8 Allocation Plan Language - State Aid Deficit
SEPTEMBER 26, 2014 CEO COUNCIL
ATTACHMENT 8
ALLOCATION PLAN LANGUAGE – STATE AID DEFICIT
ISSUE In 2013-14, there was a statewide 2.8% deficit applied to special education funding. CEO Council action is needed to approve Allocation Plan language to address potential deficits that may occur in 2014-15 and the future.
BACKGROUND Special education funding statewide had a deficit in 2012-13 of $8.6 million. Charter SELPAs were however fully funded and not included in the deficit calculation. Special education funding statewide had a deficit in 2013-14 of $86 million. Charter SELPAs were included in the deficit calculation at year end and we received this information June 25, 2014. Our deficit was $1.2 million. 2013-14 Special Education Statewide Target Rate & Charter SELPA Rate
State Funding Deficit Funding after deficit SELPA MH Shortfall* Net Rate
Charter SELPA SELPA PS/RS Statewide Member portion Target Rate $ 507.40 $ 15.46 $ 522.86 2.79% 493.25 $ (7.50) $ 485.75
* One time rate reduction to address Charter SELPA $1.3 m. mental health shortfall
In February 2014, CDE certified special education funding (P-1 estimate) and the AB602 base funding had a shortfall of approximately $114 million. On June 25, 2014 the shortfall was $85 million. The deficit is primarily the result of a new state funding formula, for which insufficient funds were appropriated. Also, statewide there is a portion of property taxes allocated to special education, reducing the state share. Taxes as of June 2014 were lower than expected. When final property taxes are reported for 2013-14, the final 2013-14 deficit may adjust up or down and that factor will not be known until February 2015. The 2014-15 budget appropriation for special education increased and it may be sufficient to fully fund the state deficit. The rate for 2014-15 may range from $497 to $512. We believe it is prudent to plan for some level of deficit in 2014-15 and are recommending a budget rate of $500.
2014-15 Special Education Statewide Target Rate 1 2 3 4 5 6
State Rate/Charter Rate COLA Amount Rate if Fully Funded Rate if Deficit same as PY "Rounded Option"
Charter SELPA SELPA PS/RS Member Portion Rate $ 507.40 $ 15.46 $ 4.31 $ 0.13 $ 511.71 $ 15.59 $ 497.45 $ 500.00
El Dorado County Charter SELPA/ Allocation Plan Language – State Aid Deficit
Statewide Target Rate $ $ $
522.86 4.44 527.30
Page 1 of 3
SEPTEMBER 26, 2014 CEO COUNCIL
ATTACHMENT 8
ALLOCATION PLAN LANGUAGE – STATE AID DEFICIT
A potential deficit in 2014-15 will surface on February 27, 2015 and be refined June 30, 2015 with final verification in February 2016. Process for budgeting 2014-15 State Aid: July/August
Estimate a budget rate of $500 per ADA.
February 2015 Advise budget revisions if the rate is lower than $500. Advise maintaining $500, even if the rate is higher than $500 in February. June 2015
If the rate is lower than $500, advise charters and send out final checks based on actual rate. If the rate is higher than $500, options are indicated below using a sample rate of $512 with an adjustment in the following year to $510.
Option A
Option B
Option C
Certified Rate = $512
Certified Rate = $512
Certified Rate = $512
on June 30, 2015
on June 30, 2015
on June 30, 2015
2014-15 Rate stays at budget of $500.
2014-15 Rate increased to $512.
2014-15 Rate stays at budget of $500.
$12 not passed through.
$12 passed through year end surprise!
$12 not passed through
Rate= $510 February 2016
Rate = $510 February 2016
Rate = $510 February 2016
$10 passed through for 14-15 in 15-16 for PY Charters
$2 surprise deduct made for 14-15 in 1516 for PY Charters
$10 per ADA placed in a future deficit "rate smoothing" pool
CEO Executive Committee reviewed Options A, B, and C and suggested Option C be brought forward for CEO Council approval. El Dorado County Charter SELPA/ Allocation Plan Language – State Aid Deficit
Page 2 of 3
SEPTEMBER 26, 2014 CEO COUNCIL
ATTACHMENT 8
ALLOCATION PLAN LANGUAGE – STATE AID DEFICIT
RECOMMENDATION FOR CEO COUNCIL ACTION: For 2014-15, the following Allocation Plan language is approved and will be utilized to establish state aid funding: July/August
Estimate a budget rate of $500 per ADA.
February 2015 Advise budget revisions if the rate is lower than $500. Advise maintaining $500 rate, even if the rate is higher than $500 in February. June 2015
If the rate is lower than $500, advise charters and send out final checks based on actual rate. If the rate is higher than $500, close the books with the $500 rate. When the increase is certified in February 2016, maintain the increase (or portion) in a rate “smoothing pool” for future deficit adjustments.
This process will be reviewed in September 2015, with CEO Council action taken to establish budgeting parameters for 2015-16 state aid. CEO Council action and Allocation Plan language would be required to disperse any funds in the rate “smoothing pool”.
