE. WE'RE STILL BELOW OUR
HISTORICAL LEVELS, BUT WE ARE
GETTING CLOSER. AND SO RIGHT NOW
WE HAVE THIS ISSUE WHERE THE TWO
ARE ALMOST CROSSING EACH OTHER.
WHAT WE CARE ABOUT. WHAT WE CARE
ABOUT BOTH, BUT FROM A FUNDING
PERSPECTIVE, WHAT WE CARE ABOUT
IS THE ATTENDANCE. THAT'S WHAT
DRIVES THE REVENUE FOR THE
SCHOOL DISTRICT. AND SO AS A
TENANT YIELDS GO UP. WE MAY SEE
SOME DISTRICTS THAT BENEFIT BY
GOING BACK TO THE GREATER OF
CURRENT YEAR PRIOR YEAR AND NOT
USE THE THREE YEAR AVERAGE THAT
WE PUT IN PLACE RIGHT NOW. 80%
OF OUR LE, A S¼ USE THE THREE
YEAR AVERAGE COME JULY 1 WITH
THE NEW FISCAL YEAR THAT THREE
YEAR AVERAGE IS A MOVING
AVERAGE. RIGHT IN THIS YEAR, WE
SAW A PRE PANDEMIC YEAR. IN THE
THREE YEARS WHEN WE GET TO JULY
1, IT WILL ALL BE PANDEMIC OR
POST PANDEMIC A Dð A AND THEY
WILL MOST LIKELY NOT BENEFIT
FROM THE THREE YEAR AVERAGE.
IT'LL BE CURRENT OR GREATER.
EVENTUALLY THE TWO WILL BEGIN TO
MOVE TOGETHER AGAIN. THANK YOU
SIMILAR TO THE QUESTION ON THE
ONE TIME FUNDS. YOU KNOW THE
COLAS ARE PRETTY SUBSTANTIAL IN
THE LAST COUPLE OF YEARS, AND SO
I UNDERSTAND AND TOTALLY AGREE.
COST OF EVERYTHING GOES UP. BUT,
UM, THERE WAS A DOUBLE. WELL IN
THE TWENTIES. UH, IF YOU COMBINE
THE LAST COUPLE OF YEARS, UM
WHAT WERE WHAT KIND OF DIRECTION
THAT SUPERINTENDENTS GIVE TO HOW
YOU WOULD TREAT THAT COLA IN
TERMS OF YOU KNOW, IT'S NOT
GONNA BE 13% EVERY YEAR. I THINK
THAT'S THAT'S A VERY OBVIOUS
ASSUMPTION TO MAKE. BUT THERE
ARE UNIQUE. THOSE WERE VERY
UNIQUE NUMBERS. THEY WERE VERY
UNIQUE NUMBERS. UM AND I THINK
FROM A CAUTION STANDPOINT, WE,
UH EVERYBODY REMINDED DISTRICTS
THAT THOSE WERE NOT THE NORMS.
UM AND WE HAD FORECASTS, EVEN
USING LAST JUNE'S FORECAST FOR
NEXT YEAR WOULD HAVE BEEN BELOW
4% HALF OF WHAT THIS YEAR. ARMS.
COLO WAS SO WE'VE BEEN I THINK
EVERYBODY IS, UH, BEING VERY
CLEAR ABOUT WHERE WE WERE WHERE
WE WERE HEADED. UM. CAUTION
ABOUT HOW TO USE THOSE FUNDS.
THEY ARE COLA ON THE L èC FF
PREDOMINANTLY AND SPECIAL, ED,
UM, AND A FEW CATEGORICAL
PROGRAMS, RIGHT? SO THEY ARE, IN
THEORY RECURRING, ONGOING SO TO,
UM, BARGAIN WITH THEM. I THINK,
UH, WAS WAS APPROPRIATE, UM,
CONSIDER THEM FOR RECURRING
TYPES OF THINGS, UH, SUCH AS
ADDED STAFF WAS APPROPRIATE.
EACH DISTRICT, THOUGH, IS LEFT
IN EACH BORE. EACH GOVERNING
BOARD IS LEFT TO MAKE THAT
DECISION BASED ON THE NEEDS OF
THEIR SCHOOL DISTRICT AND THERE
WHERE THEY'RE AT WITH REGARD TO,
UM THINGS SUCH AS COLLECTIVE
BARGAINING COMPARISON OF THEIR
PEER GROUPS WITH REGARD TO
COMPETITIVE, SAL THOSE TYPES OF
THINGS THE ISSUE WOULD BE ANY
ONE TIME. COMPONENTS OF THAT
FUNDING OBVIOUSLY SHOULDN'T HAVE
BEEN ON THE TABLE TO BE
BARGAINED THOSE KINDS OF THINGS.
