BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1381 (Simitian)
Hearing Date: 05/03/2010 Amended: 04/20/2010
Consultant: Dan Troy Policy Vote: ED 8-0
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BILL SUMMARY: SB 1381 would change the date by which a child
is required to be admitted to kindergarten at the beginning of
the school year (or any time later in the school year) from
December 2 of the year in which the child will have his or her
5th birthday to November 1 for the 2012-13 school year, October
1 of the 2013-14 school year, and September 1 for the 2014-15
school year and each year thereafter. A corresponding change
for admittance to 1st grade would be made for a child having his
or her 6th birthday during the year. The bill would also
express the intent of the Legislature to appropriate one-half of
the savings resulting from the bill's changes for the purposes
of expanding the state's preschool system. The bill further
states the intent of the Legislature that children aged four and
five that are ineligible for kindergarten admission be allowed
to participate in the state preschool program.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Age of admission/preschool Cost pressure in the tens of
millions General*
in 2012-13, followed by subsequent
savings in the hundreds of millions
*Counts toward meeting the Proposition 98 minimum funding
guarantee
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Current law makes education compulsory for individuals aged 6
through 18. While current law does not compel kindergarten
attendance, it requires districts to offer admittance to
kindergarten at the beginning of the school year for a child who
will turn 5 on before December 2 of that calendar year. Thus
many children begin kindergarten several months before their
fifth birthday. By moving the cutoff date of admission to
September 1 (the change would be phased in over 3 years), this
bill would essentially ensure that kindergarteners would be aged
5 or older at the beginning of the school year.
Current law provides for general purpose funding to school
districts through the revenue limit program. Each district has
a defined revenue limit per unit of average daily attendance
(ADA) that is based on historical expenditures on education as
modified through various statutory adjustments. A district's
total revenue limit apportionment is calculated based on the
greater of current or prior year ADA. Thus, districts are held
harmless for losses in ADA for one year (the declining
enrollment adjustment). Revenue limit apportionments are offset
by local property taxes, and have been deficited in recent years
due to the state's fiscal condition.
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SB 1381 (Simitian)
Current law establishes the state preschool program, for
purposes of providing part-day and full-day programs of
educational development for three- and four-year old children.
By adjusting the date of admission back 1 month in three
successive years, this bill would reduce the size of the
kindergarten cohort by approximately 1/12th of the size it would
otherwise have been for three successive years. These reduced
cohorts will flow though the K-12 system for 13 years each,
achieving, at the least, programmatic savings in Proposition 98
programs. The largest programmatic cost savings would be in the
revenue limit program.
According to data provided by the Legislative Analyst's Office,
the provisions of this bill would reduce the number of students
in the K-12 system by approximately 43,000 in the 2012-13 school
year, by 89,000 in the 2013-14 school year, and by 126,000 for
the 2014-15 school year and for several years thereafter, until
these cohorts begin exiting the system in 2026-27.
If implemented, the state would begin to realize savings in
revenue limit apportionments the year after the age of admission
cutoff date begins to move up earlier in the year. Revenue
limit savings in the first year are unlikely to materialize due
to the revenue limit declining enrollment adjustment. Assuming
the current deficited revenue limit average of $5,215 per unit
of ADA, the state would realize programmatic savings of $227.2
million in the 2013-14 fiscal year, of $462.2 million in
2014-15, and $658.2 million from the 2015-16 through the 2027-28
fiscal years, once the cohorts begin exiting the system. Note
that actual state savings in these years would only be half of
those amounts, as the bill states the intent to utilize half of
the savings for purposes of expanding the preschool program to
help accommodate the displaced 4-year olds that would otherwise
be attending kindergarten.
The bill does create a significant cost pressure in the 2012-13
fiscal year to fund additional preschool slots for the children
who would otherwise have been eligible to enroll in
kindergarten. It's not known how many of the displaced families
would apply for preschool slots or how the displaced 4 and 5
year olds would be prioritized given the current waiting list,
but as the average annual cost for part day preschool is $3,714,
the cost pressure would be significant. As an example, the cost
for every 10,000 new slots would equal $37.1 million. After the
2012-13 fiscal year, the revenue limit savings would help
mitigate the preschool cost pressure.
Further, reducing the enrollment will likely have some impact on
the Proposition 98 minimum guarantee. Projections this far out
are very uncertain, but current LAO projections estimate that
this bill would decrease the guarantee by up to $100 million in
2012-13, by $50 million to $250 million in 2013-14, and by $200
million to $600 million in 2014-15. There would be no effect if
the state was in a Test 1 situation.