BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Alan Lowenthal, Chair
2011-2012 Regular Session
BILL NO: AB 18
AUTHOR: Brownley
AMENDED: June 19, 2012
FISCAL COMM: Yes HEARING DATE: June 27, 2012
URGENCY: No CONSULTANT:Daniel Alvarez
SUBJECT : California School Finance Commission.
SUMMARY
This bill creates the California School Finance Commission
to review and analyze alternative formulas for allocating
funds to public schools and to identify and recommend a
formula or formulas that best meet the needs of
California's public school system and public school pupils.
BACKGROUND
1) Provides for Revenue Limit (base discretionary)
funding for school districts that is, in part, based
on average daily attendance (ADA), where ADA is
calculated by dividing the number of days of
attendance for all pupils enrolled in the district by
the number of instructional days in the district's
fiscal year, and 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 the school district
present. The funding computation uses the annual ADA
reported by each district in the last attendance
report of the fiscal year, for the current or prior
fiscal year, whichever is greater. 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) base
revenue limit by ADA.
2) Provides, historically in specific years, funding
and a mechanism for equalizing school district revenue
limits by increasing the base revenue limit for some
set of low revenue limit districts.
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3) Establishes and funds categorical programs that
focus resources and/or compliance requirements on
specific classes of students or schools, or on
specific uses of funds, identified by the Legislature
as priorities.
4) Consolidates a number of historical categorical
programs into a smaller set of block grants, where a
block grant gives funding recipients the flexibility
to spend the funds across any of the previously
individual programs consolidated into that block
grant.
5) Allows for limited transfers of funds between
specific categorical programs.
6) Provides for temporary flexibility to spend the
funds appropriated for nearly all categorical programs
in order to relieve local budget pressure created by
the current economic downturn.
7) Requires that each school district produce an
annual school accountability report card for each
school in the district, including various specific
data elements describing the school and its condition.
8) Requires the development of the California
Longitudinal Pupil Achievement Data System, and
authorizes the use of Standardized Account Code
Structure, developed by the California Department of
Education, to account for revenues and expenditures.
ANALYSIS
This bill creates the California School Finance Commission
to review and analyze alternative formula(s) for allocating
funds to public schools and to recommend a formula or
formulas that best meet the needs of California's public
school system and public school pupils. More specifically,
this bill:
1) Specifies criteria to evaluate different funding
formulas to include, but not be limited to:
a) The degree any formula results in a level of
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funding for local educational agencies that match
that particular local educational agency's
(LEA's) needs as determined by pupil
demographics, grade level enrollment, regional
cost differences, and other factors identified by
the commission.
b) The degree a formula facilitates the
attainment of educational policy objectives.
c) The degree a formula can be modified over
time to reflect changing conditions and policy
objectives.
d) The degree the formula can be easily
administered and understood by policy makers and
the public.
1) Requires the membership of the commission shall
consist of 13 members, who must represent the
diversity of the state population, and who shall be
appointed as follows:
a) Six members appointed by the Governor.
b) Three members appointed by the Speaker of
the Assembly.
c) Three members appointed by the Senate Rules
Committee.
2) Specifies legislative intent the commission include
representation from urban, suburban, and rural school
districts; currently employed teachers,
administrators, and classified school employees;
school board members; parents; historically
underserved pupil populations; and members of the
research community with expertise in school finance.
3) Requires the Superintendent of Public Instruction or
their designee to be a member and serve as chair of
the commission.
4) Requires the commission to do the following:
a) Identify key issues related to the fair,
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efficient, and equitable distribution of
resources among and within LEAs;
b) Identify means that a funding formula(s) can
maximize local decision-making authority while
ensuring statewide policy objectives are met;
c) Solicit comments and suggestions from
professional educators and administrators,
parents, school finance experts, and other
interested parties.
d) Develop alternative formulas for
distributing resources to LEAs. The formulas to
be considered shall include, but not be limited
to the following:
i) Modifications to the current
system of general purpose funding, plus
categorical program funding.
ii) General purpose funding, plus
categorical program block grants.
iii) A weighted pupil formula.
e) Simulate the distribution of funds under
alternative formula(s).
f) Identify, for each formula simulated, a
target level of funding for each LEA.
1) Requires the commission to report its findings and
recommendations to the Legislature on or before
February 1, 2013.
2) Defines "local educational agency" as school
districts, county offices of education, and charter
schools.
3) Defines "target level of funding" as the level of
funding not less than the amount yielded when a
formula is applied to the total level of funding,
exclusive of federal and lottery funds, allocated to
LEAs for the 2012-13 fiscal year, plus the school
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district share of the outstanding maintenance factor
as of July 1, 2012.