THANK YOU. YOU'RE WELCOME. MR
MEUCCI. THANK YOU, MR. FINE. UM
UH, GOOD TO SEE YOU. GOOD TO SEE
YOU BACK. UM, THANK YOU. YOU,
YOUR YOUR YOUR CHART HERE. IT
KIND OF SUMMARIZES MY LIFE
EXPERIENCE WITH, UH, A SCHOOL
DISTRICTS. I. I WAS FIRST
ELECTED TO MY SCHOOL BOARD IN
2005. AND SO I EXPERIENCED THAT
SPIKE THERE AND THIS HAS BEEN MY
LEGISLATIVE. UH, MY EXPERIENCE
IN THE LEGISLATURE, UM AND SO,
LOOKING AT THIS, YOU KNOW, BIG
PICTURE TREND OF, UH HOW. THE
SCHOOL DISTRICTS, YOU KNOW,
STRUGGLE, THE MOST DURING THE
GREAT RECESSION. DO YOU SEE? YOU
KNOW, UH, ANY YOU KNOW, TREND IN
IN IN TERMS OF, UH, INCREASES,
UH, ON ON ON ON THESE GRAPHS.
THANK YOU FOR THAT QUESTION,
SIR. I I SEE CERTAINLY A TREND
OF INCREASES, BUT NOTHING LIKE
THE GREAT RECESSION. I THINK WE
HAVE TO PAUSE AND REMIND
OURSELVES BOTH THE ARCHITECTURE
AND THE CONDITIONS AROUND. THE
STATE BUDGET ARE VERY DIFFERENT
TODAY THAN THEY WERE IN 0708
SCHOOL DISTRICTS. UH, RESERVE
LEVELS CASH. A HOLDINGS AND
PRACTICES ARE ALSO DIFFERENT
TODAY THAN THEY WERE IN 07 OR
EIGHT GOING INTO THE LAST, UM
SIGNIFICANT DOWNTURN. WE HAVE TO
ACKNOWLEDGE THAT A LOT OF WORK
HAS BEEN DONE, UM BY THE
DEPARTMENT OF FINANCE BY THE
LEGISLATURE, UM, BY THE L A Ó
BY LOTS OF OTHER FOLKS, UM, TO,
UM, ACKNOWLEDGE THOSE DIFFICULT
PERIODS OF TIME, UH, PUT SOME
SAFETY GAPS IN PLACE. UM, TO
AVOID THAT I DON'T SEE US
REPEATING THAT. UM AND AS THINGS
DO GET A LITTLE TIGHTER AT THE
LOCAL LEVEL. I CERTAINLY SEE THE
NUMBERS, UM, GOING UP A LITTLE
BIT, BUT NOTHING THAT'S
UNMANAGEABLE. MOST DISTRICTS ARE
IN ARE ENTERING THIS IN A
COMPLETELY DIFFERENT POSITION
THAN THEY WERE IN 0708. WHICH IS
GREAT TO HEAR I. I REMEMBER WHEN
UH, OURS. UM YOU KNOW, THE
TORRANCE UNIFIED SCHOOL DISTRICT
, UM, HAD SAVED UP A 22% LOCAL
RESERVE. YOU KNOW, UH, OUR
COLLECTIVE BARGAINING UNITS WERE
WERE SAYING THAT WE WERE SITTING
ON MONEY. YOU KNOW, UH, WE
SHOULD BE SPENDING IT ON KIDS
HERE AND NOW, BUT, UH UH. THESE
TIMES ARE THE REASON WHY THESE
RAINY DAY FUNDS ARE SO CRITICAL
AND SO, UM, BUT BUT III, I
THOUGHT THAT WITH THE PASSAGE OF
THE STATE RAINY DAY RESERVES
THAT, UH AND WE WERE TALKING
EARLIER ABOUT THE CAPS ON LOCAL
SCHOOL DISTRICT RESERVES. I. I
DON'T WANT TO REHASH WHAT WAS,
UH, DISCUSSED EARLIER. BUT HOW
IS IT THAT DISTRICTS ARE ABLE TO
GET STILL GET UP TO LIKE 22% IN
IN IN IN THE LOCAL RESERVES, SO
FIRST OFF REMIND YOU THAT'S AN
AVERAGE SO WE HAVE SOME THAT ARE
WELL BELOW THAT SOME THAT ARE
WELL ABOVE IT. UM BUT THERE ARE
A NUMBER OF PROVISIONS IN THE
RESERVE CAP, UM, THAT PROVIDE
FOR EXCEPTIONS TO A HARD CAP. UM
THE CAP ITSELF, FROM A PRACTICAL
STANDPOINT, HAS VERY LITTLE
IMPACT ON THE DISTRICT UNLESS IT
THE DISTRICT WANTS IT TO HAVE AN
IMPACT. UM FIRST OFF MORE THAN
HALF OUR DISTRICTS AREN'T
SUBJECT TO THE CAP. SO ANY
DISTRICT WITH AN A Dð A OF 2500
