BILL NUMBER: AB 8 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 9, 2009
PASSED THE ASSEMBLY SEPTEMBER 10, 2009
AMENDED IN SENATE SEPTEMBER 3, 2009
AMENDED IN SENATE JULY 23, 2009
AMENDED IN SENATE JUNE 30, 2009
AMENDED IN ASSEMBLY JUNE 1, 2009
AMENDED IN ASSEMBLY MARCH 26, 2009
INTRODUCED BY Assembly Member Brownley
(Coauthor: Assembly Member Smyth)
(Coauthors: Senators Hancock and Romero)
DECEMBER 1, 2008
An act to amend and repeal Section 42238.21 of, and to add Section
41054 to, the Education Code, relating to education finance.
LEGISLATIVE COUNSEL'S DIGEST
AB 8, Brownley. Education finance: working group.
(1) Existing law establishes the public school system in this
state, and, among other things, provides for the establishment of
school districts throughout the state and for their provision of
instruction at the public elementary and secondary schools they
operate and maintain. Existing law establishes a public school
funding system that includes, among other elements, the provision of
funding to local educational agencies through state apportionments,
the proceeds of property taxes collected at the local level, and
other sources.
This bill would express findings and declarations of the
Legislature with respect to the school funding system in the state.
The bill would require the Director of Finance and the Legislative
Analyst to convene a working group to make findings and
recommendations to the Legislature and the Governor on or before
December 1, 2010, regarding restructuring California's school finance
system. The bill would require those findings and recommendations to
include, among other things, alternative structures for funding
public schools, the policy and fiscal implications of the alternative
funding structure or structures, and an evaluation mechanism to
facilitate continuous improvement, maximum transparency, and
accountability of the funding structures.
(2) Existing law provides that the revenue limit for the
Newport-Mesa Unified School District for the 1996-97 fiscal year, and
future fiscal years, shall not include specified funds allocated to
that district the receipt of which were delayed due to bankruptcy
filed by the County of Orange.
This bill would provide that these provisions would remain in
effect only until July 1, 2010.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) The 22 studies of the Getting Down to Facts Project and the
Governor's Committee on Education Excellence were consistent in their
conclusions that California's current education finance system is
overly complex, irrational, and burdensome, and is in need of a
long-term plan for comprehensive reform.
(b) The complexity of the current system poses a major obstacle to
transparency and effectiveness. It is almost impossible to determine
how much revenue each school district receives or how those revenues
are spent, let alone to report this information to local
communities, stakeholders, and the state.
(c) The current system is not logical, with district revenues that
are largely a historical artifact of spending in the 1970s combined
with a confusing and burdensome system of categorical programs.
Disparities in school and district revenues are substantial and are
not aligned to pupil or educator needs.
(d) The system places substantial restrictions on the use of
resources by schools and districts, creating high compliance costs
and making it difficult for local educators to respond to the needs
of their pupils. Fewer paperwork requirements and more flexibility in
allocating resources are cited by school principals as two of the
most important factors in improving pupil outcomes.
(e) Many schools and districts lack the proper tools or capacity
to ensure that money is spent on the most effective programs and
practices. Research consistently finds that successful schools use
data to inform teaching practices and innovation. However, California
schools and districts vary widely in their use of data and in their
capacity to use data to improve pupil performance.
(f) Ensuring that money is spent efficiently and effectively
requires a complete understanding of how money is allocated by school
districts and spent within schools. However, California does not
collect financial data that is useful for determining the
effectiveness of resources at the state, district, or school levels.
(g) Therefore, it is the intent of the Legislature to do all of
the following:
(1) Build on previous research and recommendations to produce a
comprehensive plan for finance reform to support pupil achievement,
with specific consideration given to the interactions of incentives
in school finance formulas.
(2) Establish simpler formulas for allocating funding to each
local educational agency.
(3) Make the allocation of funding more rational and equitable so
that the revenues received by each local educational agency reflect
the actual cost of educating pupils with varying needs in varying
environments, so that all pupils are prepared, at the end of their
elementary and secondary education, for college, careers, and
successful participation in our democratic institutions, no matter
where they live or what their economic, racial, or ethnic background
may be.
(4) Support accountability by increasing the transparency of state
funding mechanisms and of expenditure decisions at the local level.
(5) Improve the reporting of financial data so that programmatic
investments can be linked to programs that increase pupil
achievement.
(6) Support continuous improvement by requiring periodic review of
the school finance system and of local resource decisions.
(7) Hold local educational agencies harmless, and transition to
the new system gradually, as new moneys become available.
SEC. 2. Section 41054 is added to the Education Code, to read:
41054. (a) The Director of Finance and the Legislative Analyst
shall convene a working group to make findings and recommendations to
the Legislature and the Governor regarding the implementation of a
restructured California school finance system as set forth in
subdivision (b).
