Calculations to Determine 2013–14 P-1

Implementation Status of the Local Control Funding Formula

Assembly Bill 97 (Chapter 47, Statutes of 2013), as amended by Senate Bill 91 (Chapter 49, Statutes of 2013) and Senate Bill 97 (Chapter 357, Statutes of 2013), established the Local Control Funding Formula (LCFF), which represents a significant change in how California’s kindergarten through grade twelve (K–12) local educational agencies (LEAs) are funded.

While the new funding formula became effective July 1, 2013, the CDE is still working to incorporate many of the LCFF provisions into its apportionment systems. Consequently, the First Principal (P-1) Apportionment includes only minimal changes enacted by the 2013 Budget Act and LCFF implementing legislation. The CDE intends to calculate LEA funding using the new LCFF formula at the 2013–14 Second Principal (P-2) Apportionment, which will be certified on or before July 2, 2014. Because this apportionment is merely a means to continue allocating funds in accordance with Education Code (EC) Section 41332, it should not be used as a basis for budgeting. Actual funding allocations using the new LCFF formulas will differ from an LEA’s P-1 Apportionment.

Additional information about the LCFF is available at the following Web sites:

• CDE's Local Control Funding Formula Web page

Overview of the First Principal Apportionment (Fiscal Year 2013−14)

The P-1 Apportionment for fiscal year 2013−14 was certified on February 20, 2014, pursuant to California EC Section 41332. The details of the P-1 Apportionment as well as the details of the updated calculations of the 2012−13 Annual Apportionment and the 2011–12 Annual R2 Apportionment that were certified as part of the P-1 Apportionment are described below.

In most cases, the P-1 Apportionment has only minor updates from the calculations and methodology used in the 2013–14 Advance Apportionment. This apportionment continues to flow cash based on 2012–13 funding levels, but was updated for 2013–14 average daily attendance (ADA), property taxes and the Education Protection Account (EPA).

The P-1 Apportionment continues the increase built into the Advance Apportionment as a proxy for the LCFF “Gap” funding that will be incorporated into the P-2 Apportionment calculations (see section titled State Aid Adjustment for more information). While this is a reasonable approach to allocate funds during the development of the LCFF apportionment systems, as stated above, this is merely a means of allocating cash.

Because this apportionment includes a mix of 2013–14 funding calculations and 2012–13 dollars, not all of the normal funding exhibits are being published on the Principal Apportionment Web site. However, since 2012–13 funding is the basis of the P-1 revenue limit and charter school general purpose calculations, view the 2012–13 Annual Apportionment funding exhibits posted with this certification to see funding amounts that are being held constant as of 2012–13 Annual.

Payment Schedule and Deferrals

Monthly payments for the P-1 Apportionment are available on CDE’s Web site at the county summary level and by LEA. AB 86 (Chapter 48, Statutes of 2013) amended EC Section 14041.6, which enacted several inter-year deferrals that affect payments during the P-1 period (February through May). These deferrals are reflected in the posted payment schedules. EC Section 14041.6 defers the following payments:

2013–14 P-1 Revenue Limit and Charter General Purpose

School Districts

School District Revenue Limits were calculated using 2013–14 ADA and property taxes reported as of P-1; and the base revenue limit, deficit factor (0.77728), Public Employees’ Retirement System (PERS), and Unemployment Insurance (UI) funding from the 2012–13 Annual Apportionment.

The allowance for the NSS program is based on the combination of 2013–14 P-1 ADA and the number of full-time teachers (for elementary schools) or the number of certificated employees (for high schools), whichever provides the lesser amount. The 2012–13 allowance amounts were used to calculate 2013–14 P-1.

The charter block grant offset for unified school districts calculated pursuant to EC sections 47660 and 42238(h)(7) was discontinued at the P-1 period; this offset was specifically deleted for LCFF funding purposes.

County Offices of Education

County Office of Education (COE) Revenue Limits were calculated using 2013–14 ADA of students for which counties continue to receive direct funding under LCFF and property taxes reported as of P-1, and the juvenile court school base revenue limit rate and deficit factor (0.77451) from the 2012–13 Annual Apportionment. All other funding used to calculate COE revenue limits was held constant as of the 2012–13 Annual Apportionment.

