BILL ANALYSIS
SB 742
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Date of Hearing: August 19, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
SB 742 (Romero) - As Amended: June 1, 2009
Policy Committee: EducationVote:7-1
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill establishes a process to identify the 10 historically
low performing public schools in the state until July 1, 2016.
Specifically, this bill:
1)Creates an advisory committee to the Superintendent of Public
Instruction (SPI) to make recommendations to the State Board
of Education (SBE) on how to identify the 10 historically low
performing public schools in the state. This bill also
requires the members of the advisory committee to serve
without compensation and be appointed by the Governor, SPI,
the President Pro Tempore of the Senate, and the Speaker of
the Assembly.
2)Requires the advisory committee, by July 1, 2010, to make
recommendations to the SPI regarding all of the following: (a)
the criteria used to identify the list of the 10 historically
low performing schools, including whether or not they are
subject to restructuring in the next school year under the
federal No Child Left Behind Act (NCLB), assessment results,
and the Academic Performance Index (API) and (b) the
conditions that must exist for a school to be removed the
list.
3)Requires the SPI, on or before August 15, 2009, to make
recommendations on the criteria and conditions specified above
to the SBE and further requires the SPI and the SBE, on or
before October 1, 2010, to jointly approve the criteria and
conditions.
4)Requires the SBE and the SPI, on or before November 1, 2010,
to jointly identify (using the approved criteria) the 10
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historically low performing schools in the state. This
measure further requires three of the 10 schools to be
comprehensive high schools with a four-year derived dropout
rate of 25% or higher in 2007-08, as determined by the SPI.
FISCAL EFFECT
1)Potential GF/98 state reimbursable mandated costs, likely
between $3 million and $5 million, to LEAs to implement a
locally developed renewal effort (alternative governance
structure) for 10 historically low performing schools, as
specified. This cost may be annual or one-time depending on
the determination of the SPI or SBE. This bill requires the
DOF to determine whether or not federal funds may be used for
this purpose (see comments below).
2)One-time GF administrative costs to the State Department of
Education (SDE) and SBE, likely between $250,000 and $500,000,
to conduct the process for determining the 10 historically low
performing schools.
3)One-time GF cost pressure, likely between $400,000 and
$600,000, to complete an evaluation of this measure, as
specified. This bill requires federal funds to be used for
this purpose; however, the source of funding is not clear.
(see comment #3 below).
SUMMARY CONTINUED
1)Requires the SBE and SPI to direct the LEA (with an identified
school under its jurisdiction) to evaluate the reasons for the
determination and approve in a public hearing at least one of
the following locally developed renewal efforts (as required
in NCLB): (a) reopening the school as a charter school; (b)
replacing all or most of the school staff; and (c) entering
into a contract with an entity, such as a private management
company with proven experience, to operate the public school.
2)Requires the SPI, if a school identified as historically low
performing is a charter school, to recommend revocation of the
charter to the SBE and requires the SBE, no later than 90 days
after the recommendation, to hold a public hearing to consider
revocation.
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3)Requires the Director of Finance (DOF) to notify the SPI and
the SBE, if he or she determines that sufficient federal funds
are not available in the budget year to implement the renewal
efforts for the 10 historically low performing schools.
4)Requires the SPI and SBE, within 45 days of DOF's
determination above, to determine whether other federal funds
are available, as specified. This bill also requires the SPI
and the SBE, with approval of DOF and after the determination
of whether or not other federal funds are available, to notify
the relevant LEAs regarding which schools are subject to the
requirements of this measure for the next school year and the
remaining schools for which the renewal plans otherwise
required by this bill are recommended not mandatory.
5)Requires the State Department of Education (SDE) to contract
for an independent evaluation of this measure. This measure
also requires the costs of the evaluation to be paid with
federal funds and submitted, no later than March 1, 2015, to
the Joint Legislative Budget Committee, relevant committees of
the legislature, DOF, and the governor.
COMMENTS
1)Background . In 2001, the federal government passed NCLB,
which requires the state to adhere to a federal accountability
system because California will receive approximately $2.7
billion in K-12 federal NCLB funds in the 2009-10 FY. Of this
amount, $1.64 billion are Title I funds, which serve the
state's poorest students.
The federal accountability system is governed by a status
model, as measured by Adequate Yearly Progress (AYP), academic
targets as measured by state assessments. Under this model,
LEAs and schoolsites are identified as PI based on failing to
meet AYP targets. Program Improvement (PI) LEAs and
schoolsites that do not meet AYP for two consecutive years are
subject to one or more corrective actions and restructuring
options.
