2014–15 Advance Apportionment Letter

July 17, 2014

Dear County Superintendents of Schools:

2014–15 ADVANCE PRINCIPAL APPORTIONMENT

Towards the end of July, select county treasurers will receive a warrant that reflects state aid for programs included in the 2014–15 Advance Principal Apportionment (Advance) for elementary, high, and unified school districts; charter schools; and county offices of education. The California Department of Education (CDE) certified the Advance on July 17, 2014 pursuant to California Education Code (EC) Section 41330. The statewide total was $30,778,423,615. County superintendents of schools should advise school districts and charter schools immediately of this apportionment.

The Advance for 2014–15 is based on a statutory derivation pursuant to EC sections 14002 through 14007 and 41301. Section 41330 directs the CDE to apportion money in the Advance on the basis of the Second Principal Apportionment (P-2) from the preceding fiscal year.

A summary of the calculations that the CDE used in the Advance is described below. This letter, as well as apportionment Excel files that provide detail funding amounts for this Advance, are available on the CDE Web site at https://www.cde.ca.gov/fg/aa/pa/pa1415.asp.

Calculations to Determine the 2014–15 Advance

The Advance for 2014–15 is certified pursuant to California Education Code (EC) Section 41330. The following provides specific details regarding the calculation of funding for each program, including the Local Control Funding Formula (LCFF). Because this apportionment is merely a means to begin allocating funds in accordance with EC Section 41330, it should not be used for budget purposes.

LCFF State Aid – County Offices of Education

The estimated 2014–15 state aid for each county office of education (COE) is based on funding from the 2013–14 Second Principal Apportionment (P-2) certification and reflects the following adjustments:

1. The 2013–14 Target Entitlement was increased by the 0.85 percent cost of living adjustment (COLA). Note: COLA was not applied to the Add-on funding that is a component of the Target Entitlement.
2. The 2013–14 Floor Entitlement was recalculated to:
   1. Fix an error that was discovered in the 2013–14 P-2 Apportionment calculations. On the 2012–13 Adjusted County Revenue Limit for Floor Calculation funding exhibit the PERS amount was added rather than subtracted to derive the Total 2012–13 County Revenue Limit Held Constant which is a component of the Floor Entitlement. Funding for the 2013–14 fiscal year will be corrected at the Annual Apportionment certified in February 2015.
   2. Include 2013–14 Gap funding, if applicable. This amount is added separately because the 2013–14 Gap funding was in addition to, not part of, the 2013–14 Floor.
3. A new 2014–15 estimated Need, which is the difference between the Target and Floor, was derived from the revised Target and Floor calculations. This amount was used to determine the COE’s 2014–15 Gap funding.
4. The 2014–15 Budget includes an appropriation of $25,994,000 for Gap this fiscal year. As of the Advance Apportionment, the statewide estimated Need is less than the appropriation and as a result each COE with a remaining Need is funded at their Target. Note: this could change in subsequent certifications when the calculations reflect current year average daily attendance (ADA), unduplicated pupil counts, and local revenue data.
5. The 2013–14 P-2 local revenue amount was used to determine the COE’s Advance State Aid and reflects the exclusion of any one-time Redevelopment Agency (RDA) Asset Liquidation funds reported as part of the COE’s 2013–14 P-2 property taxes.
6. The Education Protection Account (EPA) Entitlement, which is an offset to state aid, has been recalculated to reflect the 2014–15 funding estimate of $6.6 billion. See the EPA section below for additional detail.

LCFF State Aid – School Districts and Charter Schools

The estimated 2014–15 state aid for each school district and charter school is based on funding from the 2013–14 Second Principal Apportionment (P-2) certification and reflects the following adjustments:

1. The 2013–14 Target Entitlement was increased by the 0.85 percent cost of living adjustment (COLA). Note: COLA was not applied to the Add-on funding that is a component of the Target Entitlement. In addition, districts and charter schools funded based on the Target formula as of the 2013–14 P-2 certification are funded at their Target in the Advance.
2. The 2013–14 Floor Entitlement was recalculated to:
   1. Include 2013–14 Gap funding, if applicable. This amount is added separately because the 2013–14 Gap funding was in addition to, not part of, the 2013–14 Floor.
   2. Specific to districts only, the Basic Aid Fair Share Reduction, if applicable, was recalculated to exclude the one-time RDA Asset Liquidation funds included in the district’s 2012–13 P-2 Apportionment certification. The recalculated reduction is now equal to the lesser of the district’s excess taxes without the one-time RDA funds or 8.92 percent of its 2012–13 Revenue Limit Funding Subject to the Deficit calculated as of the 2012–13 P-2 Apportionment. For the affected districts, the recalculation increases the 2012–13 Categorical entitlements used to determine the Floor Entitlement and Categorical Minimum State Aid Guarantee because a smaller Basic Aid Fair Share Reduction is applied.
3. A new 2014–15 estimated Need, which is the difference between the Target and Floor, was derived from the revised Target and Floor calculations. This amount was used to determine the 2014–15 Gap funding.
4. The 2014–15 Budget includes an appropriation of $4,721,970,000 for Gap in this fiscal year. As of the Advance Apportionment, the appropriation is enough to fund approximately 29 percent of the estimated Need in the Advance (this is in addition to the 12 percent provided in 2013–14). Note: this percentage will change in subsequent certifications when the calculations reflect current year average daily attendance, unduplicated pupil counts, and local revenue data.
5. For those districts and charters receiving an Economic Recovery Target payment, the additional 2014–15 payment was included.
6. The 2013–14 P-2 local revenue amount was used to determine the district’s Advance State Aid and reflects the exclusion of any one-time RDA Asset Liquidation funds reported as part of the district’s 2013–14 P-2 property taxes.
7. The EPA Entitlement, which is an offset to state aid, has been recalculated to reflect the 2014–15 funding estimate of $6.6 billion. See the EPA section below for additional detail.

Education Protection Account

EPA revenues, as authorized by Proposition 30, The Schools and Local Public Safety Protection Act of 2012, are generated by temporary increases in the state’s sales tax rate for all taxpayers and the personal income tax rates for upper-income taxpayers. All local educational agencies (LEAs) will receive quarterly EPA payments through the 2018–19 fiscal year, which will be paid outside of the Principal Apportionment. Except for an excess tax LEA, EPA entitlements offset state aid allocated through the Principal Apportionment.

Using a revised 2014–15 EPA revenue estimate of approximately $6.6 billion, the CDE calculated estimated EPA entitlements using a factor of 21.9621 percent based on the 2013–14 P-2 statewide total of revenue limits and charter school block grant funding and 2013–14 P-2 local revenue data, adjusted to exclude one-time RDA Asset Liquidation funds. If an LEA’s 2013–14 P-2 EPA entitlement was based on $200 per ADA (the minimum), the 2014–15 estimated EPA entitlement was not recalculated for the Advance.

While the funding is not allocated through the Principal Apportionment, estimated 2014–15 EPA amounts are provided on the Principal Apportionment Summary available at https://www.cde.ca.gov/fg/aa/pa/iassf14adv.asp for your convenience.

Basic Aid “Choice”, Court-ordered Voluntary Pupil Transfer, and Charter Supplement

Funding for Basic Aid “Choice”, Court-ordered Voluntary Pupil Transfer, and Charter Supplement are equal to the 2013–14 P-2 amounts, adjusted for the 0.85 percent COLA.

Adults in Correctional Facilities (AICF)

Funding for reimbursement of services for the AICF program is equal to the 2013–14 P-2 amounts for each LEA, adjusted for the 0.85 percent COLA.

Special Education – AB 602 and Infant (Ages Two Years and Younger) Programs

Special education programs were calculated using the 2013–14 P-2 amounts as a base. Before the AB 602 factor listed below was applied, P-2 funding was adjusted to back out the share of RDA asset liquidation revenue attributed to Local Special Education Property Taxes, which resulted in an increase to the affected SELPA’s AB 602 2013–14 P-2 apportionment. The following factors were applied:

• AB 602 Program:  1.0102598379
• Infant (Ages Two Years and Younger) Program:  1.0479022097

Payment Schedule

Monthly payments for the Advance Apportionment are available on CDE’s Web site at the county summary level and by LEA. There are no 2014–15 payment deferrals for the months of July through January. For cash planning, a schedule of Principal Apportionment payments and deferrals for the entire 2014–15 fiscal year are available at https://www.cde.ca.gov/fg/aa/pa/papayschedule.asp, which includes the estimated impact of the June to July deferral based on current projections. Section 57 of Senate Bill 858 (Chapter 32, Statutes of 2014) provides language that may eliminate or partially eliminate the June deferral allowing the funds to be paid earlier.

If you need assistance, or have any further questions, please contact the Office of Principal Apportionment and Special Education or the Office of Charter Apportionments and District Reorganization by phone at 916-324-4541 or by e-mail at PASE@cde.ca.gov.

Sincerely,



Caryn Moore, Associate Director
Local Control Funding Formula Section

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