BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 1381 (Simitian) Hearing Date: 08/31/2010 Amended: 08/30/2010 Consultant: Dan Troy Policy Vote: ED 8-0 _________________________________________________________________ ____ BILL SUMMARY: SB 1381 would change the date by which a child is required to be admitted to kindergarten at the beginning of the school year (or any time later in the school year) from December 2 of the year in which the child will have his or her 5th birthday to November 1 for the 2012-13 school year, October 1 of the 2013-14 school year, and September 1 for the 2014-15 school year and each year thereafter. A corresponding change for admittance to 1st grade would be made for a child having his or her 6th birthday during the year. The bill would also create an ongoing "transitional" kindergarten program - the first year of a two-year kindergarten program that uses a modified kindergarten curriculum that is age and developmentally appropriate - for those pupils impacted by the change in age of admission date. Effectively, this bill would bill would allow districts to claim funding for two years of kindergarten for children born between September and December, assuming certain conditions are met. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Age of admission/ Major savings from K age of admission General* Transitional Kindergarten change. These savings would likely be more than offset by creation of a 2-year Transitional Kindergarten program. Major costs to state once initial cohorts exit from the K-12 system. (See analysis). *Counts toward meeting the Proposition 98 minimum funding guarantee _________________________________________________________________ ____ STAFF COMMENTS: This bill meets the criteria for referral to the Suspense File. Current law makes education compulsory for individuals aged 6 through 18. While current law does not compel kindergarten attendance, it requires districts to offer admittance to kindergarten at the beginning of the school year for a child who will turn 5 on before December 2 of that calendar year. Thus many children begin kindergarten several months before their fifth birthday. By moving the cutoff date of admission to September 1 (the change would be phased in over 3 years), this bill would essentially ensure that kindergarteners would be aged 5 or older at or near the beginning of the school year. Page 2 SB 1381 (Simitian) Current law provides for general purpose funding to school districts through the revenue limit program. Each district has a defined revenue limit per unit of average daily attendance (ADA) that is based on historical expenditures on education as modified through various statutory adjustments. A district's total revenue limit apportionment is calculated based on the greater of current or prior year ADA. Current law establishes the state preschool program, for purposes of providing part-day and full-day programs of educational development for three- and four-year old children. Costs for full day preschool are approximately $3,700 per child, annually. This bill would phase in a change to the date by which districts must offer kindergarten admission one month at a time, so that the current cutoff of December 2 of the year in which a child turns 5 would move back one month per year, commencing with the 2012-13 fiscal year, until settling in at September 1 in the 2014-15 year and each year thereafter. The bill would make a conforming adjustment for 6-year olds entering the first grade. The bill would further allow district to claim ADA for children participating in transitional kindergarten (TK) who turn 5 between September 2 and December 2 of the year in which they turn 5. A TK program is defined as the first year of a two-year kindergarten program that uses a modified kindergarten curriculum that is both age and developmentally appropriate. The bill specifies that districts could not claim more than two years of funding for a pupil in kindergarten or a combination of two years in kindergarten or transitional kindergarten. The bill would specify that for good cause, the governing board of a school district may permit a child of proper age to be admitted to a class after the first school month of the school term. The bill further states Legislative intent that the ADA claimed through TK counts for calculating revenue limit apportionments and for the funding requirements of Proposition 98. By adjusting the date of admission back one month in three successive years, this bill would reduce the size of the kindergarten cohort by approximately 1/12th of the size it would otherwise have been for three successive years. These reduced cohorts will flow though the K-12 system for 13 years each, achieving programmatic savings in Proposition 98 programs during that time. The largest programmatic cost savings would be in the revenue limit program. These savings, however, are unlikely to materialize due to the bill's creation of a transitional kindergarten for pupils who turn age 5 during the between September 2 and December 2 (this would also be phased in over three years). By allowing pupils born between September 2 and December 2 to attend transitional kindergarten, this bill would lead to ongoing costs once the initial smaller cohorts leave the system, if not sooner. This is because the TK program essentially allows certain children to attend two years of kindergarten instead of one depending on their date of birth. According to data provided by the Legislative Analyst's Office, the earlier version of this bill would have reduced the number of students in the K-12 system by approximately 43,000 in the 2012-13 school year, by 89,000 in the 2013-14 school year, and by Page 3 SB 1381 (Simitian) 126,000 for the 2014-15 school year and for several years thereafter, until these cohorts begin exiting the system in 2026-27. These estimates assumed 8 percent of eligible kindergartners were "red shirted" (i.e., voluntarily held out of school for a year even though eligible), annually. Whether this bill will lead to immediate costs or savings depends on the attractiveness of the new TK program to parents of eligible children. The Assembly Committee on Appropriations, using the LAO data, for example, finds that if all parents who would have otherwise chosen to red shirt their children choose to enroll their children in the TK program, this bill would result in new costs of approximately $19.8 million in the 2012-13 fiscal, $40.4 million in the 2013-14 fiscal year, and $57.2 million in 2014-15 and several years thereafter. The TK option may be an attractive one for parents, as it would be free, presumably have a curriculum more aligned with the K-12 curriculum than would a typical preschool or day care situation, and would represent a good landing spot for parents who would otherwise hold a child back out of concern that he or she were not quite ready for traditional kindergarten. On the other hand, to the extent parents hold their children back for competitive purposes (i.e., they would prefer their child to be older than other children in their class), this bill would be unlikely to impact their decision to red shirt the child. Staff anticipates that while some parents will continue to hold their children back, this bill will likely result in costs in the millions, though perhaps not to the full extent estimated by Assembly Committee on Appropriations. Once the initial cohorts begin to move out of the K-12 system, this bill would clearly result in major costs to the state. In the 2027-28 fiscal year, the reduced initial kindergarten cohorts will have moved out of the system, but the state commitment to fund TK for 130,000 to 150,000 children would remain. These costs would be approximately $700 to $900 million, annually. It's possible the bill would also result in other costs or cost pressures. The bill indicates that transitional kindergarten is to involve a modified curriculum that is age appropriate. While it is not clear how districts would address this issue, the design of a modified curriculum could lead to local costs for administration, professional development, and materials. These costs would likely be in the millions, though they would likely be local rather than reimbursable at the state level. There would likely be pressure at the state level to fund these costs, though. Broadly, the Committee should consider whether delaying the age of admission for traditional kindergarten is worth the cost exposure to the state of providing an additional ongoing year of transitional kindergarten for children that is accessible only to children who are born between September 2 and December 2 and that is not based on need. A previous version of this bill passed out of the committee in a different form. That bill phased in the change in age for kindergarten admission and expressed the intent of the Legislature that half of the revenue limit savings resulting from Page 4 SB 1381 (Simitian) the reduction in ADA be used to expand access to preschool. That version provided major programmatic savings the state over a 15-year period.