CDPI Information Bulletin
03/01/2010 -
DATE: February 26, 2010
FROM: Tim Fitzharris, Ph.D. Legislative Advocate
CDPI INFORMATION BULLETIN
February 26, 2010
CORRECTION: Let me clarify a couple of typos in my last Bulletin. The first headline read, "LAO Releases Budget Analysis; Now Projects $16 Billion Deficit." That is wrong in two ways: First, the Legislative Analyst did not project, or re-bench, to a $16 billion deficit (instead of the 18-month, $19.9 billion shortfall previously estimated). Second, he has discontinued releasing Perspectives and the Analysis, in favor a series of smaller, issue-specific fiscal analyses.
To set up yesterday's Bulletin, I used the February 20, 2008 Bulletin as a template. I changed all the content but, in my rush, missed changing the headline. I didn't know about the publications modification until I went over to the Analyst's office to pick up a physical copy. I apologize to the LAO and to any of you who got your hopes up temporarily.
It will be interesting to see, however, how close that false deficit number from 2008 may be when new projections are published in May.
More on The LAO Analysis of the Education Budget Proposal
The Analyst says that the Governor's FY 2010-11 spending plan for Education - although missing many opportunities and tenuously held together - is headed in right direction. Relative to its wobbliness, he cites legal risks, the minimum guarantee questions, and the need for a federal waiver from the ARRA education MOE requirement. He says there are two options: (1) Suspend Proposition 98 or (2) Raise additional revenues or cut other spending to meet higher current-law funding levels. On the other hand, he says, the Governor is on the right track.
"After determining how much total Proposition 98 funding to provide, the state will need to decide how to spend available monies. We believe the Governor's overall Proposition 98 spending plan has some merit. Specifically, we think the Governor's overall plan heads in the right direction by finding some ways to reduce costs, providing additional flexibility, and seeking additional federal funding. In these ways, the administration tries to help local education agencies in responding to another tight budget. The administration's Proposition 98 plan also does not rely on any new borrowing. Instead, the administration proposes ongoing solutions to align ongoing program with ongoing resources.
...But Misses Many Opportunities. Though the Governor's spending plan appears to be headed in generally the right direction, we believe it misses many opportunities. Specifically, we believe the Governor's plan misses opportunities to increase flexibility, undertake meaningful reform, align state and federal programs, and leverage additional federal funding. Moreover, the plan makes rather tenuous links between state cuts and local savings."
LAO Alternative Proposition 98 Plan
The LAO offers a strategy for building the education budget "that could be used regardless of the exact dollar amount ultimately provided for K-14 education." "Our alternative is intended to provide the Legislature with both a better overall approach toward crafting its education budget and recommendations for addressing specific K-14 budget issues," Taylor said.
The LAO alternative builds on the positive aspects of the Governor's plan but tries to make various improvements. In particular, the alternative identifies additional ways to reduce costs and expands flexibility for schools and colleges. Moreover, the alternative includes comprehensive mandate reform, strategically aligns certain existing program efforts, and seeks opportunities to increase federal support.
Building Blocks of Proposition 98 Budget
Weigh priorities among K-12 education, child care and development, and the community colleges.
Make targeted reductions.
Make additional reductions, as needed, to apportionments and/or categorical programs.
Maximize flexibility.
Undertake comprehensive education mandate reform.
Align program efforts.
Leverage additional federal funding.
Weigh Overall Proposition 98 Priorities. The first challenge the Legislature faces in building its Proposition 98 plan is to establish priorities among CCD, K-12 education, and community colleges. Given all three areas have experienced reductions in programmatic funding over the last few years, evaluating where to make additional cuts likely will be particularly difficult. From 2007-08 (actual) to 2010-11 (proposed by Governor), programmatic funding would decline almost 3 percent per child care slot and more than 10 percent per K-12 student. Community college programmatic funding would decline almost 5 percent based on budgeted per student counts and up to roughly 10 percent based on actual per student counts. Aside from these comparisons, the Legislature obviously will want to weigh other considerations, such as the different populations, needs, programmatic quality, and public benefits of the three areas. Whereas the Governor makes all 2010-11 spending reductions to CCD and K-12 education, our alternative cuts CCD less than the Governor, while also raising student fees to provide more overall CCC funding, thereby preventing even deeper cuts to K-12 education.
