BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 81| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ UNFINISHED BUSINESS Bill No: SB 81 Author: Senate Budget and Fiscal Review Committee Amended: 1/30/12 Vote: 21 PRIOR SENATE VOTES NOT RELEVANT ASSEMBLY FLOOR : Not available SUBJECT : Home to School Transportation program: funding SOURCE : Author DIGEST : This bill restores a reduction of $248 million to the Home to School Transportation (HTST) program for Fiscal Year (FY) 2011-12 and replaces this with a reduction of $248 million to school districts, county offices of education and charter school funding in the 2011-12 FY. Assembly Amendments delete the prior version of the bill which was the transportation budget trailer bill containing provisions necessary to modify the 2010-11 budget and implement the 2011 Budget Act. ANALYSIS : Existing Law 1.Provides discretionary funding to school districts, county offices of education and charter schools to CONTINUED SB 81 Page 2 support the general costs of operating schools. These funds are provided based on a formula that takes their average daily attendance over the course of the year and multiplies it by their individual funding rate (also known as a "revenue limit"). 2.Requires, for the 2011-12 school year, that the revenue limit for each school district, county office of education, and charter school be reduced pursuant to a specified formula. 3.Provides categorical program funding for school district and county office of education transportation costs based on the amount received for that purpose in the prior year, or the agencies' actual transportation costs, whichever is less. Existing law also requires school districts to provide transportation services for special education students if the students' individual education plans specify such need. This bill restores a reduction of $248 million to the Home to Scholl Transportation (HTST) program for Fiscal Year (FY) 2011-12 and replaces this with a reduction of $248 million to school districts, county offices of education and charter school funding in the 2011-12 FY. Specifically, this bill: 1.Increases the school district revenue limit deficit factor from 19.754 percent to 20.404 percent for the 2011-12 FY. This adjustment reduces school district and charter school revenue limit funding in the current year in order to offset restoration of funding for the HTST program for 2011-12. 2.Increases the county office of education revenue limit deficit factor from 20.041 percent to 20.691 percent for the 2011-12 FY. This adjustment reduces county office of education revenue limit funding in the current year in order to offset restoration of funding for the HTST program for2011-12. 3.Increases the reduction to categorical programs for Basic Aid districts in 2011-12 from 8.92 percent to 9.57 percent. This ensures a "fair share" reduction CONTINUED SB 81 Page 3 commensurate with the revenue limit reduction for non-Basic Aid districts in 2011-12. Basic Aid districts are defined as districts that do not receive state funding for revenue limits. 4.Makes an appropriation of $248 million from the General Fund to the California Department of Education for transfer to Section A of the State School Fund to restore funding for home-to-school transportation for the 2011-12 FY. 5.Declares that the bill is to take effect immediately as a bill providing for appropriations related to the Budget Bill. Comments The HTST program provides funds to offset a school district's cost to transport students to and from home and school. Allocations are based on either a district's prior year allocations or approved costs, whichever is less. In the 1992-93 FY, school districts were required to establish a base year of funding for both home-to-school and special education transportation funding. All future allocations of this funding are based on the amount districts received in 1992-93. 2011-12 Budget Act . The 2011-12 Budget Act provided a total of $495 million in General Fund (Proposition 98) for the HTST program. Of the $496 million appropriated in the 2011-12 budget $491 million is provided for pupil transportation, which includes both allocations for home-to-school transportation and allocations for some pupils with disabilities, specifically "severely disabled and orthopedically impaired" pupils. $5 million is provided for Small Bus Replacement. AB 121 (Assembly Budget Committee), Chapter 41, Statutes of 2011, authorized additional reductions to school transportation appropriations in the Budget Act that would be "triggered" if state revenues revenue estimates fall below specified levels. In December 2011, the Department of Finance applied the trigger cut to the HTST Program, which resulted in the elimination of the remaining half CONTINUED SB 81 Page 4 year of funding for the program in 2011-12. A trigger cut of $79.6 million was also applied to revenue limit funding pursuant to AB 121. This bill would undo the trigger cut for the HTST program and replace it with a comparable reduction to school district, county office of education and charter school revenue limit funding. Basic aid school districts would also take a "fair share" reduction. 