Assembly Budget Subcommittee No. 2 on Education Finance

Okay, good morning. We'll start today's hearing. This is the Assembly Budget Subcommitee on Education Finance May Revise hearing. Yesterday we focused on higher ed. Today we will focus on our TK through 12 schools, as well as early education. For the past few months, we've been focused on the January budget proposals, and now we have the May Revise before us. We still have opportunity to adequately fund our public schools.

I think most school districts are very satisfied by this historic rate of ongoing funding with the COLA, not to mention the historic funding with the LCFF increases we've seen over the last few years. We have a few issues to get into today, and we'll certainly start with that. So let's start with the first issue, the Prop 98 overview. We'll hear from Department of Finance and LAO.

Good morning, Chair and Members. I'm Singh with the Department of Finance and I'll be discussing the Proposition 98 guarantee for TK through 12 education in the May Revision. The May Revision estimates that Proposition 98 guarantee amount for the budget year, fiscal year 23-24 will be $106.8 billion. This is $2 billion lower than forecast at Governor's Budget and 3.5 billion lower than forecast of the 2022 Budget Act. In the three year budget window from fiscal year 21-22 through 23-24, the guarantee is expected to decrease by $6.6 billion relative to Budget Act.

All budget years remain in a test one, which means that Proposition 98 receives approximately 39% of the revenue changes in each of these three years. The guarantee is rebenched to reflect the continued implementation of universal transitional kindergarten and education programs that receive a statutory cost of living adjustment, or COLA will see that adjustment increase from 8.13% at Governor's Budget to 8.22% in the current May Revision. So that's a slight increase in COLA.

The percentage change in average daily attendance, or ADA, from fiscal year 22-23 to 23-24 is expected to be 0.28%, which indicates slight growth. ADA continues to be a lower share of enrollment than prior to the COVID-19 pandemic, with estimated enrollment at 91.4% in the current year compared to about 95-96% prior to COVID.

The TK enrollment estimate came in 35,000 students lower than expected at Governor's Budget, with estimated TK take-up rate dropping from 62% in the prior year to 52% in the current year. The TK participation rate is something that continues to fluctuate year to year. The Prop 28 Arts and Music and Schools Act, which passed last November, requires additional funding to Prop 98 equal to 1% of the previous year's guarantee level.

The very first year of the Prop 28 appropriation will be fiscal year 23-24, and it will be with a supplemental payment of $933 million. Prop 28 will then be rebunched permanently into the Prop 98 guarantee beginning in fiscal year 24-25. Next, I'll move on to the Prop 98 Rainy Day Fund, also called the PSSSA account, which stands for the Public School System Stabilization Account. The Governor's Budget estimated that $8.5 billion in payments to the rainy day fund would be necessary in the budget window.

However, adjustments in capital gains revenues have revised these required payments upward to $10.7 billion. That's $2.2 billion higher. This balance also reflects the account balance reaching the constitutional cap for the budget year. The $10.7 billion balance in the rainy day fund continues to trigger School District Reserve Cap requirements in the budget year. These requirements limit the amount of funds districts may maintain as reserves from one year to the next.

The May Revision does not reflect a discretionary withdrawal from the rainy day fund, as the criteria for withdrawal have not been met before. Moving on to K through 12 investments and solutions, I'll take any questions if you have any.

No, please proceed.

Okay. First, the May Revision continues to fully fund transitional kindergarten expansion. However, due to decreases in projected ADA, we estimate savings of $301 million in 22-23 and $396 million in 23-24. There is an additional $110 million in the current year and $191 million in the budget year to fund revised estimates to support universal school meals. For alternative funding for juvenile court and community schools, the May Revision provides $80 million in Prop 98 General Fund to address the unique needs of those schools.

For the California State Preschool Program, the May revision includes reduced General Fund costs to support preschool reimbursement rate increases that are currently supported by limited term federal funds. This would reduce program costs by $54.3 million. There's also a $52 million Prop 98 General Fund reduction in the funds needed to support the 8.22% COLA. These reduced costs are due to a smaller number of contractors being reimbursed at the standard rate than expected at Governor's Budget. My colleagues will be covering these investments in greater detail.

We've outlined several K through 12 actions and solutions to prioritize Prop 98 spending in the May Revision. First, the May Revision proposes a $689 million decrease to support the 8.22% COLA and to reflect further enrollment declines for district and charter LCFF for a net increase of roughly $3.4 billion when combined with Governor's Budget, a $36.2 million increase to support the COLA and growth adjustments for county LCFF for a net increase of roughly $88.0 million.

$1.7 million decrease to support the COLA for categorical programs, for a net increase of roughly $555,000,000 and a $2.1 million increase to support inflationary costs in the California School Information Services Program. Finally, a $2 million increase to support equity leads that would assist districts and charter school efforts to close achievement gaps. There are some smaller items, but I outlined the ones with the greatest budgetary impact. The May Revision includes multiple K through 12 solutions to prioritize Prop 98 spending because available Prop 98 resources have declined between the Governor's Budget and the May Revision, the May Revision adjusts prior allocations.

The first solution is utilizing an additional $1.5 billion in onetime resources to support the LCFF in the budget year for a net total of roughly 3 billion when combined with Governor's Budget. Second is reducing 2022 Budget Act support for the Arts, Music and Instructional Materials Discretionary Block Grant by an additional $607 million for a net total of 1.8 billion when combined with Governor's Budget.

This takes support for the program from roughly 3.6 billion to 1.8 billion. Third, reducing 2022 Budget Act support for the Learning Recovery Block Grant by $2.5 billion, taking support for the program from roughly 7.9 billion to roughly 5.4 billion. With these changes, the state is reasonably positioned to continue supporting and maintaining critical ongoing education investments in the multiyear window. Proposition 98 also provides funding to the California Community colleges, which my colleagues discussed in yesterday's panel. That concludes my overview of TK through 12, Prop 98 and the May Revision. I'm happy to take any questions.

Okay, let's hear from the LAO first, and then we'll get to Q and A.

Good morning, Chair and Members. This is Ken Kapphahn with the Analyst Office. We have a handout that will cover our comments on the minimum guarantee and the overall architecture of the K-12 plan. For K-14 education, this May revision presents a budget picture that remains manageable, but has clearly weakened over the past year. The drop in the guarantee since January, 2.1 billion over the three years, reflects weakening in a number of key economic sectors manufacturing, housing and trade.

Turning to page three in our handout, you've heard a lot about economic uncertainty this year, and that point is well taken. But what is a little bit more certain is that state revenues have already entered a downturn. Most notably, personal income tax collections have come in below last year, every month since last fall, and we've seen core sales tax collections below expectations for the past two quarters as well. We see more downside than upside to the administration's General Fund estimates.

Our best estimate is that revenues would be around 10 or 11 billion lower than what's presented in the May Revision, obviously with a wide range around that estimate. But under that scenario, the Proposition 98 guarantee would drop nearly 4 billion, or nearly $0.40 for each dollar of lower revenue. Some portion of that drop might be offset by higher property tax revenue. And we also have differences from the Administration in our estimates of capital gains, specifically the portion of overall state revenue that's coming from capital gains.

That might sound like a bit of an esoteric forecasting statistic, but it's important for calculating the Proposition 98 Reserve deposits. So whereas the Administration has an additional 2.2 billion in deposits compared with January, we have lower capital gains estimates and no increase in the required deposits. Turning to K-12 spending, this is page four of your handout, I want to focus on the broader picture.

The May Revision overall reduces K-12 spending by 4 billion compared with the Governor's Budget, and I think you can think of those changes as really falling into three buckets. There's about 1 billion related to lower costs for the Local Control Funding Formula. This is largely the Department of Finance, squaring additional savings from declines in student attendance that have happened over the past few years. It's offset by the slightly higher cost of living adjustment and a few new proposals.

There's 3.2 billion in additional reductions to grants the state approved last year, focusing mainly on two big block grants, and there's 138,000,000 in smaller onetime augmentations for various programs. With the lower revenues, some more difficult tradeoffs are probably inevitable in this May Revision, but we think overall, the Governor is moving in the wrong direction. Turning to page five, the January budget had proposed reducing existing programs to make room for some new proposals.

The May Revision retains all of those proposals, and it adds even more new proposals amidst an even weaker revenue environment. We're even more concerned about the state's ability to sustain all of those commitments moving forward. The May Revision also proposes even more reductions to funding that school districts already have in hand. Most notably, the 2.5 billion reduction to the Learning Recovery Block Grant would apply to funds that districts received two months ago.

I think our biggest concern is that the May Revision relies even more heavily on onetime funds to pay for ongoing costs, including 2.8 billion to cover the Local Control Funding Formula. That approach creates a deficit in your budget moving forward, because those costs are going to continue into the future and those onetime funds will not. Those are all significant structural issues, and we think it's going to be difficult to address those with just making small refinements to the May Revision.

We'd recommend an alternative starting point, what we're calling a baseline budget instead of the spending framework proposed in the May Revision, and this is outlined on page seven. Essentially, this starts with rejecting all of the major new spending proposals from January and May, funding only a handful of smaller workload related proposals, or health and safety related proposals. It starts without making reductions to grants and programs that you approved last year, and it avoids creating deficits by aligning the COLA with the available ongoing funds.

In practical terms, what that would mean is that the state could still cover a 5.1% COLA for existing programs, less than the statutory rate, but still high by historical standards, and much larger than what other state programs are receiving over the past two years. That would still represent a 19% increase for the Local Control Funding Formula. The state also would need far fewer reductions in solutions in the current year.

Under that approach, the May Revision would reduce existing programs, K-14 programs, by more than 5.1 billion, whereas under the baseline budget, you'd only need about 1.5 billion in solutions, and we think you could obtain that without relying on reductions to funding that districts have already received. Turning to page eight, that baseline budget approach would have a couple of advantages.

We think it would be less disruptive for districts that have already made plans to spend the funding they received last year on activities like learning recovery and other local priorities. We think it would put the state in a better position to deal with lower revenues and address shortfalls that might emerge if the economy continues to weaken. And importantly, it preserves your flexibility.

If the state adopts the May Revision, some or even all of any increase in the guarantee next year might need to go toward addressing the deficit that's created in 23-24 instead of being able being available to fund the COLA or other priorities that you might have. One concluding comment when we talk about this baseline budget, we're not trying to present that as a recommendation in stone.

