BILL ANALYSIS Ó
AB 948
Page 1
Date of Hearing: May 15, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 948 (Olsen) - As Amended: May 7, 2013
Policy Committee: Education
Vote:6-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill makes the following changes to the Charter Schools
Facility Grant (CSFG) program:
1)Requires the State Department of Education (SDE) to expand
program eligibility to include schools in which less than 70%
of its pupil enrollment is eligible for free-reduced price
meals (but no less than 50%) if the schools meet current
requirements, as specified.
2)Authorizes program funds to be used for the purchase of a
facility and its related debt service under the following
conditions:
a) Requires the facility to be used by a charter school
exclusively to provide direct classroom instruction.
b) Requires the facility to meet design and building
standards equivalent to all schools, as specified.
c) Requires the charter school to dispose of the facility
in the same manner as required under the Charter Schools
Facility program established under the State School
Facilities construction bond program if the school
occupying the facility ceases to use it for the purposes it
was intended.
3)Requires a charter school to be subject to audit requirements
for the purposes of this program.
FISCAL EFFECT
1)Under the program eligibility and use expansion proposed in
this measure, there is likely to be a potential loss of GF/98
savings over the next two fiscal years (FYs), likely between
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$9 million and $20 million. In past several years, the
Legislature, with the governor's approval, has utilized this
program savings for other K-14 purposes.
2)Over the last several years, charter schools' average daily
attendance (ADA) has increased at a rate of approximately 15%
each year, this increase may lead to the need for additional
charter school facilities in the future. As such, full
utilization of the CSFG program is a possibility and the
proposed changes in this measure create GF/98 cost pressure,
likely in the hundreds of thousands to low millions, to
increase funding for the CSFG program.
3)The 2012 Budget Act allocated $92 million (GF/98) for the CSFG
program. This amount includes the 19.8% reduction applied to
all categorical programs.
COMMENTS
1)Background . A charter school is a public school that may
provide instruction in any of grades K-12. It is usually
created or organized by a group of teachers, parents and
community leaders or a community-based organization. A charter
school may be authorized by an existing local public school
board, county board of education, or the State Board of
Education (SBE). According to SDE, there were 1,062 charter
schools (including three statewide benefit charters and 33
approved by SBE) with an enrollment of 456,000 pupils in
2012-13.
2)Purpose . The author argues that when the state significantly
increased CSFG in the 2007 Budget Act, "it was anticipated
that?it would be necessary to revise the eligibility
requirements (while protecting the program's core objective to
serve low-income neighborhoods) and the permissible expenses
in order to align with the funding." This bill expands CSFG
program eligibility to include schools in which less than 70%
of its pupil enrollment is eligible for free-reduced price
meals (but no less than 50%) if the schools meet current
requirements, as specified. It also authorizes funds to be
used to purchase facilities, as specified.
3)The CSFG program is a non-competitive program that provides
assistance with facilities rent and lease expenditures for
charter schools that meet specific eligibility criteria. The
program was enacted to reimburse charter schools for rental
and lease costs in low-income areas. Eligible applicants must
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have at least 70% of students enrolled at the charter school
who are eligible for free-reduced price meals or the charter
school must be physically located in an elementary school
attendance area where at least 70% of students enrolled are
eligible for free-reduced price meals. The charter school must
also give a preference in admissions to students who reside in
the elementary school attendance area. The charter schools are
funded at $750 per unit of classroom-based ADA, up to 75% of
its annual facilities rent and lease costs for the school.
The latest data available indicates 270 charter schools
received funding in the 2010-11 FY. It is estimated that 300
charter schools received funding in the 2011-12 FY.
Funding for this program has increased substantially over
time, with the bulk of the increase coming from the transfer
of funds due to the phase out of the Multi-track Year-Round
Education (MTYRE) Operational Grant Program. SB 658, Chapter
271, Statutes of 2008, required all funds - $97 million
(GF/98) - appropriated for the MTYRE Program in the 2007
Budget Act to be transferred to the CSFG program at a rate of
20% each year. The 2012 Budget Act made the last payment of
$15 million (GF/98) from MTYRE to the CSFG program.
4)Previous legislation . SB 645 (Simitian) made changes related
to charter school accountability and facilities, including
expanding eligibility under the CSFG program to include
schools in which less than 70% of its pupil enrollment is
eligible for free-reduced price meals, as specified. This
bill was held on this committee's Suspense File in August
2011.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081