IUSD adopts budget based on state plan that’s complicated but ultimately positive for schools


The IUSD Board of Education voted to adopt a budget for the 2013-14 school year on Tuesday night, and for the first time in years the forecast for Irvine and other districts looked relatively bright.

John Fogarty, the district’s assistant superintendent of business services, said IUSD’s spending plan was based on the latest projections out of Sacramento, where Governor Jerry Brown and the Legislature recently reached agreement on a brand new funding formula for K-12 education.

You may remember that the old Revenue Limit system granted each district a base level of per-student funding along with a raft of categorical payments that were tied to specific programs. The new model provides an increased base level of funding while allocating additional dollars to help support English-language learners, students in foster care and students who are eligible for free and reduced-price lunches. Fogarty said it’s expected to generate approximately $315 per student in additional revenues for IUSD.

Though there are a number of details to be revealed, including the unveiling of a new accountability system, the extra funding would appear to begin an era of recovery for California’s public schools after years of devastating cuts.

“This is a much better budget picture than we’ve seen in many years,” Fogarty said.

At the same time, he said, a convoluted accounting requirement from the state will prompt IUSD to dig into its reserves for one more year. Here’s why:

During the economic downturn, Irvine fell into an alternate funding formula known as Basic Aid, in which a district is funded by its own property taxes. This usually means more revenue, but in the interest of equity, the state decided in 2009 that it would annually scoop away any extra funding from Basic Aid districts. Because California waits a year to take these dollars, IUSD will be stripped of about $10 million for the 2012-13 school year sometime in 2013-14, Fogarty said.

With that in mind, the spending plan approved for IUSD on Tuesday night outlines $233.2 million worth of expenditures – both restricted and unrestricted – against $225.7 million worth of total revenue. The difference will be offset by reserve set-asides, and Fogarty predicted that positive ending balances will return in 2014-15 and 2015-16, marking the end of deficit spending. (Click on the graphic above to view his presentation.)

Here are some other takeaways from Tuesday’s budget discussion:

•  Unlike the previous Revenue Limit funding model, the state is now differentiating base per-student funding depending on student grade levels. In addition to that base, supplemental funding equal to 20 percent of each student’s base grant will be allocated to support English learners, students from low-income families and those in foster care. A separate concentration grant will benefit districts in which at least 55 percent of students meet the above criteria.

•  Fogarty cautioned that challenges remain, including implementation of the new Local Control Funding Formula and increases in health care costs.

•  IUSD could also fall in and out of Basic Aid over the next few years as new residential developments and an influx of new students shake up revenue calculations, Fogarty said. The district is projecting 998 new students this year, followed by 1,437 in 2014-15 and 1,941 in 2015-16.

•  Revenue in California is up about $4.5 billion through April, partly as a result of the passage of Proposition 30. The state’s Legislative Analyst’s Office appears to be more optimistic about new revenue than Governor Brown, who is taking a more conservative approach, Fogarty said.

•  The governor and the Legislature have agreed to allocate $1.25 billion to help school districts implement the new Common Core instructional standards. Districts will be asked to develop specific plans for utilizing these funds.