Brown ignores LAO warning, stands pat with distributing $1b in Prop. 39 funds

By Kimberly Beltran Originally appearing in SIA Cabinet Report Three months ago the typically reserved nonpartisan Legislative Analyst used especially robust language in calling into question a plan from Gov. Jerry Brown to use new corporate tax revenue to improve energy efficiency at K-12 schools and community colleges. Last week, the governor released his revised May budget and the only change Brown made to his vision for how the state should distribute Proposition 39 proceeds was to propose giving small districts a minimum grant award rather than allocating money based on each district’s average daily attendance. As a result, Brown faces something of a confrontation with the influential LAO as well as a gaggle of legislative leaders who have bills pending that would enact different regulations for how the $1 billion-a-year new revenues should be used. “The governor sees a statewide need that Prop. 39 can provide to K-12 schools – as well as to the jobs market because people are going to have to install these things,” said H.D. Palmer, spokesman for the Department of Finance. “And, in the long term, it’s going to benefit schools even more because the energy savings will allow them to put that money back into the classrooms.” Prop. 39, passed by voters last November, is expected to generate nearly $1 billion a year by closing a tax loophole that allowed multistate businesses a choice in determining their California taxable income. The measure requires that for a five-year period (2013-14 through 2017-18) half of the revenue raised – up to $550 million – be transferred to a new Clean Energy Job Creation Fund to support public building projects intended to improve energy efficiency and expand the use of alternative energy sources. The new money comes at a critical time for schools since state funding for K-12 construction projects – provided through voter-approved facilities bonds – is all but exhausted. Advocates in the Legislature and education community are pushing for a new facilities bond measure for the 2014 ballot but there are no guarantees that will happen or, if it does, that voters will approve it. Under Brown’s Prop. 39 proposal, only K-12 schools and community colleges would receive the energy efficiency funds, expected to be $464 million in 2013-14. Community colleges would receive $51 million with K-12 local educational agencies collecting the remaining $413 million. The LAO has also taken issue with Brown’s plan to include all Prop. 39 revenue into the state’s general fund to be calculated in the constitutionally-guaranteed school funding formula created under 1988’s Proposition 98. The LAO, in a strongly-worded February analysis of the governor’s Prop. 39 proposal, argued that counting the revenues intended for energy upgrades as part of the Prop. 98 schools’ allocation is “a serious departure from our longstanding view of how revenues are to be treated for the purposes of Proposition 98, which we have developed over many years with guidance from Legislative Counsel.” Palmer said the governor continues to disagree with the LAO, believing that the funds are indeed state revenues to be counted toward the school guarantee and that “you can’t pick and choose” which revenues should be counted and which shouldn’t. Brown’s initial proposal in January was to award the money to all districts at a rate of about $67 per ADA but concerns that smaller districts wouldn’t generate enough funds to initiate and complete energy efficient projects led the administration to offer minimum grants. It is a small concession given that only districts with an ADA of less than 764 will receive the minimum grants, and in light of the fact that the LAO is calling for the Legislature to distribute the money through a competitive grant process open to all public agencies – not just schools – as suggested in the proposition itself. Additionally, the governor’s revised May budget allocates $4 million for the existing Energy Resources Programs Account and eight positions to enable the California Energy Commission to provide technical assistance to small local education agencies undertaking energy retrofits. That assistance would include helping identify cost‑effective, energy-saving opportunities for K‑12 school facilities, and providing guidance on establishing energy baselines and tracking performance. The Prop. 39 windfall has also prompted several pieces of legislation from lawmakers with their own ideas about how the energy efficiency monies should be distributed and used. While at least seven different bills suggest various methods for allocating the new revenues, those likely to garner the most support include SB 39 by Senators Darrell Steinberg and Kevin de Leon, and AB 39 by Assembly woman Nancy Skinner. SB 39 calls for the Office of Public School Construction to establish a competitive grant program for the distribution of Prop. 39 funds to only K-12 school districts and county offices of education through a priority ranking system. LEAs with above average energy consumption, those located in economically disadvantaged communities or in areas with above-average unemployment would be given priority. The OPSC would be required to consult with the energy commission, Public Utilities Commission and the California Department of Education in developing guidelines for the program. The State Board of Education would be required to approve all LEA applications. Skinner’s AB 39 would require the California Energy Commission to develop a program to distribute grants, loans or other financial assistance to K-12, community college, university or other public buildings. Under this legislation, 75 percent of the eligible funding would be awarded as grants to K-14 projects; 25 percent would be available in the form of low- or no-interest loans to all public agencies for eligible projects and technical assistance. Under the governor’s plan, exceptionally small districts – those with ADA of 200 or less – would receive the minimum grant of $15,000. All other districts would receive a minimum grant of $50,000 or a per-ADA allocation of $65.46, whichever is larger. Therefore, districts with an ADA up to 764 would get $50,000 each while all others would receive $65.46 per ADA. A rough count of district ADAs shows about 188 districts with an average daily attendance of 200 or less; 189 have an ADA between 201 and 765 while the remaining 663 districts are higher – many into the thousands. Oakland Unified, for example, with its 2010-11 ADA of 36,359 would receive approximately $2.4 million. The largest district in the state, Los Angeles Unified, would earn upwards of $36 million for energy efficiency upgrades.

Over 11K Stories!

| Independently Powered Energy News

Brown ignores LAO warning, stands pat with distributing $1b in Prop. 39 funds

dgrandyadmin

Related Posts

Using Free Casino Video Slots To Enhance Your Odds Of Winning

A Guide to Finding the Most reputable UK Online Casinos

California’s Third Auction Results Show Program’s Good Health