This information is current as of August 29, 2011. Up-to-date information on the state and federal education budgets is available on the California Department of Education (CDE) budget page.
On June 30, 2011, Governor Jerry Brown signed Senate Bill 87 (Chapter 33, Statutes of 2011), the Budget Act of 2011. In addition to the Budget Act, the Governor signed various “trailer bills” that amend the California Education Code and other California codes to reflect technical changes necessary to implement the budget. In enacting the 2011 Budget Act, the Governor and the Legislature were obligated to take drastic measures for the fourth year in a row to bring the state budget into balance.
As of passage of the final budget act, the budget deficit was estimated at $27.2 billion. Actions in March, together with final budget actions, closed the deficit through improvement in the state’s revenue outlook ($8.3 billion), expenditure reductions ($15 billion), revenue solutions ($900 million), and other solutions ($2.9 billion).
Major Budget Changes
The budget includes the following major components:
- Mid-Year Reduction Triggers. The budget package includes a provision to trigger additional mid-year cuts if the revenues do not materialize as anticipated.
- Realignment. The final budget shifts a variety of public safety and social welfare programs from state-level administration to local government administration. The primary source of funding for the shift is a sales tax swap that will give $5.1 billion in sales tax revenues to local governments.
- Redevelopment Agencies. The budget package eliminates redevelopment agencies (RDAs). Cities and counties may elect to participate in an Alternative Voluntary Redevelopment Program provided that they make payments to fund local services, including schools.
Kindergarten through Grade 12 Education Highlights
Table 1 and Chart 1 summarize the total funding for kindergarten through grade twelve (K–12) education from all sources in 2011–12. The table shows that the budget projects total funding of $64.1 billion. Including all fund sources, the K–12 education budget provides funds of $10,747 per pupil in average daily attendance (ADA) in 2011–12.
Table 1: Funding for K–12 Education (in millions)
| Sources of Funding | All Sources | Proposition 98 |
|---|---|---|
State General Fund |
$34,704 |
$29,328 |
State lottery |
858 |
0 |
Other state funds |
191 |
0 |
Federal funds |
6,962 |
0 |
Local debt service |
3,020 |
0 |
Local property taxes |
14,560 |
13,823 |
Other local funds |
3,831 |
0 |
Total |
$64,126 |
$43,151 |
Note: Includes funds for CDE state operations, state special schools, state school facilities bond repayments, state contributions to the State Teachers Retirement System, the State Library, and the Commission on Teacher Credentialing.
Chart 1: Sources of Funding for California Schools
Focusing on Proposition 98 funding for K–12 education, the budget provides $43.2 billion in 2011–12. This compares to a funding level of $43.9 billion in 2010–11 as revised in May 2011.
Chart 2 shows the trend in Proposition 98 funding per pupil in K–12 schools from 2001–02 through 2011–12. The chart shows that, under the Budget Act of 2011, schools will receive Proposition 98 funds averaging $7,232 per pupil in ADA for 2011–12. This is a $137, or 1.9 percent, decrease per pupil from the revised 2010–11 level.
Chart 2: Proposition 98 Per-Pupil Funding: 2001–02 through 2011–12
The Proposition 98 funding level reflects two major program funding shifts: child care, excluding preschool, has been moved out of Proposition 98—$1.1 billion—and educationally necessary mental health services for children in special education has been moved into Proposition 98—$221.8 million. If these two funding shifts were not part of 2011–12 Proposition 98 funding, total Proposition 98 funding would be $44 billion and per-pupil funding would be $7,379. In addition, $5.1 billion in sales tax revenues associated with realignment (described above) is not included in the revenues used in the Proposition 98 calculation.
Major Kindergarten through Grade 12 Changes
The budget package defers $2.1 billion in revenue limit funds from 2011–12 to 2012–13. This deferral is in addition to the ongoing $1.7 billion deferral adopted as part of the 2010–11 budget package. Revenue limit funds will be reduced further if Tier Two “trigger” reductions are implemented. If the reductions are imposed, local educational agencies (LEAs) may reduce the number of instructional days and minutes by up to seven days, subject to collective bargaining agreements. These seven days would be in addition to the five-day reduction allowed previously. This provision is effective February 2012.
In addition, if the Tier Two reductions are imposed, up to $248 million will be reduced from Home-to-School Transportation.Categorical Flexibility
The budget package extends the flexibility provisions implemented in 2008-09 for an additional two years. The February 2009 budget package authorized local educational agencies (LEAs) to use funds from about 40 categorical programs “for any educational purpose” for a five-year period ending June 30, 2013.
Child Care and Development
The 2011–12 budget package reduces child care by $242.7 million. The specific actions in the budget package include:
- Imposes an across-the-board reduction of 11 percent, including Preschool and excluding CalWORKs Stage 2.
- Reduces license-exempt providers from 80 percent to 60 percent of the licensed provider rate.
- Reduces income eligibility from 75 percent of the state median income (SMI) to 70 percent of the SMI, including Preschool.
- Shifts $1.1 billion in child care expenditures from Proposition 98 funds ($1 billion) and Proposition 98 one-time funds ($52.2 million) to non-Proposition 98 funds.
Local Budgeting
The budget package specifies that school district and county office of education budgets for 2011–12 “shall project the same level of revenue per unit of average daily attendance as [the agency] received in the 2010–11 fiscal year and shall maintain staffing and program levels commensurate with that level.” The budget package further specifies that school districts and county offices of education “shall not be required to certify in writing whether or not [the agency] is able to meet its financial obligations for the two subsequent fiscal years.”
The budget package also suspends a provision of existing law that allows certificated staff layoffs in August if revenue limits increase by less than 2 percent.
Special Education
The former Governor vetoed $133 million provided in the 2010–11 budget for prior-year mandate claims submitted by county mental health departments for mental health services for special education pupils (AB 3632 services), stating in his veto message that the mandate was suspended. The effect of suspending the mandate was to require LEAs to assume responsibility for providing these services. The March budget package provided $80.8 million in one-time funds for school districts to support mental health services in 2010–11.
The 2011–12 budget package:
- Eliminates the AB 3632 mandate, thereby permanently shifting the responsibility for providing educationally necessary mental health services to special education pupils from county mental health departments to LEAs.
- Provides $221.8 million for LEAs to provide educationally necessary mental health services, including $3 million to fund an extraordinary cost pool for necessary small Special Education Local Plan Areas. The package rebenches the Proposition 98 guarantee to account for the program shift.
- Redirects $69 million in federal funds from county mental health departments to LEAs for educationally necessary mental health services.
- Provides $98.6 million in Proposition 63 (Mental Health Services Act) funds on a one-time basis to county mental health departments for mental health services.
