The May Revision fully funds Proposition 98 and K-12 education at $68.6 billion ($41.1 billion General Fund, $27.4 billion from other funds) total from all sources. This reflects a total increase of $297.5 million ($855.8 million General Fund increase offset by $558.3 million other funds decrease) over the January Budget proposal. The total per-pupil expenditures from all sources are projected to be $11,240 in 2006-07 and $11,584 in 2007-08. These are both all-time records for the state.

Proposition 98
Proposition 98 funding for 2007-08 is proposed at $57.6 billion, a four percent increase over the Governor’s Budget estimate. The General Fund comprises approximately 72.7 percent, or $41.9 billion of total proposed Proposition 98 funding. The totals include funding for K-12, community colleges, and other state agencies that serve students. Total per-pupil expenditures from all sources are projected to be $11,225 in 2006-07 and $11,562 in 2007-08,

The May Revision also proposes one-time Proposition 98 Reversion Account funding totaling $56.7 million appropriated as follows:

• An additional $4.4 million for School Breakfast Startup grants.
• $4.2 million for one-time activities for the implementation of changes in school nutrition requirements.
• $48.1 million to fund Supplemental Program obligations.

Major Changes Included in the May Revision

Total Funding Increases

• The May Revise reflects total K-12 education funding increases of $297.5 million for 2007-2008 and of $172 million for 2006-2007. This results in total 2007-08 spending of $66.6 billion. This spending increase comes in spite of a slight decrease in the projected enrollment for 2007-08, to 5,932,000 (ADA).

Addressing the Teacher Shortage and Improving Teacher Quality The Governor’s May Revision proposes funding for several programs to address the teacher shortage:

• $50 million for grants to school districts to support the hiring of more than 1,000 additional credentialed career technology education teachers.
• An increase of $2 million to the already allocated $10 million to create the EnCorps Teachers Program to add 2,000 experienced retirees to the teaching corps. The EnCorps Teachers Program will establish a public-private partnership with industry and business to actively recruit retiring professionals to the classroom.
• $50 million in grants for school districts to hire more teachers for college preparatory courses (a through g courses) in an effort to assist more students to become eligible to attend college.
• $7.5 million to fund a variety of incentives for existing credentialed teachers in other subject areas to become authorized to teach science and math.
• $2 million for a grant program to assist public school employers and exclusive representatives of credentialed teachers to plan an alternative teacher salary schedule based on criteria in addition to years of training and experience.
• $3 million to continue funding for the Personnel Management Assistance Teams to provide technical assistance to school districts in establishing and maintaining effective personnel management, recruitment, and hiring process.
• $2.5 million for enhancement and expansion of the Administrator Training Program. This program provides effective training and coaching for new K-12 school principals on leadership skills, financial and personnel management, the interrelation between academic standards, instructional materials, and curriculum frameworks, and the effective use of pupil assessments. The current program does not adequately serve existing administrators; the primary purpose of the additional funding is to ensure that these existing administrators receive appropriate training and coaching.

Special Education

• The May Revision proposes a Proposition 98 General Fund increase of $35.9 million and a Federal Fund increase of $7.6 million over amounts proposed in the January budget. These changes include adjustments for revised figures for local property tax and ADA growth.

Home-to-School Transportation

• The Budget proposes to shift the fund source for the $627 million Home-to-School Transportation program from Proposition 98 General Fund to the Public Transportation Account (PTA); the May Revision proposes that, instead of shifting the fund source, the PTA should reimburse the General Fund for the cost of the Home-to-School Transportation program.
• In addition, the May Revision proposes to increase the 2007-08 reimbursement from the PTA for Home-to-School Transportation by $3 million to reflect the increase in the COLA for the program and to reflect $2.6 million in transportation costs for the State Special Schools and to reimburse the General Fund for $200 million in 2006-07 Home-to-School Transportation expenditures.

Making School Meals Healthy The May Revision builds on the progress made by the Governor’s Obesity Initiative by proposing funding for several school nutrition programs:

• $11.1 million to permanently establish the California Fresh Start Program which was created by the Governor’s Obesity Initiative.
• $24.9 million to support a 4.7 cent increase in the meal rate for the School Nutrition Program; however, this funding is contingent upon enactment of Administration-sponsored legislation that will provide a financial incentive to schools that eliminate fried foods and reduce unnatural, trans-fatty acids.
• $4.4 million one-time allocation from the Proposition 98 Reversion Account is included to provide a total of $5.4 million for School Breakfast Startup grants. This program provides up to $15,000 per school site for initiating or expanding a School Breakfast program or Summer Food Service Program and is expected to fund an estimated 501 grants.
• $8.5 million for county offices of education to provide educational services and technical assistance to schools and districts to cover the many nutrition requirement changes currently underway and on the horizon ($4.3 million for ongoing program activities and $4.2 million for one-time implementation activities).

Governor’s School Safety Initiative

• $100 million one-time block grant for a three-year pilot program to increase school safety. The funding will be distributed though a competitive process to county offices of education which will then partner with K-12 schools for a variety of one-time activities including but not limited to: (1) training for safe school trainers; (2) developing immediate emergency notification systems; and (3) identifying best practices for prevention/mitigation, preparedness, response and recovery.
• $9 million in ongoing funding to county offices of education to hire approximately 120 additional school resource officers who are widely acknowledged by educators and law enforcement as a primary strategy to prevent violence on school campuses.