2012-13 Budget Proposes to Eliminate Home-to-School Transportation . The Governor's 2012-13 Budget proposes to eliminate all funding for the HTST program in 2012-13. The Governor also proposes eliminating most other categorical programs and instead would provide districts with a new weighted pupil formula in an effort to make more funds discretionary for school districts. Los Angeles Unified School District (LAUSD) Lawsuit . After receiving notification of the $248 million "trigger" reduction, LAUSD filed suit in the Los Angeles Superior Court to block the mid-year cuts to HTST. LAUSD claims that they would receive a $38 million reduction, and that they cannot cease to transport their students due to a 1981 desegregation court-order and special education transportation requirements. The district argues that the cut would require them to choose between "two illegal and unconstitutional outcomes": terminate transportation services in violation of the court-order, or divert classroom funds to pay for transportation (resulting in a "disproportionately lower share of funding and educational opportunities as compared to students in school districts without those mandatory costs"). Problems with the Existing Program . The Bureau of State Audits (BSA) released a report on HTST in 2007, acknowledging many problems with the existing program funding formula. Some of the findings include: 1.The current funding mechanism prevents some school districts that did not receive HTST program funds in the immediately preceding fiscal year from receiving these funds because of the basis of allocation. 2.Allocation increases are not always consistent with student population growth. Some school districts have CONTINUED SB 81 Page 5 experienced dramatic increases in student population over the years; however, their allocations have not always increased at the same rate. 3.Most school districts had to use other funding sources to pay for some transportation costs and many reported it had varying levels of fiscal impact on other programs. FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes Local: No No net fiscal effect. This bill replaces a one-time $248 million General Fund (Proposition 98) reduction to the HTST program in 2011-12 with a one-time $248 million General Fund (Proposition 98) reduction to revenue limits and basic aid school districts, as specified. SUPPORT : (Verified 2/1/12) American Federation of State, County and Municipal Employees (AFL-CIO) Atascadero Unified School District Burrel Union Elementary School District Butte Valley Unified School District Caliente Union School District California Association of School Transportation Officials California Department of Education California Labor Federation California Nurses Association California PTA California School Boards Association California School Employees Association California Teachers Association Central Union School District Central Valley Education Coalition Chatom Union School District Coast Unified School District Cottonwood Union School District Cuyama Joint Unified School District Education Coalition Gold Trail Union School District Golden Feather Union Elementary School District Keppel Union School District Kern County Superintendent of Schools Kings Canyon Unified School District CONTINUED SB 81 Page 6 Los Angeles Unified School District Mariposa County Office of Education Paso Robles Joint Union School District Pierce Joint Unified School District Placer Hills Union School District Redding School District Sandy Bluffs Alternative Education Center Sierra-Plumas Joint Unified School District Sierra Unified School District Small School Districts Association Snowline Joint Unified School District Sunnyvale School District Trinidad Union School District Twin Rivers Unified School District Valley Center-Pauma Unified School District Washington Unified School District Wheatland School District OPPOSITION : (Verified 2/1/12) California Charter Schools Association (unless amended) School for Integrated Academics and Technologies (unless amended) ARGUMENTS IN SUPPORT : According to the California School Employees Association, "The current law $248 million mid-year cut to school transportation has a devastating impact on school transportation services across this state and will put the safety and lives of public school children at risk. The cut requires a small percentage of districts to shoulder a disproportionate and unfair fiscal burden at the worst possible time. If the mid-year school transportation reduction is implemented, over 180 school districts will be required to take a cut that is equal to or greater than $150 per ADA. Moreover, the school districts that will take this large unequal and unfair cut will have difficulty in implementing such a reduction because the special education and home-to-school transportation services provided cannot be reduced or eliminated without having an impact on student attendance. In many rural areas, public transportation is not an option and the roads are very treacherous for them to walk alone on. Elsewhere, children will have to walk through dangerous neighborhoods and on busy streets to get to school. Parents may be forced to drop their children off CONTINUED SB 81 Page 7 at school before it opens, with the children left on campus unattended. Other children will not attend school at all. The impact of these cuts will also stress our already fragile economy and high unemployment rate with the mass layoff of bus drivers, maintenance workers, and others who provide vital services in ensuring school transportation programs run smoothly. For all of these reasons, we urge you to sign Senate Bill 81." ARGUMENTS IN OPPOSITION : According to the California Charter Schools Association, "SB 81 would impose new and additional mid-year cuts to K-12 education, including charter schools contrary to the budget agreement reached last June. Historically, charter schools have never been provided access to the Home-to-school Transportation categorical program yet this bill seeks to take funds from charter schools to pay for the cut faced by many school districts, which have had access to the program. This bill is intended to improve fairness. However, by including charter public schools the inequities of public school funding would be further exacerbated since charter schools were unable to participate in the program prior to the cut. CCSA respectfully requests amendments to allocate the cuts only among those school districts which have had access to this program." CPM:cm 2/1/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED