BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | ACR 54| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: ACR 54 Author: Brownley (D), et al Amended: 7/15/09 in Senate Vote: 21 SENATE EDUCATION COMMITTEE : 6-3, 7/8/09 AYES: Romero, Alquist, Hancock, Liu, Padilla, Simitian NOES: Huff, Maldonado, Wyland ASSEMBLY FLOOR : 49-29, 5/11/09 - See last page for vote SUBJECT : Education finance SOURCE : Author DIGEST : This resolution resolves that it is the Legislature's intent that California generate and allocate sufficient funds to bring the per pupil spending up to or into the top half of the national average and to a level that accounts for the actual cost of educating California pupils. ANALYSIS : Under existing law, there are several components that determine the level of funding provided to a local school district including: 1. Revenue limits (base revenue funding) . Revenue limit funding for school districts is, in part, based on average daily attendance (ADA), where ADA is calculated by dividing the number of days of attendance for all CONTINUED ACR 54 Page 2 pupils enrolled in the district by the number of instructional days in the district; a day of attendance is generally defined as a minimum number of instructional minutes (specific to grade level) in a classroom setting with a certificated employee of school district present. This funding computation uses the annual ADA reported by each district in the last attendance year, or the current or prior fiscal year, whichever is greatest. Total Revenue Limit (local property taxes plus state General Fund) funding for a district is then calculated by multiplying the district's set (per pupil) revenue limit by ADA. 2. Equalization funding . This is a mechanism for equalizing school district revenue limit funding by increasing the base revenue limit for some set of low revenue limit districts. 3. Categorical funding . This is "targeted" funding that focus resources and/or compliance requirement on specified classes of students, schools or programs as specified by the Legislature. 4. Other funding . In addition, local districts are authorized to raise funds locally (e.g. local voter approved tax increases). They may also receive federal funds, private grants and/or other specialized sources of funding (loans, bail-outs, legal settlements, etc.). This resolution: 1. States legislative intent that California generate and allocate sufficient funds to education so that per pupil spending: A. Is brought up to or beyond the national average. B. Accounts for the actual cost of educating California's diverse pupil population so that all pupils are prepared for college, careers and successful participation in our democratic institutions. 2. Includes a variety of findings and declarations ACR 54 Page 3 regarding California's current education finance system. Comments Education Week published a ranking that showed California as 47th among the states and District of Columbia in per pupil expenditures on K-12 education when cost-of-living differences across the states are taken into account. The National Education Association ranks California as 34th among the 50 states and District of Columbia in per pupil expenditures in 2007-08. The United States Census Bureau reported in 2008, that California was 29th among the 50 states and District of Columbia in per pupil expenditures by public schools in 2005-06, with per pupil spending on education approximately eight percent below the national average. Prior Legislation and Initiatives SB 90 (Dills), Chapter 1406, Statutes of 1972, established a ceiling (revenue limit) on the amount of general purpose money that each district could receive per unit of ADA, and required the state to reimburse local governments, including schools, for new mandates. AB 65 (Greene), Chapter 894, Statutes of 1977, responded to the Serrano decision and allowed districts to raise a minimum amount per pupil from local property taxes. For districts unable to raise the minimum amount, the state paid the difference as equalization aid. Proposition 13 (1978), limited property tax rates, which were historically the main funding source for schools, and other tax increases. AB 8 (Greene), Chapter 282, Statutes of 1979, provided a response to Proposition 13 that established a formula for dividing property taxes among cities, counties, and school districts (ERAF), and created the current "revenue limit" entitlement system, which replaced property taxes as the main funding source for schools. Proposition 98 (1988) guaranteed a minimum funding level for schools. ACR 54 Page 4 Proposition 111 (1990), changed the inflation index for Proposition 98 calculations to the change in per capita personal income, effectively raising the limit and the guarantee, and added Test 3 to the Proposition 98 calculation for low revenue years. SB 727 (Rosenthal), Chapter 855, Statutes of 1997, increased base revenue limits to offset the exclusion of excused absences from average daily attendance counts. FISCAL EFFECT : Fiscal Com.: No SUPPORT : (Verified 7/15/09) Association of California School Administrators California ACORN California Adult Education Administration Association California Association of School Business Officials California Association of Suburban School Districts California Federation of Teachers California School Boards Association California School Employees Association California State PTA California Teachers Association Californians for Justice Californians Together Los Angeles County Office of Education Pajaro Valley Federation of Teachers Public Advocates, Inc. Riverside County Schools Advocacy Association San Francisco Community College Faculty Union-AFT Local 21 Small School Districts' Association OPPOSITION : (Verified 7/15/09) California Taxpayers' Association Howard Jarvis Taxpayers Association ARGUMENTS IN SUPPORT : The California State PTA "believes that public education provides a common experience for building and maintaining a commitment to the basic values of a democratic system of government and that a strong public education system is vital to California's well being ACR 54 Page 5 in a global society. Adequate funding is a key component in restoring excellence to our public schools and closing the achievement gap that exists among our students." They believe it is "important to memorialize the insufficient levels of funding for education in California, as well as the causes and impacts related to that funding, and to recognize the obligation of elected officials to ensure that funding is sufficient to provide optimum educational opportunity for all students." The California Association of Suburban School Districts (CALSSD)states: "According to Education Weekly, California currently ranks 47th among the states and District of Columbia in per pupil expenditures on K-12 education when cost of living differences across the states are taken into account. There is no question that California's schools are underfunded if the goal is to ensure that our students meet the world-class standards we have set. CALSSD strongly believes that the State of California needs to become more proactive in support of public school funding and the return to being a first class school system. ACR 54 is a critical step to ensuring that all children have access to an appropriate education that meets the needs of our diverse population and leads to quality jobs as our children graduate." ARGUMENTS IN OPPOSITION : The opposition states that "ACR 54 is a resolution relating to education finance that directly attacks Proposition 13 in one of its clauses by saying 'WHEREAS, Proposition 13, which unfairly restricts corporate property tax increases, has limited the ability to raise the additional revenues necessary to provide the high quality education that Californians expect and to support academic success for all of the state's pupils.' By advocating for a split roll property tax system and more education funding, this resolution seeks to advance an unwarranted attack on both Proposition 13's two-thirds vote requirement and property tax protections. Moreover, blaming Proposition 13 for the sorry state of California education makes no sense. California currently spends 30% more in inflation adjusted dollars than it did just prior to Proposition 13's passage back in 1978." ASSEMBLY FLOOR : ACR 54 Page 6 AYES: Ammiano, Arambula, Beall, Block, Blumenfield, Brownley, Buchanan, Caballero, Charles Calderon, Carter, Chesbro, Coto, Davis, De La Torre, De Leon, Eng, Evans, Feuer, Fong, Fuentes, Furutani, Hall, Hayashi, Hernandez, Hill, Huffman, Jones, Krekorian, Lieu, Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, John A. Perez, V. Manuel Perez, Portantino, Price, Ruskin, Salas, Saldana, Skinner, Solorio, Swanson, Torlakson, Torres, Torrico, Yamada, Bass NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill, Blakeslee, Conway, Cook, DeVore, Duvall, Emmerson, Fletcher, Fuller, Gaines, Garrick, Gilmore, Hagman, Harkey, Jeffries, Knight, Logue, Miller, Nestande, Niello, Nielsen, Silva, Smyth, Audra Strickland, Tran, Villines NO VOTE RECORDED: Galgiani, Huber DLW:mw 7/15/09 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****