Calculations to Determine the 2010–11 Advance

The Advance Principal Apportionment (Advance) for 2010–11 is based on a statutory derivation pursuant to California Education Code (EC) sections 14002 through 14007 and 41301 and certified pursuant to EC Section 41330. Given the absence of a signed state Budget Act for the 2010–11 fiscal year, the funding for the Advance is limited to the state-aid portion of the revenue limits for school districts and county offices of education and the general-purpose entitlement for charter schools funded under the charter school block grant, as well as other continuously appropriated programs.

The California Department of Education (CDE) calculates the Advance using statewide averages and by targeting estimated state-aid identified by the Department of Finance (DOF). Therefore, local educational agencies should view the Advance simply as a means to begin the flow of cash for the first half of the year and should not use these amounts for budgeting.

Please note that this Advance does not take into account any proposed statutory measures to apply deficit factors, revenue limit base reductions, or to change the statutory cost-of-living adjustment. We anticipate that the deficit factor will be reinstated when the 2010–11 budget is enacted. The following provides specific details regarding the calculation of funding for each program.

County Offices of Education Revenue Limits

The state-aid portion of the revenue limit for each county office of education (COE) was calculated using the most current estimates from DOF. To tie to that number, the 2009–10 Second Principal (P-2) Apportionment for each COE was adjusted as follows:

• A factor of 1.4045369298 was applied to the P-2 state-aid amounts that were positive. This factor includes the temporary elimination of the deficit factor, the revenue limit cost-of-living adjustment (COLA) of -0.39 percent, estimated increases to the Public Employees’ Retirement System (PERS) contribution rate, funding to mitigate the PERS reduction, and increases to unemployment insurance expenditures. The factor also includes DOF’s estimated statewide decreases in average daily attendance (ADA) and local revenues.
• The P-2 amounts for special education, county community school, and nonpublic, nonsectarian school/licensed children’s institutions county office funds transfers were divided by the 2009–10 school district revenue limit deficit factor (0.81645). The result was then adjusted by the -0.39 percent COLA. The calculated amount was added to the state-aid portion of the revenue limit.

School District Revenue Limits

The state-aid portion of the revenue limit for each district was calculated using the most current estimate of state aid from DOF. To tie to that number, the 2009–10 P-2 revenue limit state-aid for each district was adjusted as follows:

• A factor of 1.3736171782 was applied to the P-2 state-aid amount for each district. This factor includes the temporary elimination of the deficit factor, the revenue limit COLA of -0.39 percent, estimated increases to the PERS contribution rate, funding to mitigate the PERS reduction, increases to unemployment insurance expenditures, and DOF’s estimated statewide increases in ADA and local revenues.

Note: Local revenue was adjusted to back out 2009–10 P-2 in-lieu tax transfers for charter schools that have closed, and for charters whose general-purpose entitlement was fully funded thru in-lieu tax transfers at 2009–10 P-2.

Charter Schools General-purpose Entitlement

The apportionment for charter schools funded through the charter school funding model was developed using the most current estimates from DOF and the 2009–10 P-2 general-purpose entitlement as a base. A factor of 1.221380011 was applied to the P-2 general-purpose entitlement. This factor includes the -0.39 percent COLA, DOF’s estimated 0.11 percent increase in statewide ADA, and the temporary elimination of the 0.81645 deficit factor. This amount was then reduced by the P-2 in lieu of property taxes to determine the state aid amount for each charter school. For charter schools whose general-purpose entitlement was fully funded thru in-lieu tax transfers at 2009–10 P-2, the total in-lieu tax transfer was recalculated to reflect the increased entitlement.

Charter School Overpayments (Prior and Current Years)

The apportionment also includes funding adjustments to charter schools that had received overpayments of state aid at P-2 due to changes in the block grant rates, ADA, local revenue, and adjustments to prior years (Line A-26 on the Advance Apportionment Summary). Charter schools that have insufficient funding to offset a prior year overpayment will also have a current year overpayment adjustment (Line A-25).

The overpayment adjustment(s) for the charter school is an amount owed back to the state and, as part of recouping this amount over the entire year, is reflected in the Advance. This adjustment will continue in the charter school’s subsequent apportionments until the state recovers the full amount owed. In some cases, an invoice will be sent directly to the charter school.

Basic Aid “Choice”/Court-ordered Voluntary Pupil Transfer and Basic Aid Supplement Charter School Adjustment

Funding for Basic Aid “Choice”/Court-ordered Voluntary Pupil Transfer and Basic Aid Supplement Charter School Adjustment was calculated by dividing the 2009–10 P-2 amount by the 2009-10 school district revenue limit deficit factor (0.81645), and then multiplying the result of that calculation by the -0.39 percent COLA.

Community Day School Program (CDS)

Funding for CDS pupils who were expelled for any of the mandatory expulsion offenses as described in EC Section 48915(c) was calculated by multiplying the 2009–10 P-2 amounts by the -0.39 percent COLA.

County Office Funds Transfer

Funding for county office funds transfers, was calculated by dividing the 2009–10 P-2 amounts for special education, county community school, and nonpublic, nonsectarian school/licensed children’s institutions county office funds transfers by the 2009–10 school district revenue limit deficit factor (0.81645). The result was then multiplied by the -0.39 percent COLA.

Programs Not Included in the Advance Certification

Appropriation authority does not exist for certain programs in the Principal Apportionment; therefore, the following programs are not included in the Advance, but will be included in a Recertified Advance: Adult Education, Adults in Correctional Facilities, Apprenticeship, Charter School Categorical Block Grant, Community Day School Program, Gifted and Talented Education, Regional Occupational Centers and Programs, Special Education, and Supplemental Instructional Programs.

Payment Schedule and Deferrals

Assembly Bill 5 of the Eight Extraordinary Session (ABX8 5, Chapter 1, Statutes of 2010) amended by Assembly Bill 14 of the Eight Extraordinary Session (ABX8 14, Chapter 10, Statutes of 2010) added deferrals of the July and October payments. The deferrals during the advance period are as follows:

• July- $2.5 billion may be deferred up to 60 days. As a result, the entire 2010–11 July Advance payment will be deferred.
• October- $2.5 billion may be deferred up to 90 days. As a result, the entire 2010–11 October Advance payment will be deferred. 

A spreadsheet of the payment schedule (XLS) is available on the CDE Web site. A letter explaining the impact of these deferrals on Principal Apportionment cash flow and other state funding is available on the CDE Web site [Note: the letter explaining the impact of these deferrals on Principal Apportionment cash flow and other state funding is no longer available].