2015-16 Advance Apportionment Letter

July 20, 2015

Dear County Superintendents of Schools:

2015–16 ADVANCE PRINCIPAL APPORTIONMENT

Towards the end of July, select county treasurers will receive a warrant that reflects state aid for programs included in the 2015–16 Advance Principal Apportionment (Advance) for elementary, high, and unified school districts; charter schools; and county offices of education. The California Department of Education (CDE) certified the Advance on July 20, 2015 pursuant to California Education Code (EC) Section 41330. The statewide total was $35,168,396,537. County superintendents of schools should advise school districts and charter schools immediately of this apportionment.

The Advance for 2015–16 is based on a statutory derivation pursuant to EC sections 14002 through 14007 and 41301. Section 41330 directs the CDE to apportion money in the Advance on the basis of the Second Principal Apportionment (P-2) from the preceding fiscal year.

A summary of the calculations that the CDE used in the Advance is described below. This letter, as well as apportionment Excel files that provide detail funding amounts for this Advance, are available on the CDE Web site at http://www.cde.ca.gov/fg/aa/pa/pa1516.asp.

Calculations to Determine the 2015–16 Advance

The following provides specific details regarding the calculation of funding for each program, including the Local Control Funding Formula (LCFF). Because this apportionment is merely a means to begin allocating funds in accordance with EC Section 41330, it should not be used for budget purposes.

LCFF State Aid – County Offices of Education

The estimated 2015–16 state aid for each county office of education (COE) is based on funding from the 2014–15 P-2 certification and reflects the following:

1. For COEs that received Gap Funding in the prior fiscal year, the 2014–15 Target Entitlement was increased by the 1.02 percent cost of living adjustment (COLA). Note: COLA was not applied to the add-on funding that is a component of the Target Entitlement.
   
2. For COEs that did not receive Gap Funding in the prior fiscal year, the Advance carries forward the COE’s 2014–15 P-2 LCFF Entitlement.
3. The 2014–15 P-2 local revenue amount was used to determine the COE’s Advance State Aid and reflects the exclusion of any one-time Redevelopment Agency (RDA) Asset Liquidation funds reported as part of the COE’s 2014–15 P-2 property taxes.
4. The Education Protection Account (EPA) Entitlement, which is an offset to state aid, has been recalculated to reflect the 2015–16 funding estimate of $7.3 billion. See the EPA section below for additional detail.

LCFF State Aid – School Districts and Charter Schools

The estimated 2015–16 state aid for each school district and charter school is based on funding from the 2014–15 P-2 certification and reflects the following:

1. The 2014–15 Target Entitlement was increased by the 1.02 percent COLA. Note: COLA was not applied to the add-on funding that is a component of the Target Entitlement. Districts and charter schools funded based on the Target formula as of the 2014–15 P-2 certification are funded at their Target in the Advance.
2. The 2014–15 Floor Entitlement was recalculated:
   1. To include 2014–15 Gap funding.
   2. To zero out any class size penalty applied in 2014–15.
3. A new 2015–16 estimated Need, which is the difference between the Target and Floor, was derived from the revised Target and Floor calculations. This amount was used to estimate 2015–16 Gap funding for the purposes of the Advance calculations.
4. The 2015–16 Budget includes an appropriation of $5,994,417,000 for Gap in this fiscal year. The Advance Apportionment provides approximately 50 percent of the estimated Need. This is less than the Department of Finance’s (DOF) Preliminary Gap Percentage of 51.52 percent (as of the 2015–16 Budget Act) because at the Advance and First Principal Apportionment (P-1) CDE’s calculations do not reflect additional Gap funding that will be available for LEAs that fund Gap through local revenue. Note: The percentage used at Advance and P-1 will change in subsequent certifications when the calculations reflect current year average daily attendance (ADA), unduplicated pupil counts (UPC), and local revenue data. The CDE will finalize the 2015–16 Gap Percentage at the 2015–16 P-2 Apportionment in June 2016.
5. For those districts and charters receiving an Economic Recovery Target payment, the additional 2015–16 payment was included.
6. The 2014–15 P-2 local revenue amount was used to determine the district’s Advance State Aid and reflects the exclusion of any one-time RDA Asset Liquidation funds reported as part of the district’s 2014–15 P-2 property taxes.
7. The EPA Entitlement, which is an offset to state aid, has been recalculated to reflect the 2015–16 funding estimate of $7.3 billion. See the EPA section below for additional detail.

