[Email notice of this letter was sent on July 20, 2022, to the PASE and CDEfisc email distribution lists.]
July 20, 2022
Dear County Superintendents of Schools:
2022–23 Advance Principal Apportionment
The California Department of Education (CDE) certified the 2022–23 Advance Principal Apportionment (Advance) on July 20, 2022, pursuant to California Education Code (EC) Section 41330. The statewide total was $49,496,413,510. At the end of each month from July 2022 through January 2023, county treasurers will receive warrants that reflect state aid for Advance programs for local educational agencies (LEA). County superintendents of schools should advise school districts and charter schools of this apportionment immediately.
The 2022–23 Advance is apportioned on the basis of an LEA’s Second Principal Apportionment (P-2) funding from the preceding fiscal year pursuant to EC Section 41330 and funding appropriations provided in the 2022–23 Budget Act and Assembly Bill (AB) 181, Chapter 52, Statutes of 2022.
A summary of the Advance calculations is provided below. This letter, as well as Excel files that provide funding and monthly payment amounts, are available on the CDE website at https://www.cde.ca.gov/fg/aa/pa/pa2223.asp. Additionally, the CDE has posted the 2022–23 Funding Rates and Information web page at https://www.cde.ca.gov/fg/aa/pa/pa2223rates.asp.
2022–23 Advance Calculations by Program
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 by LEAs for budgeting.
AB 181 enacted several calculation changes to programs within the Principal Apportionment. While some of these changes were captured in the 2022–23 Advance, other changes—such as the calculation for declining enrollment protection for school districts or the County Operations Grant adjustments—were not. Items not included in the 2022–23 Advance calculations will be reflected at the 2022–23 First Principal Apportionment (P-1) Certification.
Local Control Funding Formula State Aid – County Offices of Education
The estimated 2022–23 LCFF State Aid for each county office of education (COE) is based on funding from the 2021–22 P-2 certification and reflects the following:
- The 2021–22 LCFF Entitlement, with exception of the add-on funding component, was adjusted to reflect the 6.56 percent 2022–23 cost-of-living adjustments (COLA) for COEs funded based on the LCFF Target.
- Additional funding for Local Control and Accountability Plan support for COEs funded on the Target formula as of 2016–17 P-2, pursuant to EC Section 2575.1, is included in the Advance state aid amount and was adjusted to reflect the 6.56 percent 2022–23 COLA for LCFF.
- Additional state aid for differentiated assistance pursuant to EC Section 2575.2 is equal to the 2021–22 P-2 amount and includes a $200,000 base allowance for COEs of single district counties.
- The 2021–22 P-2 local revenue amount was used to determine the COE’s Advance state aid and excludes any one-time Redevelopment Agency (RDA) Asset Liquidation funds reported as part of the COE’s 2021–22 P-2 property taxes.
- The Education Protection Account (EPA) Entitlement, which is an offset to state aid, has been recalculated to reflect the 2022–23 funding estimate of $12.6 billion. See the EPA section below for additional details.
Local Control Funding Formula State Aid – School Districts and Charter Schools
The estimated 2022–23 LCFF State Aid is based on funding from the 2021–22 P-2 certification and reflects the following:
- The 2021–22 P-2 LCFF Entitlement was recalculated with adjusted base grant rates to reflect the statutory COLA of 6.56 percent, as well as a 6.28 percent adjustment pursuant to EC Section 42238.02(d)(5). Details on the 2022–23 LCFF base grant rate calculation can be found at https://cde.ca.gov/fg/aa/pa/pa2223rates.asp#sdandcslcff.
- The recalculated LCFF Entitlement includes transitional kindergarten add-on funding pursuant to EC Section 42238.02(g)(2), based on average daily attendance (ADA) reported for transitional kindergarten at 2021–22 P-2.
- The recalculated LCFF Entitlement includes adjustments to Necessary Small School Allowances in accordance with EC sections 42282, 42284, and 42287.
- 2021–22 class size penalties (reflected in the miscellaneous adjustments and minimum state aid adjustments lines of the School District LCFF funding exhibit) have been excluded from the Advance.
- The 2021–22 P-2 local revenue amount was used to determine the school district’s Advance state aid and excludes any one-time RDA Asset Liquidation funds reported as part of the district’s 2021–22 P-2 property taxes.
- The EPA Entitlement, which is an offset to state aid, has been recalculated to reflect the 2022–23 funding estimate of $12.6 billion. See the EPA section below for additional detail.
Education Protection Account
EPA revenues, as authorized by Section 36 of Article XIII of the California Constitution, are generated by an increase in the personal income tax rates for upper-income taxpayers. All LEAs will receive quarterly EPA payments through the 2030–31 fiscal year, which will be paid outside of the Principal Apportionment. For most LEAs, EPA funding offsets state aid allocated through the Principal Apportionment.
Using a revised 2022–23 EPA revenue estimate of approximately $12.6 billion, the CDE calculated estimated EPA entitlements using a factor of 42.11134218 percent based on the adjusted 2021–22 P-2 statewide total of revenue limits and charter school block grant funding, adjusted to reflect the statutory COLA of 6.56 percent, and 2021–22 P-2 local revenue data, adjusted to exclude one-time RDA Asset Liquidation funds. If an LEA’s 2021–22 P-2 EPA entitlement was based on $200 per ADA (the minimum), the 2022–23 estimated EPA entitlement was not recalculated for the Advance.
While the funding is not allocated through the Principal Apportionment, estimated 2022–23 EPA amounts are provided on the Advance Apportionment Summary available on the CDE’s website at https://www.cde.ca.gov/fg/aa/pa/iassf22adv.asp for your convenience. For additional information on EPA calculations, letters of apportionment, payment schedules, spending restrictions, frequently asked questions, Standardized Account Code Structure financial reporting and more, please refer to the CDE’s EPA web page at https://www.cde.ca.gov/fg/aa/pa/epa.asp.