El Dorado County Charter SELPA/ Allocation Plan Language – State Aid Deficit
Page 3 of 3
ATTACHMENT 8
ALLOCATION PLAN LANGUAGE – STATE AID DEFICIT
ISSUE In 2013-14, there was a statewide 2.8% deficit applied to special education funding. CEO Council action is needed to approve Allocation Plan language to address potential deficits that may occur in 2014-15 and the future.
BACKGROUND Special education funding statewide had a deficit in 2012-13 of $8.6 million. Charter SELPAs were however fully funded and not included in the deficit calculation. Special education funding statewide had a deficit in 2013-14 of $86 million. Charter SELPAs were included in the deficit calculation at year end and we received this information June 25, 2014. Our deficit was $1.2 million. 2013-14 Special Education Statewide Target Rate & Charter SELPA Rate
State Funding Deficit Funding after deficit SELPA MH Shortfall* Net Rate
Charter SELPA SELPA PS/RS Statewide Member portion Target Rate $ 507.40 $ 15.46 $ 522.86 2.79% 493.25 $ (7.50) $ 485.75
* One time rate reduction to address Charter SELPA $1.3 m. mental health shortfall
In February 2014, CDE certified special education funding (P-1 estimate) and the AB602 base funding had a shortfall of approximately $114 million. On June 25, 2014 the shortfall was $85 million. The deficit is primarily the result of a new state funding formula, for which insufficient funds were appropriated. Also, statewide there is a portion of property taxes allocated to special education, reducing the state share. Taxes as of June 2014 were lower than expected. When final property taxes are reported for 2013-14, the final 2013-14 deficit may adjust up or down and that factor will not be known until February 2015. The 2014-15 budget appropriation for special education increased and it may be sufficient to fully fund the state deficit. The rate for 2014-15 may range from $497 to $512. We believe it is prudent to plan for some level of deficit in 2014-15 and are recommending a budget rate of $500.
2014-15 Special Education Statewide Target Rate 1 2 3 4 5 6
State Rate/Charter Rate COLA Amount Rate if Fully Funded Rate if Deficit same as PY "Rounded Option"
Charter SELPA SELPA PS/RS Member Portion Rate $ 507.40 $ 15.46 $ 4.31 $ 0.13 $ 511.71 $ 15.59 $ 497.45 $ 500.00
El Dorado County Charter SELPA/ Allocation Plan Language – State Aid Deficit
Statewide Target Rate $ $ $
522.86 4.44 527.30
Page 1 of 3
SEPTEMBER 26, 2014 CEO COUNCIL
ATTACHMENT 8
ALLOCATION PLAN LANGUAGE – STATE AID DEFICIT
A potential deficit in 2014-15 will surface on February 27, 2015 and be refined June 30, 2015 with final verification in February 2016. Process for budgeting 2014-15 State Aid: July/August
Estimate a budget rate of $500 per ADA.
February 2015 Advise budget revisions if the rate is lower than $500. Advise maintaining $500, even if the rate is higher than $500 in February. June 2015
If the rate is lower than $500, advise charters and send out final checks based on actual rate. If the rate is higher than $500, options are indicated below using a sample rate of $512 with an adjustment in the following year to $510.
Option A
Option B
Option C
Certified Rate = $512
Certified Rate = $512
Certified Rate = $512
on June 30, 2015
on June 30, 2015
on June 30, 2015
2014-15 Rate stays at budget of $500.
2014-15 Rate increased to $512.
2014-15 Rate stays at budget of $500.
$12 not passed through.
$12 passed through year end surprise!
$12 not passed through
Rate= $510 February 2016
Rate = $510 February 2016
Rate = $510 February 2016
$10 passed through for 14-15 in 15-16 for PY Charters
$2 surprise deduct made for 14-15 in 1516 for PY Charters
$10 per ADA placed in a future deficit "rate smoothing" pool
CEO Executive Committee reviewed Options A, B, and C and suggested Option C be brought forward for CEO Council approval. El Dorado County Charter SELPA/ Allocation Plan Language – State Aid Deficit
Page 2 of 3
SEPTEMBER 26, 2014 CEO COUNCIL
ATTACHMENT 8
ALLOCATION PLAN LANGUAGE – STATE AID DEFICIT
RECOMMENDATION FOR CEO COUNCIL ACTION: For 2014-15, the following Allocation Plan language is approved and will be utilized to establish state aid funding: July/August
Estimate a budget rate of $500 per ADA.
February 2015 Advise budget revisions if the rate is lower than $500. Advise maintaining $500 rate, even if the rate is higher than $500 in February. June 2015
If the rate is lower than $500, advise charters and send out final checks based on actual rate. If the rate is higher than $500, close the books with the $500 rate. When the increase is certified in February 2016, maintain the increase (or portion) in a rate “smoothing pool” for future deficit adjustments.
This process will be reviewed in September 2015, with CEO Council action taken to establish budgeting parameters for 2015-16 state aid. CEO Council action and Allocation Plan language would be required to disperse any funds in the rate “smoothing pool”.
El Dorado County Charter SELPA/ Allocation Plan Language – State Aid Deficit
Page 3 of 3