Education Protection Account

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 local educational agencies (LEAs) will receive quarterly EPA payments through the 2018–19 fiscal year, which will be paid outside of the Principal Apportionment. Except for an excess tax LEA, EPA entitlements offset state aid allocated through the Principal Apportionment.

Using a revised 2015–16 EPA revenue estimate of approximately $7.3 billion, the CDE calculated estimated EPA entitlements using a factor of 25.07815510 percent based on the 2014–15 P-2 statewide total of revenue limits and charter school block grant funding and 2014–15 P-2 local revenue data, adjusted to exclude one-time RDA Asset Liquidation funds. If an LEA’s 2014–15 P-2 EPA entitlement was based on $200 per ADA (the minimum), the 2015–16 estimated EPA entitlement was not recalculated for the Advance.

While the funding is not allocated through the Principal Apportionment, estimated 2015–16 EPA amounts are provided on the Principal Apportionment Summary available at http://www.cde.ca.gov/fg/aa/pa/iassf15adv.asp for your convenience.

Basic Aid “Choice”, Court-Ordered Voluntary Pupil Transfer, and Charter Supplement

Funding for Basic Aid “Choice”, Court-Ordered Voluntary Pupil Transfer, and Charter Supplement are equal to the 2014–15 P-2 amounts, adjusted for the 1.02 percent COLA.

Adults in Correctional Facilities (AICF)

LEAs that participate in the AICF program receive funding on a reimbursement basis. The $15,096,000 provided in 2015–16 will be used to fund the 2014–15 program. The Advance carries forward entitlement amounts from the 2014–15 P-2 certification to estimate 2015–16 entitlements and applies the 2014–15 COLA of 0.85 percent.

Special Education – Assembly Bill (AB) 602 Program

The Advance carries forward the 2014–15 P-2 apportionment for AB 602. An adjustment was made to back out the share of one-time RDA Asset Liquidation funds attributed to Special Education Property Taxes, which resulted in an increase to the affected Special Education Local Plan Areas (SELPA) AB 602 2014–15 P-2 apportionment. SELPA’s should be advised that overall state aid funding for AB 602 declined from $2,824,351,000 in 2014–15 to $2,745,855,000 in 2015–16 due to an anticipated increase in local revenue. Should that increase in local revenue not materialize, SELPAs may see a larger proration factor in 2015–16.

Special Education – Infant (Ages Two Years and Younger) Program

Funding for Special Education Infant program is equal to the 2014–15 P-2 amounts for each LEA, adjusted for the 1.02 percent COLA. The 2015–16 Budget Act includes an appropriation of $74,802,000 in this fiscal year. In addition, the Budget Act provides an additional $30 million to provide early intervention services to infants and toddlers younger than three years of age. The Budget Act does not prescribe a methodology to distribute this additional funding and directs CDE, DOF, and the Legislative Analyst’s Office to determine the methodology. Over the next several months CDE will be working with those agencies on a plan to distribute the new funding.

Transfer of Funds for County Served District Funded ADA

Funding for the Transfer of Funds for County Served District Funded ADA is equal to the 2014–15 P-2 amounts, and was not adjusted for COLA.

Payment Schedule

Monthly payments for the Advance are available on CDE’s Web site at the county summary level and by LEA. For cash planning, a schedule of Principal Apportionment payments for the entire 2015–16 fiscal year are available at http://www.cde.ca.gov/fg/aa/pa/papayschedule.asp. There are no payment deferrals for the 2015–16 fiscal year.

If you need assistance, or have any further questions, please contact the Office of Principal Apportionment and Special Education or the Office of Charter Apportionments and District Reorganization by phone at 916-324-4541 or by e-mail at PASE@cde.ca.gov.

Sincerely,

Caryn Moore, Associate Director
Local Control Funding Formula Section
School Fiscal Services Division