BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Alan Lowenthal, Chair
2011-12 Regular Session
BILL NO: SB 452
AUTHOR: Berryhill
AMENDED: April 6, 2011
FISCAL COMM: Yes HEARING DATE: April 13, 2011
URGENCY: No CONSULTANT:Beth Graybill
SUBJECT : Charter Schools: Funding.
SUMMARY:
This bill makes a basic aid school district that is the
district of residence of pupils who attend either a charter
school whose petition is granted by a school district or a
charter school whose petition is initially denied by a school
district and later approved by a county board of education, a
"sponsoring local educational agency" for those pupils.
BACKGROUND
Existing law authorizes anyone to develop, circulate, and
submit a petition to establish a charter school, requires
charter developers to collect certain signatures in support
of the petition, and requires the governing board of a school
district to grant a charter unless the petition fails to meet
specified criteria. If the governing board of a school
district denies a petition for a charter school, the
petitioner may submit the petition to the county board of
education for approval. (EC � 47605)
Existing law specifies the intent of the Legislature that
each charter school be provided with operational funding that
is equal to the total funding that would be available to a
similar school district serving a similar pupil population,
except that a charter school may not be funded as a necessary
small school or a necessary small high school, nor receive
revenue limit funding that exceeds the statewide average for
a school district of a similar type. (EC � 47630)
Existing law, for purposes of charter school funding, defines
a sponsoring local educational agency as a school district
that grants a charter or one that initially denied the
charter but is designated as the sponsoring district after
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the charter is approved by the county board of education.
Existing law also specifies that for pupils attending
countywide charter schools who reside in a basic aid school
district, the sponsoring local educational agency means the
school district of residence of the pupil. (EC � 47632)
Existing law requires a sponsoring local educational agency
to annually transfer to each of its charter schools funding
in lieu of property taxes that is equal to the lesser of the
following two amounts:
a) The average amount of property taxes per unit of
average daily attendance received by the local
educational agency multiplied by the charter school's
average daily attendance (ADA); (EC � 47635(a)(1))
b) The statewide average general-purpose funding per
unit of ADA received by school districts, as specified,
multiplied by the charter school's ADA in each of the
four corresponding grade level ranges: kindergarten and
grades 1,2, and 3; grades 4, 5, and 6; grades 7 and 8;
and grades 9 to 12 inclusive.
(EC � 47635(a)(2))
Existing law establishes the following funding rules with
respect to basic aid districts and out-of-district pupils
attending a charter school in another district:
a) For a pupil who resides in a nonbasic aid district
attending a charter school in a basic aid district : the
Superintendent of Public Instruction apportions to the
sponsoring school district an amount equal to 70% of the
revenue limit per unit of ADA that would have been
apportioned to the school district that the pupil
resides in and would have otherwise have been eligible
to attend. (EC � 47663)
b) For a pupil who resides in a basic aid district
attending a charter school in a non basic aid district :
The basic aid district is required to transfer to the
charter school an amount of funds equivalent to the
revenue limit earned through average daily attendance by
the charter school for each pupil's attendance. (EC �
47635)
ANALYSIS
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This bill , for purposes of Chapter 6 of Part 26.8 of Division
4 of the Education Code specifies:
1) If a charter is granted by a school district, the
sponsoring local educational agency is the school
district except for those pupils whose school district
of residence is a basic aid school district, in which
case for those pupils, the basic aid school district of
residence is the sponsoring local educational agency.
2) If a charter is granted by a county office of education
after having been previously denied by a school
district, the sponsoring local educational agency means
the school district that initially denied the charter
petition, except for those pupils whose district of
residence is a basic aid school district, in which case
for those pupils, the basic aid school district of
residence is the sponsoring local educational agency.
STAFF COMMENTS
1) Basic aid districts and charter schools . A basic aid
district, or community funded district, is one in which
the district's per pupil property tax revenue is greater
than the per pupil revenue limit. Basic aid districts
receive all of their general purpose funding from local
property tax revenues and do not receive additional
general purpose funding from the state. Until 2003-04,
districts whose property tax exceeded the revenue limit
received from the state $120 per pupil in "basic aid"
thus becoming known as basic aid districts.
When a student from a basic aid district enrolls in a charter
school located in a nonbasic aid district, the basic aid
district is required to pay for the cost of that
student's education by transferring an amount equal to
the charter school's revenue limit to the charter
school. Similarly, when a student from a nonbasic aid
district attends a charter school in a basic aid
district, the basic aid district is entitled to receive
70% of the district of residence base revenue limit.
However, when a student from a basic aid district
attends a charter school in another basic aid district,
the sponsoring district (the district with the charter
school) bears the cost of educating that pupil.
2) Need for the bill . Current law does not provide
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statutory guidance regarding payment responsibilities
for charter schools when students from one basic aid
district attend a charter school in another basic aid
district. In the absence of a funding agreement between
the two districts, the sponsoring basic aid district
essentially "pays" for the students of the other
district when it transfers funds to the charter school.
Depending on the number of out- of-district students
enrolled in the charter school, the sponsoring school
district can incur significant costs, which could erode
resources available to serve their own pupils.
According to the author's office, the unintended
consequence of this policy gap is that the taxpayers in
one district pay the educational costs of students who
live in a different district. By designating each basic
aid school district as a sponsoring local educational
agency, SB 452 could help ensure that each district
bears an appropriate and equitable burden of payment for
its pupils.
When a basic aid district become a sponsoring local
educational agency as a result of a county board of
education approving a charter petition previously denied
by the school district, the district can face
uncontrolled costs, as is the case with the Big Oak
Flat-Groveland Unified School District (BOFGUSD), which
denied a charter school petition that was later approved
by the Tuolumne County Board of Education. Because of
its unique location near Lake Don Pedro, the Golden
Lakes Charter School draws enrollment from Tuolumne and
Mariposa counties and neighboring areas. According to
information provided by the author's office, BOFGUSD
expects to pay an estimated $600,000 (approximately 13
percent of the restricted and unrestricted general fund
budget of the district) in the current fiscal year for
pupils enrolled in Golden Lakes Charter School who were
previously attending schools in a neighboring basic aid
district. It is not clear, however that the issue
confronted by BOFGUSD is experienced by other districts
in the state.
3) Appropriate solution ? This bill essentially designates
basic aid districts as sponsoring local educational
agencies for their pupils who attend charter schools
outside of the district, which would be consistent with
the state policy with regard to students who reside in a
basic aid district and attend a countywide charter
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school. The effect of this change would be that basic
aid districts would be required to transfer funding to
the charter school for each pupil who attends the
school. However, given the complexity of school finance
laws concerning charter schools and basic aid districts,
the potential for unintended consequences resulting from
this bill is less clear. For example, it is unclear
whether this bill would change how charter schools in
nonbasic aid districts receive funding for pupils whose
district of residence is a basic aid district and it is
unclear how this measure could impact districts whose
pupils attend nonclassroom-based charter schools.
Given that other districts in similar situations have
established agreements to address this funding issue,
one could argue that a memorandum of understanding could
address the policy issue. Are there other solutions
that should be considered, such as the 70% formula that
applies for pupils who reside in a nonbasic aid district
attend a charter school in a basic aid district?
SUPPORT
Big Oak Flat-Groveland Unified School District
OPPOSITION
None received.