Many refinements and variations are possible, but we think starting from that point, instead of the May Revision spending proposals would give you a better finished product and something that's more easy to align with some of the priorities that you outlined in your opening comments yesterday. That concludes our comments on this item. Happy to take any questions.

Okay. Questions for LAO or Department of Finance? Mr. Alvarez.

Thank you, Mr. Chair. Thank you both for the update today. Let me start with the one that stands out, an additional decrease in the Arts Block Grant funding. So it was a decrease of I believe, I don't want to get the numbers wrong, but it was pretty significant the last time. And that is one that we've heard from testimony and from district officials that there are a lot of commitments have been made with that funding either, well, maybe both to Department and to the LAO.

Maybe to the Department, the question is why an additional reduction? And what's the expectation from school districts to meet the commitments that they've already made? And to the LAO, if you have any further evidence of those commitments that have been made. As I've been hearing from our local district officials.

Aman Singh from the Department of Finance. The reduction in the Arts and Music Block Grant will take support from 3.6 billion, which is the original amount, to roughly $1.8 billion as proposed in the current May Revision. Due to revenues declining between Governor's Budget and the May Revision, the Administration finds that this downward revision is necessary. As for school district obligations, the vast majority of those funds were meant to be spread across a multiple year window. So it's not likely that districts have used those funds yet. We do acknowledge that it may create a disruption, but the reality of the budget is that we will need to make a reduction in this block grant.

Okay. LAO's Office?

Yeah. So I think our understanding of the effect of this is very similar to yours, Assembly Member Alvarez, that it would be disruptive to districts. In many cases, they may not have spent the funding, but our understanding is that districts have engaged in a local planning process. They have multi-year plans to allocate these dollars.

I think we think there would be it makes more sense, if you need to make a reduction, do it to some grant that hasn't been allocated to districts yet, might not even be allocated for another couple of years rather than a grant districts have already received and made plans to spend.

Do we know do either of you know which category districts are in as it relates to committed, spent, planning phase? Do we have that assessment?

Aman Singh, Department of Finance. I can provide a little bit detail about the payment. The first payment for the Arts, Music and Instructional Materials Block Grant had been allocated already and pending final budget decisions. The second payment, the occurrence of that is yet unknown. So half of it has gone out to districts, but half of it has not yet been made as a payment.

And just to clarify, half of the full 3.6 billion when you say half, is that what you're referring to?

Yes, that's correct. So the original amount in June was a little over 3.6 billion. Half went out to districts last November. The other half was scheduled to go out in the spring, late spring. And under the May Revision, there just wouldn't be that second payment.

Sure. Well, that continues to be a concern for me. I think we should continue to fund that. I'm interested in this baseline approach that's presented by the LAO's office and sort of working our way forward. One question I have is on the COLA. So we have an obligation of whatever the number is, and according to the May Revise, that number is now 8.22 as opposed to 8.13. So if we were to reduce that, we'd have to obviously waive the COLA.

But- this question is to the LAO- what if we fully funded the COLA of 8.22% and did all the other things you're suggesting with baseline, which includes not spending on new programs and fulfilling our prior obligations? Did you do an analysis on that approach?

Yeah. So that's a very good question. So if you look at the May Revision, essentially it relies on, across schools and community colleges combined, it relies on 3.3 billion in one time funds for ongoing costs. Of that 3.3 billion, roughly 500 million is to fund new proposals in the May Revision or Governor's Budget and 2.8 billion is to pay for the LCFF COLA.

Okay. And when you talk about new proposals, can you give us a flavor of what those new proposals are?

Yeah, some of these are the same from January. So these would include the equity multiplier, the additional funding for reading specialists, the high school cultural arrangement, the most notable new proposal in the May Revision is 80 million for certain schools operated by county offices of education. I think those are all of the newer proposals that while potentially there could be some merit to some of them in this weaker environment, we'd recommend prioritizing existing programs instead of expanding.

So really the reduction in the COLA from 8.22% to 5% or anything around that is really where the vast majority of savings would occur in your proposed alternative or recommended alternative. It's almost two thirds, or more than two thirds actually of that amount of the 3.3 billion. Your numbers in terms of the difference of the guarantee as it relates to revenue obviously, it's a $10 billion difference.

What is the largest discrepancy, if you would, on the numbers used by the Administration versus the numbers that you're using?

I'd probably have to talk to our economists to get a very detailed list. But my sense is that just from preliminary conversations with the Administration is that they have, I think, emphasized, as you know, there's been a delay in the tax payment deadline and they've emphasized some of the uncertainty as being reasons they don't want to make too many adjustments to their January revenue estimates.

I think our sense is that we have a clear enough signs already, even without that data being good, that revenue is going to be lower. And so we're saying the state should recognize that lower revenue, recognize that we've seen weakness in many different parts of the economy and not wait for the October tax payment deadline before we sort of fully recognize the weakness that's happened since January.

Can I ask the Department, are you utilizing some current rate of decreased revenue in personal income tax on a month to month basis? That's already been the, I'm assuming these are the estimated tax payments that are used to measure this. Are you in the budget year calculating continued trend or increase? What figure are you using to calculate that?

Aman Singh, Department of Finance. So our Revenue and Taxation team comes up with these estimates and, from my understanding, they are taking into heavy consideration the delayed payments for personal income tax due to the tax extension that's in October. And the multi-year forecast takes that into account as well as ongoing economic trends.

I understand that. I'm asking about particularly, I think it's the estimated tax payments ,as a previous business owner, you have to pay these on a quarterly basis. And so if those are coming in at an estimated amount, is that what you meant when you meant the monthly personal income tax numbers that's demonstratedly been lower than expected in current year?

Well, I think there's kind of two parts of, several parts to the personal income tax withholding, which is the largest component is unaffected by these delays. So the regular money that's taken out of employee salaries and certain kinds of bonuses, that's still coming in on schedule, it's the estimated payments for both the personal income tax and the corporate tax that those payment deadlines are delayed until October.

Our economists looked at some data and it looks like the trends in revenue receipts from withholding tend to mirror the receipts from estimated payments fairly closely. So if withholding is coming in lower than we thought, and it is coming lower than what the state thought, it seems like estimated payments are very likely to follow that same trend. So that's part of how we think about our revenue forecast.

What is the administration's approach if, after October 15, the numbers do come in lower than expected? Is the expectation that there would be a budget at midyear with potential changes, or how would we address shortfalls given the current projections?

Brittany Thompson, Department of Finance. At this time, we're not anticipating the need to do a mid-year budget revision.

And if the projections are lower, though, is that what would come next?

I guess we'll have to see what the economic outlook is, but at this time, we're not anticipating having to do any type of mid-year revision next year.

Okay. Let me ask about the, I think it was roughly $2 billion that was going to be placed into one of the reserves. Remind me which one it is.

Thank you. How does that impact- That is a Prop 98 guarantee, a portion of Prop 98 guarantee, is that correct?

PSSA.

Yes.

Okay. And I hear the common theme here, two different opinions on what the ultimate revenue is going to be. So LAO is saying perhaps don't put anything there, and the Administration is suggesting that $2 billion be set aside there. But, for example, we could restore the cuts to arts and music in schools as part of that $2 billion, correct?

Well, one quick clarification. So the deposits that the Administration is recognizing in the May Revision are required under their revenue estimate. So there's not really a discretionary component to that. They're doing what the formulas require given their revenue estimates. There is the possibility of making a discretionary withdrawal that's contingent on the Governor declaring a budget emergency and a Legislature passing a Bill to reduce or eliminate the deposit.

Okay. I also saw in the budget letter something about the Prop 28 funding, funding- I might have misread this, Funding two positions for workload related to equity multiplier. Is that correct? It's item, it's on page 12, 111, the bottom of the page: 'And also position for early education using Prop 28 funding'.

Two positions provided to the School Fiscal Services Division for workload related to the implementation of Prop 28 and school site level data collection workload related to Equity Multiplier.

Yeah. So that's for the implementation of the proposition and then we're providing also position for the Equity Multiplier school site level data analysis piece. So those are both for school fiscal services but they're General Fund. They're real General Fund.

Okay, got it. It's titled "School and arts music funding, Proposition 28 funding."

Yeah. I think that's maybe confusing, but it's the state operations component for those positions.

And then the early Education Division position for Prop. 28 implementation. You believe that position is for Prop 28 related work?

Yes, that's another. So the total will be, I believe, three positions, two for School Fiscal Services, and I think I might be conflating them, but one will be with the Early Education Division for Proposition 28 implementation.

Okay.

Yeah.

Okay. Thank you. I'll stop there. Thank you, Mr. Chair.

Thank you. I think you got most of the issues there, Mr. Alvarez. I may have one follow up, but in the meantime, Mr. Muratsuchi.

Thank you. So I wanted to start with the, I don't know if historic is the right label for the COLA. It seems to me like we've talked a lot about how other recipients of state funding would very much appreciate an 8.22 COLA proposal. And so, to me, that seems to be the biggest takeaway for me in terms of the May revise not only the Governor protecting classroom funding but increasing in terms of the increase in the COLA proposed.

To me that would seem like that is giving more money, more flexibility to local school districts so that they could possibly make up for the cuts like for the Arts and Music Block Grant. But a question for LAO, just in terms of making sure that I understand, because I know that like Mr. Alvarez said, we heard a lot from school districts about how we are going to interrupt the commitments made for the Arts and Music Block Grant.

The Proposition 28 funds are for the next fiscal year whereas the school districts are complaining about how this would mean cuts to the current school year. Is that correct?

Yes, that's correct. The Proposition 28 funds start at 933 million starts in 23-24. The Arts and Music Instructional Materials Discretionary Block Grant was approved in last year's budget, and schools already have the first half of that payment.

Okay. Was there language in the proposition that said that the monies in Proposition 98 were to supplement not supplant arts and music funding?

Yes, there is some language in the proposition about that. I think maybe one other sort of state level consideration is that the allowable uses of Proposition 28 are a lot are much narrower than the Arts and Music Discretionary Block Grant. That block grant was quite flexible.

So districts came up with lots of different ways and ideas for allocating it. Proposition 28 funds are specifically for arts instruction and, as you said, to supplement what districts might have been allocating for arts previously.