Basic Aid “Choice”, Court-Ordered Voluntary Pupil Transfer, and Charter Supplement
The 2022–23 Advance funding for Basic Aid “Choice”, Court-Ordered Voluntary Pupil Transfer, and Charter Supplement is based on the 2021–22 P-2 amounts for each LEA, adjusted for the 6.56 percent COLA.
Adults in Correctional Facilities
LEAs that participate in the Adults in Correctional Facilities (AICF) program receive funding on a reimbursement basis. The 2022–23 Budget Act provides $8,136,000, which will be used to fund the 2021–22 program. Advance funding for the AICF program is equal to the 2021–22 P-2 state aid amounts for each LEA adjusted for the statutory COLA for 2020–21 at 2.31 percent and 2021–22 at 1.70 percent. Details on the 2021–22 rate calculation can be found at https://www.cde.ca.gov/fg/aa/pa/pa2122rates.asp.
Special Education – Assembly Bill 602 Program
The 2022–23 Budget Act provides $4,488,775,000 for the AB 602 program. The estimated 2022–23 state aid for each Special Education Local Plan Area (SELPA) is based on funding from the 2021–22 P-2 certification and reflects the following adjustments:
- The 2021–22 Special Education Property Tax amount was used to determine the SELPA’s Advance state aid and excludes any one-time RDA Asset Liquidation funds reported as part of the county’s 2021–22 P-2 property taxes.
- A factor of 1.1639662919 was applied to each SELPA’s adjusted 2021–22 state aid amount.
The 2022–23 Budget Act provides for an additional $500 million to increase the base funding rates to $820 per ADA and is included in the factor calculation used in the 2022–23 Advance. In addition, AB 181 implemented a new base funding formula to calculate allocation at an LEA level rather than at the SELPA level, but funding continues to flow through the SELPA. The CDE will implement the new base funding formula at the 2022–23 P-1 Certification, to be calculated pursuant to EC Section 56836.148.
Special Education – Infant (Ages Two Years and Younger) Program
The 2022–23 Budget Act provides $84,886,000 for the Infant program. The Advance is based on the 2021–22 P-2 amounts for each LEA, adjusted for the 6.56 percent COLA.
Special Education – Mental Health Services
The 2022–23 Budget Act provides $422,334,000 for Mental Health Services. The Advance is based on the ADA reported for the SELPA for the 2019–20 P-2 fiscal year. The mental health rates per ADA are $0.5272775220 for the Los Angeles County Court and $71.5833553563 for all other SELPAs.
Special Education – Early Intervention Preschool Grant
The 2022–23 Budget Act provides $260,000,000 for Early Intervention Preschool Grant. The Advance is equal to the 2021–22 P-2 amounts for each LEA.
Expanded Learning Opportunities Program
The 2022–23 Budget Act provides $4 billion for the Expanded Learning Opportunities Program. The CDE has set aside $5 million of the total appropriation for COE apportionments to provide technical assistance, evaluation, and training services to support program improvement, pursuant to EC Section 46120(d)(7).
The 2022–23 entitlement calculation is based on each LEA’s 2021–22 P-2 unduplicated pupil percentage (UPP) and classroom-based ADA in grades kindergarten through sixth grade pursuant to EC Section 46120(d)(1). The Advance reflects the new UPP thresholds and increased funding rates pursuant to AB 181. Details on the 2022–23 rates can be found at https://www.cde.ca.gov/fg/aa/pa/pa2223rates.asp#elop. Preliminary entitlement calculations are available at https://www.cde.ca.gov/fg/aa/pa/elop.asp. [Note: The preceding URL was added to the letter as of 7/27/2022.]
Transfer of Funds for County Served District Funded Average Daily Attendance
EC Section 2576 requires the CDE to transfer funds from the district of residence to the COE for District Funded County Program ADA at the per-ADA LCFF rate of the school district, unless school district and COE agree on an alternative. Transfer of Funds for County Served District Funded ADA is based on the 2021–22 P-2 amounts, adjusted to reflect the 6.56 percent 2022–23 COLA applicable to the per-ADA LCFF rates.
Other State Aid
Other State Aid appropriations for the 2022–23 Advance can be found in AB 104 (Chapter 13, Statutes of 2015) and AB 130 (Chapter 44, Statutes of 2021).
Charter School Overpayments
Fourth quarter EPA revenue for fiscal year 2021–22 increased by approximately 53 percent over the estimated revenue used for the preceding quarters. This significant increase in EPA and a commensurate decrease in LCFF state aid resulted in many charter schools being overpaid at the 2021–22 P-2 Certification. For these charter schools the 2021–22 overpayment will be reflected in the Advance Apportionment Summary on Line A-19, Prior Year Amount Charter Overpaid. The negative adjustment on this line decreases the charter school’s total 2022–23 Principal Apportionment, which has the effect of decreasing current year monthly Principal Apportionment payments to repay the prior year overpayment.
Monthly payments for the Advance (July 2022 – January 2023) are available on the CDE’s website at the county summary level and by LEA. For cash flow planning, LEAs should refer to the Principal Apportionment Payment Schedule web page at https://www.cde.ca.gov/fg/aa/pa/papayschedule.asp. The State Controller’s Office website provides monthly payment information, including offset amounts at https://www.sco.ca.gov/ard_payments_k12.html and estimated payment dates at https://www.sco.ca.gov/Files-ARD-Payments/sched_2022.xlsx (XLSX).
If you need assistance, or have any further questions, please contact the Principal Apportionment Section by email at PASE@cde.ca.gov or by phone at 916-324-4541.
Aaron Heredia, Assistant Director
Principal Apportionment Section