BILL ANALYSIS
SENATE COMMITTEE ON EDUCATION
Gloria Romero, Chair
2009-2010 Regular Session
BILL NO: SB 1396
AUTHOR: Lowenthal
AMENDED: April 14, 2010
FISCAL COMM: Yes HEARING DATE: April 21, 2010
URGENCY: No CONSULTANT:Daniel Alvarez
SUBJECT: Education funding: maximum categorical education
flexibility pilot
program.
KEY POLICY ISSUE
Do the benefits of providing maximum flexibility in the use
of all categorical funding, even on a pilot program basis,
outweigh the particular programmatic or student specific
reasons that a categorical program(s) were intended to
address?
SUMMARY
This bill establishes the Maximum Categorical Education
Flexibility Pilot Program authorizing the Superintendent of
Public Instruction to select three school districts to
participate and utilize their categorical funding for any
purpose related to improving pupil academic achievement and
academic instruction. Requires a school district applying for
selection as a pilot program to meet preconditions, as
specified. In addition, requires a selected school district
to demonstrate various accountability criteria, as specified.
BACKGROUND
Categorical Flexibility - February 2009 (mid-year reductions)
and 2009 Budget Act
SB 4 (Chapter 12, 3rd Extraordinary Session, 2009), reduced
funding for various categorical programs for the 2008-09
fiscal year through the 2012-13 fiscal year. Approximately 40
categorical programs are in what is described as "Tier 3".
The 2009-10 programs were funded about 20% lower than the
2008-09 funding level. To help mitigate these reductions, SB
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4 authorized school districts to use funding for those
programs during that time for any educational purpose to the
extent permitted by federal law. (EC 42605) The newly
flexible programs total approximately $4.5 billion statewide
in 2009-10. Pursuant to SBX3 4:
For the 2008-09 to the 2012-13 fiscal years, local
education agencies that use the flexibility provisions
are deemed to be in compliance with program and funding
requirements contained in statutory, regulatory, and
provisional language for the categorical programs.
As a condition of receipt of funds, governing boards of
a school district or county office of education must, at
a regularly scheduled open public hearing, take
testimony from the public and take action on the
proposed use of funding and make explicit the purposes
for which the funds will be used.
Current law provides for general purpose funding of school
districts through revenue limits. In addition, school
districts may receive per pupil funding in lieu of "regular'
revenue limits for various alternative education programs,
such as adult education or regional occupation programs.
Finally, school districts also receive funding in the form of
categorical aid that is targeted to the provision of certain
categories of services (i.e. education technology,
instructional materials), or directed to certain categories
of pupils (i.e. economically disadvantaged or gifted).
ANALYSIS
This bill establishes the Maximum Categorical Education
Flexibility Pilot Program authorizing the State
Superintendent of Public Instruction (SPI) to select three
school districts to participate in the pilot program.
Specifically, this bill:
1) Requires the pilot program be implemented during the
2011-12, 2012-13, and 2013-14 fiscal years.
2) Requires a school district, in order to be eligible to
apply for selection to meet various preconditions,
including, but not limited to:
a) The school district has a plan or initiative,
developed in conjunction with parents and teachers
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to accelerate pupils' progress to proficiency. The
plan shall include measurable metrics to improve
pupil performance, close the achievement gap,
increase college entrance rates, and increase
career readiness.
b) The governing board of the school district has
approved the plan and developed corresponding
policies in support of the plan.
c) The annual evaluation of the performance of
the superintendent of the school district is linked
to pupil performance goals, as specified.
d) At least one-half of the permanent teachers
and one-half of the surveyed parents or legal
guardians in the district support participation in
the pilot program, and that support is demonstrated
in writing.
e) The standards-based curriculum for English
learners is cognitively complex, coherent, well
articulated, meaningful, and will enable English
language learners to learn English quickly and
fluently so that they may participate fully in
grade-level academic curriculum, as specified.
3) Requires the SPI, at a minimum, to consider the quality
and rigor of the preconditions outlined in #2 above.
4) Requires the program for English learners at a minimum
to provide:
a) Support for English learners who are new to
the district.
b) An English language development program that
is comprehensive and
standards-aligned and that has all of the following
characteristics: actively develops all domains of
language, addresses varying degrees of English
fluency, develops age-appropriate and
context-appropriate language, including an emphasis
on academic English, includes opportunities for
English learners to interact with native English
speaking peers, creates a supportive learning
environment for language learning and recognizes
the role of primary language development.
c) Full access to a challenging curriculum.
d) High quality instruction and materials.
e) Inclusive and affirming school climate.
f) Valid, comprehensive and useful assessments.
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g) Strong family partnerships.
h) A qualified educator workforce.
