BILL ANALYSIS �
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Date of Hearing: June 25, 2014
ASSEMBLY COMMITTEE ON EDUCATION
Joan Buchanan, Chair
SB 1137 (Torres) - As Amended: May 27, 2014
SENATE VOTE : 37-0
SUBJECT : School transportation: apportionments
SUMMARY : Establishes a new formula for providing state funding
for home-to-school transportation for school districts, county
offices of education, transportation joint powers agencies, and
regional occupational centers or programs that provide
transportation services. Specifically, this bill :
1) Provides that each of these entities shall receive a
state transportation apportionment equal to the greater of
100% its transportation apportionment for the 2013-14
fiscal year or its apportionment computed pursuant to the
following schedule:
a. For the 2014-15 fiscal year, 41% of its
approved costs for the prior fiscal year;
b. For the 2015-16 fiscal year, 42.5% of its
approved costs for the prior fiscal year;
c. For the 2016-17 fiscal year, 44% of its
approved costs for the prior fiscal year;
d. For the 2017-18 fiscal year, 45.5% of its
approved costs for the prior fiscal year;
e. For the 2018-19 fiscal year, 47% of its
approved costs for the prior fiscal year;
f. For the 2019-20 fiscal year, 48.5% of its
approved costs for the prior fiscal year; and
g. For the 2020-21 fiscal year, 50% of its
approved costs for the prior fiscal year.
2) Requires the 2013-14 transportation apportionments to be
adjusted annually from the 2014-15 to the 2020-21 fiscal
year, inclusive, by the percentage change in the annual
average value of the Implicit Price Deflator for State and
Local Government Purchases of Goods and Services, as
specified.
3) States that these provisions shall be operative only to
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the extent that funding is provided in the annual Budget
Act or other statute.
EXISTING LAW
1) Provides transportation funding as an add-on to the
local control funding formula (LCFF).
2) Provides that the amount of transportation funding
received by each local education agency (LEA) shall be
equal to what it received in 2012-13.
3) Requires transportation funding to be used only for
transportation purposes.
4) Requires each LEA that receives transportation funding
to spend no less for transportation than it did in 2012-13.
FISCAL EFFECT : According to the Senate Appropriations
Committee, annual General Fund/Proposition 98 costs of $165
million to $220 million from 2014-15 to 2017-18, and $220
million to $270 million from 2018-19 to 2020-21.
COMMENTS : Prior to the enactment of the LCFF, state
transportation aid was based on a formula that provided each LEA
with the lessor of its prior year approved costs or its prior
year state aid. This formula was established in 1983. While
the formula allowed for the reduction of state aid if approved
costs fell, it did not allow for increases in state aid if
approved costs exceeded prior year aid, which was the case for
many growing districts. As a result, the percentage of approved
costs that get reimbursed by state aid ranges from 0% (for
districts that did not have a transportation program in the base
year) to 97%. The statewide average in 2011-12 was 38%. The
result of this inequity is ultimately felt in the classroom,
because districts that receive little state aid must apply funds
to transportation that would otherwise be used for instructional
purposes.
The transportation add-on to the LCFF . The Governor proposed to
eliminate transportation funding, along with most other
categorical programs, as part of his original LCFF proposal.
However, a compromise was reached whereby LEAs that received
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transportation funding in 2012-13 would continue to receive that
same level of funding as an add-on to their LCFF funding. No
cost-of-living adjustment is provided. The total statewide
amount of the transportation add-on is $496 million.
LAO report. In February 2014, the Legislative Analyst's Office
(LAO) issued a report with the following three options for
funding transportation:
1) Fund transportation within the LCFF. This is consistent
with the Governor's original proposal and with how most
other categorical programs were treated. LEAs would pay
for their transportation costs with their LCFF funding.
2) Create a targeted program that reimburses a portion of
extraordinary transportation costs. This would provide
reimbursement for a fixed percentage of transportation
costs that exceeds a specified level (for example, in
excess of 8% of an LEA's budget).
3) Create a broad-based program that reimburses a fixed
percentage of all transportation costs.
The state could gradually transition to whichever option is
adopted.
This bill is based on option 3, and phases in a 50%
reimbursement level over seven years. LEAs that have more than
50% of their costs reimbursed would be held harmless.
Arguments is support. Supporters argue that this bill is needed
to reduce funding disparities that have grown over time. In
addition, they argue that home-to-school transportation funding
should be retained as a separate categorical program outside of
LCFF, because the factors that drive transportation costs are
different from the factors used to determine LCFF funding.
These factors include special education needs, geography,
weather, traffic, and safety concerns. Basing funding on
approved costs would do a better job of basing funding on need,
which is a primary objective of the LCFF. Requiring districts
to continue paying for up to half of their transportation costs
retains the local incentive to keep costs down.
Arguments in opposition. Opponents raise two concerns. First,
they argue that charter schools should be included, because some
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charter schools also provide transportation services. Second,
they argue that the bill's goal of increased equity should be
achieved by redistributing the existing $496 million that the
state provides for transportation, instead of by increasing
state transportation funding. Staff notes that the combined
impact of these two recommendations would be to increase funding
for charter schools and reduce funding for all other LEAs that
receive transportation funding.
Recommended amendments. The new formula established by this
bill takes effect in 2014-15. This was written in anticipation
of funding for this purpose being provided in the 2014-15
budget. However, the recently-adopted budget does not provide
this funding. Accordingly staff recommends that the bill be
amended to begin the phase-in in 2015-16. In addition, staff
recommends the following amendments:
Provide for the continuation of the 50% reimbursement
rate beyond 2021-22 (this is the author's intent and
corrects a drafting error).
Add charter schools to the LEAs that can receive
reimbursement for approved transportation costs, because
some charter schools provide transportation services.
Provide that LEAs that currently have more than 50% of
their approved costs reimbursed shall not receive a
cost-of-living adjustment until their reimbursement rate
drops to 50%.
Require the Superintendent of Public Instruction to
establish a process to provide one-time startup funding for
school districts that do not currently provide
transportation services. (This recognizes that
transportation funding is provided a year after costs are
incurred and that startup costs may be too prohibitive for
districts to initiate a transportation program.)
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL-CIO
California Association of School Business Officials
California Association of School Transportation Officials
California Labor Federation
California School Boards Association
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California School Employees Association
California State PTA
California Teachers Association
Central Unified School District
Central Valley Education Coalition
Kern County Superintendent of Schools
Panama-Buena Vista Union School District
Red Bluff Joint Union High School District
Riverside County Superintendent of Schools
Rural County Representatives of California
Santa Monica Malibu Schools
School Transportation Coalition
Service Employees International Union-California
Small School Districts Association
West County Transportation Agency
Two individuals
Opposition
California Charter Schools Association Advocates
Analysis Prepared by : Rick Pratt / ED. / (916) 319-2087