BILL ANALYSIS
AB 2008
Page 1
Date of Hearing: April 23, 2008
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mark Leno, Chair
AB 2008 (Swanson) - As Introduced: February 15, 2008
Policy Committee: Education
Vote:6-3
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill prohibits a chartering authority from approving a
charter school that operates within the boundaries of Oakland
Unified School District (OUSD) while either of the following is
applicable:
1)The state administrator appointed by the Superintendent of
Public Instruction (SPI) continues to exercise any of the
powers and responsibilities of the governing board of OUSD.
2)OUSD has an outstanding balance on the emergency apportionment
it received in 2003 when the school district entered into
receivership.
FISCAL EFFECT
1)To the extent that there is litigation as a result of this
measure, there will be GF cost pressure, likely in excess of
$200,000, to the SPI for litigation costs. This bill would
effectively ban all new charter schools from operating in
OUSD. Since 2003 (when the SPI assumed control of the
district), 21 charter schools have been approved by the state
administrator.
2)SB 39 (Perata), Chapter 14, Statutes of 2003 appropriated $100
million for an emergency loan to OUSD. However, it was
determined that OUSD needed only $65 million. But since this
time, the district has taken another loan for the remaining
$35 million. The total outstanding balance is approximately
$87.3 million. OUSD received approximately $222 million in
revenue limit (general purpose) funding from the state in
2006-07, based on $5,959 per average daily attendance (ADA).
AB 2008
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COMMENTS
1)Purpose . SB 39 (Perata), Chapter 14, Statutes of 2003,
appropriated $100 million for an emergency loan to OUSD and
required the SPI to assume all legal rights and duties of the
district. It also required the Fiscal Crisis and Management
Team to prepare an improvement plan for the school district by
July 1, 2003 and to report on the implementation of the plan
in written progress reports.
OUSD is one of the approximately 513 of 977 school districts
in California experiencing a decline in enrollment. In the
2003-04 school year (first year under state receivership),
OUSD's enrollment was 50,437. In 2007-08, the district's
total enrollment was 46,441. Therefore, OUSD has experienced
a 3,996 decline in pupil enrollment in a five year period.
According to the State Department of Education (SDE), there
are 38 charter schools with 7,247 pupils (15% of total
enrollment) operating within the boundaries of OUSD.
Likewise, since the district entered into receivership, there
have been 21 new charter schools approved by OUSD. These
charter schools enroll approximately 3,557 pupils.
If school districts are experiencing declining enrollment,
they are losing revenue limit funding (general purpose)
because the amount they received is based on the number of
students they serve. Therefore, a district declining in
enrollment receives less funding from the state. This bill
seeks to ease OUSD's loss of funding by prohibiting new
charter schools from operating within its boundaries. The
author argues that this bill will enable OUSD to become more
financially stable and pay back its loan quicker because it
will no longer lose pupil enrollment (i.e., state funding) to
charter schools.
2)Is prohibiting the establishment of charter schools the answer
to OUSD's declining enrollment problem? As referenced
earlier, approximately 53% of school districts in the state
are experiencing a decline in enrollment. The 513 school
districts with declining enrollment comprise 60.8% of the
statewide ADA and the average annual decline of these
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districts is approximately four percent. The Legislative
Analyst Office (LAO) estimates that over the next 10 years,
K-12 enrollment growth will decline beginning in 2008-09. This
contrasts with the high enrollment growth in recent years,
which averaged 2.2% annually in the 1990s. The LAO predicts
elementary school enrollment will decline annually between
2004-05 and 2010-11, resulting in a loss of 56,000 pupils, or
1.3%, in grades K-8 during this period.
While the state does not maintain data on the number of school
districts experiencing a decline in enrollment due to pupils
enrolling in charter or private schools, it is safe to assume
there are factors beyond charter schools leading to declining
enrollment, such as a lower number of school-age children and
families leaving the area for more affordable housing or a
lower overall cost-of-living.
The committee may wish to consider whether it is appropriate
to prohibit the establishment of charter schools in OUSD given
the fact that it is not the only school district in the state
experiencing a decline in enrollment, nor the only district in
the state who received an emergency loan. There are four
school districts (excluding OUSD) that have outstanding loans
from the state and combined they owe $68.2 million. Two of
these districts are still in receivership (i.e., they are
under control of a state administrator/trustee).
Furthermore, state law provides for the establishment of
charter schools as an alternative to public schools. There is
a charter school approval process that must be followed. Some
individuals argue that this process is flawed because it does
not adequately allow for the school district perspective;
however, prohibiting charter schools may not be the answer to
this problem. Instead, the committee may wish to consider if
it is more appropriate to reassess the charter school approval
process before choosing to ban charter schools.
Finally, statute also allows school districts that are
experiencing declining student enrollment to delay revenue
limit reductions associated with enrollment declines for one
year. The majority of school districts argue that this
formula (i.e., declining enrollment adjustment) is flawed and
does not adequately address the severity of the problem
statewide. Perhaps a more comprehensive policy discussion
should occur regarding declining enrollment. This would
benefit not only OUSD, but 53% of the school districts in the
state.
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3)Current law authorizes the establishment of charter schools,
established by a group of teachers, parents, community leaders
or community-based organization. Charter schools are usually
sponsored by an existing public school board, county board of
education, or in rare cases the State Board of Education.
According to the SDE, there were 585 charter schools enrolling
222,942 pupils (4% of the total K-12 enrollment) in 2006-07.
Specific goals and operating procedures for the charter school
are detailed in an agreement (or "charter") between the
sponsoring board and charter organizers. A charter school is
generally exempt from most laws governing school districts,
except where specifically noted in the law.
SB 319 (Migden), Chapter 355, Statutes of 2005, specified how
a unified school district (e.g., OUSD) calculates its revenue
limit funding as it relates to charter schools, including
"conversion" charter schools (a public school converted into a
charter school). Specifically, Chapter 355 requires a
conversion charter school in a unified school district to
receive the same funding it did in the prior year (when the
school was a "regular public school" in a unified school
district), with adjustments as specified. This measure also
requires the state "make-up" the difference in revenue limit
funding (i.e., $800 per pupil) for charter schools in a
unified school district.
4)Related legislation . AB 45 (Swanson) established a statutory
process for the return of rights, duties, and powers to the
governing board of OUSD. This bill was vetoed by the governor
in October 2007, with the following message:
"I support returning local governance to OUSD when it is
appropriate to do so. To date, the emergency loan to the
district has been the largest to a school district in the
state and has been under the control of the SPI. While the
reports produced by the FCMAT are valuable tools, they provide
only a snapshot of the district at a particular point in time.
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
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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."
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081