BILL ANALYSIS Ó AB 189 Page 1 ASSEMBLY THIRD READING AB 189 (Eng) As Amended May 27, 2011 Majority vote EDUCATION 8-0 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Brownley, Norby, Ammiano, |Ayes:|Fuentes, Blumenfield, | | | Buchanan, | |Bradford, Charles | | |Butler, Carter, Eng, | |Calderon, Campos, Davis, | | | Williams | |Gatto, Hall, Hill, Lara, | | | | |Mitchell, Solorio | | | | | | |-----+--------------------------+-----+--------------------------| | | |Nays:|Harkey, Donnelly, | | | | |Nielsen, Norby, Wagner | | | | | | ----------------------------------------------------------------- SUMMARY : Modifies the existing public hearing and reporting requirements for participation in categorical flexibility. Specifically, this bill : 1)Requires local educational agencies (LEAs) to hold the regularly scheduled public hearing to take testimony from the public prior to and independent of a meeting where the school district or the governing board of the county office of education (COEs) adopts a budget. 2)Requires the district and COE governing board, if it intends to close a program, to identify in the hearing agenda notice the program or programs it proposes to close. 3)Requires the California Department of Education (CDE) to establish a unique resource code for categorical programs subject to the flexibility provision and inform LEAs that these funds shall be considered general purpose nonrevenue limit funding for the purposes of reporting expenditures. 4)Authorizes, until July 1, 2015, the governing board of a school district to charge a fee for an adult education class in English and citizenship. FISCAL EFFECT : According to the Assembly Appropriations AB 189 Page 2 Committee: 1)General Fund (GF)/Proposition 98 costs, likely between $75,000 and $125,000, to school districts to report categorical program information, as specified. Currently, districts are reporting minimal information on how they are spending their categorical flexibility funds. This bill requires school districts to report more detailed information. 2)Increased GF administrative costs, likely less than $75,000, to CDE to report fiscal information, as specified. COMMENTS : There are approximately 60 categorical programs that serve specific goals (e.g., to assist high school students in passing the high school exit exam) or for specific programs (e.g., Regional Occupational Programs/Centers, special education). There are also numerous statutes and regulations that specify allowable use of categorical funds and how funds are allocated. The fiscal year (FY) 2009-10 Budget had an important impact on categorical programs. The Budget agreement imposed a 20% reduction on 39 programs and gave LEAs that received those funds in FY 2007-08 the flexibility to use the funds for any educational purposes from FY 2008-09 through FY 2012-13 ÝSB 4 X3 (Ducheny), Chapter 12, Statutes of the 2009, Third Extraordinary Session]. SB 70 (Senate Budget and Fiscal Review Committee), Chapter 7, Statutes of 2011, extends this flexibility until FY 2014-15. This reduction and flexibility provision is commonly known as "Tier 3" flexibility, which essentially gives LEAs $4.5 billion in additional unrestricted funds. Tier 1 protected four categorical programs from cuts and flexibility while 11 categorical programs sustained reductions but were given no flexibility under Tier 2. For Tier 3 funds, school districts receive their allocations for seven years based on the applicable percentage the programs received in FY 2007-08. As a result, until 2015, LEAs are not required to justify or report average daily attendance (ADA) in order to receive the specified categorical funds. Under current law, the governing board of a school district or COE, at a regularly scheduled public meeting, must take testimony from the public, discuss, approve or disapprove the proposed use of the funding. The sponsor of this bill, the California Council on Adult Education, states that some governing boards believe they have complied with the public AB 189 Page 3 meeting requirement through deliberation of the budget. This bill requires the governing board of a school district or COE to hold the public meeting prior to and independent of a meeting where the governing board of a school district or COE adopts a budget. The sponsor also states that adult education programs, one of the 39 Tier 3 programs, are closing as a result of categorical flexibility. In order to ensure that the public has an opportunity to express their concerns, this bill requires the notice of the agenda to indicate the program or programs proposed to be closed. With the flexibility provisions, LEAs are not required to report how much funds were diverted and to which programs they were transferred. As a result, there is no data available to discern the extent to which LEAs diverted categorical funds for other educational needs or the number of programs that have been dismantled. The Legislative Analyst's Office (LAO) has conducted two surveys, in the fall of 2009 and 2010, in an effort to ascertain the effects of flexibility and other resources in helping LEAs balance their budgets. The survey results were based on 382 completed surveys out of the 1,000 school districts; the respondents represent 58% of the state's ADA. Among the findings in the survey is that more districts are discontinuing programs in FY 2010-11 compared with FY 2009-10, including 7% of survey respondents report discontinuing adult education programs in FY 2010-11. This bill also requires the CDE to assign a unique resource code for all Tier 3 funding and requires the CDE to inform LEAs that for purposes of reporting expenditures, Tier 3 funds shall be considered general purpose nonrevenue limit funding (as opposed to revenue limit funding or restricted categorical funding). This is to enable the state to better track how Tier 3 funds are spent as a whole without creating extraordinary burdens for LEAs to report the expenditures for each Tier 3 program. Adult education schools offer the following 10 programs: Adult Basic Education, English as a Second Language (ESL), High School Diploma or Adult Secondary Education, including General Education Development certification, Citizenship Preparation, Career Technical Education, Adults with Disabilities, Health and Safety, Parent Education, Home Economics, and Older Adult. Education Code Section 52612 authorizes districts to charge a AB 189 Page 4 fee required to maintain a class, except for three programs: Adult Basic Education, ESL, and High School Diploma or Adult Secondary Education, including General Education Development certification classes. This bill authorizes a LEA to charge fees for English and citizenship classes. According to the author, some districts have discontinued ESL and citizenship courses but would be willing to maintain them if fees are allowed to be charged. The author states that in order to address the growing demand in English acquisition courses, eliminating the prohibition to charge fees will prevent the closure of those courses. This bill authorizes the fees to be assessed only while the flexibility provisions are in effect. The California Council for Adult Education states, "California Adult Schools help adult students find jobs, learn English, earn degrees, become citizens and become better parents. There are 5.3 million California adults without high school diplomas and 3 million English language learners who need access to adult education resources in order to work in the state's economy. As categorical flexibility cuts deeper into adult education programs, these opportunities will be lost, perhaps permanently." Analysis Prepared by : Sophia Kwong Kim / ED. / (916) 319-2087 FN: 0001062