Make Targeted Reductions. After developing an overall plan for allocating funds among the segments, we recommend making as many targeted reductions as possible. The LAO lists almost $1.1 billion of targeted reductions included in his alternative (about $800 million in Proposition 98 and almost $300 million in non-Proposition 98 General Fund reductions). Most of these reductions involve difficult policy decisions. For example, the alternative achieves savings by lowering the eligibility ceiling for families to receive subsidized child care from 75 percent to 60 percent of the state median income. A few of the reductions, however, merely reflect savings from programs being over-budgeted. For example, given the decline in K-12 ADA, Economic Impact Aid is now over-budgeted by more than $100 million. Similarly, if the state were to continue funding the Charter School Facility Grant program on a reimbursement basis, it would have over-budgeted significantly in 2009-10 and 2010-11. (The Governor's budget assumes a funding change will be adopted in the 2009-10 special session.) The LAO also recommends changing the kindergarten start date, beginning in 2011-12. ("Given lead time is needed to implement the change without serious disruption, and 2011-12 looks to be another difficult budget year, we recommend enacting the authorizing legislation this year.")
Reductions. If the Legislature decides that additional reductions are needed beyond the $1.1 billion we have identified (the Governor's plan has almost $2 billion in Proposition 98 cuts), then we recommend it make additional reductions to apportionments and/or the categorical flex items. The Legislature relied on these approaches in 2008-09 and 2009-10 to generate large amounts of savings. Exactly how the cut is applied will have distributional effects among districts. Because categorical program funding varies significantly by district-with certain large districts receiving more than small districts (and charter schools)-electing to cut categorical flex funding will have a different impact than electing to cut apportionments. Given the varying distributional effects, the Legislature might want to use some combination of the two strategies. For CCC, the Legislature also could consider certain targeted reductions to apportionments. For example, it could reduce funding for physical education and other lower-priority enrichment classes.
Maximize Flexibility. Our alternative includes a dozen flexibility options to help districts cope with another tight budget. In several cases, we recommend folding more programs into the K-12 and CCC flex items. (These flex items allow K-12 districts to use associated funding for any education purpose and allow CCC districts to use associated funding for any categorical program purpose.) In several other cases, we recommend easing or removing specific state requirements. For example, we recommend easing existing restrictions associated with contracting out for noninstructional services and CCC's "50 Percent" law, as well as removing restrictions that laid-off teachers be given priority for substitute teaching assignments. In the remaining cases, we recommend specific policy changes to remove certain restrictions while preserving some of the underlying policy objectives. For example, we recommend eliminating certain K-12 career technical education (CTE) program requirements and reorienting the CTE system around performance outcomes. We also recommend eliminating many K-14 mandates.
Undertake Comprehensive Reform of Education Mandates. As one way to help districts free up funds for high priorities, we recommend the Legislature undertake comprehensive education mandate reform. As detailed in our recent report, Education Mandates: Overhauling a Broken System (February 2010), we assess each of the 51 existing K-14 mandates on a case-by-case basis. In the few cases mandates are serving essential purposes, we recommend funding them using a simplified reimbursement process. For some mandates, the underlying policy objective appears worth preserving, but we think the mandate process is not the best means of achieving the objective. In these cases, we find a more effective means of achieving largely the same goal. We recommend eliminating the remaining mandates either in whole or part. By relieving schools from performing the vast majority of K-14 mandate requirements, our package of recommendations would result in about $375 million in annual savings. We think this is a far superior approach to merely suspending virtually all mandates with little regard for their policy merits (as the Governor proposes).
