BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: SB 1166
AUTHOR: Vidak
INTRODUCED: February 20, 2014
FISCAL COMM: Yes HEARING DATE: April 9, 2014
URGENCY: Yes CONSULTANT:Daniel Alvarez
SUBJECT : Education finance: home-to-school transportation.
SUMMARY
This bill, an urgency measure, requires school districts,
as defined, to receive state reimbursement for the full
cost of home-to-school transportation of pupils. Commencing
with the 2014-15 fiscal year, these costs shall be
reimbursed through an appropriation in the annual Budget
Act.
BACKGROUND
Current law authorizes school districts and county offices
of education to provide transportation services to regular
education students attending their schools at the
discretion of their governing board. The California
Education Code requires school districts to provide
transportation services for special education students
whose individualized education programs require such
services (Education Code § 39800 and § 41850 et. seq.).
Federal law requires local educational agencies (LEAs) to
transport the following three groups of students: (a)
students with disabilities, (b) students attending
federally sanctioned schools, and (c) homeless students.
School districts generally use one of two types of funding
for pupil transportation: general purpose or categorical.
General purpose funds can be spent on everything from
teacher salaries to utility bills. Categorical funds must
be spent for specific purposes. One example of a
categorical program is the Home-to-School Transportation
(HTST) program, which is intended to help school districts
provide transportation services to special education and
regular education students.
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In 2013, the Local Control Funding Formula (LCFF) was
enacted. The LCFF replaces almost all sources of state
funding, including most categorical programs. The LCFF
establishes a per-pupil funding target that is adjusted for
differences in grade level, but otherwise is uniform across
the state. The LCFF also provides supplemental funding for
districts to serve students who are low-income, English
language learners or foster youth. However, one
categorical program not rolled into the LCFF is the HTST
program. This program retained its separate funding stream;
such that any district that received HTST funding in
2012-13 continues to receive that same amount of funding in
addition to its LCFF allocation each year. However, the
HTST, unlike in prior years, would not be eligible for
future cost-of-living adjustments (COLAs). And state law
continues to require that districts spend HTST funding on
pupil transportation.
ANALYSIS
This bill , an urgency measure, requires school districts,
as defined, to receive state reimbursement for the full
cost of home-to-school transportation (HTST) of pupils.
Commencing with the 2014-15 fiscal year, these costs shall
be reimbursed through an appropriation in the annual Budget
Act. More specifically, this bill:
1) Defines school district to include a charter school
and a county office of education.
2) Requires a school district to receive state
reimbursement for the full cost of HTST of pupils.
3) Requires the State Department of Education to develop
and implement procedures for the submission by school
districts of information regarding their costs of HTST
of pupils.
4) Requires, commencing with the 2014-15 fiscal year,
these costs be reimbursed through an appropriation
included in the annual Budget Act.
5) Specifies the operative date of this measure is July
1, 2014.
STAFF COMMENTS
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1) Need for the bill . According to the author,
California school districts are currently facing
financial hardships when it comes to providing for the
HTST. School districts in rural communities in
particular have had to incur huge costs since they
often have to transport pupils who live a long
distance from their schools and outside the city
limits. School districts have had to make hard
decisions on how to fund the HTST program since less
than 50 percent of the costs is covered by the state
in many cases. The remaining costs are incurred by
the school district itself, resulting in less funding
and resources available for classrooms.
2) 2013 Budget Act . The 2013 Budget Act provided
approximately a total of $496 million in General Fund
(Proposition 98) for the HTST program 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.
In addition, the Legislative Analyst was requested to
consider new approaches that could address historical
inequities and include incentives for efficient and
effective pupil transportation services. The
Legislative Analyst Office (LAO) report was issued
February 2014, the report included a description and
assessment of three options: (1) funding pupil
transportation services within the new LCFF, (2)
creating a new, targeted program to help districts
facing extraordinarily high transportation costs, and
(3) creating a broad-based program whereby the state
pays a share of each district's transportation costs.
3) The most recent LAO report of February 2014 basically
concurs with the findings of the BSA 2007 audit. To
assist the Legislature's deliberations, the LAO
identified three options for funding pupil
transportation moving forward. The options primarily
differ in the degree to which they account for
transportation costs separately from the other costs
districts face. These three options are to (1) fund
transportation costs within the LCFF, (2) fund only
extraordinary transportation costs, or (3) fund a
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share of all transportation costs. Although the basic
approach for each option differs, all contain some key
advantages. Most notably, all three options provide a
means to phase out the use of allocations linked to
historical factors and apply the same funding rules to
all LEAs, addressing key problems with the state's
existing approach. In addition, all of the options
would encourage efficiency by requiring local budgets
to cover a notable share of total costs. Finally, all
three options would be relatively simple to implement
and easy for districts and the public to understand.
4) Problems with the existing program are not new . 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:
a) 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.
b) Allocation increases are not always
consistent with student population growth. Some
school districts have experienced dramatic
increases in student population over the years;
however, their allocations have not always
increased at the same rate.
c) 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.
5) How much funding exposure would this bill create ?
According to information provided by the author, the
additional costs (above the current appropriation for
the HTST program of $496 million) would be
approximately $800 million annually.
6) California has long provided state funding to school
districts for student transportation . Before 1984, a
law formally prescribed allocations for transportation
to elementary and high school districts. Legislation
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passed in 1983 required that Education allocate the
Home-to-School program funds based on the same amount
as the school district's prior year's allocation,
increased by the amount provided in the Budget Act, if
its approved cost for that year was at least 95
percent of its Home-to-School program allocation for
the same year. Otherwise, this legislation required
that Education allocate an amount equal to the school
district's certified percentage of the prior year's
transportation costs plus 5 percent, the sum increased
by the amount provided in the Budget Act. Legislation
enacted in 1991 amended previous laws and created the
current funding formula. This legislation required
that, beginning with fiscal year 1993-94, each school
district receive a student transportation allowance
equal to the lesser of its prior year Home-to-School
program allocation or actual approved transportation
expenditures from that year, increased by the growth
in average daily attendance rate and cost-of-living
adjustments as specified in the Budget Act.
7) Related legislation . SB 1137 (Torres), provides for
school districts to be funded at a minimum of 50
percent of approved transportation costs, thereby
providing equalization funding for school districts
that are reimbursed at less than 50 percent; this
equalization would occur over a seven-year period
beginning in 2014-15. In addition, this bill provides
the 2013-14 fiscal year school transportation funding
receive a cost-of-living adjustment (COLA), as
specified. This measure is scheduled to be heard in
this committee on April 9.
SUPPORT
California Association of School Business Officials
California Central Valley Education Coalition (Fresno,
Kings, Madera, Mariposa, Merced, and Tulare county offices
of education)
California Charter Schools Association Advocates
Fresno Unified School District
Rural County Representatives of California
Tulare Joint Union High School District
OPPOSITION
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None on file.