BILL ANALYSIS
AB 2008
Page 1
Date of Hearing: April 9, 2008
ASSEMBLY COMMITTEE ON EDUCATION
Gene Mullin, Chair
AB 2008 (Swanson) - As Introduced: February 15, 2008
SUBJECT : Oakland Unified School District: approval of charter
school petitions.
SUMMARY : Prohibits any chartering authority from approving a
petition to establish a charter school within the geographic
boundaries of the Oakland Unified School District while the
State Administrator continues to exercise any powers or the
district has an outstanding balance on the emergency
apportionment. Specifically, this bill :
1)Prohibits a petition to establish a charter school within the
geographic boundaries of or under the jurisdiction of, the
Oakland Unified School District from being approved by any
chartering authority while either of the following is
applicable:
a) The administrator appointed by the Superintendent of
Public Instruction (SPI) continues to exercise any of the
powers and responsibilities of the governing board of the
school district.
b) The school district has an outstanding balance on the
emergency apportionment it received.
EXISTING LAW :
1)Provides for emergency apportionments to school districts
subject to specified conditions, including, in certain
circumstances, the appointment by the Superintendent of Public
Instruction of an administrator to exercise the powers and
responsibilities of the governing board of the school
district.
2)Authorizes a petition for the establishment of a charter
school within any school district to be circulated by one or
more persons seeking to establish the school and submitted to
the governing board of the school district for review.
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3)Authorizes the governing board of a school district, after
reviewing the charter school petition and holding a public
hearing on the subject, to grant or deny the petition on the
basis of certain specified criteria.
4)Provides an appeal procedure in the event of the denial of a
charter school petition in which a petitioner may submit the
petition to the county board of education or the State Board
of Education.
FISCAL EFFECT : Unknown
COMMENTS : Oakland Unified School District (OUSD) has been in
State receivership since 2003, having at that time been
authorized a $100 million emergency loan with a repayment period
of 20 years. According to CDE, the outstanding balance on the
apportionment is $84,358,251. A State Administrator was
appointed by Superintendent Jack O'Connell and empowered to
assume total control of all aspects of OUSD's governing board.
In 2003, as a result of being in receivership, the governing
board of OUSD had all of its rights, duties and powers removed.
In 2007, the following areas of responsibility were returned to
the governing board of OUSD: Community Relations and Governance,
Personnel Management and Facilities Management. The State
Administrator still retains responsibility of the following
areas: Pupil Achievement and Financial Management.
This bill would prohibit any chartering authority (district,
county board of education or State Board of Education) from
approving new charter school petitions within the boundaries of
OUSD while the district has an outstanding balance on the
emergency apportionment or while a State Administrator retains
any powers of the governing board. This bill would not prohibit
chartering authorities from renewing existing charter schools.
According to CDE, 21 twenty-one new charter schools have been
authorized since the state administrator assumed responsibility.
Since June 2003, the number of new charters approved
year-to-year was relatively consistent.
The November 2007 Fiscal Crisis and Management Assistance Team's
(FCMAT) audit of OUSD found that, "The district had promoted the
small school concept, dividing campuses into several smaller
schools, supporting small schools in 'incubation,' and
encouraging the creation of charter schools, resulting in a
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further decline in the district's student enrollment. The
reforms undertaken by the district have not always considered
fiscal recovery as the primary goal."
Oakland Unified School District and Charter School Enrollment
between 2000-2008
-----------------------------------------------------------------
| Year | District | Charter School |
| | Enrollment | Enrollment |
|---------------------+---------------------+---------------------|
| 2000-01 | 54,024 | 839 |
|---------------------+---------------------+---------------------|
| 2001-02 | 52,467 | 1,078 |
|---------------------+---------------------+---------------------|
| 2002-03 | 50,424 | 2,077 |
|---------------------+---------------------+---------------------|
| 2003-04 | 47,650 | 2,787 |
|---------------------+---------------------+---------------------|
| 2004-05 | 44,925 | 4,289 |
|---------------------+---------------------+---------------------|
| 2005-06 | 41,467 | 6,668 |
|---------------------+---------------------+---------------------|
| 2006-07 | 39,854 | 7,158 |
|---------------------+---------------------+---------------------|
| 2007-08 | 38,720 | Not reported |
-----------------------------------------------------------------
Source: OUSD FCMAT Report, November 2007. Figures for 2000-2007
are from Ed-Data (District figures do not include charter school
enrollment). Figure for 2007-08 is district reported.
According to the author, OUSD's recovery has been complicated by
a precipitous drop in pupil enrollment from 54,000 to 38,700
students in approximately seven years. Since that time, the
number of charter schools has grown significantly, and now house
approximately 7,000 students. This creates a large fiscal
impact on the district, as Average Daily Attendance (ADA)
funding is attached to individual students, and declines as
those students transfer to charter schools. The district is
unable to scale its budget accordingly, due to the rigidity of
human resources and physical infrastructure costs. A freeze on
the creation of new charter schools until the district has been
restored to fiscal health will prevent additional damage to
OUSD's finances. Current law allows chartering authorities to
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open new charter schools within OUSD's boundaries, regardless of
the financial situation the district currently faces. This
situation is detrimental to the district's fiscal recovery, and
could potentially endanger the State's financial investment in
the district.
Oakland School Board President David Kakishiba supports the bill
and argues, "It has been four-and-one half years since Oakland
Unified School District was placed into State receivership,
thereby turning Oakland's elected school board into a strictly
advisory body. In that time, the State Administrator has
approved the creation of many new charters schools, often
against the advice of the elected school board members.
