K thru 12 Education
Other Budget Adjustments


CALIFORNIA STATE LOTTERY FUNDING FOR EDUCATION
 Current law requires that at least 34 percent of lottery revenues be allocated to public education programs. Beginning in 2009-10, pending approval by the voters, the allocation of lottery revenues to public education will be replaced with annual appropriations from the General Fund. Each of the entities currently receiving lottery funding will be provided General Fund equal to the amount of lottery revenue it received in 2008-09, adjusted each year by the change in average daily attendance or full time equivalent students, as applicable, and by the change in California per capita personal income. This funding is estimated to be $1.1 billion in 2009-10. Essentially, a relatively flat funding source for education will be replaced with General Fund appropriations which will grow significantly over time.

Commencing in 2009-10, these General Fund appropriations for school districts, county offices of education, the State Department of Corrections and Rehabilitation, the State Department of Education State Special Schools, the State Department of Developmental Services developmental centers and the State Department of Mental Health state hospitals will be provided in addition to the minimum funding level required by Proposition 98 for K-12 schools and community colleges. The effect of this is to build the Proposition 98 minimum funding level by an estimated $1.057 billion in 2009-10, which will grow over time based on the Proposition 98 growth factors.


LOCAL EDUCATIONAL AGENCY CORRECTIVE ACTION ASSISTANCE
 Consistent with the requirements placed on the state and local educational agencies (LEAs) by the federal No Child Left Behind Act (NCLB), the State Board of Education, in March 2008, approved individually differentiated sanctions and technical assistance for 97 LEAs.

To ensure that this and future cohorts of corrective action LEAs have the financial wherewithal to implement these activities, the Budget includes $180 million federal Title I Set-Aside funds. LEAs will receive one-time funding to implement a variety of improvements and reforms aimed at improving student achievement. Specifically for this first cohort of LEAs, the budgeted resources will be used to fully implement a new curriculum that is based on state academic content and achievement standards, including providing appropriate professional development based on scientifically-based research for all relevant staff. Also, LEAs will contract with county offices of education, district assistance and intervention teams, or other assistance providers to analyze the fiscal, governance, and academic capacities of LEAs. These experts will make recommendations that should move these LEAs in a positive direction.

The funds provided in the Budget and the additional expertise should lead to better administrative and instructional systems aimed at the most important purpose, improving the educational achievement of California's students.


EMERGENCY REPAIR PROGRAM
 The Budget Act provides another $101 million transfer from the Proposition 98 Reversion Account to the Emergency Repair Account in satisfaction of the Williams settlement agreement. This increment of funding for the program will bring total transfers to $392 million for the purpose of funding school facility emergency repair projects.


STUDENT AND TEACHER LONGITUDINAL DATA SYSTEMS
 The Budget Act provides $25.4 million to support the development of the California Longitudinal Pupil Achievement Data System and related school information services workload. Total funding for these programs since 2006-07, including support for all districts in preparing for the transition to the longitudinal system in the summer of 2010, is $78.7 million. In addition, the Budget provides $1.2 million in federal funds to support development of the California Teacher Integrated Data System. The state is currently soliciting bidder proposals for implementation, and plans on initiating development in 2009-10.


CHILD CARE
 The Budget Act appropriates more than $3.3 billion for the various child care programs administered by the State Department of Education, including funding for preschool, general child care centers, family child care homes, CalWORKs child care and before- and after-school programs. Total funding includes $338.3 million in one-time Proposition 98 resources to fully fund CalWORKs Stage 2 and Stage 3 child care. The Budget Act also includes $10.9 million for growth for non-CalWORKs child care programs. A total of approximately 915,000 child care slots are funded in the budget.

The Budget Act reflects completion of the policy change initiated in 2007-08 to fully fund Stage 2 costs without a federal Temporary Assistance for Needy Families (TANF) holdback. The Budget provides an additional $25.5 million in Proposition 98 resources for this purpose.