4) Sunsets as of July 1, 2013.
STAFF COMMENTS
1) Need for the bill . According to the author, there is
growing consensus that the current system of
allocating funds to school districts is too complex
and confusing, does a poor job of matching resources
to district needs, and restricts the ability of local
district officials to make budgetary decisions that
are in the best interests of their students.
As introduced, AB 18 addressed these issues by putting
most categorical programs into one of four block
grants. The block grant approach simplified funding
and gave districts more flexibility over the use of
categorical funds (i.e., extending much of the
flexibility that is scheduled to expire after
2013-14). It also provided a basis for growing into a
more equitable distribution of funds, based on student
demographics, over time.
In January, Governor Brown proposed a Weighted Pupil
Funding (WPF) formula as part of his budget proposal.
That proposal would have collapsed nearly all
categorical program funding, along with revenue limit
funding, into a single formula containing a base
amount of funding per pupil, plus an additional
"weighted" amount for English learners and pupils from
low income families. That proposal, which was never
put into bill form for consideration by policy
committees, raised a number of policy questions
regarding the proper amount for the base grant and
weights, which categorical programs (if any) should be
excluded from the formula, what restrictions (if any)
should be placed on the use of funds, the role of
accountability, etc.
Because the proposal was not submitted to the
Legislature as a bill, there was never a formal
opportunity for legislators and other interested
parties to publicly consider these issues. AB 18, as
amended, establishes a process to do that as well as
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to consider alternative approaches to reforming school
finance. The intent of AB 18 is to provide an
opportunity for each house of the Legislature, the
Governor, the Superintendent of Public Instruction and
the public to engage in conversations, consider
options, and make recommendations in time to inform
legislation for possible introduction in 2013.
2) This measure would provide broader perspective,
balance, insight, and public input . This bill would
"provide state policymakers with a comprehensive plan
to reform the current education finance system, to
leverage and support pupil achievement by making
California's funding system simpler, more transparent,
and more effective. This bill is intended to bridge
the gap between the academic conclusions of the
Getting Down to Facts studies and specific legislative
proposals. Historical discussions concerning the
transition from one funding scheme to another have
generally focused on making the change in one step,
while sorting out those winners that gain funding and
those losers that receive less funding. Major studies
in the recent past have addressed the need for school
finance reform but the current fiscal environment
makes it virtually impossible to undertake any major
restructuring. Major revisions undertaken with no
additional funds, require that some districts lose
funding if others gain. Since studies agree that all
school districts are under financed -- in order for
our state's pupil population to reach an academic
threshold of 800 as measured by the state's academic
performance index - it make sense to take funds for
one inadequately funded school(s) funding system in
order to try to improve or move to another?
3) This measure envisions quick action and response . It
is admirable that this measure envisions the selection
of commission members, identification of key issues,
solicitation of public input, and development of
formulas and recommendations in an expedited manner.
However, the compressed timeline for reporting and the
limited number of commission members may not be able
to (a) provide meaningful representation as envisioned
by this bill, or (b) to perform multiple functions of
analysis and review in a subcommittee setting, where
necessary and appropriate.
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If the Committee chooses to pass this bill, then staff
recommends amendments as follows:
a) Technical amendment change from commission
to task force.
b) Increase membership of the commission from
13 to 19 members of which eight are appointed by
the Governor, five appointed by the Speaker of
the Assembly, and five appointed by the Senate
Rules Committee, with the SPI serving as chair of
the task force. Maintain SPI as chairperson and
member of the task force.
c) Extend the reporting deadline to on or
before April 1, 2013.
Furthermore, committee staff recommends that the
author keeps committee staff informed on any issues as
the bill moves forward - since both Education
Committees of the Legislature were committed to a
joint hearing on May 9th of the governor's weighted
pupil funding formula (which was ultimately cancelled
at the request of the administration).
1) Prior legislation .
AB 8 (Brownley, 2009) required the Director of Finance
and the Legislative Analyst to convene a working group
to make findings and recommendations to the
Legislature and the Governor regarding the
implementation of a restructured school finance
system.
AB 2159 (Brownley, 2008) would have established a
Funding and Accountability Commission for Transparency
and Simplicity (FACTS) to provide policymakers with a
comprehensive plan to reform the education finance
system. The commission was composed of an unspecified
number of members representing the education and
business communities, parents and the research
community with expertise in educational policy and
best practices. By contrast, AB 8 would have created
a working group comprised of representatives of state
policy makers, together with stakeholders and experts.
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AB 2159 was held in the Senate Rules Committee in
August 2008.
SUPPORT
Public Advocates
OPPOSITION
None on this version