County Funds Transfer

Under the prior funding system, revenue limit funding for students in county-operated special day classes and community schools was transferred to COEs based on the revenue limit of the student’s district of residence. This process was referred to as the “County Funds Transfer”. However, under LCFF, these funds instead flow to the student’s district of residence.

Because the changes for LCFF apportionments have not yet been made, the P-1 Apportionment maintains the transfer equal to the 2012–13 Annual Apportionment transfer. The adjustment of cash flow will not be made until the apportionment calculated with LCFF funding is certified at the P-2 Apportionment on or before July 2, 2014. CDE recently issued a letter that provides additional detail on how LCFF impacts both COE and school district funding for these students.

Charter Schools

General purpose funding for charter schools was calculated using 2013–14 P-1 ADA, 2013–14 tax per ADA rates for in-lieu of property taxes, and 2012–13 block grant rates from the 2012–13 Annual Apportionment. The 2012–13 funding rates were used to calculate 2013–14 P-1. Non-classroom based ADA was adjusted for any charter schools that received a 2013–14 determination of funding from the State Board of Education.  

Other information and changes affecting charter funding calculations for P-1 include:

• Charter schools that operate county programs pursuant to EC Section 47605.5 were instructed for P-1 to report only the ADA of students that would continue to generate funding at the juvenile court school rate. All other funding for these schools was held constant as of the 2012–13 Annual apportionment and the dollars are included in the 2013–14 P-1 apportionment for the applicable county office of education. See section on County Offices of Education for more information.
• Funding adjustments for charter schools are displayed in Columns A-16 and A-17 of the Principal Apportionment Summary Excel file. These columns represent charter school overpayments of state aid in current or prior years due to one or more changes in the block grant rates, ADA, local revenue, or other data used in the apportionment calculations. For most charter schools, the overpayment will be collected through the apportionment process in the current fiscal year. In some cases, an invoice will be sent directly to the charter school.
• The In-Lieu of Taxes by District of Residence Excel file includes in-lieu of taxes calculations for charter schools that have been approved on appeal by a county office of education pursuant to EC 47605(j). Pursuant to EC 47632(j)(2), the district of residence is still responsible for transferring in-lieu of taxes to the charter school. This file also contains in-lieu of taxes calculations for countywide charter schools approved pursuant to EC 47605.6, where the district of residence is a basic aid district and therefore is still the sponsoring district. In both circumstances, the in-lieu of taxes must be transferred at the local level. The Countywide ADA by District of Residence file will also continue to be posted.

Education Protection Account (EPA) Entitlement

EPA revenues, as authorized by Proposition 30, The Schools and Local Public Safety Protection Act of 2012, are generated by temporary increases in the state’s sales tax rate for all taxpayers and the personal income tax rates for upper-income taxpayers. All LEAs will receive quarterly EPA payments through the 2018-19 fiscal year, paid outside of the Principal Apportionment. Except for an excess tax LEA, EPA revenues offset state aid allocated through the Principal Apportionment. The EPA Entitlement was calculated prior to the adjustment for AB 97 funding (see State Aid Adjustment section).

Using a 2013–14 EPA revenue estimate of approximately $5.6 billion, the CDE recalculated EPA entitlements using a factor of 18.1903 percent based on the 2013–14 statewide total of revenue limits and charter school block grant funding. LEAs fully funded through local revenue and in-lieu of property taxes, and charter schools that are newly operational in 2013–14, received the minimum funding of $200 per ADA.

The 2013–14 estimated EPA revenues are shown for information purposes only on the 2013–14 First Principal Apportionment Summary (XLS). EPA entitlements can also be seen on the 2013–14 P-1 school district and county office of education revenue limit exhibits, and on the 2013–14 P-1 charter school block grant funding exhibits. The 2013–14 third quarter EPA payment made in March will reflect this revision.

See the EPA Web page for more information relating to EPA.

