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 29, 2009
URGENCY: No CONSULTANT:Beth Graybill
SUBJECT : High School Graduation Requirements: financial
literacy.
SUMMARY:
This bill requires one-half of the economics course required
for high school graduation to 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
History-Social Science Framework. The 2010 update of the
History-Social Science Framework update is underway and is
expected to include guidance on the instruction of financial
preparedness.
ANALYSIS
SB 223
Page 2
This bill requires one-half of the high school economics
course to focus on personal finance and financial literacy.
STAFF COMMENTS
1) Mandated costs . In its current form, this bill
imposes a state mandate by requiring schools to ensure
that 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 half of the economics course to be devoted
to financial literacy instruction, this bill would
reduce instruction time for the existing economic
standards to 9 weeks instead of 18. By adding new
content, this bill 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 then require governing
boards to adopt new textbooks to meet the instruction
mandate and could further require the revision of
standards for the preparation of social science
teachers.
SB 223
Page 3
3) Financial literacy efforts . The Superintendent of
Public Instruction (SPI) has launched a financial
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
California Department of Education 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 has 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.
SB 223
Page 4
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 SPI and schools
already have the authority to incorporate the principles
of money management into the curriculum.
5) Another approach . 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
on whether to adopt each concurrent resolution passed by
the Legislature that proposes changes to the frameworks.
Although SB 426 is not law, the process proposed by
that measure could allow for a more consistent approach
to legislation that proposes changes to the K-12
curriculum. To that end, Staff recommends the bill be
amended to remove the mandate to include financial
literacy in the 12th grade economics course and instead
require the Curriculum Development and Supplemental
Materials Commission to consider and vote on whether to
include a unit on financial literacy in the proposed
changes to the 2014 History-Social Science Frameworks.
SUPPORT
SB 223
Page 5
California Bankers Association
California Society of Certified Public Accountants
California State Controller
OPPOSITION
None received.