OR BELOW, WHICH IS MORE THAN
HALF OUR DISTRICTS ARE NOT
SUBJECT. OUR COMMUNITY FUNDED OR
BASIC AID DISTRICTS, WHICH TODAY
. I DON'T KNOW THE NUMBER BUT
SOMEWHERE AROUND 50 ARE ALSO NOT
SUBJECT TO IT. SO WE'RE REALLY
LEFT WITH OUR, UM UH, YOU KNOW,
PROBABLY ABOUT 48. PERCENT OF
OUR DISTRICTS THAT MAY BE
SUBJECT TO IT. THEY HAVE SEVERAL
OPTIONS, UM, AND THEY CAN SPEND
THEIR RESERVES DOWN. MOST OF
THEM HAVE NOT ELECTED THAT
OPTION. UM THEY CAN SEEK AN
EXEMPTION FROM THEIR COUNTY
SUPERINTENDENT ON A TEMPORARY
BASIS, SOME IN THE EARLY YEARS
OF THE CAP. WELL JUST THE LAST
COUPLE YEARS BECAUSE, REMEMBER
WE'VE HAD THE CAP IN PLACE FOR A
NUMBER OF YEARS, BUT IT WASN'T
TRIGGERED UNTIL TO WAS IT 2122
THINK TWO YEARS AGO. UM BUT BUT
THE MAIN WAY THEY DO THAT THE
CAP APPLIES TO THEIR UNASSIGNED
AND ASSIGNED RESERVES, WHICH ARE
CATEGORIES IN THEIR ENDING FUND
BALANCE. THERE ARE FIVE
CATEGORIES. THERE ARE ONLY TWO
THEN THAT ARE SUBJECT TO THE
CAP, SO DISTRICT BOARDS UM, ARE
TO LOOK AT ANALYSIS AND NEED AND
BOTH. STATUTE AND THE
GOVERNMENTAL ACCOUNTING
STANDARDS BOARD STATEMENTS,
WHICH IS WHAT GOVERNS ACCOUNTING
IN SCHOOL DISTRICTS. UM PROVIDE
FOR A COMPONENT OF THE IN FUND
BALANCE CALLED COMMITTED FUNDS.
THEY ARE EXEMPT FROM. THE CAP.
AND SO DISTRICT BOARDS THROUGH
RESOLUTION IN MOST CASES OR
THROUGH SOME ACTION. UH, COMMIT
FUNDS TO A PARTICULAR PURPOSE.
THOSE COMMITMENTS ARE TO BE
REVIEWED BY THEIR INDEPENDENT
AUDITOR, SO THEY NEED TO HAVE
JUSTIFICATION FOR IT. THEY NEED
TO HAVE A CLEAR PLAN FOR IT. UM
AND THAT WOULD BE WHAT I WOULD
DESCRIBE AS THE NUMBER ONE
REASON WHILE A DISTRICT WOULD
HAVE TOTAL RESERVE GREATER THAN
THE 10. OK, UM AND, UH UM. SO
THE COMMITTED FUNDS CAN YOU
LIKE, FOR EXAMPLE, COMMIT UH, A
POOL OF FUNDS TO ADDRESS LIKE
YOUR FORESEEABLE PENSION
OBLIGATIONS. YES VERY SPECIFIC
ITEMS. UM THERE'S ALSO A GENERAL
CATEGORY THAT YOU COULD COMMIT
TO CALLED THAT WOULD BE REFERRED
TO AS A STABILIZATION. UM FUND
OR STABILIZATION ACCOUNT JUST TO
HELP YOU DEAL WITH THE CHANGES
FROM YEAR TO YEAR. UM BUT, UH,
TECHNOLOGY REFRESH DEFERRED
MAINTENANCE. BOTH OF WHICH ARE,
UM SIGNIFICANT INVESTMENT SCHOOL
DISTRICTS MAKE OUT IN THE
FUTURE. UM UH, OTHER FORMS OF
CAPITAL EXPENDITURES. A OFFSET
FOR, UM DOCUMENTED DECLINING
ENROLLMENT. SO AN ADDED SOFT
LANDING DONE LOCALLY. IN
ADDITION TO WHAT THE STATE
PROVIDES, THOSE WOULD ALL BE
SOME EXAMPLES, OK? AND THEY CAN
CHANGE JUST THROUGH BOARD ACTION
, THE BOTH THE AMOUNT AND THE
REASON CAN CHANGE FROM YEAR TO
YEAR. ALL RIGHT, SO, I. I
REMEMBER WHEN WE PASSED THE
LOCAL, UH, RESERVE CAPS AND
DISTRICTS WERE SCREAMING TO ME
THAT, UH, THAT WE WERE TAKEN
AWAY LOCAL CONTROL, BUT SOUNDS
LIKE THEY WERE ABLE TO FIGURE
OUT WAYS AROUND IT. THERE ARE
WAYS TO MANAGE IT. OK, THANK
YOU, UM AND ON YOUR LIST OF NEAR
TERM TRENDS IMPACTING SOLVENCY.