State Aid Adjustment

AB 97 appropriated $32 million for COEs and $2.1 billion for school districts and charter schools to begin implementation of the provisions of the LCFF. A portion of this new funding, approximately $20 million for COEs and $1.5 billion for school districts and charter schools, is being allocated at the P-1 Apportionment. This increase is approximately 3.56% of each COE’s 2013–14 revenue limit, and approximately 4.63% of each school district’s 2013–14 revenue limit or charter school’s 2013–14 general purpose entitlement funding. For an excess tax COE or school district, this increase was offset by excess property taxes. The state aid adjustment amount is not reflected on the revenue limit or general purpose block grant entitlement funding exhibits. Rather the increase for each LEA can be viewed on the Revenue Limit or Charter School Block Grant State Aid Adjustment (XLS) Excel file posted as part of the P-1 certification and is included in an LEA’s revenue limit or charter school general purpose state aid on the P-1 Principal Apportionment Summary (XLS). It is important to note that this funding amount will change for each COE, school district and charter school in the 2013–14 P-2 Apportionment when LCFF calculations are implemented.

2013–14 Other Programs Included in the Principal Apportionment

2012–13 Adjusted Local Control Funding Formula Categorical State Aid Education Code Sections 2575(h) and 42238.03(e)(2)(A)

The LCFF statutes eliminated many categorical programs, and required the dollars that were previously allocated for the separate programs in 2012–13 to be combined and rolled into each LEA’s LCFF entitlement as a lump sum. Line A-19 of the Principal Apportionment Summary is a combination of 54 separate categorical programs, most of which were previously allocated outside of the Principal Apportionment. The amounts reflect 2012–13 entitlements prior to the 2012–13 basic aid fair share reduction of 9.57 percent that was applied based on each district’s basic aid status in 2011–12.

The individual programs are listed separately by LEA on the 2012-13 Adjusted Local Control Funding Formula Categorical State Aid – Education Code Sections 2575(h) and 42238.03(e)(2)(A) (XLS) Excel file and the following updates were made at the P-1 Apportionment:

• Revised the per-ADA portion of the Charter School Categorical Block Grant, as well as the New Charter Supplemental Categorical Block Grant to reflect 2013–14 P-1 ADA. The calculations continue to use the funding rates and deficit factors from the 2012–13 Annual apportionment. Funding for the in-lieu of Economic Impact Aid (EIA) portion of the Charter School Categorical Block Grant was held constant at the 2012–13 Annual funding rate and counts of eligible educationally disadvantaged pupils. For new charter schools, the pupil counts reported in the 20-day report of attendance were used for the in-lieu of EIA funding.
• Revised the Community Day School Additional Funding for Mandatory Expelled Pupils to reflect 2012–13 Annual entitlements.
• Revised the Regional Occupational Centers/Program to reflect 2012–13 Annual entitlements.
• Added entitlements for Teacher Dismissal Apportionments and the Standards for Preparation and Licensing of Teachers Program previously not known at the Advance Apportionment.

Note: The Excel spreadsheet does not include categorical funds that were previously allocated to entities other than LEAs. Principal Apportionment funds are currently only allocated to LEAs.

For districts that were basic aid as of the 2012–13 P-2 Apportionment, as required by EC Section 42238.03(e)(2)(A) a reduction equal to the lesser of: (1) the district’s 2012–13 Total Revenue Limit Subject to the Deficit Factor, calculated as of the 2012–13 certified P-2 Apportionment, multiplied by 8.92 percent; or (2) the amount of the district’s excess taxes, was applied to Line A-19 of the Principal Apportionment Summary. Special Education, Basic Aid Choice and Adults in Correctional Facilities funding have not been reduced but because these programs are not precluded from a reduction, if necessary, a reduction may be applied to these programs at the P-2 Apportionment.

Adults in Correctional Facilities (AICF)

The 2013–14 funding for the AICF program was based on the lesser of each LEA’s 2012–13 rate per ADA or 80 percent of the 2007–08 statewide average revenue limit for Adult Education. This amount is multiplied by the lesser of prior year annual ADA or a cap based on 2002–03 ADA funding increases of 2.5 percent each year. The amount appropriated for this program equals $14,967,000. The appropriation was sufficient to fund all of the growth in the program.

Basic Aid “Choice” and Basic Aid Court-ordered Voluntary Pupil Transfer

Funding for Basic Aid “Choice” and Basic Aid Court-ordered Voluntary Pupil Transfer is equal to 70% of the district of residence’s 2012–13 base revenue limit per-ADA multiplied by 2013–14 ADA.

