BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 374

                                                                  Page A

          AB 374 (Block)
          As Amended  June 1, 2009
          2/3 vote

           EDUCATION           11-0        APPROPRIATIONS    13-3          

          |Ayes:|Brownley, Nestande,       |Ayes:|De Leon, Ammiano, Charles   |
          |     |Ammiano, Arambula,        |     |Calderon, Davis, Fuentes,   |
          |     |Buchanan, Carter, Eng,    |     |Hall, John A. Perez, Price, |
          |     |Garrick, Miller, Solorio, |     |Skinner, Solorio,           |
          |     |Torlakson                 |     |Audra Strickland, Torlakson |
          |     |                          |     |                            |
          |     |                          |Nays:|Nielsen, Duvall, Harkey     |
          |     |                          |     |                            |
           ASSEMBLY:      75-1 (June 2, 2009)      SENATE:              
          29-2(September 2, 2009)

          SUMMARY :  Requires the Superintendent of Public Instruction  
          (SPI) to produce a consequences of dropping out (CDO) notice to  
          inform pupils of the consequences of dropping out of school  
          prior to reaching 18 years old or completing high school  
          graduation requirements, as specified.  Specifically,  this bill  
          requires  : 

          1)The SPI to make the CDO notice available to school districts  
            by posting it on the California Department of Education's  
            (CDE) Web site.  

          2)The CDO notice to include, but not be limited to, the  
            following information: 

             a)   Specified consequences of dropping out before high  
               school graduation, such as reduced income, greater  
               likelihood of engaging in criminal activity and receiving  
               public assistance, and the lesser likelihood of properly  


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               caring for and educating children; 

             b)   Rights and procedures of a pupil reenrolling in school  
               to complete graduation requirements; and 

             c)   The availability of alternative educational services, as  

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, one-time General Fund (GF) costs, likely less than  
          $100,000, to the CDE to develop the CDO notice and post it on  
          its Web site. In addition, minor absorbable GF cost to maintain  
          and update the CDO.

           COMMENTS  :  Dropping out of school is a process that stems from  
          various factors.  According to research conducted by Russell  
          Rumberger, Director of the California Dropout Research Project  
          at the University of California, Santa Barbara, there are two  
          types of factors that predict whether students drop out or  
          graduate from high school:  factors associated with individual  
          characteristics of students, and factors associated with the  
          institutional characteristics of their families, schools, and  
          communities.  Individual factors that predict whether students  
          drop out or graduate from high school include: educational  
          performance, behaviors, attitudes, and background.<1>

          The author states, "Recent studies have shown that the high  
          school dropout rate is nearly 25% statewide, and as high as 33%  
          in places like Los Angeles.  The dropout rate is especially high  
          among students of color.  For African American students it is  
          41.6% and 30.3% for Latino students.  Studies have also shown  
          that high school graduates create more wealth over their  
          lifetime, cost the state less money in public benefits, and are  
          less likely to end up in prison."

          California schools are indeed facing a critical dropout problem  
          as is demonstrated by information from the CDE that estimates a  
          21.1% dropout rate for the 2006-07 school year.  The statistics  

          <1>Why Students Drop Out of School: A Review of 25 Years of  
          Research. California Dropout Research Project Report 15. October  


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          show that minority students fare much worse.  The dropout rate  
          for African-American students was estimated at 35.8% and for  
          Latino students at 26.7%.  

          High school dropouts experience higher rates of unemployment;  
          lower earnings; poorer health and higher rates of mortality;  
          higher rates of criminal behavior and incarceration; increased  
          dependence on public assistance; and are less likely to vote.<2>  
           The effects of dropping out are detrimental not only to the  
          individual student but also to the state and its economy.  

          The California Dropout Research Project finds that over their  
          lifetimes, each cohort of dropouts costs California state and  
          local governments $9.5 billion in fiscal losses:

          1)$3.1 billion in lost state and local tax revenues
          2)$3.5 billion in health expenditures
          3)$2.5 billion in crime expenditures
          4)$400 million in welfare expenditures<3>

          Conversely, the California Dropout Research Project estimates  
          that if the high school dropout rate for a single year was  
          reduced by 30% the aggregate savings to state and local  
          governments would be $1.9 billion, and social gains would amount  
          to $13.9 billion.<4>

          This bill seeks to inform pupils about the potential  
          consequences of dropping out in an effort to reduce the number  
          of students that drop out of school. 

          Arguments in support:  The American Federation of State, County  
          and Municipal Employees (AFSCME) writes, "A high school  
          education is an important factor to beginning a successful life.  
           The National High School Center reports high school drop-outs  
          are more likely to be unemployed, use public assistance, be  
          single parents, have children at a younger age, and earn  
          <2> Ibid.
          <3>The Economic Losses from High School Dropouts in California.  
          The California Dropout Research Project Policy Brief 1. August  
          <4> Ibid. 


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          $260,000 less over a lifetime.  AFSCME supports this bill in  
          hopes that the form will make potential drop-outs consider the  
          consequences of dropping out of high school."


          "While I am supportive of efforts to prevent students from  
          dropping out of school, the objective of this bill can be  
          accomplished administratively by the Superintendent of Public  
          Instruction without additional statutory authorization.   
          Therefore, this measure is unnecessary."

          Analysis Prepared by  :    Marisol Avi?a / ED. / (916) 319-2087 

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