BILL ANALYSIS
SENATE COMMITTEE ON EDUCATION
Gloria Romero, Chair
2009-2010 Regular Session
BILL NO: AB 548
AUTHOR: Chesbro
AMENDED: March 1, 2010
FISCAL COMM: Yes HEARING DATE: June 23, 2010
URGENCY: Yes CONSULTANT:Beth Graybill
NOTE: This bill has been amended to replace its contents and
this is the first time the bill is being heard in its current
form in a policy committee.
SUBJECT : Education finance: K-3 Class Size Reduction
Program.
SUMMARY
This bill, an urgency measure, grants local education
agencies specific options for claiming class size reduction
funding in the 2008-09 school year and authorizes the
Riverside Unified School District to receive funding for
grade 3 classrooms that participated in the CSR program
during the 2009-10 school year.
BACKGROUND
Existing law establishes the Class Size Reduction (CSR)
program to improve education of children in kindergarten and
grades one through three. The goal of the K-3 CSR program is
to increase student achievement, particularly in reading and
mathematics, by decreasing the size of K-3 classes to 20 or
fewer students per certificated teacher. (Education Code
52120 et. seq.)
Under the K-3 CSR program, school districts apply for an
apportionment to implement a CSR program under one of two
options: (EC 51222)
a) Option One - in which a school district
provides reduced class size in each classroom for
the full regular school day in each grade level for
which funding is claimed.
b) Option Two - in which a school district
AB 548
Page 2
provides reduced class size for at least one-half
of the instructional minutes offered per day.
The state provides school districts participating in the CSR
program with an apportionment of $1,071 per pupil in
attendance in a kindergarten, first, second, or third grade
class as long as there is an average class size of 20 or
fewer pupils per teacher. Districts can lose up to 80
percent of their CSR funding if they exceed the 20-student
limit. (EC 52124)
The California Constitution authorizes the Governor to
declare a fiscal emergency and to call the Legislature into
special session for that purpose. The Governor proclaimed a
fiscal emergency and called the Legislature into special
session on December 19, 2008, and again on July 1, 2009.
These extraordinary sessions yielded the following measures
pertaining to Class Size Reduction funding:
SB 4 of the 3rd Extraordinary Session (Chapter 12,
February 2009), reduced funding for various categorical
programs and provided school districts with greater
flexibility to operate those programs through the
2012-13 years.
SB 4 also revised the CSR penalty schedule for the
2008-09 through 2011-12 school years. During these
years, districts that exceed the 20 to 1 ratio incur
apportionment penalties according to the following
schedule (EC 52124.3):
Classes of 20.5 or more but less than 21.5: Lose 5% of
funding.
Classes of 21.5 or more but less than 22.5: Lose 10% of
funding.
Classes of 22.5 or more but less than 23.0: Lose 15% of
funding.
Classes of 23.0 or more but less than 25.0: Lose 20% of
funding.
Classes of 25.0 or more lose 30% of funding.
AB 2 of the 4th Extraordinary Session (Chapter 2, July
2009) specified that for the 2008-09 through 2011-12
school years, a local education agency may receive
funding only for the number of classes for which it had
applied to as of January 31, 2009. AB 2 further
specified that a district is not eligible for additional
funds for any classes added to what the district
AB 548
Page 3
requested in its 2008-09 CSR application. (EC
52124.3)
ANALYSIS
This bill , an urgency measure:
1) For the 2008-09 school year, provides that a local
education agency may choose one of two options for class
size reduction state apportionments:
a) The option, set forth in subdivision (b) of EC
52124.3, to receive funding for the same number
of classes included in its application for program
funding as of January 31, 2009; or
b) The option to receive funding pursuant to the
option provided under the Class Size Reduction
Program on December 31, 2008, prior to enactment of
SB 4 (3rd Extraordinary Session) and AB 2.
2) For the 2009-10 school year, provides that the Riverside
Unified School District (RUSD) may choose one of two
options for its grade 3 classrooms that participate in
the Class Size Reduction Program:
a) The option, set forth in subdivision (b) of EC
52124.3, to receive funding for the same number
of classes included in its initial 2008-09
application, or
b) The option to receive funding pursuant to the
option provided under the Class Size Reduction
Program on December 31, 2008.
3) Makes a finding by the Legislature that a special law is
necessary because of the unique fiscal circumstances of
the RUSD and declares the measure to be an urgency
statute.
