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2016-2017 Budget

2016-2017 Budget Signed by the Governor

After the Legislature taking action and passing the budget on the constitutionally mandated date of June 15th, Governor Jerry Brown signed the state budget for FY 2016-2017. The approved budget at $167 billion includes $122.5 billion in General Fund spending, $44.6 billion in special fund spending, and $3.6 billion in bond spending.  Overall, the budget package continues to focus on the Governor's interest in fiscal stability by doubling the state's Rainy Day Fund, continuing to pay down debt, increasing school funding and boosting programs to combat poverty and homelessness.  Other significant components include:
 

  • Boost Rainy Day Fund, Pay Debt - adds an extra $2 billion to the required $1.3 billion deposit, bringing total reserves to $6.7 billion (54% of goal); directs $1.75 billion to the Special Fund for Economic Uncertainties; and directs $1.3 billion to pay down debt and liabilities
  • Investing in Education - Increases the minimum funding guarantee for K-12 and community colleges to $71.9 billion including per K-12 funding to $10,643 and $2.9 billion in new funding to Local Control Funding Formula
  • Counteracting Poverty - Includes the statutorily increased minimum wage adjustment to $10.50 per hour in 2017; cost-of-living increases for Supplemental Security Income/State Supplementary Payment; repeals the maximum family grant rule in CalWORKs; and limits the state's asset recovery from the estates of deceased Medi-Cal recipients
  • Reducing Housing Costs - Provides $3.6 billion in funding and awards authority for affordable housing and homelessness programs, such as CalWORKs and emergency homeless shelters; sets aside $400 million for allocation at a later date for affordable housing programs; authorizes a $2 billion bond from a portion of future Proposition 63 mental health revenues for homelessness and affordable housing programs for the mentally ill and more
  • Strengthening Infrastructure - Includes $2 billion for state infrastructure improvements and maintenance, $1.3 billion for state buildings, $270 million in lease-revenue bond authority for local jails; and $688 million for critical deferred maintenance at state levees, parks, universities, community colleges, prisons, hospitals and other facilities

 
Specific to adult education, we were able to secure a few beneficial enhancements to the Adult Education Block Grant (AEBG).  The enhancements to AEBG were contained within trailer bill AB 1602 (Budget), as follows:

 

  • Enhances language under AEBG rules and procedures to ensure a requirement that, in its decision-making process, the consortium consider input provided by pupils, teachers employed by local educational agencies, community college faculty, principals, administrators, classified staff, and the local bargaining units of the school districts and community college districts before it makes a decision;
  • Requires a member, if chosen to be the fiscal agent of a consortium, to commit to developing a process to apportion funds to each member of the consortium pursuant to the consortium's plan within 45 days of receiving funds appropriated for the program;
  • Requires the chancellor and the Superintendent to submit preliminary reports on or before October 30th following each fiscal year for which funds are appropriated, and final reports on or before February 1st of the following year regarding the use of available funds and outcomes for adults statewide and in each adult education region;
  • No later than August 1, 2017, requires the chancellor and the Superintendent to report to the Director of Finance, the State Board of Education, and the appropriate policy and fiscal committees of the Legislature on options for integrating the assessments described above into a specified common assessment system, compliance of the assessments with federal and state funding requirements for adult education programs, estimated costs and timelines for the assessments, and changes in policies that may be needed to avoid duplicate assessments;
  • Appropriates, for the 2016-17 fiscal year, $5,000,000 from the General Fund to the Chancellor of the California Community Colleges for allocation via joint decision by the chancellor and the Superintendent to a community college district, school district, county office of education, or adult education consortium to provide statewide leadership for community college districts and local educational agencies participating in the Adult Education Block Grant Program for FYs 2016-17, 2017-18, and 2018-19;

 
With regard to the level of funding for the AEBG, we did not see an increase in funding granted for the next fiscal year - not unexpected. Although we have been talking with the Department of Finance (DOF) and Legislature for the last year on the need to grow the pot of funds, they were not inclined to do so for FY 16-17.  The rationale was based on a few key factors - 1) AEBG is only one year old and they want to monitor progress for another year; 2) AEBG funding in some regions wasn't distributed until the end of the school year; and 3) DOF continues to be concerned about future revenues with a projected return of recessionary conditions within the next year to eighteen months. 
 
