Governor Releases Proposed 2017-18 State Budget: School Funding Levels Off

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January 13, 2017 On January 10, 2017, Governor Jerry Brown introduced his proposed state budget for the 2017-18 fiscal year. The Governor notes that "this is the most difficult budget we have had since 2012" and proposes rolling back some planned spending increases to close a projected $2 billion deficit if left unaddressed. If the economy strengthens over the next few months, projections could be revised in May before the budget is enacted. CCSA will provide a full CCSA Budget Brief and additional resources in the coming days.

Overall, the budget proposal provides $122.5 billion in General Fund spending in 2017-18, reflecting a flattening of the state economy during the fiscal year. The budget does not assume any changes to federal policy at this point, but notes that considerable uncertainty in federal policies may require future adjustments.

Highlights of the education funding proposal for 2017-18 include:

  • Overall, the budget for K-14 education provides a Proposition 98 funding level of $73.5 billion in 2017-18, but also reduces the guarantee by $900 million in 2015-16 and 2016-17 combined. With a revised guarantee of $71.4 billion in 2016-17, the 2017-18 budget proposal increases Proposition 98 by $2.1 billion.
  • $744 million for a Cost of Living Adjustment (COLA) of 1.48 percent to the LCFF but no additional investment toward full implementation of LCFF. LCFF funding will remain at 96 percent of full funding targets.
  • $851 million in a one-time LCFF "cost shift" to defer LCFF payments from June to July of 2017 to accommodate the reduction in the Proposition 98 guarantee in 2016-17 without imposing operational cuts in the current year.
  • $58 million for a 1.48 percent COLA for other state categorical programs such as special education and child nutrition.
  • $287 million (about $48 per pupil) in one-time per pupil discretionary block grants to be allocated per pupil based on prior year average daily attendance counts.
  • $30 million for tobacco use prevention in accordance with Proposition 56.
  • $10 million for grants to LEAs for truancy and dropout prevention programs through Proposition 47.
  • Charter Schools: No specific proposals or new funding for charter schools, but maintains current funding rates for existing programs such as SB 740 Facility Grants.
  • Special Education: Only technical and caseload budget adjustments are proposed. However, the Governor recommends a stakeholder engagement process through the spring to evaluate and consider recent recommendations on revising special education funding formulas and structures.
  • School Facilities: Voters approved a new state school bond in November, including $500 million for charter schools. The Governor proposes to support the expenditures of the bond funds only after tighter accountability provisions on the appropriate use of bond funds are enacted.
  • Childcare: $111 million for the full-year adjustment to the multi-year expansion of early education programs that was enacted in the 2016 budget. However, the Governor proposes delaying by one year the additional augmentations that were anticipated in the multi-year plan.

Next Steps: The Governor's budget release is only the first step in the budget process. The California State Legislature will discuss budget priorities through the spring and key economic indicators will be updated in May 2017 before a final plan is adopted in June 2017. CCSA will provide a full CCSA Budget Brief and additional resources in the coming days. We will inform charter schools of details and updates as they emerge and work on your behalf to ensure positive budget outcomes for charter schools.