UH I DON'T SEE. YEAH, I DON'T
SEE. UM, PENSION COSTS. UH,
WHICH I THOUGHT WAS GOING TO I
MEAN I DISTRICTS AGAIN IN PAST
YEARS WERE WERE SCREAMING AT ME
SAYING THAT, UH, YOU KNOW YOU'RE
YOU'RE YOU'RE, UH GONNA BANKRUPT
OUR OUR DISTRICTS. UH, BY BY NOT
REFORMING PENSIONS, BUT, UH, SO
I. I KIND OF INCLUDE PENSION
COSTS IN THOSE YEAR OVER YEAR
CHANGES THAT ARE PART OF THE
FIXED COST CHANGE ENVIRONMENT,
RIGHT? WE DO HAVE OUT YEAR
FORECAST FOR PERS RATES.
CONTRIBUTION RATES GOING UP, UM,
STIRS RATE RIGHT NOW. THE
FORECAST IS STATIC, BUT
CERTAINLY COULD CHANGE. UM BUT
THAT'S PART OF MY COMMENT ABOUT
THE LOWER COLA. THAT FIXED COSTS
OF 4.5 TO 5% EVERY YEAR. UM AND
SO WHEN WE HAVE A COAL AT 1% OR
BELOW, IT FEELS LIKE A LOCAL CUT
BECAUSE THERE'S A DISPARITY
THERE IN THAT 4.5 TO 5% IS WHERE
I WOULD HAVE PUT THAT PURSE
INCREASE. OR IS WHERE I PUT IT.
ALL RIGHT, BUT BUT IT SOUNDS
LIKE I MEAN, IN TERMS OF ISSUES
TO BE ADDRESSED THIS LIABILITY
INSURANCE ISSUE APPEARS TO BE A
BREAKING THROUGH. I I'M HEARING
ABOUT IT MORE THAN THAN THAN I
HAVE IN THE PAST ABOUT PENSION
COSTS I HIGHLIGHTED TODAY
DIFFERENT THAN I'VE HIGHLIGHTED
THE LAST COUPLE OF YEARS BECAUSE
AGAIN WE HAVE MORE DATA TODAY,
BUT IT IS VERY MUCH AN EMERGING
ISSUE. I I'M DEALING WITH
DISTRICTS FACING THESE
JUDGMENTS. AND WHAT DO THEY DO?
I'VE DEALT WITH ONE AT FIRST
INTERIM WHO BEGAN TO SIGH SET
ASIDE 10 MILLION A YEAR TO PAY
THEIR JUDGMENT. UM THAT'S A
SIGNIFICANT DRAW FROM THEIR L
èC FFI. I WANNA REMIND US THAT
WHEN WE'RE IN A UNDER UNINSURED
OR INSURED IN UNINSURED OR
UNDERINSURED ENVIRONMENT WITH
THESE JUDGMENTS AND SETTLEMENTS,
THOSE MONIES ALONG WITH THE
PREMIUM INCREASES IN THE SPECIAL
ASSESSMENTS COME OUT A CURRENT
YEAR. L èC FF, SO THEY PROGRAM.
THE IMPACT ABILITY TO HIRE
TEACHERS PAY THEM A COMPETITIVE
WAGE. UM AND SO ON. THAT'S WHERE
THE RUBBER MEETS THE ROAD, UH,
WITH REGARD TO THE IMPACT OF THE
SCHOOL DISTRICT, ALL RIGHT,
THANK YOU VERY MUCH. YOU'RE
WELCOME. THANK YOU. I APPRECIATE
THAT. THE INSURANCE ISSUE KEEPS
COMING UP AROUND A LOT OF THINGS
IN THE STATE. SO THANK YOU VERY
MUCH. UH, THAT IS THE END OF OUR
PANEL. SO WE WILL NOW BEGIN A
PUBLIC COMMENT, AND WE'LL GIVE
YOU, UH, A CHANCE TO SPEAK LINE
UP HERE. UH, AT THIS MICROPHONE,
WE'LL GIVE YOU ABOUT A MINUTE.