Find Ways to Better Align Programs. One way to promote flexibility as well as maximize efficiency and potential program effectiveness is to align complementary programs. We have identified several areas in which existing state and/or federal policies suffer from a lack of alignment. One of these areas is K-12 school improvement. In this area, we recommend a number of policy changes that would align state and federal programs-essentially freeing districts from state rules while still complying with federal rules. This would both streamline the improvement process for struggling schools as well as generate state savings. Another area suffering from misalignment is education data and technology. In this area, we recommend changes that would ensure various state and local efforts are working in concert.
Leverage More Federal Funding. Lastly, our alternative includes two specific components designed to increase federal funding for education. For K-12 education, we recommend the state request that the federal government increase federal special education funding, such that the federal appropriation covers 40 percent of the excess cost of educating a special education student on an ongoing basis for all states-consistent with longstanding federal policy. For CCC, we recommend leveraging more federal support via a recently enacted tax credit. Specifically, we recommend raising the CCC fee from $26 to $40 per unit. This would generate roughly $150 million to help support CCC programs while having only a modest impact on students. This is because most students would qualify either for a state fee waiver or the federal tax credit, which provides full reimbursement of fee costs. (Even at this higher amount, California's fee rate would remain the lowest in the country.)
Prop 98 Minimum Guarantee Lawsuit Coming?
According to the Sacramento Bee, Education groups held a press conference this week at the office of the California Teachers Association, charging that the Governor had reneged on his Prop 98 agreement in last year's budget. While education leaders said they hoped not to litigate the issue, they said they believed they would prevail if they had to ask the courts to hold Governor Schwarzenegger to last year's budget deal.
At issue is the Governor's proposed funding level of the Minimum Guarantee. If the union's interpretation were to prevail, the guarantee would be significantly higher. The LAO says the state would owe schools $2.2 billion more in FY2009-10 and $3.2 billion more in FY2010-11 than the governor wants to give them.
Here are Some More New Bills
In the February 24th issue of the Bulletin, we listed the new Child Care and Development bills introduced last week. Here are a few that we missed:
AB 2252 (Torrico)- Universal preschool - This bill would express the intent of the Legislature to enact legislation to provide a universal preschool program that would beavailable for 3- and 4-year-old children, to be funded through the imposition of an inheritance tax.
AB 2478 (Mendoza) - School safety: disruptive messages - Existing law provides that a person who comes into any school building or upon any school ground, or adjacent street, sidewalk, or public way, whose presence or acts interfere with or disrupt a schoolactivity, without lawful business, or who remains after having been asked to leave, as specified, is guilty of a public offense. This bill would expand this provision to also apply to any person who comes into any school building or upon any school ground, oradjacent street, sidewalk, or public way, and conveys disruptive messages where the disruption threatens the physical safety of school children in preschool, elementary school, or middle school while they are coming to, leaving from, or attending school.
SB 1099 (Correa) - Foster care funds: subsidized child care for foster parents - This bill would require the State Department of Social Services to amend its foster care state plan to authorize the use of state child care and development funds administered by the State Department of Education as the nonfederal match for specified child care forchildren receiving protective services, foster children, and children at risk of abuse and neglect. The bill would make conforming changes to the law relating to the payment of the nonfederal share of these costs.
SB 1116 (Huff) - Heritage school instruction - Existing law requires every entity offering or conducting private school instruction on the elementary or high school level to annually verify information by filing with the Superintendent of Public Instruction an affidavit or statement under penalty of perjury setting forth specified information relating to the current year. The affidavit or statement must be made available to any parent or guardian whose child is currently enrolled or is considering whether to enroll his or her child in the school, as specified. If the employees of any entities that have a contract with a private school to provide specified services may have any contact with pupils, thoseemployees are required to submit their fingerprints to the Department of Justice for a background check. The Department of Justice is authorized to notify the private school when the employee has a pending criminal case, or a criminal conviction, of specifiedcrimes. Private schools contracting with an entity for construction or other related services where employees of the entity will have other than limited contact with pupils, are required to ensure the safety of the pupils by utilizing one or more methods.