Enrollment in charter schools has more than tripled in this time
and is estimated at over 8,000 students, more than half the
number of students the District has lost in the last eight
years. The creation of these new charter schools has created an
additional fiscal burden for the District by exacerbating the
District's problem of declining enrollment. Every child that
leaves Oakland Public Schools takes an average of $6,000 per
year from the District. That means that Oakland's schools are
losing over $48 million per year, nearly half the total of the
loan that the district took from the State. Clearly, opening
new charter schools will make it increasingly difficult for the
District to pay back the loan and continue to offer a quality
education to its students."
The California School Boards Association has a support position
and argues, "Due to the loss of students and funding, each
charter school that is approved within the jurisdiction of the
OUSD exacerbates the financial difficulties facing the district.
AB 2008 would provide some relief by establishing a moratorium
on charter schools so the district and its community can make
steady progress toward financial stability."
The California Charter Schools Association has an oppose
position and argues, "Effectively, the bill is a de facto ban on
charter schools, because even if the administrator is replaced
with local governance, the repayment of the emergency
appropriation is many years in the future." The fact that OUSD
has a state administrator does not affect the district's
capacity to exercise its statutory authority to reject a charter
school petition or intervene if the charter school fails to live
up to its petition, and, in fact, the OUSD under its governing
board and the state administrator has exercised that authority
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repeatedly in granting the creation of 32 charter school
petitions. "Most importantly, AB 2008 harms a population that
is a top priority for the charter school movement, namely
children of color in urban areas. Charter schools in Oakland
have demonstrated substantial success in pursuing educational
objectives for thousands of OUSD students. Oakland charter
schools have enrolled a great percentage of African American and
Latino students and have achieved higher API scores than the
rest of the district at all levels. The median API scores for
African American and Latino students are also higher than their
counterparts in traditional public schools: 676 versus 620 for
African American students and 646 versus 610 for Latino
students."
Previous Legislation . SB 39 (Perata), Chapter 14, Statutes of
2003, appropriated $100 million for an emergency loan to OUSD,
and required the SPI to assume all the rights, duties, and
powers of the governing board of the district and to appoint an
Administrator to act on behalf of the SPI in exercising
authority over the school district. This bill also specified
that the governing board of the school district not receive any
compensation during the period of the SPI's authority over the
district, and continued the authority of the SPI over the school
district until certain conditions were met, including the
completion of an improvement plan for the district. The bill
required FCMAT to prepare an improvement plan for the school
district by July 1, 2003, and to report on the implementation of
the plan in progress reports until September 2004; and, budget
actions subsequently extended these annual reports until
September of 2006. The bill required the district to repay the
straight line loan amortized over a 20-year term, with interest
as provided, and required the district, except as specified, to
bear 100% of all costs associated with implementing its
provisions.
AB 45 (Swanson) from 2007 required the Fiscal Crisis Management
Assistance Team (FCMAT) to annually submit a progress report on
OUSD's Assessment and Recovery Plan; and, required FCMAT to make
future evaluations of the district's progress and
recommendations as to operational areas that should be returned
to the control of the governing board of OUSD. The bill
required OUSD and the State Administrator to reach agreement on
the operational details of returning any areas of responsibility
recommended for return to OUSD in the previous progress report
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submitted by FCMAT; and, required the SPI to produce a statement
if an agreement can not be reached. The bill authorized OUSD to
appeal that statement to the Office of Administrative Hearings
(OAH). The bill required that any areas of responsibility
recommended for return to OUSD by FCMAT in the annual progress
report become part of the rights, duties, and powers of the
governing board of OUSD on the next July 1, excepting that the
SPI is also required to deem OUSD to be in no risk of fiscal
distress before the area of fiscal control is returned to the
governing board; and requires that any area of responsibility
previously returned to OUSD be reverted to the control of the
State Administrator upon such recommendation by FCMAT in its
annual progress report. The bill allowed members of the
governing board of OUSD to draw compensation for their service
at any time during which this process returns any area of
responsibility to OUSD; such compensation shall be made in the
same manner and amount as was allowed prior to state takeover.
The Governor vetoed AB 45 with the following message:
I support returning local governance to the Oakland Unified
School District when it is appropriate to do so. To date, the
emergency loan to Oakland Unified has been the largest to a
school district in the state and has been under the control of
the Superintendent of Public Instruction (SPI). While the
reports produced by the Fiscal Crisis Management and
Assistance Team are valuable tools, they provide only a
snapshot of the district at a particular point in time.
Furthermore, I am concerned that the Office of Administrative
Hearings will not be in a position to make decisions related
to the day to day management of the school district, as these
matters are generally not a matter of law, but a matter of
overall educational benefit.
As such, I am concerned with the process for determining
return of local control, as proposed in this bill. The pace at
which it seeks to restore the authority of the school board
may surpass the pace at which the state administrator can
imbed sustainable reforms. Current law contemplates the
return of the district to local control once the SPI has a
level of confidence that the improvements in the district are
sustainable. In the interest of the educational well being of
the students, it is well worth investing the time to allow the
SPI to finish the work that has already begun.
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REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL-CIO
California Federation of Teachers
California School Boards Association
David Kakishiba, President, Oakland Board of Education
Jean Quan, City Council President Pro Tem, City of Oakland
Opposition
California Charter Schools Association
None on file.
Analysis Prepared by : Chelsea Kelley / ED. / (916) 319-2087