BILL NUMBER: AB 18	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Brownley

                        DECEMBER 6, 2010

   An act to add Section 41055 to, and to add and repeal Section
41054 of, the Education Code, relating to education finance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 18, as introduced, Brownley. School-based financial reporting
system.
   Existing law establishes the public school system in this state,
and, among other things, provides for the establishment of school
districts throughout the state and for their provision of instruction
at the public elementary and secondary schools they operate and
maintain. Existing law establishes a public school funding system
that includes, among other elements, the provision of funding to
local educational agencies through state apportionments, the proceeds
of property taxes collected at the local level, and other sources.
   This bill would require the Superintendent of Public Instruction,
on or before December 1, 2012, to make recommendations to the
Legislature and the Governor regarding prescribed topics relating to
the statutory and regulatory changes that would be necessary to
support the development, implementation, and use of comprehensive
school-level financial data. These provisions would be repealed on
December 1, 2015. The bill would require the Superintendent, on or
before July 1, 2012, to make all ministerial changes that are
necessary to support the future reporting of school-level financial
data by local educational agencies, as specified. The bill also would
require the Superintendent, on or before July 1, 2012, and annually
thereafter, to notify the superintendent of each school district and
county office of education, and the administrator of each charter
school, of specified items relating to tracking and reporting
school-level financial data.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The 22 studies of the Getting Down to Facts Project and the
Governor's Committee on Education Excellence were consistent in their
conclusions that California's current education finance system is
overly complex, irrational, and burdensome, and is in need of a
long-term plan for comprehensive reform.
   (b) The complexity of the current system poses a major obstacle to
transparency and effectiveness. It is almost impossible to determine
how much revenue each school district receives or how those revenues
are spent, let alone to report this information to local
communities, stakeholders, and the state.
   (c) The current system is not logical, with district revenues that
are largely a historical artifact of spending in the 1970s combined
with a confusing, bureaucratic, report-driven, and burdensome system
of categorical programs. Disparities in school and district revenues
are substantial and are not aligned to pupil or educator needs.
   (d) The system places substantial restrictions on the use of
resources by schools and districts, creating high compliance costs
and making it difficult for local educators to respond to the needs
of their pupils. Fewer paperwork requirements and more flexibility in
allocating resources are cited by school principals as two of the
most important factors in improving pupil outcomes.
   (e) Many schools and districts lack the proper tools or capacity
to ensure that money is spent on the most effective programs and
practices. Research consistently finds that successful schools use
data to inform teaching practices and innovation. However, California
schools and districts vary widely in their use of data and in their
capacity to use data to improve pupil performance.
   (f) Ensuring that money is spent efficiently and effectively
requires a complete understanding of how money is allocated by school
districts and spent within schools. However, California does not
collect financial data that is useful for determining the
effectiveness of resources at the state, district, or school levels.
   (g) California is currently facing lawsuits which claim that the
state's system for funding public education is deficient. One lawsuit
claims that the system is unconstitutional in that it fails to
provide all pupils with equal access to the required educational
program, while a second lawsuit seeks to have the state take the
individual educational needs of each pupil into consideration when it
makes funding decisions pursuant to the system.
   (h) Therefore, it is the intent of the Legislature to do all of
the following:
   (1) Build on previous research and recommendations to produce a
comprehensive plan for finance reform to support pupil achievement,
with specific consideration given to the interactions of incentives
in school finance formulas.
   (2) Establish simpler pupil-based formulas for allocating funding
to each local educational agency that provide base funding along with
an amount that is tied to the specific needs of the pupils in the
local educational agency and the costs of educating those pupils.
   (3) Make the allocation of funding more rational and equitable so
that the revenues received by each local educational agency reflect
the actual cost of educating pupils with varying needs in varying
environments, so that all pupils are prepared, at the end of their
