BILL ANALYSIS
SB 1396
Page 1
Date of Hearing: August 4, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1396 (Lowenthal) - As Amended: August 2, 2010
Policy Committee: Education Vote:7-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill establishes the Maximum Categorical Flexibility Pilot
(MCFP) program for implementation in up to three school
districts from the 2011-12 to 2013-14 fiscal years (FY) and
sunsets this program on July 1, 2014. Specifically, this bill:
1)Authorizes the Superintendent of Public Instruction (SPI) to
select up to three school districts to participate in the MCFP
program, as specified.
2)Requires an eligible school district to meet specified
preconditions, including the following: (a) a plan to
accelerate pupil progress that is adopted by the school
district governing board; (b) metrics used to measure pupil
performance as it relates to plan details; (c) an annual
evaluation of the district superintendent's performance linked
to the plan; (d) community support for the plan; and (e) a
school district's ability to demonstrate a pattern of
stability between management and bargaining units.
3)Requires a school district, as a condition of eligibility, to
survey all parents/guardians in the district to gauge support
for participation in the MCFP program. This measure also
requires at least one-half of the permanent teachers and
one-half of the surveyed parents/guardians to support
participation in this program.
FISCAL EFFECT
1)GF/98 reallocation, likely in the tens of millions, to
establish the MCFP program. This bill authorizes up to three
school districts to repurpose categorical program funding
allocated for specified programs until the 2013-14 FY. The
SB 1396
Page 2
following table illustrates the amount (compared to current
law) of statewide categorical program funding available for
selected school districts to repurpose under this measure.
--------------------------------------------------
| Programs | 2009-10 FY Allocation |
| | (in millions) |
|-------------------------+------------------------|
|Adults in Correctional | $15,000|
|Facilities | |
|-------------------------+------------------------|
|Child Development* | $1,814760|
|-------------------------+------------------------|
|Economic Impact Aid* | $945,760|
|-------------------------+------------------------|
|Foster Youth Program * | $15,000|
|-------------------------+------------------------|
|Home To School | $495,951|
|Transportation | |
|-------------------------+------------------------|
|K-13 CSR | $3,149,874|
|-------------------------+------------------------|
|Total |$6,436,364 |
--------------------------------------------------
*Programs are required to serve same pupils as specified
in current statute.
2)One-time GF administrative costs to the State Department of
Education (SDE), likely between $300,000 and $650,000, to
administer the MCFP program and contract for an evaluation, as
specified.
SUMMARY CONTINUED
4)Requires a school district, as condition of eligibility, to
implement a standards-based curriculum for English language
learner (ELL) pupils, as specified.
5)Requires a school district selected to participate in the MCFP
program to demonstrate the following: (a) significant progress
toward accelerating pupils' progress toward proficiency on the
state's academic standards over a three-year period; (b)
narrowing the achievement gap in the district's federally
recognized subgroups; (c) fiscal solvency, as measured by
state standards and criteria; (d) positive growth, as measured
by the Academic Performance Index and state assessments; and
SB 1396
Page 3
(e) improvement in the district's graduation rate, as
specified.
6)Requires the SPI to apportion the amount of funding
participating school districts received in the 2008-09 FY for
programs authorized under categorical flexibility pursuant to
the February 2009 budget agreement and the following programs:
(a) home-to-school transportation (HTST), (excluding the
amount for special education); (b) foster youth programs; (c)
economic impact aid (EIA); (d) child development; (e) adults
in correctional facilities and (f) K-3 class size reduction.
7)Authorizes a school district participating in the MCFP program
to use categorical program funds allocated in this measure for
any purpose related to improving pupil achievement and
academic instruction, except for the following programs: EIA,
foster youth, and child development. This measure requires
districts to expend these program funds for the same pupil
populations as required in statue (e.g., EIA funds for ELL and
low-income pupils).
8)Requires a participating school district to allow public input
at no less than two regularly scheduled governing board
meetings on the use of funding authorized under the MCFP
program, as specified.