Expanding Pre-Kindergarten Family Literacy

• $50 million in ongoing Proposition 98 funding for the second phase of a three-year initiative to expand preschool opportunities for 4-year olds residing in attendance areas of schools ranked in the lowest three deciles of the 2005 Academic Performance Index. This brings total PKFL funding to $100 million and total state funding for preschool programs to $470.7 million.
• In addition, the May Revision continues to propose $5 million in ongoing funding to provide full day wrap-around care for children of parents who work full-time to participate in preschool and still receive quality child care for the remainder of the day.

Meeting California’s Information Needs

• The Governor’s Budget included $2.5 million to continue the development of the California Longitudinal Pupil Achievement Data System (CalPIDS) and $1.1 million to continue the development of the California Longitudinal Teacher Integrated Data Education System (CalTIDES); the May Revision includes an additional $65 million one-time funding to be allocated by the Fiscal Crisis and Management Assistance Team to school districts based on their assessment of each district’s training and pre-implementation needs.
• $2 million is included for local staff and equipment support for the California School Information Services program which issues student identifiers.

Summer of Safety

• $2 million to county offices of education to collaborate with experienced community-based organizations that serve youth ages 11-18. This program is intended to veer teens away from poor choices and towards activities such as sports, art, music, dance, academic achievement programs, and community service projects and is expected to provide enrichment programs for up to 5,000 teens beginning in summer of 2008.

English Learner Supplemental Instructional Materials for After School and Summer School Programs

• $20 million one-time Proposition 98 General Fund for English learner supplemental instructional materials.

Supplemental Instruction

• $48.1 million Proposition 98 Reversion Account to fund Supplemental Instruction Program obligations. This program consists of four smaller programs which support after school instruction and summer school activities; this one-time funding should sufficiently fund the mandatory Grades 7-12 and Grades 2-9 programs.

Preparing Students to Graduate

• $5 million for school districts to purchase individual intervention materials for students who have failed or are at risk of failing the California High School Exit Exam (CAHSEE); the May Revision proposes $8.5 million for county offices of education to provide school districts with instructional assistance that will help high school students pass the CAHSEE.

Cost of Living Adjustment (COLA)

• $226.8 million increase for COLA: $160.8 million for revenue limits, $7.5 million for child care programs, $9 million for class size reduction and $31.7 million for various categorical programs. This is on top of the Governor's Budget proposal of a $1.9 billion: $1.4 billion for revenue limits, $133 million for special education, $62.1 million for child care programs, $49.6 million for class size reduction and $277.9 million for various categorical programs

Providing Online, User-Friendly Information on Schools

• In an effort to strengthen school transparency for the public, the May Revision includes $300,000 to coordinate along with the Department of Education, a working group to develop criteria and definitions within the state’s Standardized Account Code Structure for the purpose of tracking district revenues and expenditures at the school site level.

Items Largely Unchanged from the Governor’s 2007 January Budget

School Construction The Budget proposes a $2.8 billion increase in 2006-07 and a $3.8 billion increase in 2007-08 for school facilities. The largest portion of the increases is for the 2004 and 2006 School Facilities Bonds. In particular, the newly approved 2006 bond fund adds over $3 billion in new funding for current and budget years.

The Budget includes an augmentation of $575,000 for the Department of General Services' Office of Public School Construction (OPSC) to assist in the implementation of Proposition 1D, the Kindergarten-University Public Education Facilities Bond Act of 2006.

• The Governor’s continued efforts to rebuild the Golden State include a proposal for $11.6 billion of additional general obligation bonds to provide state bond funding for schools into 2012-13.
• This funding, when combined with the $7.3 billion contained in Proposition 1D on last November's ballot, is estimated to provide for approximately 32,000 new classrooms to house approximately 826,000 students and almost 79,000 renovated classrooms – providing state-of-the-art facilities for over 2 million students.

Charter School Facility Grants

• To ensure that pupils from low-income families have access to high-quality educational alternatives, the Budget proposes $43.9 million from the Proposition 98 Reversion Account to fund the Charter School Facility Grant Program.

New Resources and Tools for Low Performing School The budget includes $268 million to be provided to approximately 450 to 500 school sites to meet specific goals such as reducing class sizes, reducing student-to-counselor ratios and providing teacher professional development.

• The Budget also includes $50 million in one-time funding to continue the Low-Performing School Enrichment Block Grant for a third year. These funds are available for activities including: (1) assuring a safe, clean school environment for teaching and learning; (2) providing support services for students and teachers; (3) creating incentives, including differential pay, to help recruit and retain highly qualified teachers and highly skilled principals; (4) fostering small group instruction; and (5) giving teachers and principals time to work together to improve academic outcomes for students.

California Program Improvement Management System (PIMS)

• The budget proposes $1 million to establish the California Program Improvement Management System (Cal PIMS). This system will provide low-achieving schools and school districts a unified intervention program, including research-based programs and virtual coaching, to turn around federal Program Improvement schools or those that are subject to academic intervention by the state.

Child Care Shift

• The Budget proposes to increase Proposition 98 funding for CalWORKs Child Care by $269 million to ensure that California’s children have their basic needs met so they are prepared to succeed in school.