February 2, 2010
Dear County Superintendents of Schools and Treasurers:
This apportionment, in the amount of $49,734,680, is made from funds provided in Item 6110-232-0001, Morgan Hart Program to Reduce Class Size in Grades 9 – 12 (CSR9-12), of the Budget Act of 2009 (Chapter 1, Statutes of 2009, Third Extraordinary Session as amended by Chapter 1, Statutes of 2009, Fourth Extraordinary Session). This apportionment is being offset in part to recoup prior payments made for the CSR9-12 Program as explained below.
County superintendents of schools are requested to immediately inform school districts of this apportionment. Warrants will be mailed to county treasurers approximately four weeks from the date of this Notice. To view the schedule of apportionment, showing for each recipient local educational agency (LEA) its entitlement, offset, and current apportionment, please visit the California Department of Education (CDE) Categorical Programs Web page at http://www.cde.ca.gov/fg/aa/ca/. Charter schools are not entitled to separate program funding and, as such, are not included on the payment schedule because the program was included in the Charter School Categorical Block Grant in the 2007-08 base year of program funding. For standardized account code structure coding, use Resource Code 0000, Unrestricted, and Revenue Object Code 8590, All Other State Revenue.
Assembly Bill 3 (Chapter 3, Statutes of 2009, Fourth Extraordinary Session, ABX4 3) was enacted in July 2009 as part of the revised budget package for 2009-10, and provided for the reversion (reduction) of $1.6 billion in Proposition 98 General Fund monies appropriated for various categorical programs for the 2008-09 fiscal year. In addition, ABX4 3 appropriated $1.6 billion in 2009-10 funds, in amounts equal to the 2008-09 reverted funds, with direction that these 2009-10 funds may be used to satisfy 2008-09 obligations.
In November 2009, Assembly Bill 56 (Chapter 31, Statutes of 2009, Third Extraordinary Session, ABX3 56) amended ABX4 3 and required that $355 million of the $1.6 billion 2009-10 General Fund appropriation be allocated for the Quality Education Investment Act (QEIA) Program. This QEIA allocation is provided in lieu of funds that were appropriated in the legislation that enacted QEIA.
In a companion action, on October 15, 2009, the California Department of Finance issued a letter to the Legislature [http://www.cde.ca.gov/fg/aa/ca/documents/dofsection28ltr.pdf; Accessible Alternative Version of the California Department of Finance Control Section 28.00 letter: http://www.cde.ca.gov/fg/aa/ca/dofsection28ltr.asp] pursuant to Control Section 28.00 of the Budget Act that directed the CDE to reduce select programs that were included in the $1.6 billion 2009-10 appropriation by a total of $355 million. The Section 28.00 letter also authorized the CDE to allocate $355 million in federal State Fiscal Stabilization Funds (SFSF) to LEAs whose categorical program funding was reduced. In this way, each LEA will be made whole.
Because all or a portion of the $1.6 billion was allocated prior to the enactment of ABX3 56 and the Section 28.00 letter, a reduction of $355 million means amounts are now owed to the state. Whereas the CDE could either invoice or offset future apportionments to recoup funds, in order to pay QEIA more timely, the CDE will offset the regular 2009-10 apportionments for the select programs. Note, CDE is not reducing the regular 2009-10 entitlements for the select programs, rather CDE is using their apportionments as the vehicle to collect funds.
The CSR9-12 Program is one of the above select programs. Its current apportionment is being offset in part, by $44,547,688, to recoup funds that will be credited back by the state to the program appropriation in ABX4 3. The remaining amount owed, $5,186,992, is being paid in this apportionment. As noted above, each LEA will receive SFSF to compensate fully for the reduction. The SFSF will be allocated once the statewide SFSF cash management threshold is met.
California Education Code (EC) Section 42605 authorizes complete flexibility by a school district, county office of education, and charter school in the use of funds appropriated in the state budget for fiscal years 2008-09 through 2012-13 for numerous budget items, including the funds formerly restricted to the Morgan Hart Program to Reduce Class Size in Grades 9 – 12. School districts, county offices of education, and charter schools may now use the funds formerly restricted to this program for any educational purpose, and should account for them as unrestricted. Program and funding requirements as otherwise provided in statute, regulation, and budget act provisional language associated with the funding are not in effect.
EC Section 42605 also provided that funds for the programs made flexible be allocated in 2009-10 through 2012-13 based on the relative share that each LEA received of funds allocated for the 2008-09 fiscal year. In July 2009, EC Section 42605 was amended, however, to change the base year for the CSR9-12 and seven other programs from 2008-09 to 2007-08.
The 2009-10 entitlements for the CSR9-12 Program, therefore, were calculated based on the relative share that each LEA received of 2007-08 program funds, then reduced to reflect a 19.8 percent funding reduction enacted in Control Section 12.42 of the Budget Act of 2009. Control Section 12.42 of the Budget Act of 2008 reduced the 2008-09 budget items by 15.4 percent. Accordingly, LEAs’ 2009-10 entitlements are 7.76 percent below the funding allocated for 2008-09.
If you have any questions regarding this apportionment or offset, please contact
Christina Schlueter, Analyst, Categorical Allocations and Management Assistance, by phone at 916-324-9806 or by e-mail at email@example.com. [Note: the preceding contact information is no longer valid].
Susan Lange, Deputy Superintendent
Finance, Technology, and Administration Branch