Finally, the Budget updates the regional market rate ceilings for child care reimbursements for voucher-based programs at the 85th percentile of the rates charged to private pay clients for the same type of child care for the same age child in that region based on the 2007 Regional Market Rate (RMR) survey, effective March 1, 2009. This will drive considerably higher costs per case in the future, similar to the rate increases of approximately 12 percent experienced in 2007-08. Additional costs in excess of $50 million for CalWORKs child care are projected in 2009-10.


PROPOSITION 98 SETTLE-UP PAYMENTS
 The 2008-09 Budget defers $150 million in settle-up payments that have traditionally been appropriated to reduce prior years outstanding K-14 unfunded reimbursable costs for mandated programs.

The Budget includes $402 million in settle-up funds to continue the Quality Education Investment Act of 2006. Over a seven-year period, nearly $2.7 billion will be spent in an effort to improve the quality of academic instruction and the learning environment at the lowest-performing schools in the state. These goals are to be achieved through reduced class size and improved teacher quality and training in schools at all grade levels, and improved counselor-to-student ratios in low-performing high schools. The program also creates a process for schools to calculate and report average experience of their teachers.


CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM
 The California State Teachers' Retirement System (CalSTRS) administers the Teachers' Retirement Fund, which is an employee benefit trust fund created to administer the State Teachers' Retirement Plan (Plan). The Plan is a defined benefit pension program that provides retirement, disability, and survivor benefits for teachers and certain other employees of the California public school system. The Plan is comprised of three programs: the Defined Benefit Program, the Defined Benefit Supplement Program and the Cash Balance Benefit Program. Within the Defined Benefit Program there is also a Supplemental Benefit Maintenance Account (SBMA), which provides annual supplemental payments in quarterly installments to retired teachers whose purchasing power has fallen below 80 percent of the purchasing power of an initial allowance.

Currently the state makes annual General Fund contributions to the SBMA of 2.5 percent of teacher payroll for purchasing power protection. However, the 80 percent level of supplemental payments is not a vested benefit. This means that if the amount in the SBMA was not sufficient to bring purchasing power up to the 80 percent level, supplemental payments may have to be suspended or paid at a lower level. An actuarial analysis performed in 2005 at the direction of the Department of Finance shows that the SBMA is being overfunded and has more than enough funds to provide the purchasing power protection for current and future retired teachers. The Legislature adopted a comprehensive package to provide General Fund savings while enhancing benefits for retired teachers. This comprehensive package provides:

  • An increase up to 85 percent non-vested purchasing power protection. The CalSTRS Board is allowed to set SBMA benefits between those necessary to preserve 80 to 85 percent of retirees' purchasing power pursuant to CalSTRS regulations, subject to the availability of the 80 percent level.
  • An annual General Fund contribution to the SBMA of 2.5 percent of teacher payroll less $66.4 million in fiscal year 2008-09, $70 million in 2009-10, $71 million in 2010-11 and $72 million thereafter.
  • A change from a single July 1 payment to a 50/50 split over two payments to be made on November 1 and April 1 of each year.
  • Payments of $56,979,949 for four fiscal years beginning in 2009-10 to pay for interest accrued from the CalSTRS lawsuit.
  • An extended payroll reporting period to October 25 with the ability to amend the report until April 15 of each year.
  • An additional appropriation of up to $3 million in 2009-10 to account for prior payroll reporting errors.
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CHAPTER HIGHLIGHTS for K thru 12 Education Back to Top

 Total K-12 Funding
image of black pointing arrowOther Budget Adjustments
PRINTABLE BUDGET DOCUMENTS Back to Top
Enacted Budget Summary - K thru 12 Education (pdf * - 222K) -
Provides the entire K thru 12 Education Chapter in pdf format.
ADDITIONAL INFORMATION Back to Top
Enacted Budget Detail - K thru 12 Education
Displays Enacted Budget Detail information for K thru 12 Education.