NCLB requires PI schoolsites that are Title I (i.e., primarily
serve poor pupils) to adhere to a series of
requirements/sanctions that become more severe as the
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schoolsite advances in PI status. If a school fails to make
AYP after four years, the LEA, for PI year four school under
its jurisdiction, is required to implement one of the five
following restructuring/alternative governance or "locally
developed renewal efforts" (as referred to in this bill): (1)
reopening the school as a charter school; (2) replacing all or
most of the school staff; (3) entering into a contract with an
entity, such as a private management company with proven
experience, to operate the school; (4) turning the operation
of the school over to the state education agency; and (5) any
other major restructuring of the school's governance
arrangement that makes fundament reforms (i.e., significant
changes in the school's staffing or governance, etc.).
According to the SDE, as of August 2009, there are a total of
2,263 schools in PI under NCLB. Of this number, 1,188 schools
are in PI year four and five and therefore, these schools are
in the process of implementing one of the
restructuring/alternative governance or locally developed
renewal efforts referenced above. This bill establishes a
process for identifying the 10 historically low performing
schools.
2)Potential state reimbursable mandate . As referenced above,
NCLB requires a LEA to choose one of five alternative
governance structures to impose on its schools in PI year four
and five. This measure limits an LEA's choice to the
following three governance structures: (1) reopening the
school as a charter school; (2) replacing all or most of the
school staff; and (3) entering into a contract with an entity,
such as a private management company with proven experience,
to operate the public school. This bill requires the SPI and
the SBE to direct the LEA responsible for a school identified
as low performing to approve, in a public hearing, at least
one of the locally developed renewal efforts (i.e.,
alternative governance structures established in NCLB).
By requiring the LEA to choose from only three alternative
governance options, rather than the five established in
federal law, the state may be subject to a reimbursable
mandate claim for the implementation of this measure. Under
this bill, the state is limiting the alternative governance
options provided to LEAs under federal law and instead,
mandating they choose from among only three options. This
limitation essentially indicates "state approval" of these
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three options. Whereas under NCLB, the LEA, not the state, is
the sole entity that determines which of the five alternative
governance structures is imposed on a school under its
jurisdiction. The committee may wish to consider the
potential of creating a state reimbursable mandate with the
passage of this measure.
3)Federal funds available for PI restructuring under NCLB . Over
the last several years, the federal government has allocated
approximately $1.6 billion in federal NCLB Title I basic grant
funds, which serve the state's poorest students. NCLB
requires states to set aside four percent of their total Title
I basic grants to help schools and districts in PI to improve
their performance. This equates to approximately $65 million
in federal Title I ongoing funding available each year for
this purpose.
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
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.
Likewise, the 2009 Budget Act states that these federal funds
"shall first be used to fund LEA corrective action pursuant to
AB 519 (Committee on Budget), Chapter 757, Statutes of 2008."
4)2009 budget actions on federal funds and the Quality Education
Investment Act (QEIA) program . 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
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two of the API (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. 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 SIG funds (see
comment #3 above). Chapter 2 also requires SDE to award
grants to schoolsites in the 2009-10 FY pursuant to the
requirements of these federal funds.
The 2009 budget action prioritized the use of federal Title I
set-aside and SIG grant funds for LEAs under corrective action
pursuant to NCLB and LEAs participating in the QEIA program.
Therefore, it is unclear how much of this funding would be
available for other purposes, including this bill.
5)Does this bill provide appropriation authority to entities
other than the Legislature ? This bill does not directly
appropriate any funding, GF or federal funds, to implement the
identification of the 10 historically low performing schools
or the implementation of the locally developed renewal
efforts. However, the bill states: "If the DOF determine that
sufficient federal funds are not available to implement the
renewal efforts pursuant to this section for the budget year,
the DOF shall notify the SPI and the SBE?" This language
assumes that federal funds are available to implement this
measure, but it does not directly state this intent or
appropriate it.
Likewise, the bill further states that once the DOF notifies
the SPI and SBE that there are not sufficient federal funds
the following shall occur: the SPI and the SBE shall determine
whether other federal funds are available to implement this
measure and if so, they shall determine how that funding is
best allocated. After the SPI and SBE make this
determination, with the approval of the DOF and pursuant to
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any applicable requirements in the budget act, they are
required to notify the relevant LEAs affected by this measure.
The language in the bill omits legislative authority to
determine which federal funds are to be used and how much
federal funding is used to implement this measure. Likewise,
it does not provide any specific notification mechanism to the
legislature as to how identified federal funds are utilized.
This bill establishes a precedent for agencies other than the
Legislature to determine if there is sufficient funding to
implement a program and what type of funding may be utilized.
The committee may wish to consider whether or not this is an
appropriate precedence to establish given the legislature's
desire to designate funding priorities, particularly during
the state's severe fiscal crisis.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081