UM NOTING THAT, UH. COMMITTEE
MEMBERS HAVE A 12 O'CLOCK
COMMITMENT, BUT WE ARE
DEFINITELY GONNA STICK AROUND
AND LISTEN TO YOUR TESTIMONY. SO
PLEASE, STATE YOUR NAME AND YOUR
COMMENTS. GIVE YOU EACH A
MINUTE. WELCOME. THANK YOU. UM
AND, UH, THANK YOU SO MUCH, UH,
CHAIR AND MEMBER. MY NAME IS
ADALIA KING WITH CATALYST
CALIFORNIA AND A MEMBER OF THE
CALIFORNIA PARTNERSHIP FOR THE
FUTURE OF LEARNING. UH, THE
PARTNERSHIP IS THE STATEWIDE
ALLIANCE OF COMMUNITY ORGANIZING
AND AVIC SECRET SET CENTER BLACK
, INDIGENOUS AND BROWN STUDENTS,
FAMILIES AND COMMUNITIES OF
COLOR TO ADVANCE A SHARED VISION
FOR SCHOOLS. UH, YESTERDAY WE
SUBMITTED A LETTER TO YOU. UH,
SIGNED BY 11 OF OUR CORE
ORGANIZATIONS, URGING YOU TO
PROTECT FUNDING FOR THE
CALIFORNIA COMMUNITY SCHOOLS
PARTNERSHIP PROGRAM THAT
STUDENTS AND FAMILIES RELY ON.
UH, WE CELEBRATE THE HISTORIC
INVESTMENTS MADE OVER THE LAST
FEW YEARS ACROSS THE BIRTH TO
12TH GRADE CALIFORNIA PUBLIC
EDUCATION SYSTEM, INCLUDING THE
HISTORIC 4.1 BILLION IN THE
CALIFORNIA COMMUNITY SCHOOLS
PARTNERSHIP PROGRAM. UM THE
SCHOOL'S APPROACH IS ESSENTIAL
TO TRANSFORMING PUBLIC EDUCATION
IN PARTICULAR FOR HISTORICALLY
AND PRESENTLY, UNDERS SOURCED
AND MARGINALIZED BLACK
INDIGENOUS LOW INCOME STUDENTS
AND STUDENTS OF COLOR. LIKE
THOSE REPRESENTED IN OUR
COALITION. THE EVIDENCE IS CLEAR
. THIS APPROACH CHANGES THE
OUTCOMES FOR STUDENTS WHO HAVE
HISTORICALLY BEEN DENIED EQUAL
OPPORTUNITIES. AND THE SCHOOLS
REDUCE RACIAL AND ECONOMIC
EQUITY GAPS, SUCH AS THOSE SEEN
IN LOST HILLS UNION ELEMENTARY
SCHOOL IN RURAL KERN COUNTY,
WHICH HAS HAVE SEEN DOUBLE DIGIT
GROWTH IN ENGLISH LANGUAGE, ARTS
AND MATH EFFICIENCIES. THANK YOU
. IF YOU CAN WRAP YOUR COMMENTS,
WE LOOK FORWARD TO PARTNERING
WITH YOU AND CHAMPION, UM,
EFFECTIVELY IMPLEMENTS COMMUNITY
SCHOOLS ACROSS CALIFORNIA. THANK
YOU AGAIN. THANK YOU. HØI GOOD
AFTERNOON, KATIE HARDIMAN WITH
THE CALIFORNIA TEACHERS
ASSOCIATION. I DID WANT TO SPEAK
TO ISSUE THREE ON THE $8
BILLION. CAME MANEUVER. WHATEVER
YOU WANNA CALL IT, UM èC Tð A
DOES HAVE CONCERNS AROUND THAT
PROPOSAL. WE BELIEVE THAT THE
PROPOSAL IS NOT FOLLOWING THE
CONSTITUTION AND EXISTING
STATUTE. UM SO WE ENCOURAGE YOU
TO THINK OF ALTERNATIVES. I
THINK, UM, ESSENTIALLY, WHAT IT
DOES IS BRINGS DOWN THE PRIOR
YEAR GUARANTEE. UH, WHICH EITHER
THROUGH THIS $8 BILLION OFF THE
BOOKS, PAYMENT OR THROUGH, UM,
THE ELIOS PROPOSAL OF USING, UM
THE RESERVES AND ESSENTIALLY
BRINGS DOWN THAT CARRIER
GUARANTEE, WHICH HAS A LONG
TERM, UM SIGNIFICANT LONG TERM
IMPACT ON THE GUARANTEE GOING
FORWARD. SO UH, LOOK FORWARD TO
WORKING WITH YOU ON THAT IMPOR
IMPORTANT ISSUE. THANK YOU FOR
THE TESTIMONY. GOOD AFTERNOON ON
IO MEETS WITH LOS ANGELES
UNIFIED SCHOOL DISTRICT. UM WE
APPRECIATE THE CONVERSATION
TODAY AROUND THE COLA AND WOULD
REALLY LIKE TO EMPHASIZE THAT
THE COLA PROPOSED IN THE
GOVERNOR'S BUDGET IS WHAT WAS
NECESSARY, UH, TO MAINTAIN, UH,
OUR STAFFING LEVELS AND WHAT WE
HAVE PROMISED IN OUR PREVIOUS
BARGAINING AGREEMENTS. UM WE
ALSO APPRECIATE THE CONVERSATION
AROUND FLEXIBILITIES FOR UM MANY
PROGRAMS GIVEN THE EXPECTED
BUDGET DEFICITS IN PARTICULAR,
WE'D LIKE TO EMPHASIZE THE NEED
FOR FLEXIBILITIES IN EXPANDING
LEARNING OPPORTUNITIES. PROGRAM
FINALLY, WE'D LIKE TO TOUCH ON
THE PENALTIES FOR DISTRICTS THAT
HAVE EXPANDED TRANSITIONAL
KINDERGARTEN IN ADVANCE OF THE
STATE MANDATE. UH, WE THINK THAT
WE ARE SERVING CHILDREN WHO
WOULD NOT OTHERWISE HAVE ACCESS
TO FREE HIGH QUALITY EARLY
LEARNING, AND WE BELIEVE THE
DISTRICT SHOULD NOT BE PENALIZED
WHILE Tð Kò IMPLEMENTATION IS
STILL ONGOING FOR EXPANDING
THOSE OPPORTUNITIES, THANK YOU.