Okay, yeah. You're reminding me that we had discussion recognizing the creative uses of the Arts and Music Block Grant that goes beyond Proposition 28. So, in terms of the proposed increase in funding and with the flexibility with the increase coming through the COLA, that would not directly address the proposed cut to the Arts and Music Block Grant that school districts are going to have to deal with for this current school year?

I think that's our sense. Maybe for some context, I think districts, most school districts know that there is volatility up here in the state budget, and they're used to dealing with variations in their future funding.

They know that the COLA can change from year to year, and they make plans to address that. We have a whole system of fiscal oversight that tries to help them and think about the future, and they run through different scenarios to think about that. What they have to do a lot less is think about, well, how am I going to deal with a change to something that was already approved last year and now in the midst of my planning process that's been changed or reduced?

That was something that the state kind of had to rely on during the Great Recession. It seemed particularly disruptive to districts at that time. And so that's one reason I think we're suggesting a different budget approach that does fund a lower COLA in the future but requires far fewer reductions to funds that districts have already received.

Yes, of course. We always appreciate the LAO being the voice of fiscal responsibility. I'm thinking though that assuming that your economic forecasts may be closer to what we may expect next year than what Department of Finance is projecting, how does that play in relative to the state being able to fall back on the $10.7 billion in the public school Rainy Day Fund? Can we continue to be optimistic in terms of supporting some of the new initiatives that the Governor is proposing with the fallback if we do have the downturn of the $10.7 billion that we have in the Proposition 98 Rainy Day Fund.

Our take on that is that having that reserve reach its 10% sort of cap or target, that's an important fiscal milestone. And I think it gives you the ability to allocate a bit more to ongoing funding than we might have recommended in the past.

And you might have been comfortable with. Under this baseline budget approach, the state would be fully allocating all of the available ongoing funding to ongoing programs. In past years, we've sometimes recommended against that. We've said you really need to build in a cushion because of all this uncertainty. But having 10.7 billion in the Proposition 98 Rainy Day Fund, that gives you the ability, something you can do other than mid year cuts or reductions if things get worse during a downturn.

Now, in a severe downturn, that funding could go very quickly. I mean, I think the Governor, even in his press conference, talked about this $40 billion reduction during a moderate or severe recession. So it's not a panacea, but it does give you a little bit more ability to commit to ongoing funds than you might have done in the past.

So, basically, you're saying that we may be setting ourselves up for a situation where we're giving more now, but we might have to take more back later?

That's our concern. I mean, always, I think the question we have, the conversations around how do we protect the ongoing programs and commitments that we've made as a state? And with the kinds of increases that are proposed here with the higher COLA and some of the other ongoing commitments, that's going to be harder to do if we do enter a downturn or even if revenues are just a little bit below what we're thinking.

We're starting sort of behind next year's budget because we'll need to identify 3.3 billion in additional ongoing funds just to get back to even before we even start talking about the COLA next year.

For the Department of Finance, the lack of TK enrollment growth, what is in the budget to increase the TK enrollment?

Brittany Thompson, Department of Finance. I think that question might be better suited for CDE, if they're in the room.

But as far as the May revised, there's no budget line item specifically.

Oh, correct. I thought you were asking, like, what is being done to increase enrollment? No, there's nothing in a budget in terms of funding that's specifically aimed at increasing enrollment.

Okay. All right, thank you.

Yeah, maybe just follow up on that. On the TK enrollment, we know the total enrollment now because we have essentially a cohort for basically six months eligibility, but we don't know which ones are the existing fall babies versus the new cohort. Are we tracking that? Because that certainly is key to helping us make sure it's successfully implemented as we move forward.

I haven't seen that data point, but I can certainly check and get back to your staff on that.

Okay, thank you. And then just to clarify, I know there's a lot of talk on the budget with overall the reserves and when do we tap in and how the architecture manages that. So can just clarify here, with this Prop 98 reserve here, how this budget relates to that Prop 98 reserve?

Yeah. So as part of the May revision, Department of Finance has higher capital gains estimates. And so that's what's requiring an additional 2.2 billion deposit relative to their January estimates. We have lower capital gains. And so no increase in required deposits over the period. I think maybe one other point to emphasize is that most of these higher deposits are related to 21-22. So it's related to the prior year being, data showing the prior year being better than we thought, rather than a lot of strength in capital gains in the budget year.

Okay. Thank you. Mr. Alvarez and Mr. Fong. Follow ups.

Just to follow up on, so now that we've got new figures for prior years, do we also recalculate the COLAs? Were the COLAs the full COLAs in the last couple of budget years?

Our practice is not to change the COLA. In 21-22, we funded, essentially, the statutory COLA we didn't provide in 20-21 plus the 21-22 COLA, plus a little bit of an increase on top of that. Then in this fiscal year, the statutory COLA was, I think, 6.56%, but we funded a 13.26% COLA. So we just made a discretionary choice as a state to fund much more than what the statutory COLA was this fiscal year. But there's no mechanism to automatically update the COLA after we enact the budget, and typically we don't do that.

Thank you, Mr. Fong.

Thank you so much, Mr. Chair. And thank you everyone for the presentation. I just want to give my colleagues comments as well. I had strong concerns about the proposed reduction of $607 million in addition to the $1.2 billion reduction that was proposed in January, which would pretty much slice the arts, music, and instructional materials discretionary block grant program by half. And I know, at least school districts in my area as well, they've planned for this. They've reached out.

We know that Prop 28, when it was passed by the voters last year, was not meant to supplant the fundings, but to supplement, from my understanding, as well. So I just really wanted to add my comments to that and really look at how we can continue to support the arts here in our schools here in California. Thank you.

Okay, thank you. Let's move on with the actual May revised proposals. Next agenda item, we'll hear from the Department of Ed and the various May revise proposals with their department. We'll hear from Finance and LAO on the Department of Ed proposals, not the actual Department of Ed. Okay, please proceed. DOF, LAO.

Good morning, Chair and Members. Paula Fonacier Tang with the Department of Finance. I'll be giving a brief overview of the proposals included in the May revision letter, starting with resources provided for the Department of Education, and then we'll move on to highlighting some of the proposed trailer bill included in the May revision. The May revision provides five positions and 29.6 million in state operations for the Department of Education.

This is in addition to 40 positions and 14.9 million in state operations for the Department in Governor's Budget, for a total increase of 45 positions and 44.5 million for 23-24. With the addition of these positions and funding, a total of 2645.9 positions, and 510.9 million is proposed for the Department of Education in 23-24. Of this amount, 361.5 million and 1677.2 positions is for CDE headquarters, and 149.3 million and 968.7 positions is to support the three state special schools and three diagnostic centers.

Since my colleague has already provided the high level overview of the Proposition 98 proposals, including the May revision, I will highlight the other adjustments in the letter related to non Proposition 98 General Fund, federal funds, and special funds, as follows, 434.5 million for state operations and local assistance related to various technical adjustments, which include aligning to the available federal grant awards, reflecting federal carryover funds available for the budget year, updates to revenue estimates for special funds, revised estimates for state preschool, and a reappropriation of funds from the current year to allow additional time for expenditures.

An 851 million decrease to the Federal Fund Authority for the Child Nutrition Program based on updated meal projections. 119.8 million federal funds over several years for the new Stronger Connections Grant authorized by the Bipartisan Safer Communities Act. 6.5 million federal funds to support the Golden State Teacher Grant for special education and the development of alternative coursework options for students with disabilities.

6.5 million to support existing programs and core workload in the department, including infrastructure support for the Office of School Transportation, increased reimbursement authority for state special schools, and increased reimbursement authority for the Department of Education's implementation of the School Facility Program. Finally, 773,005 positions are provided to support Governor's Budget proposals, including resources for the Local Control and Accountability Plan and dashboard and support for the Proposition 28 Arts and Music Funding Program.

The May revision also includes various amendments to Governor's Budget trailer bill proposals for the Equity Multiplier and accountability provisions, California State Preschool Program, transitional kindergarten, Arts, Music, and Instructional Materials Block Grant reduction, and the Opioid Overdose Reversal Medication proposal.

Additionally, the May revision includes the following notable new proposals, which include 20 million one time for the Bilingual Teacher Professional Development Program, 7 million one time for restorative justice best practices, 1 million for professional development training related to anti-bias education, 148,000 for the Local Control and Accountability Plan E Template and query tool, base grant increases for county offices of education for differentiated assistance work, removal of the reference to a fee cap related to the High School Equivalency Exam.

Implementation language for Proposition 28 arts and music funding, 21-22 charter school declining enrollment relief, clarifying amendments related to the alternative diploma pathway, guidance related to the classroom assessment scoring system, amendments to alter the funding model for county offices of education, alternative education grants for juvenile court and community schools, requirements related to an expert panel for reading difficulty screeners, and the Learning Recovery Block Grant reduction, among other technical and clarifying changes. This concludes my remarks, and I'm happy to answer any questions you may have at the appropriate. I also have my Finance colleagues available in the room to help answer any specific questions on the proposals included in the May revision letter.

Okay, thank you. Mr. Cabral.

Yes. Good morning, Mr. Chair and Members. Edgar Cabral with the Legislative Analyst Office. We're still continuing to review the state operations proposals and many of the federal funding changes that are in the May revision. And so over the coming days, we will let you and your staff know if we have any concerns or comments.

I did want to highlight just five proposals where we did have some concerns, and as my colleague, Mr. Kapon, mentioned, our recommendation to the Legislature to start in its budget building with a baseline budget that rejects the discretionary increases in Prop 98. But these proposals that I'll highlight are issues that we would have concerns with regardless of the budget situation. So the first is related to the LCFF for county offices of education. This is $80 million increase in funding for alternative education.

We do recommend rejecting this proposal without prejudice to the details of the proposal. It's one that would represent a very large increase in funding, roughly a third increase in funding for alternative education, and has many moving pieces. And given that complexity, we think the May revision is just a tight timeline to evaluate the proposal on its merits. If the Legislature were to consider that next year, there could be more time for deliberating and understanding the details of the proposal.

In that assessment, we think the Legislature may want to take into consideration the overall context of LCFF funding for county offices of education, including other provisions like the minimum state aid and other whole harmless provisions that result in many counties receiving more funding than their LCFF targets require. On the funding for county offices for providing differentiated assistance to two districts that are identified as a need of assistance because of the dashboard, there are two components there.