Basic Aid Charter Supplement

Basic Aid Supplement Funding, to reimburse basic aid school districts for charter school in-lieu of taxes, was allocated based on 2013–14 ADA and property taxes, and 2012–13 Annual funding rates. To partially implement the funding provisions in AB 97, adjustments were made to cap funding for individual school districts at the amount of total in-lieu of property taxes paid to charter schools. The remaining provisions of AB 97 will be applied to basic aid supplement funding at the P-2 apportionment.

Special Education Assembly Bill (AB) 602 Funding

Assembly Bill (AB) 86 (Chapter 48, 2013) in conjunction with the 2013–14 State Budget, authorized several changes to the AB 602 funding formula in an effort to simplify the formula and provide Special Education Local Plan Areas (SELPAs) with additional funding flexibility. Following is a summary of the changes reflected in the P-1 Apportionment:

• Removed the federal local assistance funding from AB 602 calculations.
• Recalculated the statewide target rate, which increased the rate to $522.86 per ADA.
• Added 2012–13 funding levels for the Program Specialist and Regionalized Services (PSRS) and Personnel Development grants to the SELPA’s base formula. Small SELPAs will continue to receive supplemental PSRS funding.
• Consolidated the Low-Incidence (LI) funding: LI specialized services, LI equipment and materials, and LI Career Technical Education (formerly ROC/P Handicapped)

The budget includes a 1.57 percent statutory COLA for special education. However, the current year appropriation was not sufficient to fully fund AB 602 at P-1. As a result, a proration factor of 0.9589964166 was applied to the base apportionment.

The Budget Act of 2013 appropriated $157.8 million to the Out of Home Care program. The facility rates were adjusted by the 2013–14 statutory COLA. Funding for the 2013−14 P-1 Apportionment was calculated using prior year data funded at the program’s FY 2013−14 budgeted amount. At the 2013−14 P-2 Apportionment, the program’s funding calculation will be updated to reflect the true bed and pupil count data as of April 1, 2014.

Funding for mental health services is outside of the Principal Apportionment, and is apportioned separately.

Special Education Infant (Ages Two and Younger) Program

Total funding apportioned for the Infant program for 2013−14 is $70,171,819. Following are the 2013−14 Infant program statewide average unit rates:

Prior Year Adjustments (Fiscal Years 2012−13 and 2011−12)

The following provides updates to the 2012–13 (2012–13 Annual) and 2011–12 (2011–12 Annual R2) apportionments certified at the same time as the 2013–14 P-1 Apportionment. The Adjustments and Prior Year Recomputations Excel file includes details of prior year adjustments. In general, these corrections reflect revised ADA or updated property tax information. This information is also provided in Column A-18 of the Principal Apportionment Summary Excel file. Only programs where funding has changed at the 2012–13 Annual or 2011–12 Annual R2 are listed below.

Fiscal Year 2012−13 Annual

Adults in Correctional Facilities (AICF)

The 2012–13 funding for the AICF program is based on the lesser of each LEA’s 2011–12 rate per ADA or 80 percent of the 2007–08 statewide average revenue limit for adult education. This amount is multiplied by the lesser of prior year annual ADA or a cap based on 2002–03 ADA funding increases of 2.5 percent each year. The amount appropriated for this program equals $14,967,000. The growth funding was sufficient to fund all of the growth in the program.

Community Day School (CDS) Additional Funding for Mandatory Expelled Pupils

The 2012–13 funding for CDS pupils who were expelled for any of the mandatory expulsion offenses as described in EC 48915(c) was calculated using 2012–13 Annual ADA for the 5^th and 6^th hours for these pupils.

Schools with small school waivers that report ADA for mandatory expelled pupils will receive waiver funding that equals the amount displayed on the 2012–13 necessary small schools funding table for one certificated teacher less revenue limit received for any community day school pupils. The additional funding provided by the waiver is reduced by the current dollar value of any waiver funding included in the base-year funding for “All Other” CDS pupils. The current dollar value is calculated by multiplying the 2007–08 amount by a 0.80119 adjustment factor. The adjustment factor recognizes the decrease in funding for “All Other” CDS pupils from the 2007–08 level and is determined by dividing the statewide total dollars available for CDS “All Other” pupils for the 2012–13 fiscal year, by the amount used to calculate the 2007–08 base.