This bill would apply a substantially identical verification requirement to heritage schools, which is a school for children that serves children who are at least 4 years and 9 months of age to 18 years of age and who attend a public or private full-time school, and which offers foreign language education or tutoring and cultural education relating to a foreign country. The bill would require every person, firm, association, partnership, or corporation offering or conducting heritage school instruction to annually file with theSuperintendent an affidavit or statement, under penalty of perjury, by the owner or other head setting forth specified information.
The bill would require heritage school contractors to submit to the Department of Justice fingerprint images and related information required by the Department of Justice of all employees of specified entities that contract with a heritage school to obtain criminal history information, as specified. The Department of Justice would be required to forward requests for criminal history information to the Federal Bureau of Investigation, review reply information received from the bureau, and provide a determination and response to the heritage school contractor. The bill would require the contractor to request subsequent arrest information, as specified, from the Department of Justice. The Department of Justice would be required to charge a sufficient fee for the costs of processing requests for criminal history information. The heritage school would also be required to maintain membership in a state or national cultural or language association, comply with relevant applicable local regulations, and not operate out of a residential home.
The bill would establish the Heritage Enrichment Resource Fund. T he Superintendent would be authorized to expend moneys deposited in the fund, upon appropriation by statute, as specified. (urgency statute)
SB8X 41 (Cox) - California Children and Families Program: funding - This bill, subject to voter approval, would eliminate the California Children and Families Actpercentages for allocations to various accounts and would, instead, provide that those funds, with specified exceptions, shall be transferred to the General Fund for appropriation by the Legislature for purposes of the Healthy Families Program and the Medi-Cal program. The bill would provide for the distribution, as prescribed, of funds held by county children and families commissions and by the California Children and Families Commission that remain unencumbered on the date that the bill's provisions are approved by the voters. This bill would abolish the California Children and FamiliesCommission and the county children and families commissions, effective 90 days after the bill is approved by the voters, and would repeal related obsolete provisions. This bill would require that its provisions be submitted to the voters for approval at the next statewide election. (urgency statute)
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CDPI's Capitol Plus
For several months, we have been talking about CDPI's new, web-based publication, Capitol Plus. This is yet another way that CDPI will work to keep the Child Care and Development field informed.
Our 7,000 readers are familiar with the CDPI Bulletin, its format, content, and timeliness. It will continue - albeit with a somewhat briefer content - on a pro bono basis.
We are very excited to bring you Capitol Plus. In addition to timely political and policy information, the publication will have some new features. Each issue will have an "It should be noted" section with some important, bulleted facts and dates. Each will raise an important policy question under the heading, "Just Thought We'd Ask ..." And, each will highlight some interesting data, under "I'm Just Saying ..." As Capitol Plus evolves, we may add opinion pieces and a periodic federal update. But let's not get ahead of ourselves ...
Capitol Plus will be available on CDPI's website on a subscription basis ($49 for the calendar year). Issues will be published on a periodic basis as new-worthy information develops. We expect that a similar number of issues will be produced as with the CDPI Bulletin today. Unlike the CDPI Bulletin, where we encourage copying and sharing, we will ask that subscribers not forward Capitol Plus, as it is a fund-raiser for CDPI.
Subscriptions will be on an individual basis and each subscriber will be able to create their username and password on our website. When an issue is released, subscribers will be notified via e-mail which will provide the link to the "Premium Account" content on CDPI's website.
SUBSCRIBE TODAY at www.cdpi.net. The first issue will be available on March 1, 2010.
If you have any questions, please feel free to contact CDPI at 1-866-662-9597. We thank you for your support.
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