Assembly Education Committee School Finance Working Group

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Assembly Education CommitteeSchool Finance
Working Group

• Status Report
• March 8, 2006

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Guiding Principles

• Be aware of work that others have done
• 2002 Master Plan for Education
• Be aware of work that others are doing
• Governors Advisory Committee on Education
  Excellence
• Our target legislation that is both significant
  and achievable

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Guiding Principles

• Education Master Plan School Finance goals
• Transparency simplicity
• Adequate funding equitable distribution
• Local revenue options
• Promote effective service delivery

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Guiding Principles

• Dont duplicate the work of others
• Recent legislation consolidating categoricals
  AB 825 (Firebaugh), Chapter 871, Statutes of
  2004.
• Governors Advisory Committee reviewing four
  areas including funding adequacy and
  distribution, function and effectiveness of
  governance structures.

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Working Group Issue Areas

• Economic Impact Aid allocations
• Declining enrollment
• Equalization funding
• Grade span funding for school districts
• Enrollment-based funding options
• Local revenue options
• State-mandated programs funding

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Economic Impact Aid Allocations

• The Program
• Funds school districts to provide additional
  education services for students in poverty and
  English learners.
• 2006 Governors budget proposes 648 million for
  the program, an increase of 10.4 percent.
• Existing funding mechanism has been in use for
  more than 25 years.

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Economic Impact Aid Allocations

• LAO findings
• Formula does not reflect current demographics
• Emphasis on poverty skews per-pupil allocations.
• Allocations are unpredictable, and may appear
  arbitrary.
• Poverty measure used CalWORKs counts may no
  longer be a good measure of poverty.
• CalWORKs data no longer provided, making formula
  unworkable.

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Economic Impact Aid Allocations

• LAO recommends adopting a new formula that is
  transparent, predictable and uses dependable
  data.
• Replace or remove CalWORKs data from the
  formula.
• Align with other programs serving the same
  population.
• Allocate through a combination of grant types.
• Provide transitional funding.

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Economic Impact Aid Allocations

• The SF Working Group has asked LAO staff to
  recommend revisions to the EIA formula that will
  best accomplish the goals they have outlined in
  their analysis.

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Declining Enrollment

• Flat pupil enrollment projected statewide for the
  coming years.
• Many individual school districts are experiencing
  persistent and significant long-term declines in
  enrollment.
• Schools are funded based on average, not
  marginal, costs persistent declines mean
  cutting the instructional program for all
  students.

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Equalization

• California funds schools in two basic parts
• General purpose funding is allocated through the
  revenue limit formula.
• Categorical funding is allocated in many
  different ways, for specific purposes or to meet
  particular needs.

Similar amounts for every student.
Different amounts, depending on needs.
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Equalization

• Goal to equalize per pupil general purpose
  funding.
• Equalization targets established for each type of
  school district elementary, unified and high
  school.
• Targets established separately for large or small
  size districts within each type.

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Grade Span Funding

• Proposal to fund school districts based on grade
  spans served, rather than type of district.
• Primary grades K thru 5
• Middle grades 6 thru 8
• Secondary grades 9 thru 12

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Grade Span Funding

• Eliminates the financial impact of changes in
  pupil distribution across grade levels.
• Provides a truly comparable base revenue per
  pupil for every school district.
• Harmonizes the funding methods between regular
  K-12 schools and charter schools.

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Enrollment-based funding options

• California funds schools based on the daily
  attendance of pupils.
• Many other states fund schools based on some
  measure of enrollment rather than actual
  attendance.
• School districts must offer an instructional
  program for each of the students that they
  enroll, regardless of attendance.

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Enrollment-based funding options

• The working group is
• reviewing practices in other states that use
  enrollment-based funding methods.
• gathering information about the impact of
  attendance-based funding systems on pupil
  attendance.
• Looking at other options that may improve
  attendance.

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Next Steps

• Continue our review of the remaining issue areas
  local revenue options, state mandated-programs
  funding.
• Develop and refine our proposals for school
  finance legislation.