THANK YOU. GOOD MORNING,
ELIZABETH ESQUIVEL WITH THE
CALIFORNIA ASSOCIATION SCHOOL OF
BUSINESS OFFICIALS. WHILE WE
APPRECIATE THE LE Ó S¼
RECOMMENDATION OF BEING CAUTIOUS
ON USING ONGOING FOR THE ONGOING
DOLLARS WE REALLY DO SUPPORT THE
, UH, FULLY FUNDING THE
STATUTORY CALL FOR THE L èC FF
AND FOR THE PROGRAMS OUTSIDE OF
THE L èC FF. WE ALSO APPRECIATE
THE ADDITIONAL FUNDING BEING
PROPOSED OF 100 AND $22 MILLION
FOR UNIVERSAL MEALS AS IT
PROVIDES SUSTAINABILITY TO THAT
PROGRAM. UM, WE APPRECIATE YOUR
COMMENTS ASSEMBLY MEMBER MET IN
REGARDS TO UM, REVISITING THE
ONE ROUGHLY $1 BILLION IN THE
ZERO EMISSION BUSES OUT OF THE
PROPOSITION 98. SO WE REALLY
APPRECIATE AND WOULD RECOMMEND
THE LEGISLATURE RECONSIDERING
THE USE OF THOSE DOLLARS FOR
OTHER PURPOSES. UM MIGHT FIND IT
A WONDERFUL JOB, UM, WITH
EXPLAINING THE CONCERNS AROUND
THE LIABILITY INSURANCE AND
ADDING TO THE BUDGET
CONSIDERATIONS, WE ALSO WANT TO
CONSIDER SPECIAL EDUCATION THAT
INCREASED COST TO SPECIAL
EDUCATION AND, UM, THE INCREASE
OF STUDENTS BEING IDENTIFIED.
UH, AS YOU MENTIONED ASSEMBLY
MEMBER. MERCI. THE PENSION
INCREASES FOR CALPERS, A JUMPING
FROM 28.1% IN 2425 TO 28.8% IN
2526, AS WELL AS THE INCREASE IN
UTILITY COSTS, ESPECIALLY FOR
THOSE SCHOOLS THAT ARE WRITING
THE EXTENDED LEARNING
OPPORTUNITY PROGRAM. THANK YOU.
THANK YOU. TIFFANY MARK ON
BEHALF OF èC F Tð, A UNION OF
EDUCATORS AND CLASSIFIED
PROFESSIONALS. I WANTED TO THANK
YOU FOR THIS IMPORTANT
DISCUSSION AND ALSO TO ASSEMBLY
MEMBER MARSI FOR MENTIONING THE
STAFFING CRISIS IS DISTRICT
FACES, WHICH IS INDICATIVE OF
WHAT WE'RE HEARING ACROSS THE
STATE AS WELL. I WANTED TO ECHO
MY COLLEAGUE'S COMMENT, UM KATIE
HARDIMAN FROM èC Tð. A
REGARDING THE BUDGET DEFICIT ON
ITEM NUMBER THREE AND THE
MANEUVER. AND ALSO, UM, THANK
YOU KNOW THIS DISCUSSION THAT
WILL BE ONGOING THAT WE CAN ALSO
INSTEAD OF TALKING ABOUT ALL OF
THESE CUTS WE CAN ALSO AND WE
WOULD RECOMMEND INCREASED
REVENUE SOURCES FROM OTHER
SOURCES, INCLUDING BUT NOT
LIMITED TO, OF COURSE, THE
WEALTH TAX, WHICH THE F Dð A HAS
BEEN A SUPPORTER OF THANK YOU.
THANK YOU. GOOD AFTERNOON CARLOS
HER HOUSE WITH THE KERN COUNTY
SUPERINTENDENT OF SCHOOLS.
