BILL ANALYSIS
SENATE COMMITTEE ON EDUCATION
Gloria Romero, Chair
2009-2010 Regular Session
BILL NO: SB 223
AUTHOR: Wyland
INTRODUCED: February 23, 2009
FISCAL COMM: Yes HEARING DATE: April 22, 2009
URGENCY: No CONSULTANT:Beth Graybill
SUBJECT : High School Graduation Requirements: financial
literacy.
SUMMARY:
This bill requires that one-half of the economics course
required for high school graduation focus on personal finance
and financial literacy.
BACKGROUND
In order to graduate from high school, current law requires
all pupils to pass both the English language arts and
mathematics portions of the California High School Exit Exam
and complete specified courses, including a one-semester
course in economics.
Current law requires the Superintendent of Public Instruction
(SPI) to, coordinate the development of model curriculum
standards for the courses of study required for graduation
and requires the State Board of Education (SBE) to adopt
statewide academic content standards in core curriculum
areas, pursuant to the recommendations of the Commission for
the Establishment of Academic Content and Performance
Standards. The History-Social Science Standards, adopted in
1998, include standards for the instruction of Economics.
Current law requires the SBE to ensure that financial
preparedness is integrated into the next revision of the
social sciences frameworks. The 2010 History-Social Science
framework update is underway and is expected to include
guidance on the instruction of financial preparedness.
ANALYSIS
This bill requires one-half of the high school economics
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course to focus on personal finance and financial literacy.
STAFF COMMENTS
1) Mandated costs . This bill imposes a state mandate
by requiring schools to ensure that the one-half of
the high school economics course focuses on personal
finance and financial literacy.
2) What's included in the economics course ? The State
Board of Education (SBE) has adopted content standards
for the instruction of economics that address the
following fundamental economic concepts:
a) Common economic terms, concepts, and economic
reasoning.
b) Elements of America's market economy in a
global setting.
c) The influence of the federal government on the
American economy.
d) The elements of the U.S. Labor market in a
global setting.
e) The impact of aggregate economic behavior on
the U.S. economy.
f) International trade and how the U.S. economy
affects and is affected by economic forces beyond
the borders of the United States.
By requiring one half of the economics course to include
instruction on financial literacy, this bill would
require that each of these standards be addressed in 9
weeks instead of 18. The bill also adds new content
that could require teachers to receive training to
provide financial literacy instruction.
Because current law requires model curriculum standards
for the courses of study required for graduation, this
bill could trigger a revision of the History-Social
Science standards to include financial literacy in the
economics content standards. It is likely that the
revision of the standards would require governing boards
to adopt new textbooks to meet the instruction mandate
and could require the revision of standards for the
preparation of social science teachers.
3) Financial literacy efforts . The Superintendent of
Public Instruction (SPI) has launched a financial
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literacy awareness campaign to provide schools,
teachers, students and parents with access to
supplemental resources that can help students develop
knowledge and understanding of money management. The
CDE hosts an online resource library that provides
information and links to programs that teachers and
parents can use to increase financial literacy.
4) Financial literacy legislation . Previous legislation
addressing the need for financial literacy instruction
in public schools have been vetoed by the Governor:
a) AB 1502 (Lieu, 2008), which was passed by the
Senate Education Committee on an 8-0 vote would
have required the SBE and the Curriculum
Development and Supplemental Materials Commission
to ensure that financial literacy is included in
appropriate subject area frameworks.
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b) AB 150 (Lieu, 2007), which was passed by this
Committee on a 9-0 vote, would have required the
SPI to administer a California Financial Literacy
Initiative (CFLI) as a program for improving pupil
financial literacy.
c) AB 1950 (Lieu, 2006), which was passed by the
Senate Education Committee on a 9-0 vote would have
authorized school districts to provide instruction
in economics courses related to the understanding
of personal finances including budgeting, savings,
and credit.
d) AB 2435 (Wiggins, 2004), which was passed by
the Senate Education Committee on an 8-1 vote would
have authorized districts to teach middle school
and high school students about personal finance.
In his veto messages for all four bills, Governor
Schwarzenegger opined that while improving the financial
literacy of students is meritorious, the Superintendent
of Public Instruction and schools already have the
authority to incorporate the principles of money
management into the curriculum.
Additionally, SB 426 (Yee), which was passed by this
Committee on a 6-3 vote on April 15, 2009, requires the
Curriculum Development and Supplemental Materials
Commission, as part of its regular process of developing
and revising curriculum frameworks to consider and vote
at least twice a year on whether to adopt each
concurrent resolution passed by the Legislature that
proposes changes to the frameworks.
5) Implementation . If this measure is enacted, the
requirement to teach financial literacy would become
effective on January 1, 2010. To give the SBE and
schools time to implement the legislation, staff
recommends amendments to specify an implementation date
of January 1, 2012.
SUPPORT
California State Controller
OPPOSITION
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None received.