(1) In addition to the Department of Finance and the Legislative
Analyst, the working group shall be composed of representatives of
the Governor, representatives of the Superintendent of Public
Instruction, and majority and minority staff of the appropriate
policy and fiscal committees of the Assembly and Senate.
(2) The working group shall consult with, or invite the
participation of, organizations or experts it deems appropriate to
accomplish its tasks.
(3) In its deliberations, the working group shall consider and
give appropriate weight to the sequence of recent research, findings,
and recommendations beginning with the Getting Down to Facts Project
and leading to the report of the Governor's Committee on Education
Excellence and other subsequent research papers and reports, and
shall draw upon, rather than repeat, those efforts.
(b) The working group shall make findings and recommendations
regarding all of the following:
(1) Alternative structures for funding public schools that shall
include, but not necessarily be limited to, all of the following
characteristics:
(A) Simple formulas for allocating funding to each local
educational agency.
(B) Rational and equitable allocation of funding so that the
revenues received by each local educational agency reflect the cost
of educating pupils with varying needs in varying environments,
including, but not necessarily limited to, pupils in poverty and
English learners.
(C) Predictability and stability of funding so that local
educational agencies can effectively plan for the future.
(D) Support for accountability by providing transparency of state
revenue allocation rules as well as expenditure decisions at the
local level.
(E) Facilitation of the reporting of financial data so that
programmatic investments can be linked to pupil achievement.
(F) Allocation of consistent additional resources to school
districts and county offices of education on the basis of exogenous
characteristics of the local educational agency and its pupils that
research has shown clearly affect the costs of educating pupils.
(G) Recognition of the financial consequences of growth or decline
in the number of pupils served.
(H) Reinforcement of the academic goals of the public schools.
(2) A means of transitioning from the current school funding
structure to the new structure or structures identified pursuant to
paragraph (1), only as increased funding becomes available in future
years. In particular, the findings and recommendations shall address:
(A) The conditions that should be in place before a transition
begins.
(B) The length of time that is necessary or appropriate to
transition to a new funding structure.
(C) The extent to which local educational agencies will be held
harmless during a transition from the current school funding
structure to the new system, if that transition is based only on new
funding.
(D) An equalization component for the transition to the new
funding structure, based on the characteristics identified in
subparagraphs (B) and (E) of paragraph (1).
(E) How and when to eliminate unnecessary statutory and budgetary
elements of the current school funding structure.
(3) The policy and fiscal implications of the alternative funding
structure or structures identified pursuant to paragraph (1). In
particular, the findings and recommendations shall address all of the
following:
(A) Costs associated with implementing new school funding
structures.
(B) Trade offs inherent among the characteristics set forth in
paragraph (1).
(C) Equity considerations.
(D) Incentives and disincentives that new school funding
structures may create or eliminate.
(E) Governance considerations.
(4) Modifications to the standardized account code structure to
provide school-level reports on revenue and expenditures to
facilitate easy comparisons across schools and districts, including
comparisons of school, district, and statewide demographics and
academic performance, and data on program-level expenditures.
(5) An evaluation mechanism to facilitate continuous improvement,
maximum transparency, and accountability of the primary funding
structures, as well as a consistent process to evaluate the
effectiveness of any specific programs that are funded separately.
(c) The working group shall present its findings and
recommendations to the Legislature and the Governor on or before
December 1, 2010.
(d) If the working group incurs any costs that the participating
entities determine that they are unable to absorb, those costs shall
be paid from nonstate funds donated or granted to pay them.
SEC. 3. Section 42238.21 of the Education Code is amended to read:
42238.21. (a) Notwithstanding any other provision of law, for the
purposes of this article, the revenue limit for the Newport-Mesa
Unified School District for the 1996-97 fiscal year, and future
fiscal years, shall not include any amounts that should have been
allocated to the Newport-Mesa Unified School District in the 1994-95
fiscal year but that were not received by the district until the
1996-97 fiscal year, and future fiscal years, due to the bankruptcy
proceedings initiated on December 6, 1994, by the County of Orange by
its filing of a voluntary Chapter 9 petition in United States
Bankruptcy Court, Case No. SA 94-22273-JR. These amounts shall not be
included in the revenue limit computations for the 1996-97 fiscal
year, and future fiscal years, but these amounts shall be treated as
being received by the Newport-Mesa Unified School District in the
1994-95 fiscal year, the 1995-96 fiscal year, or both.
(b) This section shall remain in effect only until July 1, 2010,
and, as of January 1, 2011, is repealed, unless a later enacted
statute that is enacted before January 1, 2011, deletes or extends
that date.