BILL ANALYSIS Ó AB 2663 Page 1 Date of Hearing: April 20, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2663 (Cooper) - As Introduced April 14, 2016 ----------------------------------------------------------------- |Policy |Education |Vote:|5 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill continuously appropriates $73.3 million for the After School Education and Safety program (ASES) beginning with the 2016-17 fiscal year (FY) and adjusts the appropriation annually thereafter based on the California Consumer Price Index AB 2663 Page 2 (CA-CPI). Specifically, this bill: 1)Continuously appropriates $73,260,000 (Proposition 98/GF) for the 2016-17 FY. Beginning in the 2017-18 FY, adjusts the $73.3 million by adding the product of $623,260,000 multiplied by the percent change in the CA-CPI from the 2016-17 FY, provided that this adjustment does not result in a reduction in any fiscal year. 2)Requires the California Department of Education (CDE), beginning FY 2016-17, and each fiscal year thereafter, to adjust the maximum grant amounts, daily rates, and weekly rates for ASES before and after school programs, as provided for in statute. 3)Makes findings and declarations regarding the role of after school programs in closing the achievement gap and the impact of the minimum wage increase on rates that have not been adjusted since 2006. FISCAL EFFECT: 1) Proposition 98/GF costs of $73.3 million starting in 2016-17. Unknown, but significant future year costs, in the millions of dollars, to adjust this appropriation annually based on the CA-CPI. The state currently provides an annual continuous appropriation of $550 million for before and after school programs, pursuant to Proposition 49 of 2002. 2) Minor administrative costs to CDE to adjust grant amounts and daily and weekly rates. AB 2663 Page 3 COMMENTS: 1)Purpose. According to the California Afterschool Advocacy Alliance, sponsors of this bill, California leads the nation in publicly-funded after-school programs, with annual appropriations of nearly $700 million in combined state and federal funding. This commitment provides more than 400,000 students access to safe and enriching after-school activities. According to the sponsor, the current investment in after school programs is not keeping pace with rising costs and expectations. This bill proposes to increase the state's continuous appropriation by $73.3 million. This amount would grow annually based on inflation adjustments. According to the author, this increase will support a daily rate increase from $7.50 to $8.50 per pupil per day, providing maximum grants of $127,000 for elementary school programs and $170,000 for middle school programs. 2)Minimum wage impacts. One of the main reasons supporters seek an increase in state funding is due to the increase in the state minimum wage. As the state increases the minimum wage, sponsors of the bill state that it is more difficult to attract qualified staff when other entry level jobs may be less demanding. Supporters also state the wage increase has affected their ability to pay site coordinators who are classified as full-time exempt. Current law requires exempt employees to be paid twice the minimum wage. According to supporters of the bill, site coordinators annual salaries have increased from $33,000 when the state provided a minimum wage of $8 an hour, to $42,000 when the $10 minimum wage went into effect. According to the sponsor, many programs have reclassified workers as hourly employees to avoid this increase and structure jobs so that overtime is not earned. Nothing in this bill would prohibit the continued reclassification of employees; however, according to the AB 2663 Page 4 author, the $1 increase per pupil is sufficient to restore site coordinators to full-time status. 3)Prior year budget actions. Although funding has remained constant for after school programs for more than a decade, the Legislature acknowledged the $550 million allocation may not be keeping pace with program costs. Last year, an attempt was made to secure increased funding in the 2015-16 Budget Act. The Assembly's budget provided $50 million. The Budget Conference Committee reduced this amount to $25 million. However, the budget signed by the Governor included no increase. 4)Prior legislation. SB 645 (Hancock) of 2013 authorized the ASES program, beginning January 1, 2016 and ending July 1, 2017, to suspend its operation for a maximum of five schooldays in each fiscal year in order to provide some financial relief. The bill was held on the Suspense file in this committee. Analysis Prepared by:Misty Feusahrens / APPR. / (916) 319-2081