LAO: Cut basic aid districts’ money
Savings would restore money to child care
The Legislative Analyst is recommending cutting $200 million in state money to revenue-wealthy districts to restore a piece of the sizable cuts that Gov. Brown is proposing for child care. From San Jose, I can see the smoke signals of resistance wafting from Palo Alto to Hillsborough.
Basic aid districts are those whose per-student revenue from local property taxes exceeds what they’d otherwise get from general state revenue. They comprise about one-tenth of the state’s 1,000 school districts; their revenues run from less than $100 to thousands of dollars more per student (Palo Alto, Woodside, Montecito, Sausalito) than state-funded districts, called revenue-limit districts. Not all basic aid districts have high-income families; some, like Santa Clara Unified, are basic aid because of commercial developments. Basic aid districts do get various categorical grant money from the state, and that’s what the LAO is proposing to cut – an average of about $790 per student, a significant amount.
About $2 billion in child care and preschool services are funded through Proposition 98, the main funding source for K-12 schools. Brown is proposing to whack $716 million, or 35 percent of the funding, by reducing the number of slots, raising the income eligibility, and eliminating services for 11- and 12-year-olds. The Assembly and the Senate want to cut it less or use one-time money to fill in the gap. The LAO’s recommendation to cut money for basic aid would restore more than a quarter of Brown’s cuts.
The LAO’s proposal would need to be refined to protect barely-basic-aid districts from cuts that would put them below what they would receive as a revenue-limit district. The most wealthy basic aid districts would experience larger cuts than $790 per student.
In the past, basic aid districts have experienced categorical cuts equal or proportionate to those imposed on revenue-limit districts. The cuts under the LAO’s proposal would apply to basic aid districts alone. In the past, state Sen. Joe Simitian of Palo Alto has led efforts to protect basic aid schools. Edgar Cabral, K-12 analyst for the LAO, said that basic aid districts have taken proportionately fewer cuts in the past three years, justifying the recommendation.
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It’s a fantastic idea, most school districts have been suffering while basic aid districts have been immune to cuts. The custs should be proportional if you receive any State funding.
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I read the LAO report referenced above, Child Care and Development (CCD) Budget: Overview of Conference Issues. I could not find any reference to a cut to revenue limit district. Can you point me to where this info came from? I am expecting a move like this if the legislators decide to move to block grants from categorical funding but have no indication that will actually happen. So very interested if this is something different. Thanks Bruce Abbott
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Opps I ment to say cuts to basic aid district above.
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It’s in the February 24 LAO handout, “Proposition 98: Overview of Conference Issues” on page 5. And it’s not necessarily tied to child care cuts.
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Joe is right that it is not tied to child care cuts in the document. But Edgar Cabral of the LAO suggested this during testimony and confirmed this in a conversation with me.
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Just to clarify, basic aid school districts have NOT been immune to cuts.
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My understanding is that Basic Aid districts have experienced some cuts related to a so-called “fair share” categorical funding cut, but the cuts are capped and often not as severe as those experienced by districts funded through the state’s Revenue Limit system.
For various reasons, Basic Aid districts often have the least internal capacity to manage budget cuts. This is primarily due to their oft-entitled stakeholders who have become accustomed to their district’s largess.
If the state moves forward with such cuts, it should accompany the cuts with legislation to grant Basic Aid districts needed staffing and budget flexibility so that they don’t go belly-up and/or make cuts that hurt kids unnecessarily. Absent such flexibility, Basic Aid districts are forced to RIF their most recently-hired staff first, often without regard to district need and the impact on services to students.
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There are over 100 + basic aid districts in CA. The number has grown signifcantly over the past few years due to economic shifts and property values. Many of these districts backed into basic aid due to rapid changes in property values. Several of these and other districts are finding themselves moving in and out of basic aid within months of their status change. This leads to vary precarious fiscal issues for these districts. The vast majority of these districts are struggling and the fiscal dynamic as Eric indicates is fairly accurate. In addition, recently basic aid districts have been taking a fair share proportional hit, similar to revenue districts. Please if you comment, do some footwork and educate yourselves. Comments that give the impression that basic aid districts are or have been immune, lead readers to a lack of understanding of the funding dynamics and the various dynamics within the vast differences among basic aid districts. Thank You
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Basic Aid districts are already returning much (sometimes all) of the funding they receive from the State. This is a response from Basic Aid Districts recognizing our responsibility to all districts suffering cuts by the State. Basic Aid does not have the same percentage because first, they don’t get much from the State to return (most funding is generated within the local boundaries by property tax payments from the local community) and second, the property tax revenues that Basic aid district depend on has taken a free fall in the past several years which represents a reduction to funding on the natural.
Basic Aid funding is different from the norm and complicated. It is clearly an issue that the LAO does not fully understand. I would suggest that they get a comprehensive tutorial from those who know BEFORE they throw out ideas that are not going to affect the issue they wish to solve.
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Absolutely. Basic Aid districts are all very different and have diverse property tax values and fluctuations. In my county (Calaveras), taxes declined 2.1% in 09/10, 11.3% in 10/11 and our assessor is projecting another 10% for 11/12. The combination of taxes alone equates to $1,882/ada. The fair share and ada reductions that we also have taken total another $638/ada.
So, these folks need to do the math and look at the whole picture before they make an arbitrary statement and lump Basic Aid districts into one pot. If the temporary tax extension fails and the proposal of an 8.9% hit flies, we will have to find another $1,000 per ada. Pretty hard to do for a district of 684.
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The proposal the LAO floats in their doomsday analysis specifically states that the categorical funding cut to basic aid districts would apply only to those whose excess revenues could cover it. For districts that have had significantly increased funding for years, it would certainly be a massive cut. But the remaining 90+% of districts have been receiving far less for years now. Continuing to fund above the $120 per student rate is giving the haves more – at the expense of the majority.
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The link to your website is missing the ‘m’ in .com.
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