All of this said, we'll be continuing the push for additional funding as part of the FY 17-18 budget cycle.  More to come on that front in the coming months... 
 
In addition to the AB 1602 provisions related to AEBG, it also contained a framework and funding for the Strong Workforce Initiative/Program under the community college system.  The Program would be provided $200 million in ongoing Proposition 98 General Fund to expand the availability of quality CTE and workforce development courses, pathways, and programs resulting in certificates, degrees, and other credentials.   Under the Program, community colleges would coordinate CTE programs within 14 regions identified under the state's implementation of the federal Workforce Innovation and Opportunity Act (WIOA).  These regions would create "collaboratives" of community college districts, local education agencies, interested CSU and UC campuses, civic representatives, workforce development boards, representatives from the organized labor community, and economic development and industry sector leaders.  Collaboratives would meet at least annually to develop four-year plans to meet regional workforce education needs. These plans would include a needs assessment based on regional labor market analyses, efforts to coordinate existing programs in the region, student success goals, and work plans for meeting regional priorities. Funding would be distributed to a college in each region acting as a fiscal agent; that college would distribute funding to other colleges within the region based on the plan. The allocation would reflect each region's share of the state's: (1) unemployment, (2) CTE enrollment, (3) projected job openings, and (4) after the first year, successful performance outcomes. The Chancellor's Office could reserve up to 5 percent of annual program funding for statewide coordination activities.  The proposal calls for the Chancellor's Office to align the performance measures, to the extent possible, with federal WIOA performance measures. (These include measures of degree and certificate completion, employment, and earnings.) Collaboratives would set measurable goals for performance in each of these areas and provide annual updates of their progress in meeting the goals. Beginning January 1, 2018, the Chancellor would be required to report annually to the Governor and Legislature on each region's performance outcomes (disaggregated for underserved demographic groups). As part of these reports, the Chancellor would be required to provide recommendations for program improvement and for future allocations to collaboratives based on program outcomes.  The Chancellor's Office would be required to develop recommendations, including policies, regulations, and guidance necessary to facilitate sharing of best practices and curricula across colleges, streamline course and curriculum approval, and eliminate barriers to hiring qualified instructors (including reevaluating the required minimum qualifications for CTE instructors), among other efforts. The Chancellor would present the recommendations to the Board of Governors by June 30, 2017.   60% of funding will go directly to colleges, with 40% going to regional consortia. Language also requires consortia to collaborate with regional workforce partners, report on one-time versus ongoing spending, and encourages consortia to work with programs and providers that seek to improve workforce outcomes for the developmentally 16 disabled. Funding will be based on a formula that includes local unemployment rate, the region's proportion of CTE full-time equivalent students, projected job openings, and proportion of successful workforce outcomes.
 
Does this framework sound familiar?  It should...
 
While CCAE and CAEAA raised concerns with an entirely new and yet strikingly duplicative framework being developed outside of the regional consortia under AEBG, we are unfortunately not able to access the funding as it is being provided as part of the community colleges' share of Proposition 98 - outside of K-12 funding.  Despite not having access to the funding going forward, we were successful in including trailer bill language that, to avoid duplication of effort, requires activities funded under the Strong Workforce Program to be informed by, aligned with, and expanding upon the activities of existing workforce and education regional partnerships, including those partnership activities that pertain to regional planning efforts established pursuant to WIOA, AEBG consortia, and K-12 career technical education programs.  Additionally, the language requires these regions to collaborate with other public institutions, including, but not limited to, local educational agencies, adult education consortia, local workforce development boards, and interested California State University and University of California institutions.
 
Being aware of this Program is very important from our perspective as AEBG consortia look at budget allocations.  Recall, under AEBG Education Code Section § 84905(b) a condition of joining a consortium is that each member "shall commit to reporting any funds available to that member for the purposes of education and workforce services for adults and the uses of those funds."  As you'll remember, CCAE and CAEAA fought hard for this language to be included so as to help consortium members better prioritized the use of the precious AEBG resources for those needs that weren't otherwise being funded by other pots of money members may have access to.  In this case, consortia members across the state should be aware that this funding is available to community college partners that could, arguably, help free up AEBG dollars for K-12 needs that are not currently being funded.  Of note, however, these are local decisions and it is critical consortia members understand that these are decisions to be discussed and addressed at the local level not at the state level. 
 
For more information, please see https://www.gov.ca.gov/news.php?id=19463.