QEIA shell games amount to further education cutsAnalysis from CSBA's Governmental Relations Department
Published: October 20, 2009
Since July, when the state budget deal eliminated $450 million for the Quality Education Investment Act in 2009-10, there has been a significant amount of uncertainty regarding QEIA, the new program created to settle the California Teachers Association’s successful lawsuit against Gov. Arnold Schwarzenegger over the level of funding owed to schools in 2004-05.
QEIA funding was to come entirely from the state’s general fund, without drawing down any dollars from Proposition 98’s minimum education funding guarantee. But, while QEIA money was zeroed out of the general fund this year, the program itself wasn’t suspended—instead, it’s currently funded with Proposition 98 dollars that should be available for other educational purposes. Lawmakers accomplished this maneuver by redirecting funds from the revenue limits of the nearly 140 districts with schools participating in QEIA and authorizing those districts to apply to the California Department of Education to backfill the revenue limit reduction with federal Title I and school improvement grants.
This provided the false assurance that the cut to QEIA-district revenue limits could be backfilled by federal dollars. In fact, it appears that may not be possible, due both to specific rules tied to those federal dollars and to the lack of sufficient funding from those sources.
As a consequence, there remains a need to backfill approximately $380 million—the amount under QEIA that goes to participating school districts. The Legislature attempted to address this issue in the final days of the regular session through state Senate Pro Tem Darrell Steinberg and Assembly Speaker Karen Bass’s Senate Bill 84. However, the governor vetoed the measure, citing his plan to use State Fiscal Stabilization Funds from the American Reinvestment and Recovery Act to backfill the cut.
In yet another complex shell game to restore the pending cuts to the revenue limits of QEIA districts, Assembly Bill X3 56 by Assembly member Noreen Evans, D-Santa Rosa, would use SFSF and Title I set-aside and carry-over dollars, if available, to pay for QEIA for this year, with any remainder needed to fully fund QEIA likely coming from unspent dollars within Proposition 98. ABX3 56 was approved by the Senate last week and is awaiting approval by the Assembly.
The Title I revenues specified in the bill include $65 million from prior years that wasn’t spent and $100 million that is provided for use at the state level. Assuming this funding is available for this purpose, it would free up $165 million of SFSF dollars that should otherwise be available to all school districts to restore the cuts from 2008-09—but there is some uncertainty as to whether the Title I funds are available and, if they are, whether any savings realized from the SFSF will benefit school districts.
The only reason there is SFSF money available now is because—due to the severity of the education cuts approved in July—the governor asked federal officials to accelerate some of remaining SFSF funds available to California instead of waiting for the second round of SFSF distributions. This has the advantage of making additional money available now under the existing requirements, without the additional conditions or prerequisites that may be imposed on the remaining dollars.
It is important to emphasize that the $355 million now available is not new SFSF money; rather, this is money that all districts were expecting to receive, based on information provided last spring. Should all or part of these funds be redirected to backfill QEIA, it will amount to a further cut to education.
There is some positive news for QEIA districts. It is likely that the revenue limits for QEIA districts will not be cut, as was required by the July budget package. This is important, because some districts with QEIA schools were being required by their county offices of education to reduce their budgets by the amount of the expected revenue limit cut. And, remember, because of the elimination of this year’s general fund support, the program has been extended by one year, to 2014-15, to ensure the full amount owed under the settlement will be paid by the state.