One is a base grant increase that every county would get an additional $100,000 for this work. And then there's formula driven adjustments that are related to the existing formula and statute that provides more funding based on the number of districts in need of assistance. There was an increase in the number of districts that are in need of assistance, and we think that formula driven augmentation makes sense based on current law, and it provides additional funding for counties. We do recommend rejecting the additional base amount.

It's not clear to us why that specific amount is necessary for the work. The third proposal, $3 million ongoing for rural after school programs. We would recommend rejecting this proposal given that the state already has two or three very large before and after school programs, one of which, the Expanded Learning Opportunities Program, or ELOP, provides funding to every single school district, or LEA, in the state that has K through six attendance. So it's not clear to us why a separate program is necessary.

There's the $1 million ongoing for anti-bias grants, which goes through the Los Angeles County Office of Education to the Museum of Tolerance. We don't see a rationale for providing that increase from what's already provided, which they already received 2 million ongoing for this purpose. And then finally a trailer bill change, which is for the Expanded Learning Opportunities Program to extend the expenditure deadline.

We don't think there's a need to do that given that the districts already receive 4 billion annually and will continue to do so moving forward. So we don't think there's a need to provide additional expenditure authority given that there's additional funding being provided in future years. To the extent that, if the Legislature were to reject the proposal, that likely would increase the amount of funding that would come back to the state.

Which means that would mean there would be one time Prop 98 funding available in next year's budget that could be used to the extent that there is a budgetary shortfall or a deficit next year. That completes my comments here. I'm happy to answer any questions that you may have.

Okay, questions. Mr. Muratsuchi.

Thank you. So first of all, for Department of Finance, why is the Administration proposing a cut to the Learning Recovery Block Grant in the context of ongoing pandemic impacts to student outcomes?

Good morning, Amber Alexander with the Department of Finance. Similar to the conversation that occurred in the in the prior panel, as part of one of the solutions that's put forward by the Department of Finance to put forward a balanced budget, you do see a large reduction in the Learning Recovery Block Grant proposal that was approved in the 2022 Budget Act. Similar to the rationale that's used for the reduction in the Arts, Music, Instructional Materials Block Grant, we felt like these two larger discretionary block grants were best suited for LEAs to be able to absorb reductions, knowing that they did have a multi-year timeline to plan and expend those dollars and that they were quite flexible in terms of their focus.

So you're saying that because they had multiple years to plan this out and there's a lot of flexibility, that they should be able to plan and respond accordingly with the significant cut, notwithstanding the ongoing evidence of the significant pandemic learning losses?

That's correct. And similar to the comment that was made previously, recognizing that there is a significant COLA for some discretionary dollars through the LCFF, knowing that the block grants could be used for a variety of purposes, we felt like with that increase in COLA, to the extent an LEA chose to backfill any of those planned expenditures, they would have the flexibility to do so.

Okay. Turning next to this new dyslexia screening mandate, what is the proposal?

Good morning. Liz Mai, Department of Finance. So the proposal is, beginning in 25-26, LEAs are required to screen pupils in kindergarten through second grade for risk of reading difficulties. The May revision proposes 1 million one time Proposition 98 General Fund to support the State Board in convening an expert panel to approve a list of literacy screening instruments for LEAs to adopt for this purpose.

If a pupil is identified as being at risk of having a reading difficulty, the LEA is required to provide the pupil with supports and services appropriate to the specific challenges identified by the screening instrument and other pertinent information. Parents may opt out of the screening for their child, and if their child is screened, they will receive results within 45 days of screening.

So is there a distinction between reading testing and dyslexia?

Reading difficulties is broader than dyslexia, but dyslexia is included within that.

If a student is identified as having a reading difficulty, is that going to trigger an IEP?

No. It's not meant to be a diagnostic tool. It's just meant to be a screener for a risk, and that would warrant further conversations and further supports for that child.

Okay. So at this point, we do not expect this new proposal to lead to any significant... What is the projected impact in terms of special education costs?

That is not something that we have projected out, though we'll note that earlier identification of reading struggles and earlier intervention generally reduces costs for special education.

I'd like to ask that same question to the LAO. What is the projected ongoing cost for the new dyslexia screening?

That's something that we don't have that information, and we're not sure. I think that the question would be, depending on the outcomes, there could be additional identification. I think the question to what Ms. Mai mentioned is sometimes, if you can identify students earlier, they might then, for example, get the additional supports and services they need and no longer need an IEP. So I think that's just a big question of what the implementation outcomes would be.

Does the proposal address concerns raised of the overidentification by English learners for these reading difficulties?

Yes. So the proposal further specifies that English language learners are screened for risk of reading difficulties in their primary language, and that to the extent that a screener meeting specified criteria is not available, the proposal allows for an evaluation of risk that is not dependent on a screener. And that is also the purpose of the expert panel to make sure that the screeners that they identify are linguistically appropriate and culturally responsive.

All right. The current proposal in the May Revise, that is, for the screening mandate. Is there also funding proposed for the additional literacy supports that you proposed or indicated that would follow up for the students identified with reading difficulties?

There currently isn't, but we do recognize that that is a mandate that will begin in 25-26.

Okay. I should know this, but is the trailer language on this proposal, is it already in print?

I believe it's available on our website, but the RN is not available yet.

Okay, all right. I'll be looking for that. Also, on the topic of literacy, there is a $1 million one time General Fund allocation for a State Literacy Roadmap?

Yes, that was... Lina Grant, Department of Finance. That was a proposal that we included at the Governor's Budget for the development of resources at the Department of Education to kind of provide guidance to LEAs on the resources available to them for literacy.

Okay. And I know that there's a raging debate about, what's the term? Science of reading versus whole language. Did I get that right? Is the Literacy Roadmap based on the science of reading approach?

Not certain on what the basis for developing the exact resources will be, but we can get back to your team. I think that's something that the Department of Education will be working with and developing.

All right. Last for my end, at this point, I heard Department of Finance mention a Golden State Teacher Grant Program specifically for special education teachers.

Correct. That's 6 million one time federal IDA funds to support the Golden State Teacher Grant Program specific to special ed teachers.

Okay. And so that is to address the critical shortage of special education teachers to basically give them what, up to $20,000 to pay for their cost to become special education teachers?

Correct.

Thank you, Mr. Chair.

Thank you. Mr. Alvarez.

Yeah. Are there changes to that grant program, Golden State Teacher? Is that what, it's Golden State Teacher Program? In terms of years of service and type of school or services required?

I believe there were, but unfortunately, my colleague, who I don't think is currently here, actually covers that program.

I think some of them ravelers. I can cover some of this. Yes, there were changes in the Golden State Teacher Grant program. As you may recall, in the original proposal, there was a change so that teachers could serve in non priority schools, schools that were not considered Low income schools as long as they stayed there for four years, and then they reduced the amount to three years for those who were in a priority school. That element of the proposal has been removed.

I believe it may have been covered in the CSAC item a little because it's in there. But I think the main concerns that we had regarding the proposal, I think were removed. So we don't have, most of the changes we think are reasonable.

The one part of that proposal that we do have some concerns is there's a particular aspect of it where they would expand eligibility for certain online providers of programs, out of state teacher programs, and make teacher candidates who are enrolled in those programs eligible. That's something that's a departure from the way we provided financial aid more broadly, and I think raise some broader concerns. So we recommend rejecting that proposal. But other aspects of the May revision we did not have concerns with, particularly because they removed the area that we had the most concerns.

Okay, appreciate that. So the reasoning behind the Learning Recovery Grant Program and the arts program could probably be extended to a few other programs. Question, and I'm not saying that it should, but why are we extending the deadline on the Expanded Learning Opportunity Programs? There's a lot of programs. Why is that one being extended, and why are others not allowed to continue?

Jodi Lieberman with the Department of Finance. We extended this Expanded Learning Opportunities the encumbrance for these funds from June 30 of 2023 to June 30 of 2024 to give LEAs more time to spend down these funds. I believe the reasoning was that we've already allocated this funding to them and plans are in place, and they're working on getting those plans sorted, and this would give them more time to actually plan and fully spend those funds.

Okay. That response sounds like something that you could do with the arts program and something you could do with the Learning Recovery Program. Is there another rationale as to why this particular program is being continued and the others are not? Is there anything specifically different?

Brittany Thompson, Department of Finance. Well, specifically, we heard from LEAs in some of these hearings that they're having difficulty getting the program up and running. So we're extending these funds to allow for more planning and implementation.

Okay. And in the budget, there's additional resources for this specific program?

It's 4 billion General Fund ongoing.

Ongoing on an annual basis. And what is the cost of the expansion, if you will? Sorry, of the allowance being given for the extra year, how much has not been spent that was allocated that we think...

I don't think that we're going to have... Sorry, Jodi Lieberman with the Department of Finance. I don't think that we'll know that until spring of 2024, is my understanding.

How much has been spent to date? Oh, sorry. Thank you.

Edgar Cabral with the LAO. I think in terms of the, we don't know how much would come in, for example, if under current law, the the 21-22 funding would come back to the state at the end of this fiscal year. We do have the, after the first year of data, virtually all of the, there was $1.7 billion that was provided in that first year.

And I can't remember the exact number, but more than $1.0 billion was unspent after the first fiscal year. So obviously we would expect LEAs to have spent some of that remaining amount, but we do expect it could be a substantial amount that would revert back to the state under current statute.

And the current year allocation was for the 4 billion, or was it for...

Right. So that data that we have of a billion, that's out of a $1.7 billion allocation. That was the first year of funding. The second year of funding, the amount was increased to 4 billion. And that's where we are right now. That was the current year and then that's what's proposed moving forward.

It's a lot of billions there. Okay. Let me ask about the one thing that I saw here that I was pleasantly surprised with, the Bilingual Teacher Professional Development Program. This is also, can someone talk more about this specific program? It's $20 million from now through 28-29 for more bilingual teachers. I think that's what I'm reading in the description. What can you tell me about that program?

Megan Sabbah, Department of Finance. So this is a proposal for 20 million one time Proposition 98 General Fund over five years to support the Bilingual Teacher Professional Development Program. This program provides professional development services for teachers and paraprofessionals in bilingual learning. And so eligible teachers in this program would possess an authorization to teach English learners and have taught in an English only classroom for three plus years, or are fluent in a language other than English and seeking authorization.

