BILL ANALYSIS
SB 84
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Date of Hearing: September 10, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
SB 84 (Leno) - As Amended: September 4, 2009
Policy Committee: N/A Vote:N/A
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
As proposed to be amended, this bill requires the revenue limit
reduction (enacted as part of the July 2009 budget package)
associated with capturing GF savings under the Quality Education
and Investment Act (QEIA) program to occur only when an
equivalent amount of additional federal or state funds are
available to school districts or charter schools, as specified.
Specifically, this bill:
1)Requires the Superintendent of Public Instruction (SPI) and
the Director of Finance (DOF) to make the determination that
additional federal or state funds are available before
enacting the revenue limit reduction, as specified. This
measure also expresses Legislative intent that first priority
for restoring the revenue limit reduction be federal funds.
2)Authorizes the additional state and federal funds specified in
this measure to be used by school districts and charter
schools as general purposes funds, as specified.
3)Requires the SPI and DOF to report to the Legislature, by
March 1, 2010, the amount of the revenue limit reduction
(reference above) that will not be eligible for restoration
using available federal funds.
4)Requires the State Department of Education (SDE) to use $64.9
million in one-time carryover provided under the federal Title
I set-aside grant (funds for poor and needy pupils), as
allocated in the Budget Act enacted in July 2009, to be used
for the QEIA program, as specified.
FISCAL EFFECT
SB 84
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Potential GF/98 cost pressure of approximately $384.7 million to
provide additional state funds to local education agencies
(LEAs) who participate in the QEIA program in order to offset
the revenue limit reduction enacted in AB 2 X4 (Evans), Chapter
2, Statutes of 2009, as specified.
This measure expresses Legislative intent that first priority
for the restoration of the revenue limit reduction be federal
funds. To the extent that additional federal funds are
identified for this purpose, this cost may be significantly
reduced. For example, the budget revision enacted in July 2009
identifies approximately $347 million in federal funds for this
purpose. Of this amount, $165 million are federal Title I
set-aside funds (annual and carryover) and approximately $182
million are federal School Improvement Grant funds (see comment
#2 below). As a result, if all federal funds were able to be
used, the GF/98 costs would be approximately $37.7 million.
COMMENTS
1)Background . The QEIA program authorizes LEAs to apply for
funding to allocate to elementary, secondary and charter
schools that are ranked in either decile one or two of the
Academic Performance Index (as determined in 2005). A total
of $402 million is allocated to implement this program, which
involves reducing class size, implementing staff development,
and reducing the student to school counselor ratio at
schoolsites. According to the SDE, 487 schools receive QEIA
funding.
AB 2 X4 (Evans), Chapter 2, Statutes of 2009, swept the QEIA
program funding, along with payments for community colleges,
for a total of $450 million GF savings in the 2009-10 fiscal
year (FY). In order to realize the ongoing GF savings,
Chapter 2 reduced each LEA's revenue limit funding (general
purpose) by the equivalent amount of QEIA program funding it
receives. This reduction is in addition to the overall $2.4
billion revenue limit cut that all LEAs received in July 2009.
Furthermore, AB 2 X4 authorized LEAs participating in QEIA to
apply, on behalf of their schoolsites, to SDE for federal
Title I set-aside funds and federal School Improvement Grant
(SIG) funds (see comment #2 below). Chapter 2 also requires
SDE to award grants to schoolsites in the 2009-10 FY pursuant
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to the requirements of these federal funds.
Since July 2009, LEAs who receive QEIA program funds have
expressed strong objection to receiving the additional revenue
limit reduction without certain assurances that federal funds
would be available as specified in AB 2 X4. Also, LEAs have
objected to reducing general purpose funding (revenue limit)
and replacing it with restricted funds (federal dollars).
LEAs have asked the Legislature to ensure: (a) the revenue
limit reduction does not occur until additional federal or
state funds are available and (b) the additional state or
federal funding provided to them is equivalent to revenue
limit funding.
This bill prohibits the revenue limit reduction associated
with the QEIA program from occurring until the SPI and DOF
determine there is additional state or federal funds available
to LEAs, as specified. It also authorizes LEAs to use the
additional funds for general purposes.
2)Federal SIG and Title I set-aside funds . California receives
approximately $1.6 billion annually in federal Title I basic
grant funds. These funds are provided on a formula basis to
LEAs for their poor and needy pupils. States can spend up to
a certain percentage of their total grant on intervention
activities related to the accountability provisions of federal
law. California is able to utilize up to 4% (approximately $64
million annually) of its total grant for these activities.
This bill proposes to utilize these funds, including carryover
funds, for the purposes of the QEIA program.
In February 2009, the federal government passed the American
Recovery and Reinvestment Act (ARRA), which allocated
approximately $100 billion nationwide for education programs
with the purpose of stimulating the economy. According to
SDE, California is expected to receive approximately $1.1
billion in one-time funds for Title I pupils (i.e., poor and
needs students), based on the existing federal formula. Of
this funding, approximately $46 million is reserved for PI
school improvement activities required under NCLB.
ARRA also allocated $383.3 million for the existing School
Improvement Grants (SIG) program. The federal government
established the SIG program, a competitive grant available to
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states in 2008, to provide technical assistance for Title I
schools in PI under NCLB. Federal law establishes grant
amounts between $50,000 and $500,000 per Title I PI school.
ARRA SIG program funding is expected to be available in the
fall of 2009. AB 2 X4 authorized LEAs who participate in the
QEIA program to apply for SIG program funds.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081