BILL ANALYSIS �
AB 719
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Date of Hearing: May 27, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 719 (Block) - As Amended: May 11, 2011
Policy Committee: Education
Vote:7-3
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill repeals the sunset for the distribution of special
education funding under the Special Disability Adjustment (SDA)
and instead, establishes a new SDA formula that gradually phases
out the existing distribution formula for each year beginning
with the 2011-12 fiscal year (FY), as specified. Specifically,
this bill:
1)Requires the Superintendent of Public Instruction (SPI) to
update the incidence multiplier used to determine the SDA
using data collected in or after 2008.
2)Requires the SPI, for the 2011-12 FY only, to allocate SDA
funding according to the following: (a) 90% using the existing
funding formula (as statute read on January 1, 2011) and (b)
10% using updated incidence multiplier information as
specified above.
3)Requires the SPI, for the 2012-13 FY, to allocate SDA funding
according to the following: (a) 75% using the existing funding
formula (as statute read on January 1, 2011) and (b) 25% using
the using the updated incidence multiplier information as
specified above.
4)Requires the SPI, for the 2013-14 FY, to allocate SDA funding
according to the following: (a) 50% using the existing funding
formula (as statute read on January 1, 2011) and (b) 50% using
the using the updated incidence multiplier information as
specified above.
5)Requires the SPI, for the 2014-15 FY, to allocate SDA funding
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according to the following: (a) 25% using the existing funding
formula (as statute read on January 1, 2011) and (b) 75% using
the using the updated incidence multiplier information as
specified above.
6)Requires the SPI, for the 2015-16 FY and each FY thereafter,
to allocate 100% of SDA funding using the updated incidence
multiplier information as specified above.
7)Specifies funding for the SDA is contingent upon an
appropriation.
FISCAL EFFECT
GF/98 costs, of approximately $55 million, to provide an SDA
adjustment to Special Education Local Planning Areas (SELPAs),
as specified. This is the cost estimated for the 2011-12 FY.
Based on the latest estimates, the following table illustrates
the five largest allocations.
--------------------------------------------------
|SELPA |Amount |
|-----------------------------------+--------------|
|Los Angeles Unified |$16.7 million |
| | |
|-----------------------------------+--------------|
|San Diego Unified |$7.8 million |
|-----------------------------------+--------------|
|Garden Grove Unified |$5.8 million |
|-----------------------------------+--------------|
|East County SELPA |$3.9 million |
|(school districts in eastern San | |
|Diego County) | |
|-----------------------------------+--------------|
|South County SELPA |$2.6 million |
|(school districts in southern San | |
|Diego County) | |
--------------------------------------------------
The governor's proposed 2011-12 budget reflects the sunset of
the SDA formula and redirects this funding within GF/98 special
education allocations.
COMMENTS
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1)Background . AB 602 (Davis), Chapter 854, Statutes of 1997,
reformed special education funding by creating a system
designed to fund all SELPAs based on the total number of
average daily attendance (ADA) in the area, regardless of the
number of students receiving special education services. This
approach was intended to eliminate fiscal incentives for
identifying students for special education. However, some
argued that the "one-size-fits-all" AB 602 formula failed to
account for the fact that the need for special education
services might differ across SELPAs.
Based on the findings of an American Institutes for Research
(AIR) study, beginning in 1998, the Legislature provided an
additional SDA appropriation to certain SELPAs found to have
higher incidences of severe and/or "high-cost" special
education students residing in their attendance (based on 1997
data). An attempt to update the study was made in 2004,
however, because of concerns with the data, the adjustment
continues to be based on 1997 factors.
2)Purpose . AB 184 (Block), Chapter 403, Statutes of 2010,
extended the authority for the SPI to allocate special
education funding pursuant to the SDA formula for two
additional years (until the 2010-11 FY). It also sunset the
SDA formula on July 1, 2011.
Chapter 403 was the result of an agreement between several
SELPAs who receive funding pursuant to the SDA formula, the
administration, and the Legislature with the idea that a study
would be completed prior to the sunset to better inform the
manner in which this funding be distributed. According to the
author, "This poses two problems. First, there is no plan in
place to transition to a new funding adjustment to address the
evidenced differences in funding needs across SELPAs. Second,
it creates a difficult funding cliff for SDA-recipient SELPAs,
which would lose SDA funding at the same time as they lose
one-time federal stimulus Individuals with Disabilities Act
funding compounded by other cuts in funding for general K-12
education. This triple blow will have serious, negative
effects on students in these impacted areas."
This bill establishes a new SDA formula that gradually phases
out the existing distribution formula for each year beginning
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with the 2011-12 FY.
3)Implementation issue . Existing law sunsets the allocation of
the SDA formula on July 1, 2011. This bill requires the SPI
to allocate SDA funding in the 2011-12 FY. This bill,
however, does not contain an urgency clause and as such, would
not take effect until January 2012 -the middle of the 2011-12
FY. Therefore, for six months, there is no statutory
authority provided to the SPI to make a SDA calculation. Due
to this issue, SELPAs will not receive an SDA allocation for
the first six months of the year.
4)2010 Budget Act SDA study . The 2010 Budget Act appropriated
$300,000 in one-time carryover, federal special education
funding to SDE to contract for a study regarding the SDA
formula with the results being submitted to the Legislature on
or before April 1, 2011. The study is required to include the
following:
a) A summary of the extent to which incidences of severe
disabilities are evenly or unevenly distributed across the
state.
b) A determination of whether any observed differences in
incidences have a significant effect on the relative costs
to SELPAs for providing special education services.
c) Suggested methods for adjusting the state's funding
formula that do not create inappropriate fiscal incentives
for identifying students as needing special education or
for placing students in particular programs.
Statue required SDE to work with the Department of Finance
(DOF) and the Legislative Analyst's Office (LAO) regarding the
scope, design, and cost of the study. SDE met several times
with DOF, LAO, and legislative staff to discuss implementation
of the study. SDE indicated the short time period (less than
6 months) made it difficult to hire a contractor. As such,
SDE attempted to utilize existing data to meet the
requirements of the study. The data used was limited and
incomplete, which made it difficult to provide valid
recommendations regarding revising the SDA adjustment. To
date, SDE has not submitted a formal report to the
Legislature.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
AB 719
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