STAFF COMMENTS
1) Need for the bill . Prior to 2009, the process for
applying for CSR funding occurred in two steps. School
AB 548
Page 4
districts would first submit an initial application to
the California Department of Education (CDE) in
mid-December that included an estimate of the number of
classes that would be participating in the CSR program
for that current school year. CDE's process limited the
number of classes in the estimate to the lesser of the
prior-year actual implementation or the current-year
estimate. At the end of the school year, districts
would submit their final CSR numbers detailing the
actual implementation levels to be considered for
funding purposes. AB 548 proposes the following:
a) Enables districts that underestimated their
CSR numbers in 2008-09 to receive funding for the
actual number of CSR classes operated .
AB 2 established a base-year cap for K-3 CSR by
limiting districts to their 2008-09 CSR enrollment
numbers through the 2011-12 fiscal year. Because
the restrictions applied to Chapter 6.10 of Article
4.2 of the Education Code, AB 2 effectively capped
districts at their preliminary 2008-09 estimates
(the number included in their December 2008
application) and established that number as the
base-year number for CSR funding through 2011-12.
The sponsor of this bill, the California
Association of Suburban School Districts, argues
that AB 2 levied unintended damages on school
districts such as the Los Angeles Unified School
District (LAUSD) and Oceanside Unified School
District (OUSD) that underestimated their 2008-09
CSR numbers in their initial applications hoping to
settle up later in 2009. By providing districts
with the authority to claim the actual number of
2008-09 CSR classes for the 2008-09 school year, AB
548 will allow districts to receive their 2008-09
funding under the old CSR twenty-to-one rules
without being constrained by the cap imposed by AB
2.
b) Enables RUSD to claim funding for adding a
grade to its CSR program in 2009-10 . In April
2009, the governing board of the RUSD took action
to reinstate its CSR twenty-to-one program for all
its third-grade classes in order to improve student
achievement. Subsequently, the Legislature enacted
AB 2 in July 2009, which essentially capped
AB 548
Page 5
districts at the 2008-09 grade levels by
prohibiting districts from receiving additional CSR
funding for adding new grade levels through
2011-12. According to the author's office, AB 548
is necessary to enable RUSD to cover the increased
salary costs associated with adding its 3rd grade
classrooms to the district's CSR program.
2) Inconsistent with previous actions of the Legislature .
This bill alters Legislative action taken in
extraordinary session to address the state's fiscal
crisis. The requirements established under SB3X 4 and
AB 2 were made in concert with other decisions in order
to address the state's budget deficit. If those
decisions are modified, will other adjustments to the
2008-09 and 2009-10 budgets need to be made in order to
balance the costs associated with this measure? Is it
appropriate to create exceptions for some districts when
others have managed within the rules established by the
SBX3 4 and AB 2? Moreover, is it appropriate to make
decisions in this bill that could constrain the options
available for the 2010-11 Budget?
The Legislative Analyst Office (LAO) has recommended taking
CSR funding back to the 2007-2008 funding level then
adding those K-3 CSR funds to the categorical
flexibility item to allow districts greater flexibility
to manage class sizes relative to local needs and
educational priorities. Should the fiscal relief
proposed by this bill be addressed instead through the
Budget Act?
3) More to come ? If the Committee chooses to pass this
bill, could that encourage other groups to petition to
be excluded from the rules imposed by AB 2 in order to
preserve funding for specific programs or ensure that
programs continue to operate as they did prior to
2008-09? Notwithstanding the merits of reinstating
smaller classes in order to boost student achievement,
is it appropriate to provide relief to this district
when AB 2 specifically prohibited additional funding for
increasing the number of CSR classes beyond what was
requested for the 2008-09 school year?
4) Fiscal impact . By ensuring that districts that
underestimated their base year will get funding for
their actual 2008-09 CSR, this measure could have
AB 548
Page 6
significant costs, potentially ranging from $30 million
to $100 million, depending on the number of districts
that underestimated their CSR counts for 2008-09 to the
same degree as LAUSD and OUSD. Costs associated with
authorizing RUSD to add third grade to its CSR program
in 2009-10 could be an additional $1.2 million. While
the Governor has proposed to capture $550 million in
savings from K-3 CSR penalties for the budget year, it
is unclear how much of these funds would be available to
address the costs of AB 548, particularly if those funds
are tapped to meet other educational priorities or to
restore some funding to the CSR program.
SUPPORT
California Association of School Business Officials
California Association of Suburban School Districts
California Federation of Teachers
Los Angeles Unified School District
Oceanside Unified School District
Riverside County Schools Advocacy Association
Riverside Unified School District
San Francisco Unified School District
OPPOSITION
None received.