BILL ANALYSIS
AB 1492
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Date of Hearing: April 27, 2005
ASSEMBLY COMMITTEE ON EDUCATION
Jackie Goldberg, Chair
AB 1492 (Evans) - As Introduced: February 22, 2005
SUBJECT : Financial literacy instruction.
SUMMARY : Permits school districts to provide instruction in
economics courses related to the understanding of personal
finances, including budgeting, savings and credit.
EXISTING LAW requires:
1)The Superintendent of Public Instruction, with the approval of
the State Board of Education (SBE), to plan and develop a
one-semester consumer economics instructional program for use
in grades 7-12.
2)The program to include, among other topics, personal banking,
elementary contracts, using consumer guides, credit
management, insurance, and taxes;
3)The program to be made available to all school districts.
FISCAL EFFECT : Unknown.
COMMENTS :
Many teenagers today spend far more than they save. In fact, in
2003 they spent $175 billion dollars. More and more teenagers
are acquiring ATM and credit cards. By the time they are
freshmen in college, teenagers have an average of three credit
cards and have accumulated a debt burden of $3,000, not
including student loans. Only three out of 10 teenagers have
received any schooling on managing money and establishing good
credit. This bill encourages school districts to ensure that
students are provided with essential tools and knowledge to
manage their personal finances. The ability to make and manage
money wisely is key to achieving most life dreams and goals.
The California Federation of Teachers expressed the opinion that
teachers are already engaged heavily in structuring curriculum
to meet state standards and testing requirements. Adding to
those requirements only makes the task more difficult.
AB 1492
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This bill was passed by both houses in the 2003-2004 session as
AB 2435 (Wiggins). It was subsequently vetoed by the Governor
for the following reasons:
"Allowing school districts to teach middle school and high
school students about the importance of properly maintaining
their personal finances is a worthy objective. However, this
bill is unnecessary because school districts already have the
authority to teach 'budgeting, savings, and credit,' under
current law."
"Although I am unable to support this legislation, I agree with
the importance of learning to spend wisely and properly managing
finances. Learning to balance a checkbook, saving money for a
rainy day, and understanding the dangers of too much credit card
debt are all vital skills for kids to learn in order to become
responsible adults.
"While teaching financial responsibility is important for our
children, I would welcome future legislation that requires all
members of the State Legislature to complete a course in
financial management and responsibility. Requiring legislators
to take a refresher course on managing finances may be the
wisest investment the State could ever make. California may
never have found itself in the deep fiscal crisis that it has
had to endure, if such a requirement were signed into law
earlier.
"One of the best lessons we can offer to our children, is to
practice sound financial principles, and I believe the
Legislature should begin teaching kids by example."
Clearly, the Governor does not understand why schools can't
teach these topics, even though they are "permitted" to do so.
The content standards, upon which the accountability system is
based, do not allow time to teach these "extras". Teachers must
teach the standards so that students will have a chance to score
well on the tests, and teachers frequently have to guess which
standards will be on the tests because there is not sufficient
time to cover all of the standards. Unless the material is in
statute, it will not be taught.
REGISTERED SUPPORT / OPPOSITION :
AB 1492
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Support
California State PTA
Opposition
None on file.
Analysis Prepared by : Dee Brennick / ED. / (916) 319-2087