9)Requires a participating school district, for each of the FYs
this program is operative, to submit an annual report to the
SDE detailing the expenditure of categorical program funds, as
specified. This bill requires the report to include specified
fiscal information regarding the weight of funding expended on
low-socioeconomic, ELL pupils, and pupils with special needs.
10)Requires the SPI, by June 1, 2011, to contract for the
completion of an independent evaluation of the MCFP program.
COMMENTS
1)Background . SB 4 X3 (Ducheny), Chapter 12, Statutes of 2009,
enacted as part of the February 2009 budget agreement,
provided school districts with unprecedented fiscal and policy
flexibility related to over 40 categorical programs between
the 2008-09 FY to the 2012-13 FY. Specifically, any school
district that received funding for specified categorical
programs in the 2008-09 FY is authorized to use this funding
SB 1396
Page 4
for any other educational purpose until the 2012-13 FY. The
school district may choose to continue operating the
categorical program that it received funding for or redirect
it for any other educational purpose it deems appropriate.
Also, if the LEA chooses to continue operating the categorical
program, it is not required to abide by statutory requirements
associated with the program. For example, the LEA may choose
to continue operating a middle school counseling program, but
it is not required to only serve pupils who are struggling
academically, as required in statute prior to Chapter 12.
2)Purpose . For the last several years, school districts have
argued they need increased flexibility in their categorical
program funds, particularly during the state's fiscal crisis.
Districts contend they are in the best position, not the
state, to decide how to allocate their funding and for what
purposes. While SB 4 X3 authorized funding flexibility for
over 40 categorical programs totaling $4.5 billion GF/98,
school districts continue to request funding flexibility for
the remaining 15 programs not included in the flexibility.
According to the author, "California school districts face
unprecedented cuts to staff and programs as a result of the
state's continuing bleak economic condition and the governor's
proposed 2010-11 budget cuts to schools. [The categorical
flexibility] expires in 2012-13 and does not include an
evaluation component to assess the benefits of flexibility and
whether giving school districts categorical program funding
flexibility leads to better local decision making and improved
student achievement.
"[This bill] provides three school districts maximum
flexibility by creating a new categorical program block grant.
[It] allows participating school districts to use the funds
for any purpose related to improving student achievement and
academic instruction and at the same time hold those school
districts accountable for results."
3)Preliminary information on implementation of categorical
flexibility . According to a Legislative Analyst Office May
2010 survey of school districts' implementation of categorical
flexibility, "Most districts also indicated that they were
relying heavily on their newly granted authority to shift
funds away from the "flexed" categorical programs. In
particular, districts reported shifting some funds away from
SB 1396
Page 5
flexed programs that did not support direct K-12 classroom
instruction (such as adult education, deferred maintenance,
professional development, and school safety) as well as from
flexed programs that might be considered enrichment or
supplemental student support (such as art and music, gifted
education, supplemental instruction, and counseling). Few
districts reported shifting funds into flexed programs. Thus,
the majority of districts generally appear to be using
freed-up categorical funds to support core classroom
instruction."
The LAO recommends expanding the categorical flexibility to
include additional programs. The LAO states: "we recommend
the Legislature convert three now stand-alone programs (K-3
CSR, HTS, and After School Safety and Education) into flexed
programs. As is the case with the other currently flexed
categorical programs, this would allow districts to use
associated funding for any high priority and exempt them from
the programs' underlying statutory requirements. We also
recommend consolidating two other stand-alone programs-merging
the smaller, more narrowly focused English Language
Acquisition Program into the much larger, more broad-based EIA
program."
This bill allows participating school districts in the MCFP
program to spend HTS and K-3 CSR program funding for any
purpose that improves pupil achievement. It also relieves
school districts or programmatic requirements related to
foster youth programs, EIA, and child development programs.
Districts, however, are still required to provide these
program funds to the pupils originally intended to be served
by these funds (i.e., foster youth, low income, and ELL
pupils).
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081