August 7, 2020 The Honorable Anthony Portantino Chair, Senate Appropriations Committee State Capitol, Room 3086 Sacramento, CA 95814 RE: Assembly Bill 1835 (Weber) LCFF: Supplemental and Concentration Grants Senate Appropriations Committee Position: OPPOSE Dear Senator Anthony Portantino: On behalf of the California Association of School Business Officials (CASBO), which represents over 24,000 school business leaders in K-14 education, we must regretfully oppose Assembly Bill 1835 (Weber). The bill would require LEAs to identify unspent supplemental and concentration grant funds, require those funds to continue to be expended to increase and improve services for unduplicated pupils, and report on those unspent funds in the local control and accountability plan (LCAP). We would not have opposed AB 1835 prior to the onset of the COVID-19 public health crisis. Our current position does not signify our lack of commitment to serving economically disadvantaged students, English learners, and Foster Youth as intended by the Local Control Funding Formula (LCFF). Last year, CASBO recognized Assembly member Weber as an equity champion and voice for our students and schools. Considering the ongoing health crisis and the long-term impact it will have on the level of Proposition 98 funding and school districts’ budgets across the state, we must now oppose the measure. While the 2020 Budget Act does not make reductions to the level of LCFF funding, it does not provide a Cost of Living Adjustment that would allow school districts simply to keep pace with rising costs of operating in this unique environment. Further, the budget presents significant challenges to LEAs in the form of major cash deferrals that will take place during the 2020-21 fiscal year. To provide context to the current state funding process, school districts receive apportionment funds without any differentiation between LCFF base, supplemental, and concentration grant funds. School districts can provide an estimated amount of unspent LCFF supplemental and concentration grant funds, but it will be an estimate at the time of developing its LCAP, until the state budget is enacted. The state does not have an official Standardized Account Code Structure (SACS) code to track supplemental and concentration grant expenditures, which means that school districts have had to create their own locally defined SACS codes. To comply with AB 1835, school districts will need to update their processes to create (if they haven’t already) locally defined SACS code for supplemental and concentration grant funds, and California Association of School Business Officials 1001 K Street, 5th Floor Sacramento, California 95814 Phone Number: (916) 504-2250 www.casbo.org AB 1835 (Weber) Page 2 of 2 then align this information into expenditure reports, annual reports, board items, and transmission of information to the state, which may take some time depending on the size of the school district. Since the state funding system is not set up where the state provides this level of information to LEAs, it will require time and administrative work to transition and update finance information in a manner to report as required in AB 1835. Also unknown at this time, is the impact that the COVID-19 closures announced by Governor Newsom on July 13 will have on state revenues, and subsequently on the level of Proposition 98 funding in the 2021-22 Fiscal Year and beyond. While it is essential that great care be taken to avoid budget reductions that will do disproportionate harm to disadvantaged students, it is also true that the state’s fiscal condition will largely dictate what is possible with respect to K-12 education funding. In that environment, it is imperative that the Legislature realize that school districts will likely be unable to provide the same level of services to students as they have done with higher levels of funding. In conclusion, we thank Assembly Member Weber for being a champion for equity and her support for disadvantaged students. However, this is simply not the time to enact changes to the LCFF that would make it more difficult for LEAs to prioritize funds during the financial crisis, better manage scarce resources, and maintain focus on core services that are tied directly to improving the student achievement of all students. For the reasons outlined above, we must respectfully oppose AB 1835. Sincerely, Sara Bachez Chief Governmental Relations Officer California Association of School Business Officials California Association of School Business Officials 1001 K Street, 5th Floor Sacramento, California 95814 Phone Number: (916) 504-2250 www.casbo.org