5) School districts selected to participate in the pilot
program agree to demonstrate:
a) Significant progress toward accelerating
pupils' progress toward proficiency on California's
academic standards over a three-year period, as
measured by the annual Standardized Testing and
Reporting (STAR) and any other local, state or
national assessments.
b) Narrowing of the achievement gap in the
districts' federally recognized subgroups, and
measured annually by STAR and other assessments, as
specified.
c) Fiscal solvency, as specified.
d) Positive growth, as measured by the district's
API score, STAR, and any other local, state or
national assessment results.
e) An increase in the districts' graduation rate,
as measured by the California Longitudinal Pupil
Achievement Data System (CALPADS) and the school
district level data systems.
f) Improvement in the district's college entrance
rate, as measured by the National Student
Clearinghouse (NSC) or other state approved student
data tracking system.
g) The school district can demonstrate the number
of students who enter technical school after
graduation as measured by the NSC or other state
approved student data tracking system.
6) Requires the SPI to apportion to the school districts
selected for participation in the pilot program a
categorical block grant that is based on the amount of
funding those school districts received in the 2009-10
fiscal year, for:
a) "Tier 3"categorical programs (see Comment #6
below); and
b) Home-to-school transportation (6110-111),
Foster Youth programs (6110-119), Economic Impact
Aid (6110-128), AVID (6110-130), Adults in
Correctional Facilities (6110-158), Partnership
Academies (6110-166), Child Development (6110-196),
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Child Nutrition, summer school (6110-201), Child
Nutrition Programs (6110-202), Child Nutrition
Programs (6110-203), Year-round schools (6110-224)
and Class Size Reduction K-3 (6110-234).
7) Requires the amount of the categorical block grant be
adjusted for cost-of-living and growth in fiscal years
that state funding is appropriated for those purposes.
8) Permits a participating school district to use the
categorical block grant funds for any purpose related to
improving pupil achievement and academic instruction,
except for Economic Impact Aid (EIA) funding.
9) Requires a participating school district to utilize
funding for EIA to supplement the base program provided
to English learners and economically disadvantaged
pupils. In addition, the school district must continue
to designate staff to coordinate services and programs,
including the home language survey, for English learners
and continue in existence parent advisory committees and
schoolsite councils, as specified.
10) Requires a participating school district to implement an
open and transparent process that allows public input at
a regularly scheduled meeting of the governing board
when deciding on the expenditure of categorical block
grant funds.
11) Specifies that a participating school district is deemed
to be in compliance with program and funding
requirements contained in statutory, regulatory, and
provisional language for the categorical programs.
12) Requires a participating school district to submit an
annual evaluative report to the California Department of
Education (CDE), the State Board of Education, and the
Legislature that details the progress made during the
immediate prior school year, as specified.
13) Requires a participating school district to submit an
annual expenditure report to the CDE, detailing the
expenditure of specific categorical programs funds and
the purposes for which those funds were expended.
14) Requires the Legislative Analyst's Office to conduct a
final evaluation report that identifies the success and
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failures of the pilot program and make recommendations
regarding improving the pilot program and whether the
program should be continued.
15) Sunsets on July 1, 2014.
STAFF COMMENTS
1) Need for the bill : According to the author's office,
school districts are facing immeasurable challenges
managing reductions in state funding and need maximum
flexibility in the ways they can utilize restricted
funding from the state. This measure would give three
school districts maximum flexibility by creating a
categorical block grant comprised of a district's
existing categorical program funding (except special
education, initiative-driven education programs and
federal programs), and allow that funding to be used for
any purpose related to improving pupil achievement and
academic instruction. The goal is to demonstrate that
state money can be managed more efficiently and
effectively by school districts.
2) On the one hand, funding flexibility. The
Legislature, by a two-thirds vote in SB 4 (Chapter 12,
Third Extraordinary Session 2009), recognized the need
to provide school districts with categorical funding
flexibility as a result of unprecedented fiscal
conditions requiring over $42 billion in General Fund
solution in order to balance both the 2008 (mid-year)
and 2009 Budgets.
Irrespective of the budget condition, categorical
funding flexibility has been advocated by school
business officials and non-partisan entities, including
the Legislative Analyst, for quite some time. These
entities typically reason that since California has
adopted rigorous academic standards and assessments; let
pupil performance as measured through our assessments
system drive local funding decisions.
3) On the other hand, categorical programs created for a
purpose . The primary strategy the state has used to
make sure local school districts spend funds
"appropriately" has been through the creation of
categorical programs - funds that are earmarked for
specific purposes or students. Some-such as Economic
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Impact Aid and Special Education-were created to assure
that a given set of "special needs" students received
extra services. Other programs, such as K-3 Class Size
Reduction and staff development days, provide
participating school districts with funding as long as
they implement a specific strategy state leaders believe
will improve instruction. While other programs like
child nutrition ensure low-income pupils have access to
free and reduced price meals.
Even in light of the most recent budget problems, in
2009 the Legislature stopped short of including all
programs in the "Tier 3" categorical funding flexibility
- certain programs were deemed to be of such a high
priority that no reductions and no flexibility options
were put in place, and the programs were generally kept
intact. Some examples include: Economic Impact Aid,
child development, child nutrition, and home-to-school
transportation programs.
