As Superintendent of Berkeley Unified School District (BUSD), I am committed to sharing clear information regarding the District’s funding, our expenses, and the District budget. Our shared understanding drives critical conversations we must hold in community as we strive to meet our promise of Excellence, Equity, Engagement, and Enrichment for all of our students.
In Part One of this series, I provided background and information about the challenges of flattening state funding at a time when the District’s expenses continue to grow. In this post I’ll explain how Restricted Funding supplements our overall budget by providing money that can only be spent on certain purposes. This revenue can lead to the appearance that more money is available for across-the-board salary increases than is actually the case.
The Combined General Fund
BUSD has a Combined General Fund—essentially an account where we receive revenue from a variety of sources, just like a family might have a bank account that grows when various people in the family deposit their paychecks and from which many household bills are paid. Similarly, Berkeley’s Combined General Fund includes money from different sources that must be spent on specific intended purposes. These include funds for facilities, early childhood education, nutritional services, other capital items, and the required reserve maintained by the district. Conversations about a district’s budget are usually about the Combined General Fund, and it’s easy to miss that the overall budget is actually a set of smaller, purpose-driven accounts.
Comparing our revenue to the revenue of other school districts on a per-pupil basis can also be misleading. This is because each district’s Combined General Fund includes both Unrestricted Funding and Restricted Funding, and each district has a unique combination of these funds. With BUSD’s local funding from local special taxes, we may have more restricted local funding on a percentage basis than many other districts. Those funds have to be used in accordance with the language of the measures passed by the voters. At the same time, we may have less Restricted State and Federal funding (LCAP-Concentration Funds or Title I Funds) than other districts because of the population of students in our community. Even when the total dollars are similar, no two district budgets are alike in their funding sources and types.
The Combined General Fund includes both Unrestricted and Restricted Funding.
Unrestricted Funding from the Combined General Fund can be used at the District’s discretion. Largely provided through the state’s Local Control Funding Formula (LCFF) base funding, this revenue is available for the District’s general and discretionary needs. General needs include certificated and classified salaries, employee benefits, books and supplies, and a range of services like professional development or legal support. The Interfund Transfers section of the budget accounts for money that supports other programs within the district, like Special Education – and these funds are often also used for salaries. BUSD’s commitment to transportation as a solution to neighborhood segregation is also included in these interfund transfers. In total, 55% of the revenue in the General Combined Fund is unrestricted. This money is already committed to pay the bills necessary to keep the District’s doors open each day, and so changes to any one expense, like salaries for employees, must come with commensurate changes to other expenses. This is possible, of course, though it’s important to remember that the salaries of most teachers are paid for by only a portion of the District’s budget, not by all of it.
Unrestricted Funding can be used for the District’s general and discretionary needs.
Restricted Funding must be used to support the District programs or services for which the funds were granted. Restricted Funding, which at BUSD includes Title I, Special Education, and local bond measures and parcel taxes, as well as the Supplemental part of LCFF revenue, makes up 45% of the District’s Combined General Fund.
For example, the Berkeley Schools Excellence Program (BSEP) is a Restricted Fund from a local tax measure which provides 20% of the District’s Combined General Fund revenue. Based on the language in the measure, BSEP funds must be used to provide staffing for small class sizes and other support for teaching and learning, library staff and materials, student supports such as counselors, instructional technology, music instruction and instruments, and funding for school site programs. BSEP funds cannot be redirected to expenses that are outside of the approved measure, and Berkeley has a longstanding commitment to a citizens’ advisory committee to ensure that this is true.
BSEP’s Restricted Funding makes up 20% of the District’s Combined General Fund.
While the bulk of LCFF revenues represent Unrestricted Funding, $5.5M of the District’s 2019-2020 LCFF revenue is Restricted Funding; we call this our LCAP Supplemental Funds. LCFF identifies three categories of underperforming students requiring greater resources through this grant: students who qualify for free or reduced priced meals, students who are English Learners, and foster youth. Money from this source can be used for salary, but only for the salaries of employees whose work relates directly to these student populations and is supplemental.
LCFF’s Supplemental Grant is Restricted Funding targeting three important District goals for at-risk students.
Restricted revenue from the state serves as an important requirement that communities support efforts that contribute to equitable outcomes for all students. The restrictions on the use of these funds mean that they are protected, and must be set aside in conversations about how to pay for general raises. All of this is to say that thinking about salary increases must account for the complexities of public school budgets. Comparisons to other districts are hard, and calculations about the amount of money available for salaries must account for the specific purpose of each funding source received by the district.