BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 143 (Fuller) - Necessary Small High Schools: Average Daily
Attendance
Amended: April 17, 2013 Policy Vote: Education 9-0
Urgency: Yes Mandate: No
Hearing Date: May 23, 2013 Consultant: Jacqueline
Wong-Hernandez
SUSPENSE FILE.
Bill Summary: SB 143 authorizes three school districts continue
to count pupils in grades 7 and 8 when calculating their
necessary small school (NSS) high school funding, for the
current (2012-13) school year. This bill is an urgency measure.
Fiscal Impact:
State costs of approximately $2.5 million General Fund
to allow three school districts to claim ADA for pupils in
grades 7 and 8 toward NSS high school funding in 2012-13.
Local Control Funding Formula (LCFF): If the Governor's
budget proposal to overhaul school finance by implementing
the LCFF becomes law, this bill would lock in the
additional $2.5 million in annual General Fund costs in the
affected school districts' base funding, permanently.
Background: Existing law defines an NSS as an elementary school
with an ADA of less than 101 or a high school with an ADA of no
greater than 300 in school districts that enroll a total of less
than 2,501 pupils. NSSs receive specified allowances based upon
the size of the small school as measured by number of teachers
and students and in lieu of revenue limited funding (general
purpose funding) that would usually be allocated per pupil in
attendance. (Education Code � 42285)
Existing law also specifies necessary small elementary schools
be funded based on their ADA for K-8, excluding pupils who
attend a junior high school for grades 7 and 8. Likewise, a
necessary small high school is funded on the basis of ADA for
grades 9-12.
In 2011, AB 32 X1 (Blumenfield) Ch. 15/2011, provided, on a
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one-time basis for the 2011-12 fiscal year, authorization for
three school districts to receive NSS funding, at the NSS high
school rate, for pupils in grades 7 and 8. (EC � 42285.5)
Last year, AB 2362 (Conway) 2012 proposed to continue that
funding for the three school districts. That bill was held under
submission in this Committee, and the funding provided by AB 32
X1 for the 2011-12 fiscal year, is not being provided in the
current school year.
Proposed Law: SB 143 allows Baker Valley Unified, Butte Valley
Unified, and Scott Valley Unified school districts to count
pupils in grades 7 and 8 when calculating their NSS high school
funding, and requires them to pursue any funding deferral
exemptions for which they may be eligible. This bill is an
urgency measure.
Related Legislation: AB 2362 (Conway) 2012 was substantially
similar to this bill, but would have continued funding
indefinitely. That bill was held on this Committee's Suspense
File in August 2012.
Staff Comments: Existing law allows necessary small high school
funding to be awarded only for ADA in grades 9-12. In 2011, the
California Department of Education (CDE) determined that four
school districts, subsequently amended down to three school
districts - Baker Valley Unified, Butte Valley Unified, and
Scott Valley Unified - that received necessary small high school
funding had been misreporting grade 7 and 8 ADA in calculations
for grades 9-12 ADA and receiving funding on that basis. As a
result of misreporting, those districts received approximately
$2.5 million in additional funds, as follows:
-----------------------------------------------------------------
| District | County | School | Total NSS |
| | | | Funding |
|-------------------+-----------+-----------------+---------------|
|Baker Valley |San |Baker Jr. High |$515,549 |
|Unified |Bernardino | | |
|-------------------+-----------+-----------------+---------------|
|Butte Valley |Siskiyou |Butte Valley |$759,082 |
|Unified | |Middle | |
|-------------------+-----------+-----------------+---------------|
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|Scott Valley |Siskiyou |Scott Valley |$1.24 million |
|Unified | |Junior High | |
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This bill would allow the three school districts to continue to
receive that funding for the current school year (2012-13).
Absent this bill, the state would cease paying NSS funding for
grades 7 and 8 in these districts, resulting in cost savings of
approximately $2.5 million per year. Under the state's current
school finance system, the additional funds would cease at the
end of this school year (and the districts would have to seek
another statutory exemption for funding to continue).
Staff notes that as part of the 2013-14 Governor's Budget, the
Administration proposes to restructure the existing K-12 finance
system. The Administration proposes to primarily fund schools
using a new formula known as the Local Control Funding Formula
(LCFF). The LCFF would consolidate the vast majority of state
categorical programs and revenue limit apportionments into a
single funding stream, and establishes a target funding level
for each school district.
The LCFF has a 7-year "roll out" period for schools to reach
their target funding levels. A school district's baseline
funding for 2013-14, will not be allowed to fall below the
funding it received in 2012-13. For a school district that is
currently funded below its eventual target rate, this "hold
harmless" provision locks in funding at the current level and
then steadily increases funding (during the roll out period)
until the 7-year target is reached. For a school district
already receiving funding above its new formula-projected
target, the hold harmless provision would continue current
funding levels until, at a minimum, other school districts
achieved their target funding levels.
Under the LCFF, if the augmentations shown in the chart above
were funded in 2012-13, they would be locked in as part of those
school districts' base funding levels moving forward. The CDE
has indicated that if the districts receive NSS funding this
year, all of their LCFF hold harmless rates would be higher than
their LCFF funding would otherwise be in 2013-14. Those rates
would continue until the funding they would receive under the
LCFF roll-out catches up with those rates.
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