Education Protection Account (EPA) Entitlement

Because 2012–13 revenue limit and charter school general purpose entitlements have changed at Annual, the 2012–13 EPA entitlements have been recalculated, and are final as of the 2012–13 Annual apportionment. The 2012–13 EPA revenues of approximately $6.5 million were allocated based on each LEA’s proportionate share of statewide deficited revenue limits and charter school general purpose funding as of the 2012–13 Annual period, using a factor of 21.5165 percent; entitlements for charter schools that closed were held constant as of the 2012–13 P-2 period. LEAs fully funded through local revenue and in-lieu of property taxes received $200 per ADA. Except for excess tax LEAs, the amount of EPA funding each LEA received resulted in a corresponding reduction to the LEA’s 2012–13 Annual revenue limit or charter school general purpose state aid funding.

Any adjustment (positive or negative) in 2012–13 EPA entitlements calculated between P-2 and Annual will be applied against an LEA’s 2013–14 current year EPA apportionment. The 2012–13 EPA apportionment and related calculations can be viewed on CDE’s Web site.

Public Employees’ Retirement System (PERS) Reduction

The restoration factor resulting from the $45.781 million appropriated to reduce the PERS Reduction in 2012–13 was 0.4008612152 of the total PERS adjustment.

Regional Occupational Centers/Programs (ROC/P)

The 2012–13 funding for ROC/Ps was calculated by multiplying each LEA’s base year proportionate share percentage by the $384,708,000 appropriated for the program. Local income savings of $49,080,283 were distributed to all LEAs based on the same percentage.

Special Education AB 602 Funding

In FY 2012–13, the statewide target rate remains the same as the prior fiscal year’s value of $465.44 given a zero percent COLA. This year, an increase in federal aid for special education of $8,396,672 provides each Special Education Local Plan Area (SELPA) $1.4101452885 per unit of ADA in supplement to base funding. The program’s appropriation was not sufficient to fully fund AB 602 at Annual. As a result, a proration factor of 0.9965051333 was applied to the base apportionment. Lastly, funding for 2012–13 Extraordinary Cost Pool Program was prorated, where a proration factor of 0.5907443655 was applied to the calculation.

Special Education Infant (ages two and younger) Program

The 2012–13 Infant entitlement equals $68,491,715 and is fully funded at Annual.

Special Education Out-of-Home Care (OHC)

The 2012–13 OHC entitlement equals $149,034,544 and is fully funded at Annual.

Fiscal Year 2011−12 Annual R2

Community Day School (CDS) Additional Funding for Mandatory Expelled Pupils

The 2011–12 funding for CDS pupils who were expelled for any of the mandatory expulsion offenses as described in EC 48915(c) was calculated using 2011–12 Annual ADA for the 5^th and 6^th hours for these pupils.

Schools with small school waivers that report ADA for mandatory expelled pupils will receive waiver funding that equals the amount displayed on the 2011–12 necessary small schools funding table for one certificated teacher less revenue limit received for any community day school pupils. The additional funding provided by the waiver is reduced by the current dollar value of any waiver funding included in the base-year funding for “All Other” CDS pupils. The current dollar value is calculated by multiplying the 2007–08 amount by a 0.80119 adjustment factor. The adjustment factor recognizes the decrease in funding for “All Other” CDS pupils from the 2007–08 level and is determined by dividing the statewide total dollars available for CDS “All Other” pupils for the 2011–12 fiscal year, by the amount used to calculate the 2007–08 base.

Regional Occupational Centers/Programs (ROC/P)

The 2011–12 funding for ROC/Ps was calculated by multiplying each LEA’s base year proportionate share percentage by the $384,708,000 appropriated for the program. Local income savings of $36,105,897 were distributed to all LEAs based on the same percentage.

Special Education AB 602 Funding

The 2011–12 AB 602 entitlements, i.e., base, growth, and program specialist/regionalized services, are fully funded at the Annual R2.

Special Education Out-of-Home Care (OHC)

The 2011–12 OHC entitlement equals $156,030,748 and is fully funded at the Annual R2.