elementary and secondary education, for college, careers, and
successful participation in our democratic institutions, no matter
where they live or what their economic, racial, or ethnic background
may be.
   (4) Support accountability and local flexibility by increasing the
transparency of state funding mechanisms and of expenditure
decisions at the local level, and by facilitating the equitable
allocation of funds across schools within each school district in a
manner that reflects the specific needs of the pupils in those
schools and the costs of educating those pupils.
   (5) Improve the reporting of financial data so that programmatic
investments can be linked to programs that increase pupil
achievement.
   (6) Support continuous improvement by requiring periodic review of
the school finance system and of local resource decisions.
   (7) Hold local educational agencies harmless, and transition to
the new system gradually, as new moneys become available.
  SEC. 2.  Section 41054 is added to the Education Code, to read:
   41054.  (a) On or before December 1, 2012, the Superintendent
shall make recommendations to the Legislature and the Governor
concerning statutory and regulatory changes that would be necessary
to support the development, implementation, and use of comprehensive
school-level financial data that would be used to produce all of the
following:
   (1) Simple to use, transparent, and informative school-level
financial reports showing both the source of school-level revenue and
the expenditures made by each school.
   (2) In-depth analyses of school-level financial data including,
but not necessarily limited to, analyses by fund source, function,
program, and object.
   (3) Comparisons of financial data across schools, both within the
district and outside of the district, and over time.
   (4) Linkages between school-level financial, demographic,
programmatic, and academic achievement data so as to facilitate
program and policy evaluation.
   (5) A comprehensive means for the education community,
policymakers, researchers, and the public to easily access
information about all aspects of the performance of each school in
the state.
   (b) The Superintendent's recommendations made pursuant to
subdivision (a) shall focus on all changes that are necessary to
support the future reporting of school-level financial data by local
educational agencies and to support the comprehensive uses described
in subdivision (a). These recommendations shall address, but not
necessarily be limited to:
   (1) Modifications to the School Accountability Report Card.
   (2) Changes to existing data collections or the implementation of
new data collections.
   (3) Changes to the state's Education Information System,
especially to facilitate the linking of school financial,
demographic, and pupil program data.
   (4) Changes to the state's hardware and software support or
capacity, or other information technology needs that would be
necessary to support publicly available school-level data analysis
and evaluative tools, as well as publicly available school-level
reports.
   (c) It is the intent of the Legislature that the Superintendent,
in making the recommendations pursuant to this section, shall do both
of the following:
   (1) Build upon previous research, reports, evaluations, audits,
and studies.
   (2) Develop the recommendations in consultation with policymakers,
members of the education community, members of the public, and other
stakeholders.
   (d) (1) A report to be submitted pursuant to subdivision (a) shall
be submitted in compliance with Section 9795 of the Government Code.

   (2) Pursuant to Section 10231.5 of the Government Code, this
section is repealed on December 1, 2015.
  SEC. 3.  Section 41055 is added to the Education Code, to read:
   41055.  (a) On or before July 1, 2012, the Superintendent shall
make all ministerial changes that are necessary to support the future
reporting of school-level financial data reporting by local
educational agencies. These changes shall include, but are not
limited to, all of the following:
   (1) Modifications to the standardized account code structure.
   (2) Modifications to the California School Accounting Manual.
   (3) Modifications to financial regulations imposed upon or other
instructions provided to school districts, county offices of
education, or charter schools.
   (b) On or before July 1, 2012, and annually thereafter, the
Superintendent shall notify the superintendent of each school
district and county office of education, and the administrator of
each charter school, of both of the following:
   (1) The capacity for the tracking and reporting of school-level
financial data using the standardized account code structure
developed by the department and used for the purpose of financial
accounting and reporting in public schools and districts.
   (2) Directions for using the standardized account code structure
to track and report school-level financial data.
   (c) The notification made pursuant to subdivision (b) shall be
updated as necessary each year to include any changes that result
from the recommendations made by the Superintendent pursuant to
Section 41054, and any ministerial changes made by the Superintendent
pursuant to subdivision (a).