So this is truly for new bilingual educators?

New or, I suppose you could say, returning if they had one before. And then we're teaching in an English only classroom.

Okay. How many do you anticipate, potentially, could, teachers could we see come through this program?

We don't have that data right now.

So the $20 million funds programs at university sites, or what does it actually fund?

So it's Proposition 98 General Fund. So it'll fund programming at the local level. So this is programming for professional development services. So like continuing education. Hold on. Sorry. Let me pull up the language here.

As you're looking for that. Is this also language available on the website?

Yes, it is posted on our website. The RN, though, however, is not out yet.

Okay, so it's professional development. So would teachers be able to use it, like, as grants to get their is it still called a Bclad, the Bilingual credential?

It's an authorization. So it's not funding grant funding to receive the authorization, but it is for professional development classes, for those teachers to start working towards achieving that authorization or getting back into

They'd be certified bilingual educators at the end of this program?

Yeah, they would have an authorization from the Commission on Teacher Credentialing.

That's a new term for me. When you say authorization, is it the same as a credential or is it.

Not a credential, but similar to so the authorization is sort of like you could think of it as like an add on.

Okay.

Yeah.

All right. The CCGI funding here, not funding. I think it's just statutory changes. Would the changes make it a lot easier to transmit information such as for FAFSAs and to the UCS and CSUS and maybe even our community colleges? What exactly are we now allowing for that perhaps isn't allowed for today?

Hi, Alex Schope, Department of Finance. So for CCGIS, I think we are just trying to I don't know, we're trying to make sort of strengthen the data sharing that's already in place between CCGI and CSAC. Some of this data is used to inform some of CCGI's tools, which sort of include college search tool enhancements and help to pre populate some college application forms.

So this this would eliminate some barrier of some sort. What what exactly would this do?

I think that this language is meant, I think, to sort of provide more statutory authority to CCGI as sort of one of the primary college and career planning tools for these students.

Who runs and operates CCGI.

So CCGI is an organization, a nonprofit, and they are run through the Riverside or they receive funding through the Riverside County Office of Education.

Okay, thank you. On the opioid overdose reversal medication issue, I know we had some discussion of this when we had a hearing now going a couple of months ago and facilitating or automating or somehow making sure that people receive the kits, for lack of a better term. What are we doing with the May revise? Are we changing that? What are the changes presented to us here today?

Sure. Martina Dickerson with the Department of Finance. Could you please clarify the question?

So I see something on opioid overdose reversal. There's six lines here in the letter of opioid overdose reversal medication. And a couple of months ago, we had a hearing about overdose reversal kits. And one of the concerns we had was we weren't making it terribly simple and easy for people to just receive one from the state. Is this related to that issue, or can you tell me what this is related to?

Sure. We made a few changes in the May revision. Would you like me to go through those changes or?

Yeah, explain what this is, please.

Sure. So, for May revision, the changes to the opioid overdose reversal medication includes amending language so funding will be allocated to county offices of education instead of LEAs, and expanding language to include adult school sites that are required to meet the stocking requirements of two units at a minimum. County Offices of education will also be responsible for purchasing and distributing the medication to LEAs for the purpose of stocking the medication at all middle school, high schools and adult education school sites. And while already allowable, we added language to clarify that county offices of education can also stock elementary school sites to the extent that they have met the minimum requirements for stocking at middle school, junior high, high school, and adult school sites. We also added language to require that funding allocations be reevaluated each year. We also added language to require that funding allocations to provide more flexibility on where county offices of education can purchase this medication, given the availability of the over the counter medication that was recently approved by the FDA. We also carved out 10% of the funding for administrative costs for county offices of Education to coordinate, maintain, stock, and distribute emergency opioid antagonists to local educational agencies. And lastly, we added language to highlight additional resources available to schools for purposes of training and technical assistance.

So please help me remember correctly in the Governor's Budget in January, I'm doing this all by memory, so please correct it. Schools were being asked to request these, is that correct? Do you remember?

The funding was provided directly to LEAs and then LEAs were responsible for going out and purchasing and obtaining the medication. So in this case, I think we do think in terms of this addresses some of the conversation that occurred where particularly for some of the smaller rural schools, county office is going to get the money. The county offices will just distribute the they will go.

In this language, it sounds like now county offices are required, it's their requirement to do this.

Right, and we're providing administrative costs for them to do so. So in that sense, we do think those changes address those concerns. We still have concerns about the size of the amount. We think it could be $1.0 million. You could Fund all of the minimum requirements under the statute, but in terms of addressing the distribution issues and sort of making it a little bit more efficient so every rural small school doesn't have to go out and purchase on its own, we think that is an improvement over the January proposal.

Okay. Thank you, Mr. Chair.

Okay, thank you. Further questions? No, I do not have any either. We will take the center advisement and come up with our recommended plan next week. Let's move on issue number seven. Office of Public School Construction. Okay. Let's begin.

Good morning, Chair and Members. My name is Michelle Nguyen with the Department of Finance. The School Facility Program, also known as the SFP, provides funding for local educational agencies for school facilities, such as for new construction and modernization. For the SFP, the May revision proposes Trailer Bill language to remove instructions from the annual K-12 audit guide related to the process for determining project savings for the following project types; modernization and new school construction projects for districts receiving financial hardship funding, career Technical Education or CTE facilities Program projects and Charter School Facilities Program projects. This trailer bill change conforms to a recent ruling from California's Third Appellate District. Moving on to CSFA or the California School Finance Authority. CSFA provides facilities and working capital financing to school districts, community college districts, county offices of education and charter schools. The Charter School Facility Grant Program, which is implemented by CSFA, largely provides Proposition 98 General Fund grants to assist charter schools with lease and rent costs. This program targets schools and communities with significant populations of economically disadvantaged students. The May revision proposes 51,000 ongoing Proposition 98 General Fund for the charter school facility grant program to reflect a COLA of 8.22%. In addition, the May Revision proposes trailer Bill Language put forward at the Governor's Budget for a technical amendment to remove references to revenue limits for CSFA's mechanism to intercept state revenues and the proposed mechanism to interstate local revenues. This change was requested by the Department of Education, and it was indicated to us that the use of revenue limits for the purpose of offsetting funds is not necessary in this instance, and we agreed with their assessment. Thank you. Happy to address any questions that you have.

Department of Finance Edgar Cabral. We don't have any specific comments on any of these proposals.

Thank you.

All right.

Lisa Silverman, Executive officer for the Office of Public School Construction. And yeah, we obviously think the amendments are proper related to Education Code 4124, making changes to the audit instructions. And again, just to conform, as Michelle mentioned earlier, with the appeal of San Bernardino versus the Allocation Board. So the Court determined that the Section 17070, under the General Provisions govern the School Facilities Program And again, the recapture of savings for those three outlined sub programs need to be rectified in the statute.

All right, thank you. Questions from the Committee. Seeing none, I have a few questions. So I think there was previous testimony in this Committee for Department of Finance with the 2 billion in additional General Fund support after the exhaustion of bond funds. Is it the Department of Finance's position that existing bond funds combined with the General Fund support will cover the request through 2024?

Yes, that's correct. The remaining Proposition 51 bond funds plus the 2022 Budget Act investment of General Fund for the SFP. We're anticipating it will last until the end of 2024, and the May revision doesn't propose any changes to K 12 facilities funding.

Okay. And so that's highlighting the fact that we are running out of bond funds. Is it the Department of Finance's position that a new school bond is necessary?

We do anticipate that at some point there will be a school bond discussion between the Administration and the Legislature. You may have heard the Governor mention in his press conference a couple of other bonds that are being contemplated for the state budget on the mental health and climate bond. But we do anticipate that there will be a school bond discussion at some point. I understand there are several bills on the ballot for school bonds, but at this point, I don't believe there's been discussions at this point, but that there will be something soon, I believe.

Okay. I heard recently that with the exhaustion of the bond funds, that would trigger developer fees, which home builders characterize to me as being a de facto moratorium on affordable middle class housing in the State of California. Is the Department of Finance fully aware of the impact on the cost of housing with the exhaustion of the school bond funds?

Yes, we're aware of the potential impact of developer fees on residential home construction in the state. And given housing costs in the state as they are, I think we're looking to try to avoid exacerbating that. That was a large driver of the decision in last year's budget to put forward the sizable General Fund investment for the school facility program.

All right, thank you. Turning next to the unchanged position in the May revise regarding the delay in the $550,000,000 for the preschool, transitional kindergarten, and full day kindergarten facility funding, again, how does the Administration propose to address the critical need, especially for transitional kindergarten facilities, given the exhaustion of bond funds?

As I stated, there wasn't a change at the May revision. The May revision continues the Governor's Budget proposal to delay those funds, as you just referenced my understanding, and there's the 360,000,000 in the most recent filing round that Ms. Silverman has alluded to in the past as being allocated likely by this fall for those grants. So I don't have the exact numbers in front of me, but with the 490,000,000 allocated in 2021 Budget Act and 100 million in at least the first part from the 22 Budget Act, that reflects 590,000,000 that has gone out in recent budgets, with 550 delayed to next year. We think that's a sizable investment. But as evidenced by the amount of applications that have been received for this program, we understand that a delay does present challenges for districts, so we understand where you're coming from.

All right, thank you. Turning it back to you, Mr. Chair.

Okay. Further questions? Do not have them. Just in General, we're still concerned with the delay of the money for the facilities for Tk and full day kindergarten, especially as we try to implement universal Tk. I think they go hand in hand. Okay, we'll hold that open and you'll see our actions on this next week. Next issue, Commission on teacher Credentialing. D-O-F-L-A-O.

