BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 191 (Block) - School transportation: apportionments
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|Version: February 10, 2015 |Policy Vote: ED. 8 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: April 27, 2015 |Consultant: Mark McKenzie |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 191 would increase state allocations for school
transportation funding over a seven year period from the 2015-16
through the 2021-22 fiscal years. The bill provides that school
districts would receive the greater of either their actual
apportionments or a minimum of 41 percent of their "approved
transportation costs" from the previous year in 2015-16, and the
minimum percentage would increase annually to 50 percent by
2021-22. Districts that receive school transportation funding
apportionments above this minimum would receive an annual
cost-of-living adjustment (COLA), as specified.
Fiscal
Impact: Creating a state minimum "share of cost" approach for
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school transportation funding, while holding harmless, and
providing a COLA for, districts that receive allocations above
the minimum, would substantially increase annual state General
Fund contributions to school transportation.
Estimated General Fund cost increases in the range of $150 -
$160 million in 2015-16. These annual costs would increase
each year to approximately $250 - $270 million by 2021-22.
Actual costs are unknown, and would depend upon COLA rates and
the amount that school districts spend on transportation costs
each year.
Background: Existing law authorizes school districts and county offices of
education (COEs) to provide transportation services to regular
education students attending their schools at the discretion of
their governing boards. School districts are required to
provide transportation services for special education students
whose individualized education programs require such services.
School districts have generally used a combination of state
categorical funding and general purpose revenues to pay for
school transportation. The Home-to-School Transportation (HTST)
program, which is intended to help school districts provide
transportation services to special education and regular
education students, is the categorical program that provides
significant state funding to school districts for transportation
purposes.
In 2013, the Local Control Funding Formula (LCFF) was enacted.
The LCFF replaces almost all sources of state funding, including
most categorical programs. However, the HTST program funding was
not incorporated into the LCFF, and instead remained as a
separate funding stream as an "add-on" to LCFF allocations.
State law also continues to require that districts spend HTST
funding on pupil transportation. 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 funding is not currently eligible for future COLAs.
Approximately $491 million in HTST funding was allocated to
school districts in 2013-14. Total statewide expenditures on
school transportation was approximately $1.4 billion in that
year.
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The state HTST program was established in 1947, initially
reimbursing school districts for a share of their transportation
expenditures. In the early 1980s, as part of the state's larger
response to the passage of Proposition 13, funding allocations
for school districts were frozen at the prior year's level.
Since that time, there have been no adjustments for changes in
costs, enrollment, or other factors, except for occasional COLA
adjustments. As a result of changing demographics and district
needs over the past three decades, there are significant
disparities in the amounts that school districts receive through
the program as a percentage of their actual costs. According to
the Legislative Analyst's Office (LAO), the percentage of
approved costs that get reimbursed by state aid ranges from 0%
(for districts that did not have a transportation program in the
base year) to 97%. The statewide average in 2013-14 was 35%.
Proposed Law:
SB 191 would increase school transportation fund allocations
to school districts. Specifically, this bill would require the
Superintendent of Public Instruction (SPI), for the 2015-16
through 2021-22 fiscal years, to apportion to each school
district, county office of education, entity providing services
under a joint powers agreement, or regional occupational center
or program that provides pupil transportation services, either
100 percent of its school transportation apportionment for the
2014-15 fiscal year, as adjusted for a COLA; or the following
amount, whichever is greater:
a) 2015-16: 41% of its approved transportation costs for the
prior fiscal year.
b) 2016-17: 42.5% of its approved transportation costs for
the prior fiscal year.
c) 2017-18: 44% of its approved transportation costs for the
prior fiscal year.
d) 2018-19: 45.5% of its approved transportation costs for
the prior fiscal year.
e) 2019-20: 47% of its approved transportation costs for the
prior fiscal year.
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f) 2020-21: 48.5% of its approved transportation costs for
the prior fiscal year.
g) 2021-22: 50% of its approved transportation costs for the
prior fiscal year.
COLA provisions: This bill requires that, beginning in 2015-16,
the 2014-15 fiscal year school transportation apportionment
amount described above shall be adjusted by the percentage
change in the annual average value of the Implicit Price
Deflator for State and Local Government Purchases of Goods and
Services for the United States, as published by the United
States Department of Commerce for the 12-month period ending in
the third quarter of the prior fiscal year. This percentage
change shall be determined using the latest data available as of
May 10 of the preceding fiscal year compared with the annual
average value of the same deflator for the 12-month period
ending in the third quarter of the second preceding fiscal year,
using the latest data available as of May 10 of the preceding
fiscal year, as reported by the Department of Finance.
Related
Legislation: SB 1137 (Torres), which was held on the Assembly
Appropriations Committee Suspense File in 2014, was nearly
identical to this bill, but also included provisions requiring
the SPI to provide startup school transportation apportionments
to districts that did not provide pupil transportation services
in 2014-15. SB 1137 also included language that made the
provisions of the bill operative only to the extent that funding
was provided by the Legislature.
SB 1166 (Vidak), which failed passage in the Senate Education
Committee in 2014, would have entitled school districts to
receive state reimbursement for the full cost of the
home-to-school transportation of pupils.
Staff
Comments: This bill responds to the problem of equalization
presented by current school transportation allocations. In
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response to a 2013 request by the Legislature, the LAO issued a
report on this topic with three recommendations to improve the
state's approach to funding school transportation. SB 191 is
based upon one of those recommendations to reimburse schools for
a share of transportation costs. The LAO indicated that this
"share of cost" approach is most viable if the state's share is
set between 35 and 50 percent. This bill would phase-in the
state's share to 50 percent over a seven year period, and
provide more funds to schools that receive a share above the
minimum threshold through an annual COLA. The LAO estimates
that COLA amounts would increase annually from 2.11 percent in
2016-17 to 2.9 percent by 2019-20.
This bill would substantially increase state funding allocations
for school transportation. Exact costs are unknown and will be
determined by actual funding spent by school districts on
transportation each year, and will increase with future COLAs.
Based upon data provided by the LAO and the author's office,
estimated costs would be in the range of $150 million to $160
million in 2015-16, increasing annually to approximately $250
million to $270 million by 2021-22.
Costs may rise further, to the extent that schools decide to
provide more transportation. For school districts that currently
receive HTST allocations that cover less than 50% of their
costs, this bill will increase their allocations over time,
based on actual costs for prior fiscal year. As such, the more
they spend in a given year, the more they would receive in a
subsequent year (up to the percentage cap specified in the
bill).
Recommended
Amendments: The bill may require amendments to clarify the
author's intent. For example, the bill should be amended to:
Clarify the definition of "approved transportation costs;"
Clarify that the LCFF add-on funding provided to school
districts as HTST funding since 2013-14 count towards a
"transportation funding apportionment for the 2014-15 fiscal
year," as specified in the bill. Technically, apportionments
haven't been made since the enactment of the LCFF. The
estimates provided in this analysis assume that the add-on
funding counts towards the minimum funding requirements
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specified in the bill.
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