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Timely Topics FAQs

This frequently asked questions (FAQs) website is intended to address current topics of interest for our community to reference. Topics and resources will be updated as topics arise.

What is the Transition to Community Funded Status?

Added: April 6, 2023

As we continue to monitor the Huntington Beach City School District’s (HBCSD) possible transition to a community-funded revenue model, we want to provide our community with currently known information. 

Huntington Beach City School District (HBCSD) is and has historically been funded by state revenues, but in recent years, we have been monitoring our status as local property taxes will likely continue to outpace state funding in upcoming years.

About 100 out of the 1,000 school districts in California are funded primarily through local property taxes, also known as “community-funded” or “basic aid” districts. 

The State calculates annual allocations for school districts using the Local Control Funding Formula (LCFF). Local property taxes are counted first, and if local property taxes are less than the LCFF funding target, the State provides the difference to meet the district's funding target. However, with community-funded districts, local property tax revenues are enough to cover the district's funding target. These districts keep their local property tax revenues for education purposes. Also worth noting, community-funded districts still receive some money from the state–about $120 per student–the minimum funding required by the State Constitution.

Typically, community-funded districts have relatively higher property tax bases. Still, it is important to note that districts determine their property tax revenue well into the fiscal year, and future projections are volatile. Community-funded districts usually maintain a reserve level higher than 3%, and HBCSD Board policy requires an additional 4% of annual expenditures to ensure financial stability and meet its obligations.

The chart below is a historical comparison of HBCSD's LCFF revenues. The blue line represents the State-funded status, and the green line depicts the estimated funding under community-funded status, assuming an annual property tax growth of 4%.

Funding Chart

Based on the 2023-2024 Governor's proposed cost of living adjustment of 8.13%, the District would remain State-funded for one more year. However, the difference between the estimated local taxes and the State funding proposal in 2023-2024 is less than $25,000. Therefore, any increases to the estimated property taxes could flip the funding back to a community-funded model.

Our transition status remains fluid, and the district's 2023-24 funding model has yet to be determined. We will update revenue projections in June to incorporate the Governor’s May Revision of the 2023-24 proposed State budget. HBCSD’s budget reporting will include the latest District enrollment, attendance, estimated property taxes, and other factors that affect the funding calculation to determine if we transition to community-funded status in 2023-24 or 2024-25. 

We will continue to update you as we move forward. Please review our User-Friendly Budget (March 2023 Edition) and visit our Fiscal Services website for more information. Thank you for your ongoing support, and we look forward to continuing to serve our community.

Resources

The Orange County Department of Education has also developed a new website to unpack complex education issues. It’s called The 101, and it can be accessed at 101.ocde.us.