Good morning, Chair, Members of the Committee Subcommitee. My name is Megan Tabam with the Department of Finance. Today, I'm presenting a brief over view of the May Revision letter for the Commission on Teacher Credentialing. To begin, I'll go over a couple of proposals designed to address declining revenues at the Commission. So, the Commission has historically been supported by revenues generated from educator exam and Credential fees. As the State has experienced an ongoing teacher shortage, those fee revenues are falling while programmatic demands on the Commission are rising. This is resulting in special fund solvency issues at the Commission. To address this problem, the May revision is proposing the following a decrease of 2.6 million from the 6 million General Fund proposed at Governor's Budget. This is for a total of 3.4 1,000,001 time General Fund to backfill a projected shortfall in credential fee revenues at the Commission. This funding will go to support operational costs at the Commission. Additionally, the May revision proposes to abolish the test development and administration account and shift all those expenditures and revenues in budget year and ongoing to the Teacher Credentials Fund. This move represents a net zero shift of 1,849,000 in expenditures to the Teacher Credentials Fund in budget year. The Authority will allow for improved fiscal management and decreased overall fiscal workload associated with balancing those funds. The May revision also includes one operational request from the Commission at 690,000 onetime General Fund to support the procurement of networking equipment and laptops for the Commission's relocation to the Richards Boulevard Office Complex in the summer of 2024. The last fiscal proposal I'll cover here is a technical one. It's 612,000 one time to support an external contract for the development of a teaching performance assessment for candidates seeking a sped credential. This request is cost neutral. The funding was initially provided in the 2019 Budget Act for a multi year contract. The last payment in this contract was invoiced to the Commission late, and the Commission no longer had authority to make payment on that contract because the funding had reverted. So this is just giving them authority to make payment on work that is already completed. Moving on to some language changes. One piece of budget Bill Language here for you. The May Revision is proposing to amend provisional language to authorize the Commission to utilize current resources to provide transcript review to assess basic skills requirements and subject matter competence for educator Credential candidates. I'll note here that there will be some companion trailer Bill language on this issue that requires the Commission to begin examining how to ensure that transcripts will be reviewed for all credentialed candidates requiring a basic skills or subject matter competence determination. This language will also require the Commission to report their findings to the Legislature, State Board of Education, and Department of Finance by November 15 of 2023, so this year. Moving on to a few pieces of trailer Bill language, the May revision is proposing changes to the teacher assignment monitoring outcomes reporting language first proposed at Governor's Budget. These changes are informed by further conversations with the Commission and the Department of Education. The May revision is also proposing changes to the teacher and school counselor residency grant program. While no new dollars are being proposed here, this language does propose to increase the maximum per candidate allocation to grantee local educational agencies, or LEAs, from $25,000 to $40,000. The language also requires a minimum stipend or salary to residents of $20,000 from that allocation and allows residency candidates additional flexibilities in completing their credentialing and service requirements, as well as introducing some hardship flexibilities. Under this new language, LEAs may also apply for additional funds if they wish to recommit for existing residency candidates under these changes. A couple more pieces of trailer Bill language for you. The May revision is proposing to authorize the Commission to issue a Comparable California Credential to any United States military service member or their spouse that possesses a valid out of state teaching or services credential when that candidate is relocated to California on military orders. This language will require them to provide a copy of those military orders, verification of their spousal relationship, if that's relevant, in the form of a marriage certificate and a copy of their valid out of state credential. Further, this language provides that that California Credential is only valid for the duration of those military orders. Last piece here for you. The May revision is proposing statutory changes to authorize the Commission to waive the teaching performance assessment requirement for educators who were unable to meet that requirement during the COVID-19 Pandemic and who completed a commission approved induction program or two years of satisfactory teacher evaluations. And for context, this is to address a looming issue of teachers who taught under a COVID-19 Pandemic era relief that waived TPA for teachers. That concludes my remarks on the Commission on Teacher Credentialings May revision proposals. Happy to answer any questions at the appropriate time.

Okay, thank you. Questions, Mr. Muratsuchi?

Thank you. I was not aware of the waiver related to the TPA. Did you say that that is a temporary waiver or a permanent waiver?

So this language here is proposing, like grandfathering in teachers who have been teaching without TPA when they either completed a commission approved induction program or two years of satisfactory teacher evaluations. And this is just for teachers who have already been doing the job under the COVID-19 Pandemic relief, which did waive TPA for those folks.

Okay. Does LAO have any position on this waiver?

Good morning, Chair and Members. My name is Raquel Yaffi on behalf of the California Alternative Payment Program Association, or CAPPA. Although we believe the Governor Newsom's May revision is a solid starting point to build on, we are very concerned that a meaningful permanent increase in childcare provider rates was not included. California desperately needs to eliminate the policy where parents with stable work hours receive a set amount childcare voucher, while parents with unstable work hours receive a voucher with no guarantees, resulting in less stable childcare. All income eligible families deserve the same fair and equitable access to childcare. We are appreciative of the extending of the Family Fee Waiver until September 30, 2023, but would ask that permanent elimination of the fee be considered moving forward. Parents with young children must have access to childcare in order to secure or maintain a job, making this issue critical to the economy rebounding and growing. We hope to work with the Governor and the Legislature to support fair and equitable access to subsidized childcare by all income eligible parents. Thank you.

So in terms of the proposals, we're still reviewing some of the proposals, but there's nothing that we have major concerns with, and in particular ones that we thought were reasonable changes was the TPA waiver was one of them. We think that is reasonable. These are candidates who just did not have the ability to do the TPA during the Pandemic and then the teacher and counselor residency program adjustments allowing for a higher grant. We thought those were reasonable.

Okay. And I want to thank the Governor for the proposal and the May revise for the waiving of teachers, spouses of military personnel. I don't know if you know it there just happened to be on CBS Evening News last night a story on that exact issue and how I've heard from many of our military families about how this is a huge issue and as a military brat myself, I fully appreciate the support for our military families. So please extend my appreciation to the Governor for this proposal. Thank you.

Okay, thank you. That's it for this item. We will hold this open and come back with our actions next week. Lastly, Department of Social Services childcare programs. Okay, please begin.

Good morning. Jennifer Troia, Department of Social Services. With respect to the budget for our childcare and development programs, the overall budget in the May revision includes 5.8 billion in total funds in 23-24. This is a net decrease of $71 million from the Governor's Budget, reflecting a decline in caseloads in stages 2 and 3 of the CalWORKS Childcare programs and a reduction in the cost of living adjustment funding based on application to contracts to serving counties that are reimbursed under the standard reimbursement rate. In terms of caseloads for CalWORKS childcare, we are projecting a 25.8% increase in the stage one caseload, but decreases of 14 and 5.6% in the stages 2 and 3 caseloads. So adjustments in both directions within the CalWORKS stages. With respect to the Alternative Pavement program or a Cap program, based on the latest data that we have, which is as of April 2023, between October 2021 and March 2023, the Alternative Payment Program enrollment increased by approximately 50,106 new slots. So that reflects an 89% in increase in enrollment in the program. With respect to General Childcare, the Direct Contract programs, the May revision reflects an anticipated one time savings in the 22-23 budget year of $588,000,000. This is related to the enrollment in the program based on the responses to the request for applications for new slots and our estimates of the total amount that can maximally go into contracts as a result of those responses to the RFAs. This is a one time savings. It is savings that would have occurred on the natural, but we are recognizing it now, and the amount of the savings will be reduced if we should end up higher than currently estimated. In other words, the expenditure authority is not being reduced. We're simply reflecting what we expect to happen on the natural. This is related to the time that it is taking to implement such a large expansion in the program as was budgeted in 21-22 and 22-23. The May revision also includes $183,000,000 in General Fund for the statutory COLA for the Childcare and Development programs, the cost of living adjustment of 8.22%. This amount reflects a technical adjustment to how the COLA is applied to direct contractors. The May revision includes trailer Bill Language related to the alternative methodology for the reimbursement rates for childcare and development programs. As we discussed in the hearings earlier this spring, we are moving from a regional market rate to an alternative methodology consistent with the recommendations of a Joint Labor Management Committee and a stakeholder workgroup with respect to reforms to our payment systems and to our reimbursement rates. This statutory change is required to replace the current rate setting methodology in statutes so that we have the authorization to move to that alternative methodology in accordance with the allowance under federal regulations. The May revision also includes a request for reimbursement authority for the Preschool Development Grant Program. It's $892,000 in reimbursement authority for existing and new limited term positions. This is a grant program where the Health and Human Services Agency at the president receives a federal grant, but the agency has contracted with CDSs to administer it on their behalf. And these positions are providing technical assistance to the PDG involved contractors and stakeholders to ensure completion of those grant activities. Finally, you asked for us to also address our April 1st BCPs, the Spring Finance Letter. There are two for the Department. The first is with respect to the California supporting providers and reaching kids core automation IT system. We're requesting one time $5.9 million, 1.9 million of which is General Fund for two 2 year limited term IT positions and contract services to continue planning activities to support completion of the project approval lifecycle for this IT project. And the Second BCP from the Spring finance letter is related to the Child and Adult Care Food Program, or CACFP. The Department is requesting 16 position just authority to support the program Administration and oversight functions. It's 100% federally funded. We already have the Federal Fund authority to support the positions, but we lack the position authority. So we're trying to true that up here. That concludes the summary.

Okay, questions? Oh, excuse me. Next.

Jackie with the Legislative Analyst. Jackie Barocio with the Legislative Analyst Office. With regards to the May revision proposals, we're still working with the Department of the Administration just to get additional details. But there are four things that we just wanted to highlight for the Subcommitee. One, the Childcare program does receive a portion of Proposition 64 dollars to support slots. The budget does assume a $46 million decrease in Proposition 64 funds in the budget year which are not being backfilled. And this is in particular for the general childcare program. So if not backfilled, that essentially means we're not fully funding the slots. However, in our conversations with the Administration, it's our understanding that it is their intent to backfill these funds with carryover Proposition 64, which the last report we received in the spring, that the carryover total is 200 million. However, it's just unclear when that backfill would occur and if it would occur to be reflected in the Budget Act or afterwards and then also unclear how the remaining carryover funds will be used. Will they be saved to backfill any future Proposition 64 backfills in childcare or would they be used for other Proposition 64 programs? The second item I wanted to flag is that we're still working with the Department to confirm that the budget includes all available federal childcare development funds which recently received $170,000,000 increase. The third thing I would flag, as was mentioned by the Department, the budget does include current year savings associated with G]general childcare, but also alternative payment program funds that were unawarded and not entered into contract. Those are one time savings and we're working with the Department to just further clarify the scoring of those savings, but then also requesting updated slot information to get a better understanding of if we expect any additional savings resulting from lower slot takeup rate. And that leads me into my final point with regards to if there were any additional savings, but if those savings were in federal relief funds. Our understanding is that the Administration believes for the federal relief funds that expire in September 2023 and if there are any above the early action, they anticipate that these funds will just revert back to the federal funds, that there wouldn't be enough time to reappropriate them for other activities. Thank you.