OFFICE UM ONE EXTEND OUR SINCERE
APPRECIATION TO THE LEGISLATURE
FOR THE RECENT INVESTMENTS IN
EDUCATION, NAMELY, COMMUNITY
SCHOOL FUNDING HAS RESULTED IN,
UH, NOTABLE STUDENT IMPROVEMENTS
IN OUR SMALL RURAL SCHOOL
DISTRICTS THAT HAVE POOLED THEIR
RESOURCES TOGETHER TO WHAT THEY
CALL THE WEST SIDE CONSORTIUM.
THESE HANDFUL OF SMALL DISTRICTS
HAVE UTILIZED COMMUNITY SCHOOL
FUNDING TO HELP IDENTIFY AND
ADDRESS STUDENT BARRIERS AND
THROUGH THIS SPECIFIC WORK HAVE
SEEN CHRONIC ABSENTEEISM, RATES
DECLINE AND STUDENT ACHIEVEMENT
SCORES IMPROVE IN BOTH READING
AND MATH, AND I'M HAPPY TO
PROVIDE THAT SPECIFIC DATA IF
THE COMMITTEE IS INTERESTED IN
SEEING THAT THOSE OUTCOMES AT
THE SAME TIME DISTRICTS ACROSS
THE STATE HAVE UNSPENT FUNDS IN
OTHER INVESTMENTS, SUCH AS, UH,
EXPAND LEARNING OPPORTUNITIES
PROGRAM, ZERO EMISSION BUSES,
READING COACHES AND SPECIALISTS
AND OTHER PROGRAMS DUE TO
VARYING NEEDS OF IMPLEMENTATION
CHALLENGES. WE RESPECTFULLY ASK
LEGISLATURE TO CONSIDER
PROVIDING DISTRICTS ADDED
FLEXIBILITY IN THESE EXISTING
CATEGORICAL PROGRAMS WHILE
MAINTAINING STRICT
ACCOUNTABILITY AND HOW TO BEST
ALLOCATE THOSE DOLLARS TO MEET
THE UNIQUE STUDENT AND STAFFING
NEED. IN THEIR DISTRICTS AND TO
HELP THE STATE NAVIGATE THE
LIKELY REVENUE SHORTFALLS. THANK
YOU FOR YOUR TIME. GOOD
AFTERNOON CHAIR AND MEMBERS
BRIANNA BROWNS ON BEHALF OF THE
CALIFORNIA COUNTY
SUPERINTENDENTS. WE WANT TO
EXPRESS OUR GRATITUDE FOR THE
ASSEMBLY'S DEDICATION TO THE
WELL BEING OF OUR STUDENTS. UH,
BOTH, UM THIS YEAR, AND IN
PREVIOUS YEARS, THE LEADERSHIP
OF THIS COMMITTEE SPECIFICALLY
HAS SHOWN HAS BEEN INTEGRAL TO
THE DEVELOPMENT OF ALL OF THE
WHOLE CHILD PROGRAM, SUCH AS THE
UNIVERSAL PRE-KINDERGARTEN. UM
AS WELL AS SCHOOL BASED MENTAL
HEALTH PROGRAMS AND OTHERS. WE
UNDERSTAND THE DIFFICULT BUDGET
PICTURE THE STATE CURRENTLY
FACES. HOWEVER WE URGE YOU TO
CONTINUE TO PROTECT THE WELL
BEING OF OUR STUDENTS BY
AVOIDING CUTS, DEFERRALS AND
RETROACTIVE CALLBACKS FOR Tð Kò
THROUGH 12 SCHOOLS. THANK YOU.
THANK YOU. GOOD AFTERNOON,
CHAIRMAN ALVAREZ AND COMMITTEE
MEMBERS. MY NAME IS LAURIE
FURSTENFELD WITH THE CHILDCARE
LAW CENTER, AND I'M DIRECTOR OF
LEGAL ADVOCACY. I AM HERE TO
SPEAK ABOUT ISSUE THREE. THE
STATE BUDGET IS THE MOST
IMPORTANT LEGISLATION FOR
CREATING AN EQUITABLE SOCIETY
ONE WHERE BLACK AND BROWN
FAMILIES HAVE THE CHILD CARE
THEY NEED AND CHILDCARE
PROVIDERS ARE FAIRLY COMPENSATED
FOR THEIR HARD WORK AND
DEDICATION TO OUR CHILDREN. WE
URGE THE COMMITTEE TO CAREFULLY
CONSIDER OTHER OPTIONS TO SOLVE
THE $8 BILLION SHORTFALL.
PROTECTS THE GENERAL FUND NOW
AND THE VITAL LIFE GIVING
GENERAL FUND PROGRAMS SUCH AS
CHILD CARE IN FUTURE YEARS AND
SOLVE THE PROP 98 OVER
APPROPRIATION WITHIN PROP 98 TO
THE EXTENT POSSIBLE WHILE
PROTECTING INDIVIDUALS AND
COMMUNITIES OF COLOR. THANK YOU.
