Update: September 7, 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.
State revenues have historically funded HBCSD, but in recent years, we have been monitoring our status as local property taxes will likely outpace State funding in upcoming years.
About 10% of the 1,000 California school districts 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.
According to the revenue projections for June 2023, the District may shift to a community-funded status during the 2023-24 fiscal year. However, it's important to note that the gap between the projected local taxes and State funding is quite narrow. As a result, reductions in estimated property taxes could potentially revert the funding model back to state-funded.
Our transition status remains fluid, and we will update revenue projections in November to incorporate actual enrollment, attendance, the Orange County Auditor-Controller property tax estimates, 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 (September 2023 Edition) and visit our webpage for more information. Thank you for your ongoing support, and we look forward to continuing to serve our community.