BILL ANALYSIS
SB 223
Page 1
Date of Hearing: July 8, 2009
ASSEMBLY COMMITTEE ON EDUCATION
Julia Brownley, Chair
SB 223 (Wyland) - As Amended: May 6, 2009
SENATE VOTE : 39-0
SUBJECT : Education: history-social science curriculum
framework: financial literacy.
SUMMARY : Requires the Curriculum Development and Supplemental
Materials Commission (Curriculum Commission), as part of its
regular process of developing and revising curriculum
frameworks, to consider and vote on whether to include a unit on
financial literacy in the proposed changes to the 2014
history-social science curriculum framework.
EXISTING LAW :
1)Requires the Curriculum Commission to recommend curriculum
frameworks to the State Board of Education (SBE) and develop
criteria for evaluating instructional materials submitted for
adoption so that the materials adopted adequately cover the
subjects in the indicated grade levels.
2)Requires the SBE to ensure that curriculum frameworks are
reviewed and adopted in each subject area consistent with the
six- and eight- year submission cycles.
3)Provides that the history-social science framework shall
include the topics of financial preparedness among others in
its next revision, in order to instill in California's youth
the importance of lifelong financial responsibility.
4)Requires a student to complete a one-semester course in
economics, among other requirements, to be eligible to
graduate from high school.
5)Requires the Superintendent of Public Instruction (SPI) with
the approval of the SBE, to develop and make available a
one-semester consumer economics course for grades 7-12,
although it is not mandated that it be taught. The course
must include personal banking, basic contracts, using consumer
purchasing guides, uses and costs of credit, types and costs
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of insurance, and types of taxation.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : According to the author, students should be taught a
balanced education that prepares them for "the real world."
Financial literacy is one of the most applicable skills for
students and schools should offer relevant education that
prepares the next generation for their financial future.
Need for Financial Literacy . Many studies have consistently
demonstrated that students lack sound financial decision making
skills. According to a 2007 Teens & Money survey sponsored by
Charles Schwab, 62% of teens believe they are prepared to deal
with the adult financial world after high school. However,
self-reported data shows only 14% understand how income taxes
work, 23% understand what a credit score is, and 34% know how to
pay bills. Similarly, 73.9% of surveyed high school seniors
failed a 2008 biennial financial literacy test given by the
Jumpstart Coalition for Personal Financial Literacy, with only
4.7% scoring a C-grade or higher. Such trends seem to continue
as students mature, as the 2008 United States (U.S.) Census
estimates that Americans average $5500 in credit card debt every
year.
Three states currently require a stand-alone one-semester course
in personal finance within the K-12 curriculum, and another 17
states require personal finance as part of another course such
as economics. 30 states, including California, do not require
any financial literacy component in the curriculum.
While California does require a one-semester course in
economics, its content standards do not include topics such as
personal budgeting, saving, credit, and identify theft.
Economics content standards currently include: (1) common
economic terms, concepts, and economic reasoning; (2) elements
of America's market economy in a global setting; (3) the
influence of the federal government on the American economy; (4)
the elements of the U.S. labor market in a global setting; (5)
the impact of aggregate economic behavior on the U.S. economy;
(6) international trade and how the U.S. economy affects and is
affected by economic forces beyond the borders of the U.S.
However, school districts may elect to teach financial literacy
under current law and some curriculum content is already
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provided for in model courses and textbooks.
This bill requires the Curriculum Commission to consider whether
or not to include a unit on financial literacy in the 2014
history-social science curriculum framework. The history-social
science curriculum framework revision is scheduled for 2015, not
2014, and staff recommends an amendment to reflect this. The
Curriculum Commission considers general subject matters, not
specific units, when revising frameworks so staff recommends an
amendment to delete reference to a "unit" in the bill.
Need for This Bill . While it is important that students be
taught financial responsibility, existing law already requires
the next revision of the history-social science framework to
include financial preparedness. The 2010 update of the
history-social science framework is currently underway and is
expected to include guidance on the instruction of financial
preparedness.
Related Legislation . SB 426 (Yee) requires the Curriculum
Commission to consider and vote on whether to adopt each
concurrent resolution passed by the Legislature that proposes
changes to curriculum frameworks. The purpose of this measure
is to set up a more consistent approach by which legislators
attempt to influence the K-12 curriculum, as such bills are
routinely vetoed by the Governor. SB 426 was held in the Senate
Appropriations Committee suspense file.
AB 550 (Lieu) establishes the California Financial Literacy
Initiative for the purpose of providing financial resources and
instruction to Californians and would set aside funds in the
State Treasury for this purpose. AB 550 was held in the
Assembly Appropriations Committee suspense file.
Prior Legislation . There have been numerous bills over the
years that have attempted to include financial preparedness into
school curriculum. However, they have all been vetoed by
Governor Schwarzenegger on the basis that while improving the
financial literacy of students is meritorious, the SBE and
schools already have the authority and flexibility to
incorporate principles of money management into curriculum if
they so choose. Curriculum standards are intentionally broad to
allow coverage of various events, developments, and issues.
Vetoed bills include: (1) AB 1502 (Lieu, 2008) to ensure that
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financial literacy is included in appropriate subject area
frameworks; (2) AB 1950 (Lieu, 2006) to authorize school
districts to provide instruction in economics courses related to
the understanding of personal finances; and (3) AB 2435
(Wiggins, 2004) to authorize districts to teach middle school
and high school students about personal finance.
Arguments in Support . Supporters claim that students need to be
taught financial responsibility from an early age so they can
grow up to be smart consumers of financial services. Youths may
lack stable parental figures in their lives to instill in them
principles of financial responsibility, so it is important that
students can find such guidance in schools. Many organizations
in support offer services that educate the public about
financial responsibility and believe this bill will enhance
their efforts.
REGISTERED SUPPORT / OPPOSITION :
Support
California Bankers Association
California Coalition for Youth
Californian Credit Union League
California Society of Certified Public Accountants
California State Controller, John Chiang
Center for Student Credit Card Education
Hispanic Association of Colleges and Universities
Opposition
None on file.
Analysis Prepared by : Irene Ho / ED. / (916) 319-2087