Okay, you have questions, I have a few out of the gate. First is the transition to DSS. How's that going?

I would say the transition is going quite well. We at this point have really integrated the programs well into the Department and are really working toward the whole child, whole family vision that was envisioned in the first place to integrate those programs into the array of health and social services that exist under the Health and Human Services Agency while maintaining a close connection to our partners at the Department of Education as well.

So all of those positions that were at CDE, they've been filled at DSS to fulfill all the responsibilities and duties.

There were a number of different transfers over time. The original positions that came from Cde as well as budget change proposals that occurred in between both for CDE and for CDSs.

There's nothing like hundreds of vacancies.

I don't know the vacancy information off the top of my head but would be happy to get back to you.

And then overall, from the Department of Know, we know from the whole issue with we've heard a lot in our hearings about rates and know people in the field because they can just make more elsewhere. And then we hear from the private providers saying one thing as we implement Tk, they could serve more four year olds with adequate rates. And we have these slots that we're highlighting. And I know the Governor came out with May revised last week and talked about Childcare really matters for California and we highlighted what we did in that early action. But the Assembly and the Senate, as you know, we've already said, one of our top issues is the rate increases and we don't see anything here really addressing that. So do you think that you can have a robust childcare system in California and honor it like we all want, including the Governor, and expand all these slots without significantly increasing rates? Can you say that with a straight face that status quo with rates will be able to thrive with childcare?

Thank you for the question. Gabby Santora, Department of Finance. I would just start by noting we have a shared understanding that the level of reimbursement that providers receive is a critical piece of how we can support the field, support childcare, and support families. That is why we have entered into collective bargaining with the childcare providers United Union, CCPU. We are in continued negotiations with them with an intent to reach a successor agreement to the current one that expires June 30. And part of that includes discussions about adjustments to what providers are reimbursed. So just want to note that is still top of mind for us, discussions about reimbursement. But as that is subject to bargaining, that is why you do not see anything reflected in the May revision.

Yeah, I hear that. We heard that. I think the fundamental flaw of that is the vast majority, I'm not sure the number. I think it's maybe two thirds of childcare providers and preschool providers who would benefit from the rates are not in the union. So it's like this little tail is wagging this massive dog. So I get that and that's an important piece of the puzzle. But the lion's share, if you look at a picture of who's being served by this, it's not individuals. And granted, for the people in the collective bargain, yeah, we're all for them. We want them to get adequate wages, but waiting for that piece when the whole other piece is the one that's impacted just doesn't make sense. How would you respond to that?

Thank you for the question. I would say that we recognize the importance of work that is done both by represented and nonrepresented providers. But because we are in collective bargaining with representative providers, we want to make sure that we are looking holistically at the field rather than having a parsed approach while we're presenting something for the non represented field without.

I get that, but do you think it's fair, let's say it's two thirds. I think that's maybe conservative. So let's say two thirds are non represented and a third are. Is it fair to tell the two thirds, hey, we can't take care of you unless we take care of this third over here? This doesn't seem like that's fair nor good public policy when the majority of people aren't impacted by this piece.

I would say that it's not our intent to dismiss the importance of taking into account the non represented field. It's just we want to take a holistic approach and not have a parsed approach about how we're looking at providers who are in the union versus who aren't. So what I would say is that it's our intent as part of ultimately, what is reflected in the budget enactment is to have a holistic adjustment for the entire field, not just the represented field.

Yeah, we run the risk of having further collapse, and we highlight, rightfully so, these exciting things that we're doing for little kids in California. Universal Tk, which is the Governor front and center led on that. It's one of our most important achievements in California for education. Last three years, massive increase in slots. But if we don't adequately address this piece, those other things fall apart. So we need to make sure we don't lose track of that. Okay, thank you. Really don't have any questions. More there. That is all for this item. So we will see our actions with our spreadsheet and our agenda item next week when we take our neighbor revised actions. Now we will begin public comment. Anybody in the audience wants to speak, please come up to the front and keep your comments to 1 Minute or Less. 1 Minute or less. Thank you.

Thank you. Mr. Chair Members. Jeff Bach. I represent the Riverside County Superintendent of Schools. Going to try to fit in comments about four different issues this morning. As you put all the puzzle pieces together in a challenging fiscal environment, we'd express our strong support for the proposal to support alternative education, juvenile court programs at county offices of education. We see that as being an extension of the Legislature's efforts over the last decade to address a number of equity issues in fields as diverse as overall funding with the LCFF, with special education, and with home to school transportation. We share the concern about using one time dollars for ongoing costs regarding the LCFF, nothing gives a chief business official more heartburn than using those terms. One term funding for ongoing costs. The Block grants, arts, music, instructional materials, learning recovery block grant. We're very concerned about the clawing back of those dollars. And I think, Assembly Member Alvarez, you mentioned during the conversation that it's not so much even that the dollars have been expended in some cases, but it's the planning that goes into a multi year effort. Districts have received a lot of funding from a lot of different sources, and that requires a lot of intentional planning and braiding of funding and shifting gears in midstream does not help with that regard. And then lastly, on Proposition 28, we have submitted a letter as part of a coalition on this issue of how to define existing funding for the purposes of the supplement not supplant requirement. And we would continue to advocate that that be ongoing state funding and then not include funds over which LEAs do not have governance authority. Thank you very much.

Mr. Chair, Members Brendan Tuig on behalf of Edvoice, we strongly support the Trailer Bill language requiring universal screening for reading difficulties and risk of Dyslexia in grades kindergarten, first, and second. We're confident that that will improve literacy rates and also expand opportunity for California's children. We very much appreciate the Governor prioritizing screening and recognizing the urgency by including it in the May revision. And of course, we thank Senator Portantino for being steadfast in his efforts to make universal screening a reality in California, and we urge you to adopt it as the Trailer Bill language as part of the final budget. Thank you.

Good morning, Mr. Chair and Members, Pamela Gibbs, representing the Los Angeles County Office of Education. First of all, we'd like to thank the Administration and the Legislature for the additional funding for the Juvenile Court Schools and County Community Schools programs. And we also thank the Legislature and the Administration for the three year average ADA calculation for those programs as well, which is much needed. In addition, we support the Chair's comments related to the child care slots and also the provider rates. We look forward to working with you on getting something more permanent in the Legislature and in the budget on that front. We were concerned about the 20,000 slots that were delayed. And while it doesn't seem like much, we have parents who could use those slots and families. And since we were planning on those slots, we've submitted applications and everything. So putting back the reversing that elimination of the 20,000 slots would be helpful. We also want to thank the Legislature and the Administration for the additional funding for the differentiated assistance, programming, and funds that we use to support all of the districts in the county. We support 80 school districts in Los Angeles County and for those needing assistance and support, that funding would be helpful. We also would like to thank the Legislature for the discussions and the Administration for the discussions we've had regarding the educator workforce and LACOE along with some of our partners have been prioritizing a diverse Education Leaders pipeline initiative. We believe we have found a cost neutral or at least a budget cost neutral way to address the investments that the Legislature and the Governor have made in educator workforce by the Educator Effectiveness Block Grant. And I'll wrap up. Thank you Mr. Chair. In this instance we're asking for principals and administrators to be funded in order to support those teachers that were put in place. We know that diverse educators and leaders will help our children at the end of the day. Thank you very much and we look forward to working with you.

Thank you. Good morning Mr. Chair Members. Andrea Ball speaking first on the issue of the proposed mid year cuts to the block grants. On behalf of the Orange County Department of Education, the 28 district superintendents, the California Suburban School Districts Association and the Central Valley Education Coalition. We would urge you to reject those cuts. You had a good discussion about the impact of mid year cuts. And also I just want to point out, which I did earlier in the year, about the cuts to the Arts and Music block grant that those uses this came up also have a much broader set of uses and have been committed for things like pension health costs as was authorized in the statute creating the block grant. So cutting mid year is really going to be disruptive. On behalf of the Orange County Department of Education also want to thank the Administration for the proposal on alternative education programs and also on the LCFF increase. As you probably know for a number of reasons having to do somewhat with definitional reasons, there are many more schools and districts identified for differentiated assistance. I think county offices are trying to do the early work to prevent districts from being identified but once they are there's a lot of work that needs to be done. Thank you.

Thank you.

Good afternoon Chair and Members, Rita Medina with Coalition for Humane Immigrant Rights, CHIRLA, here to just know despite the budget shortfalls and listening to the conversations this morning, we're here in support of an item that we didn't see in the May revise but we hope will make it into the final budget. And this is support for funding to create a grant program that would either allow school districts and schools to create Dream Resource Centers or Dream Resource Center programming on their campus. This has been championed by Assembly Member Reyes and just want to lift up and we know Chair that you're a champion of newcomer students as well. But we're also talking about a population of students who has lived in California for several years maybe in some cases spent their entire K through 12 education in our school system and with the uncertainty around DACA, we're finding a lot of our students are asking basic questions that take us back to even early AB 540. Can I access higher education? What financial aid opportunities are available to me? And that's put on a lot of the school counselors. But there aren't organizations or community college partnerships that allow not only students to get information from trusted sources, but also their parents who are really critical in some of the decisions that students make when they're trying to access higher education. And so we really see this though it's a new investment, as an investment that builds on all of the work that this Committee and this state, as well as our friends in Higher Education Committee have done to make sure that students are getting that information once they get to a college campus. But this reaches them before they get there. And we just think that's really critical in order to continue the success of our students. Thank you.

Thank you.

