BILL ANALYSIS
SB 191
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Date of Hearing: July 8, 2009
ASSEMBLY COMMITTEE ON EDUCATION
Julia Brownley, Chair
SB 191 (Wright) - As Amended: June 17, 2009
SENATE VOTE : 36-0
SUBJECT : Charter schools: funding
SUMMARY : Provides that the application of a charter school
funding formula, modified in 2005, does not apply to schools
that convert to charter status in unified school districts after
January 1, 2010. Specifically, this bill :
1)Limits the application of a charter school funding formula,
modified in 2005, to schools that convert to charter status in
unified school districts on or after July 1, 2005 and before
January 1, 2010.
2)Provides that for schools converted on or after January 1,
2010, a school that is converted to charter status in a
unified district shall be entitled to receive general purpose
funding per pupil based on statewide averages of school
district revenue limit funding per pupil, as is currently the
case for other charter schools.
3)Specifies that the modified charter school funding formula for
schools that convert to charter status after July 1, 2005,
does not apply to a charter school that is independently
governed and operated by a nonprofit public benefit
corporation.
4)Provides that nothing in this bill prevents a charter school
or unified school district from agreeing to an alternative
funding formula.
EXISTING LAW :
1)Provides a general purpose apportionment, analogous to revenue
limit funding that school districts receive, based on the
school's estimated average daily attendance (ADA), the grade
level of the students, and average school district revenue
limits; like revenue limits, funding is provided from a
combination of local property taxes and state General Fund.
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2)Establishes specific calculations of funding for conversion
charter schools (i.e., a charter school that was previously a
non-charter school in a district), that include a separate
calculation of funding to be provided from the state to the
district for the charter school.
3)Provides a categorical block grant that consolidates funding
from specified categorical programs; however, these funds are
not tied to characteristics of the student population of the
charter school and may be expended by the school in a
discretionary manner.
4)Authorizes charter schools to apply for funding from other
categorical programs that are not included in the Charter
School Categorical Block Grant described in 3) above, as long
as the charter school meets eligibility and other applicable
program requirements.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : Current law calls for most charter schools to receive
general purpose funding per ADA, either from the state or from
the school's district, based on a statewide average of school
district revenue limit funding per ADA. Thus charter school
funding per ADA for pupils in grades K - 5 is equal to the
statewide average for elementary school districts, funding per
ADA for pupils in grades 6 through 8 is equal to the statewide
average for unified districts, and the funding per ADA for
grades 9 through 12 is equal to the high school district
statewide average. Since revenue limits generally are highest
for high school districts and lowest for elementary school
districts (a reflection of the cost of providing educational
services), this model results in higher levels of per ADA
funding for charter schools with higher grade levels. At the
same time, the level of funding provided to a school district
for a conversion school is based on the level of funding
provided to the district for that school in the fiscal year
immediately preceding the school's conversion, though this
amount is adjusted over time for COLA, deficiencies, and other
changes to revenue limit funding. For charter schools that were
converted by a unified school district prior to the 2005-06
fiscal year and that served pupils in grades 9-12, this model
created a potential fiscal burden on the school district.
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Conversion charter high schools in this situation would often
end up being entitled to a greater amount of general purpose
funding than the district was receiving in revenue from the
state; this occurred because the district's revenue was based on
funding received for the school in the year prior to conversion
at the lower unified school district revenue limit, while the
school's entitlement was based on the statewide average (and
higher) high school revenue limit. Districts were forced to
make up this difference in funding in order to meet the funding
obligation to the charter school.
SB 319 (Migden), Chapter 355, Statutes of 2005, established a
new basis for funding charter high schools that were converted
to charter status in unified school districts after June 30,
2005. This new funding formula only affects the funding of
schools that converted to charter status in unified districts,
while conversion charter schools in elementary and high school
districts, and non-conversion or "start-up" charters continued
to receive funding based on statewide averages. The new formula
requires that unified districts certify the funding level per
pupil received by a conversion charter school in the year prior
to its conversion to charter status. The certified funding
level then becomes the basis of that charter school's per pupil
general purpose entitlement in future years. Thus the school's
entitlement and the district's revenue for the school were
designed to be calculated to be equal.
Unfortunately, the changes made in SB 319 were not based on an
understanding that budget shortfalls and cuts to education might
persist into the future; thus nothing in current law allows the
charter entitlements to be adjusted for decreases in the funding
received by school districts. Although unified school districts
are no longer required to provide conversion charter schools
with per pupil funding based on the statewide average high
school district revenue limit, budget cuts have reduced the
districts' ability to continue the level of support for their
charter schools established historically and certified by the
district under the SB 319 model. In other words reductions in
funding to school districts have not been matched by a reduction
in the amount of funding that the school district is obligated
to provide its conversion charter schools; this has created the
same sort of budget pressure on unified school districts with
conversion charter schools that SB 319 sought to end.
This bill proposes to eliminate this new budget pressure by
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limiting application of the SB 319 general purpose funding
calculations to only those schools chartered on or after July 1,
2005 and before January 1, 2010. A conversion school chartered
on or after January 1, 2010 will receive general purpose funding
under the pre-SB 319 formula that is based on the revenue limits
of the three types of school districts and that has continued to
apply to non-conversion charter schools, unless the school and
its authorizing school district mutually agree to an alternative
formula as allowed by this bill.
Committee amendments: SB 319 (Migden) made changes in the
charter school funding model related to the calculation of
funding for conversion charter schools, and this bill is
intended to eliminate issues created by that change. This
bill's provision that exempts conversion charter schools that
are independently governed and operated by a nonprofit public
benefit corporation steps outside of this intent, proposes a
change in statute that further complicates the charter school
funding model by again differentiating between types of charter
schools, and potentially creates a situation where funding for
this class of charter schools would be required to be
retroactively adjusted back to the 2005-06 fiscal year.
Committee staff recommends that this provision be deleted from
the bill.
Previous legislation: SB 319 (Migden), Chapter 355 of 2005,
specifies how a unified school district calculates its revenue
limit funding (general purpose funding) as it relates to charter
schools, including "conversion" charter schools (a district's
non-charter school that is converted into a charter school).
REGISTERED SUPPORT / OPPOSITION :
Support
California Charter Schools Association
California School Boards Association
Los Angeles Unified School District
San Francisco Unified School District
Opposition
None on file
Analysis Prepared by : Gerald Shelton / ED. / (916) 319-2087
SB 191
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