Legislative Analyst's Office

Analysis of the 2001-02 Budget Bill

Algebra Incentive Program

The 2001-02 Governor's Budget includes $30 million from the General Fund (Proposition 98) for incentive payments to school districts to increase the number of students enrolled in algebra classes. School districts would be permitted to use these payments to attract and retain qualified algebra teachers—including the use of salary differentials, training, and reduction of class "loads" for these teachers. The funds also could be used to improve pre-algebra skills of students falling behind in mathematics. The administration intends to seek legislation to establish this program of algebra-related incentives but had not provided the Legislature with draft bill language at the time of this Analysis.

Shortage of Math Teachers

Student proficiency in algebra has played a central role in the state's recent education reform efforts. For instance, the State Board of Education approved a proposal to include the state's algebra content standards in the upcoming High School Exit Exam (HSEE) that students must pass in order to graduate from high school, beginning with the graduating class of 2004. In part due to this upcoming high-stakes requirement, the Legislature has taken steps to ensure students receive instruction in algebra. For example, Chapter 1024, Statutes of 2000 (SB 1354, Poochigian), requires students in grades 7 through 12 to complete an algebra course as a condition of receiving a high school diploma, commencing with the 2003-04 school year. This requirement gives students a reasonable opportunity to learn this subject before they will be tested on the HSEE. Given the requirement placed on schools to offer algebra courses, Chapter 1024 creates a potentially reimbursable mandate for schools to claim some additional costs associated with providing algebra instruction.

The budget proposal seeks to address a problem that districts face in helping students meet the new algebra requirement—a shortage of qualified math teachers in the state to teach algebra. Many schools are experiencing difficulty in recruiting and retaining math teachers for various reasons, including the availability of more lucrative job opportunities elsewhere. Based on current enrollments in algebra, the Office of the Secretary for Education estimates that over the next three years, schools will need to add about 1,300 algebra teachers to instruct about 160,000 students who would not have otherwise taken algebra.

Governor's Budget Proposal

The budget provides $30 million in Item 6110-121-0001 to establish the Algebra Incentive Program to assist school districts in attracting and retaining math teachers for algebra. Of this total, $17 million would provide districts with $50 for each student in grades 7 through 12 enrolled in algebra and who takes the standards-based algebra test. (For the budget year, the test-taking requirement would apply to the test administered in spring 2000. The standards-based algebra test is included in the content standards-aligned portion of the state's Standardized Testing and Reporting—STAR—exam.) The remaining $13 million would pay districts $100 for each additional student, beyond the current-year level, in grades 7 through 12 taking algebra and the standards-based algebra test in subsequent years.

Districts would be permitted to use their algebra-incentive funds for locally determined initiatives to attract and retain algebra teachers—including salary differentials, training, smaller class sizes, or other forms of reducing teaching "loads." Districts also could use funds for pre-algebra training for students having difficulty learning math. As of this writing, the administration has provided little detail on exactly how funds would be distributed to schools for increasing algebra enrollments.

Concerns With Governor's Proposal

The Governor has identified an important problem facing many public schools. However, we see two problems with his proposed solution, as discussed below.

Misguided Targeting. About $17 million of the $30 million proposed for the algebra incentive program would be awarded at a rate of $50 per student for students already taking algebra. Thus, these are "windfall" payments that will not induce any behavioral changes. In addition, schools facing little challenge in getting students enrolled in algebra would receive a disproportionate share of the estimated $17 million. Instead, we believe that this funding should be targeted to schools with the highest levels of algebra "under-enrollment" and the most severe shortages of qualified math teachers.

Problem Narrowly Defined. We agree that many school districts face challenges in attracting and retaining math teachers for algebra. The administration's approach, however, focuses on the algebra problem to the exclusion of addressing other important shortage areas. For example, a study by SRI International found that serious shortages exist for fully qualified teachers for special education, science, and services for English language learners in many public schools across the state.

Given the serious shortages of fully qualified teachers in subject areas other than algebra, we believe that the Governor's initiative is too narrowly drawn.

Legislative Analyst's Recommendation

We recommend that the Legislature redirect $17 million of the $30 million for the Algebra Incentive Program to augment the existing Teaching as a Priority (TAP) block grant because (1) the proposed allocation of the $17 million would largely benefit schools lacking teacher recruitment/retention problems and (2) other schools need resources to recruit and retain teachers not only in algebra but in other key areas of shortage. We further recommend that the Legislature broaden the permissible uses of the TAP block grant to include teacher salary differentials for subject areas with critical shortages of teachers. (Reduce Item 6110-121-0001 by $17 million and augment Item 6110-134-0001 by same amount.)

We believe the Governor's proposed algebra incentives program has important elements that can help address the teacher shortages in this one subject area. For example, the proposal gives considerable flexibility, including authority for salary differentials. We believe the proposal would be improved, however, by extending this type of flexibility to help districts attract/retain teachers in all subject areas with critical needs, not just algebra. Below, we present an alternative approach that allows the Legislature to retain the best elements of the budget proposal, yet also address the supply of teachers for other hard-to-staff subjects.

Approve $13 Million for Algebra Incentive Program. We believe that the Governor's proposal to provide $100 for each additional student enrolling in math would help address teacher shortages in algebra in the schools most in need. Given the challenges facing districts in helping students meet the state's new algebra requirement, we recommend that the Legislature approve $13 million for the Algebra Incentive Program. In adopting legislation to establish this program, we also recommend that the Legislature approve language specifying that funds provided to districts under the Algebra Incentive Program should be deemed to offset any possible state-mandated costs related to the state's algebra course requirement.

Redirect $17 Million to Teaching as a Priority. In addition to funds for the Algebra Incentive Program, the Governor's budget also includes $118.7 million in Proposition 98 funds under Item 6110-134-0001 for the TAP block grant. This block grant program, established by Chapter 70, Statutes of 2000 (SB 1666, Alarcon), awards funds to school districts for the purpose of attracting and retaining credentialed teachers in low-performing schools. Funding is allocated to school districts based on the number of pupils enrolled in schools ranked in the bottom half of the Academic Performance Index. Schools ranked in the bottom 30 percent receive one and one-half times the per-pupil funding of schools ranked between the 40th and 50th percentiles. Schools have flexibility to use the funds for different recruitment and retention incentives in order to reduce the number of teachers on emergency permits. Such incentives can include signing bonuses, improved work conditions, teacher compensation, and housing subsidies.

In view of our concerns that the Governor's initiative is too narrowly focused and that about $17 million of the proposed funds would be allocated to schools with the least need of recruiting and retaining fully qualified math teachers, we recommend that the Legislature redirect the $17 million to the TAP block grant. The block grant not only targets funding to low-performing schools, but it also gives school districts broad discretion to recruit and retain teachers in any subject area. Under our approach, school districts could use the funds to recruit and retain algebra teachers, but they also would be given the flexibility to address shortages in other subject areas, based on local needs.

The Governor's proposal specifies that school districts would be able to use algebra incentive payments for salary differentials. We believe that such an approach for attracting and retaining teachers should be clarified as one of the permissible uses of TAP funds as well. Therefore, we further recommend the enactment of legislation to (1) clarify that TAP funds can be used for salary differentials for subject areas with critical teacher shortages and (2) specify that funding provided to districts under the TAP program be deemed available to offset any possible state-mandated costs related to the state's algebra course requirement.

Return to Education Table of Contents, 2001-02 Budget Analysis