THANK YOU. HØI GOOD AFTERNOON
PAGE CLARK WITH THE NATIONAL
CENTER FOR YOUTH LAW, THANK YOU
FOR THE OPPORTUNITY TO SHARE
COMMENTS THIS AFTERNOON. UM AS
OUR STATE GRAPPLES WITH AN
INCREASINGLY CHALLENGING BUDGET
PICTURE. WE ASKED THE
LEGISLATURE TO MAINTAIN CRITICAL
SUPPORT AND ST AND SERVICES FOR
SOME OF OUR MOST UNDERSERVED
STUDENTS. THOSE EXPERIENCING
HOMELESSNESS. DATA SHOWS THAT
STUDENTS EXPERIENCING
HOMELESSNESS GRADUATE HIGH
SCHOOL THAT RATES ABOUT 15%
POINTS BELOW THEIR PEERS, AND WE
KNOW THAT TWO LEADING RISK
FACTORS FOR ADULT HOMELESSNESS
ARE NOT HAVING A HIGH SCHOOL
DIPLOMA AND EXPERIENCING
HOMELESSNESS AS A CHILD. FOR
THESE REASONS, WE STRONGLY
SUPPORT THE $1.5 MILLION
ALLOCATION FOR THE HOMELESS
EDUCATION, TECHNICAL ASSISTANCE
CENTERS INCLUDED IN THE
GOVERNOR'S PROPOSED BUDGET AND
URGED THE LEGISLATURE TO
MAINTAIN THIS ALLOCATION. THANK
YOU. THANK YOU. GOOD AFTERNOON
CHAIR MEMBERS SAM NASH AT THE
LOS ANGELES COUNTY OFFICE OF
EDUCATION. UH, WE ARE GRATEFUL
FOR THE FUNDING PROVIDED IN 2020
THREE 24 STATE BUDGET FOR
COMMUNITY SCHOOLS. THESE SCHOOLS
ARE VITAL FOR ENHANCING ACADE
ACADEMIC ACHIEVEMENTS AND WELL
BEING, PARTICULARLY IN
UNDERSERVED COMMUNITIES. UH,
SAFEGUARDING THESE FUNDS IS
ESSENTIAL TO SUSTAIN INVESTMENT
IN STUDENT AND COMMUNITY
DEVELOPMENT, ALIGNING WITH THE
STATE'S COMMITMENT AND EQUITY IN
EDUCATION. WE SUBMITTED OUR FULL
BUDGET LETTER YESTERDAY AND WE
LOOK FORWARD TO WORKING WITH THE
BUDGET COMMITTEES AND
ADMINISTRATION THIS COMING HERE.
THANK YOU. THANK YOU. THANK YOU,
MR CHAIRMAN, ASSEMBLY MEMBER OF
MARUI AND STAFF JEFF VÀ,
REPRESENTING THE RIVERSIDE
COUNTY SUPERINTENDENT OF SCHOOLS
AND THE 20 THREE SCHOOL DISTRICT
SUPERINTENDENTS IN RIVERSIDE
COUNTY LIKE TO EXPRESS GRATITUDE
FOR THE ADMINISTRATION'S EFFORTS
TO PROTECT Kò 12 EDUCATION AND
THE BUDGET PROPOSAL THIS YEAR
ALSO EXPRESS APPRECIATION FOR
MANY OF YOUR COMMENTS AND
QUESTIONS THIS MORNING, WHICH I
BELIEVE, UH, REFLECT A
COMMITMENT TO IF NOT NECESSARILY
AGREEING WITH THE GET THERE A
COMMITMENT TO PROTECTING THE
PROGRESS AND PROGRAMS THAT ARE
TAKING PLACE IN OUR SCHOOLS
TODAY, UH, WE WILL BE PROVIDING
MORE SPECIFIC FEEDBACK ON
VARIOUS PROPOSALS IN THE
HEARINGS TO COME, AND I THINK
THAT WE CAN ALSO BE HELPFUL AS A
RESOURCE FOR YOUR STAFF AND
PROVIDING INFORMATION TO HELP
YOU FIND THAT PERFECT MIX OF
SOLUTIONS THAT WILL GET US
THROUGH THE NEXT FEW SCHOOL
YEARS. THANK YOU VERY MUCH.
THANK YOU. THANK YOU ALL FOR
YOUR PUBLIC TESTIMONY VERY MUCH.
APPRECIATED UH, APPRECIATE ALSO
THE LETTERS AHEAD OF TIME JUST
TO HELP US FURTHER UNDERSTAND
YOUR COMMENTS. UM AND WITH THAT,
UH, WE WILL ADJOURN TO OUR NEXT
COMMITTEE HEARING, WHICH WILL BE
NEXT WEEK. WE AO.