4) Various preconditions . The bill contains various
preconditions that must be met by a school district,
even to be eligible to apply for the pilot program.
Staff has identified the following:
Parental involvement . The bill specifies half
of surveyed parents/guardians must indicate support
for pursuing this categorical funding flexibility
pilot. However, as drafted the measure seems to
indicate only a select group of parents would be
surveyed, is this the author's intent?
Staff Recommends an amendment to clarify that all
parents must be surveyed and that half of the
parent responses are in support of the pilot
program.
Governing board action . The bill requires
governing board approval of a school district plan
and any corresponding policies in support of the
plan.
Staff Recommends an amendment to clearly delineate
that approval by the governing board must take
place at a regularly scheduled meeting of the
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board.
5) Cost-of-living adjustment and growth . The measure
requires that the block grant be adjusted for COLA and
growth in fiscal years that state funding is
appropriated for those purposes. However, since the
underlying statutory requirements of the categorical
programs are unchanged; this provision seems
unnecessary.
Staff recommends an amendment to delete the COLA and
growth requirement.
6) Tier 3 - Full Categorical Funding Flexibility . In
February 2009, to help school districts deal with budget
cuts, the Legislature made substantial changes to many
of the state's categorical programs, allowing districts
the flexibility through 2012-13 to use funds from about
40 categorical programs for any educational purpose to
the extent permitted by federal law; the programs
include the following:
(1) Targeted Instructional Improvement Block Grant, (2)
adult education, (3) ROC/Ps, (4) School and library
improvement block grant, (5) supplemental instruction,
(6) instructional materials, (7) deferred maintenance,
(8) professional development block grant, (9)
supplemental school counseling program, (10) charter
school block grant, (11) teacher credentialing block
grant, (12) High Priority schools grant program, (13)
arts and music block grant, (14) CSR - grade 9, (15)
school safety block grant, (16) pupil retention block
grant, (17) CAHSEE instructional support, (18) CalSAFE,
(19) math and reading professional development, (20)
gifted and talented, (21) community day schools, (22)
community-based English tutoring program, (23) PE
teacher incentive program, (24) teacher credentialing
standards for preparation and licensing, (25) peer
assistance and review, (26) school safety competitive
grants, (27) certificated staff mentoring, (28) COE,
Williams audits, (29) specialized secondary program
grants, (30) principal training, (31) American Indian
education centers, (32) child oral health assessments,
(33) National Board Certification incentives, (34) AP
programs, (35) bilingual teacher training, (36) American
Indian early childhood education centers, (37) Reader
services for the Blind, (38) civic education, (39)
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teacher dismissal apportionment, (40) CA Association of
Student Councils, and (41) CBO training program.
7) Interim report can be informative. The bill requires
the Legislative Analyst's Office to conduct a final
evaluation report that identifies the success and
failures of the pilot program. However, this may not
give enough time to digest issues that may have occurred
with the pilot.
Staff Recommends an interim report conducted by the
Legislative Analyst Office occur no later than 18 months
after the Superintendent apportions funding pursuant to
Section 63063, participating school districts will
provide the Legislative Analyst Office information
related to measures identified in the bill.
8) Technical amendments . Staff recommends the following
technical amendments:
On page 7, lines 10 and 11, strike out
"subdivision (c) of this section" and insert:
Section 63063
On page 7, line 23, strike out "63031" and
insert: 63061.
9) Policy arguments :
Proponents of this measure argue to improve
student achievement we must have the flexibility to
direct our resources toward programs and services
that have proven to raise student achievement.
Additional flexibility will allow school districts
to concentrate on teaching students. The criteria
in this measure will allow an assessment of whether
funding flexibility, linked to a district-wide,
locally supported student achievement plan is
resulting in student achievement gains.
Opponents contend that the Legislature has
acted thoughtfully by providing "Tier 3"
flexibility for over 40 programs, while protecting
other programs. However, even Tier 3 flexibility
has resulted winners and losers, programs such as
ROC/Ps and adult education have been eliminated in
some areas. Finally, even when public discussion at
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the local level occurs as to what programs should
remain or be eliminated, it is the strongest parent
advocates who prevail - many times the poorest do
not get programs or resources they need because
their parents are not able to be present to
advocate for their children.
SUPPORT
California Association of School Business Officials
California State University, Long Beach
Centro CHA, Long Beach
Clovis Unified School District
Corona-Norco Unified School District
District Community Advisory Committee, LBUSD
Fresno Unified School District
Long Beach Area Chamber of Commerce
Long Beach City College
Long Beach Unified School District (Sponsor)
Los Angeles County Business Federation
Poway Unified School District
Regional Hispanic Chamber of Commerce
Riverside County Schools Advocacy Association
The Torrance Parents Organization
Torrance Unified School District
OPPOSITION
California Federation of Teachers
California Teachers Association