Good morning. Anna A. Meedes on behalf of Los Angeles Unified School District. Los Angeles Unified appreciates the continuing support for the LCFF and COLA as proposed in the May revision. In particular, we strongly support the extension of the timeline to expend the expanded Learning Opportunities Carryover funds. Los Angeles Unified is actively working to stand up its ELOP program, but given the size of our district and workforce needs, we need time to ensure we can roll this program out as it was envisioned. We would also like to thank the Administration and Legislature for restoring the eligibility requirements for the priority schools in the Golden State Teacher Grant. We ask for flexibilities around requirements that are dependent on staffing, particularly in ELOP and the Tk ratio. We believe that LEAs that can demonstrate a good faith effort to staff programs as statutorily required, should not be penalized by losing those funds or by paying penalties. Finally, Los Angeles Unified would like to emphasize the importance of maintaining the allocations to the arts and music discretionary block grant and the learning recovery emergency block grant that were allocated last year. Like many school districts, Los Angeles Unified has already committed to using those funds, and the loss of promised funding would be disruptive. We strongly oppose these cuts and ask for other state solutions to be considered. Thank you.

Thank you. Okay, that's all in the audience. I think we have a few people on the line. Moderator, if you could please begin.

Thank you. Ladies and gentlemen, if you would like to ask a question or have a comment, you may press one, then zero on your telephone keypad. You will hear acknowledgment that your line has been placed into the speaking queue. An operator will take you offline, give you your line number and place you back into the call. We will introduce you by your line number. And our first comment comes from line 16. One moment please, and you may go ahead. Line 16.

Good morning. This is Jennifer Baker, representing the California Association for Bilingual Education. I'd like to thank you for your comments regarding the importance of the Bilingual Teacher Professional Development Program. On behalf of CABE, we strongly support the inclusion of $20 million in the May revision regarding bringing back this very effective program to ensure we're not only impacting the overall teacher shortage, but that we're also adequately making plans and taking steps to address the Bilingual Teacher shortage. We also appreciate the significant amount of work that the Administration has put together to create the Panel for Reading Difficulty Screeners. We appreciate the language that's been put together, and we'll have a number of comments. We do have some concerns, and we will be communicating those shortly in a letter addressed to the Committee. We thank the Administration for their time and commitment to support California's English Learners. Thank you.

Next, we move to line 17. Please go ahead.

Christina Salazar with Californians Together, and we align with our colleague who just spoke from CABE. We want to extend our gratitude for the appropriation to bring back the bilingual teacher professional development grant program. We also greatly appreciate our budget champion Assembly Member Reyes and Latino Caucus support on this. Like my colleague mentioned, we're still reviewing the Trailer Bill language for the Panel for Reading Difficulties. We think it's a step in the right direction but we still have concerns, and appreciate assembly member Muratsuchi's regarding the impact it will have on our english learners. We look forward to providing further detail in writing, thank you.

Thank you. Next speaker, please.

Next we go to line 30. You may go ahead. Oh, one moment. Their line did not open. There we go. Line 30, please. Go ahead.

Hi, good morning. This is Michelle Underwood. On behalf of the Coalition for Adequate Funding for Special Education, we continue to oppose Trailer Bill language that will obstruct the relationship between SELPAs and their member LEAs, labeled the SELPA Administration fee cap. While we appreciate that the revised language attempts to address declining enrollment, the proposal continues to ignore LEA driven local plan changes. Many LEA's have changed next years local allocation plan due to the mental health funding shift put in motion by the current year budget. When the administration defended that proposal, they said LEA's and SELPA's could make local adjustments to continue to provide mental health services through the SELPA, and many have done just that, designing drastically different local allocation plans for 23-24 compared to this year that just wont work with this proposal. Finally, SELPA's will not know their member LEA's final 23-24 ADA until February 2024, which means 3/4 of the year will have passed before SELPA knows whether it has complies with the one year law. This new law will conflict with existing law, the state member LEA's decide how funds are allocated to both districts and to their SELPA. For these reasons, we continue to oppose this trailer bill language.

Thank you.

And our next comment is from line 34. You may go ahead. Line 34, you are open. Do you have your phone muted? Line 34. Last call.

Hi, is that me? Yes. Okay. I didn't see the number. Sorry. This is Liza Finkelstein. I am calling on behalf of FULCRUM. Full and complete reading is a universal mandate on behalf of myself and my co founder, Kareem Weaver, who could not be here today because he's on an airplane. I'm also the parent of an extreme Dyslexic student who is now 17, and he is also the parent of a Dyslexic student who was not diagnosed until she was 16. I'm just calling in support of I'm calling in support of the Bill and the budget that will the proposal to require universal screening for reading difficulties in risk of Dyslexia in grades K through 2. Thank you so much.

Thank you.

Next we go to line 32. Please go ahead.

Good morning. My name is Romelle Antoine, a Member of the Black in School Coalition. The Black in School Coalition is an 18 Member organization that consists of civil rights, education, and faith based groups focused on equity and education for California black students. It is said that if you repeat something enough times, folks will start to understand it as true. So let me start with this. Income is not a proxy for race. Income is not a proxy for race. Income is not a proxy for race. The governor's equity multiplier is in direct response to AB 2774, a Bill that sought to add the state's lowest performing subgroup not already generating supplemental or concentration funding currently Black students. That Bill enjoyed unanimous bipartisan support in the Assembly and the Senate, though it sheltered the governor's request with the promise of a compromise that compromise. The equity multiplier was created to address California's historic underfunding of its black students. Yet only 5% of the funding as proposed gets to these students. This is because the Administration believes that the only tool we have to address Black students specifically is income. What we've known for a decade now is that academic performance is the only reliable indicator that can help us fund the students who are languishing in this funding gap. Since this issue was first raised in this Legislature by then assembly member Shirley Weber in 2018, this specific group of unfunded students have continued to decline in academic performance, outpacing any of their peer groups. We've met with the Administration and every Member of this Committee illustrating the fallacies contained in this proposal and have put forward an alternative that would get 90% of the equity multiplier to a student group where 70% don't currently read and write on grade level and where 84% don't currently do math on grade level. The LCFF is due for reform. And as people interested in the welfare of Black children, all of us, you all included, we know what the right thing to do is the proposal as presented by the Administration is not that. Let's stand together and fight for Black students the way we are for English learners, marriage equality, and women's right to choose. Thank you.

We move on to a comment from line 15. Please go ahead.

Good morning. My name is Melanie Lucas, legislative advocate with the California State Parent Teacher Association. California State PTA strongly supports the Governor's May revision proposal to require universal screening for reading difficulties and risk of dyslexia in grades K through two. Thank you so much for your time.

And next commenter, we go to line 28. You may go ahead.

Good morning. Lori Depole, Co state Director of Decoding Dyslexia, California. We are in strong support of the Governor's May revise proposing annual screening for all K through two children for reading difficulties, including risk of dyslexia. Providing schools with screening information at a time when research shows reading interventions will provide the highest return on investment at a factor of four to 12 times the savings. Preventing reading failure cuts costs. 40 other states already have screening legislation. We thank the Governor and Senator Porgentino for making this a priority in California. Thank you.

Thank you.

Next, we go to the line of line 27. You may go ahead.

Next, we go to a comment from line 36. Go ahead, please.

My name is Cheryl Theiss and I'm calling on behalf of the Disability Rights, Education and Defense Fund. We're a national disability civil rights organization and also have a parent training and information center serving over 30 of our California counties. We support the Governor's May revision proposal to require universal screening for reading difficulties and risk of dyslexia in grades K-2. Every day we talk with families whose children are struggling with learning behavior and mental health challenges rooted in an unidentified or under remediated learning disability. We see how early struggles from dyslexia, many from our most vulnerable communities such as English Language Learners and Native American families, as well as children of color, are missed. Early intervention matters and screening for dyslexia early may reduce the need for special education, reduce dropout, increase college success, and decrease mental health needs. Thank you.

Next, we go to a comment from line 35. Please go ahead.

Hello, my name is Lindsay Nofeld on behalf of Reading for Berkeley, a nationally connected advocacy coalition in strong support of universal screening for reading difficulties. We believe that all students can be taught to read and that screening is an essential part of that. If schools and families don't know of reading difficulties, we can't help. Thank you.

Next, we have a comment from line 31. Go ahead, please.

Yes, this is Beverly Wong from Parents Helping Parents and just wanted to express our support of the Governor's May revision proposal to require universal screening for reading difficulties and risk of Dyslexia in grades K through two. Thank you.

Next, we have a comment from line 37. Please go ahead. Line 37, you may go ahead with your comment.

Hello, this is Rachel Heard. I am President of the Board of Education for the San Ramon Valley Unified School District. We strongly support the governor's inclusion of screening all students in grades kindergarten through second grade for reading difficulties, including Dyslexia. Our district is already doing this kind of screening and are seeing the benefits in the implementation of our multi tiered systems of support for students and think that the statewide guidance in this by pulling this Committee together is a very important improvement in moving California's literacy challenges forward. Thank you.

Next, we have a comment from line 19. Please go ahead.

My name is Denise. On behalf of Equitable Literacy for all, we strongly support Governor Newsom's May revision proposal to require universal screening for reading difficulties and risk of Dyslexia in K through second grades. Thank you to everyone for their leadership on this issue.

Next, we go to line 33. Please go ahead.

Good morning. This is Meredith Dodson representing the San Francisco Parent Coalition, a coalition and broad diverse network of over 5000 families from over 110 public schools across San Francisco. On behalf of our coalition and San Francisco's 50,000 public school students we're calling in to share our strong support of the kindergarten through second grade universal screening for reading difficulties, including risk of Dyslexia. As has been written in the May revise, too many California students are struggling to learn to read. Research has found as high as 80% of struggling readers are on the Dyslexia spectrum. Students struggling with Dyslexia often go undiagnosed. These students are less likely to graduate high school and attend college and they also experience higher rates of incarceration. We offer our strong support for this Bill and related funding required to implement it across California's public schools. Thank you.

Thank you.

Next, we go to line 38.

Good morning. Chair and Committee Members Carlos Rojas, representing the Kern County Superintendent School's Office calling in strong support of the proposed $80 million in the May revision to support the operations of county run court and community school programs. The students that make up that population that are in those programs make up less than 1% of the K through 12 population in the State of California. They are truly the most marginalized students with the greatest needs. These funds would go a long way in improving the services provided to those kids. Also, strong support of the proposed augmentations to the County Office of Education funding to allow for greater support for the increased number of districts that have become eligible for differentiated assistance and the proposed increase from making the eligibility from one year to two years. Thank you for your support. Thank you.

And Mr. Chair, turn the conference back to you.

Okay. Thank you. That concludes the public comment for today's May Revise hearing. We'll be back next week with our final actions. Thank you.