Consolidate and simplify related categorical programs into a small number of manageable and flexible block grants.
The state currently funds more than 70 categorical programs—each with detailed requirements and distinctly determined funding amounts. Chapter 871, Statutes of 2004 (AB 825, Firebaugh), took the first step to reduce the number of categorical programs by combining 22 categorical programs into six block grants beginning in 2005-06. While Chapter 871 is a start, the categorical finance system continues to be overly complicated and lacks transparency and accountability.
Our proposal would consolidate many of these programs into a few block grants to free local districts and schools to use funds more effectively and eliminate unnecessary "red tape." Under this proposal, the role of the State Department of Education would shift from program administration and compliance to focus on accountability, technical assistance (especially to low-performing districts), and research and evaluation.
Please see our 2002-03 Analysis, page E-77; 2003-04 Analysis, page E-43, and 2004-05 Analysis, page E-37.
Robert Manwaring: 319-8333 and Paul Warren: 319-8307
Relax the rigid 20 to 1 student-teacher ratio and allow school districts to use class size reduction (CSR) funding to assign teachers in ways that best meet their students' needs.
Given differences among local school sites, a single educational strategy does not usually benefit all students. Indeed, recent research reveals that California's CSR program has: (1) had an uncertain impact on student achievement; (2) contributed to a significant increase in noncredentialed teachers, especially in the state's most disadvantaged schools; and (3) intensified the state's facility shortage.
For these reasons, we propose providing greater flexibility for CSR funding. We recommend that the state reduce restrictions on pupil per teacher ratios, allow targeted CSR, or support alternative uses of certificated staff. Our proposal would help schools with serious facilities constraints and/or high numbers of underqualified teachers use funds more effectively.
Please see our 2003-04 Analysis, page E-87.
Jennifer Kuhn: 319-8332
Require the State Board of Education (SBE) to align student performance targets under the federal No Child Left Behind Act (NCLB) with the expectations for achievement under the California High School Exit Examination (CAHSEE).
Beginning with the class of 2006, students must pass the CAHSEE to graduate from high school. By defining the test's content and passing score, the board established minimum achievement levels in English and mathematics that all students are expected to meet. In 2003-04, about three-fourths of 10th grade students passed at least one component of the test. In implementing NCLB, however, the board set student achievement standards much higher, roughly at a level consistent with eligibility for admission to the California State University. While an admirable goal, this has the practical effect of focusing attention on students performing near the goal, oftentimes at the expense of poorer-performing students. It also sends conflicting messages to educators about the goals of our system. We recommend the Legislature require SBE to equate the state's NCLB performance targets with the academic expectations set by the Legislature under CAHSEE.
Please see our 2004-05 Analysis, page E-115, and 2003-04 Analysis, page E-113.
Robert Manwaring: 319-8333
Eliminate the statutory authority permitting the State Department of Education (SDE) to carry over unspent General Fund child care funds beyond the year of appropriation.
In general, budget act appropriations must be spent or obligated in one year. Education Code Section 8278, however, permits SDE to carry over General Fund appropriations for child care and development activities for two fiscal years beyond the year of appropriation. Funds that are carried over may be spent on one-time child care activities described in statute.
This unusual expenditure authority renders unspent child care allocations unavailable for expenditure in other education areas—even though these other areas may be a higher priority. Our proposal would apply the usual budgetary rules to SDE child care programs, thereby restoring the Legislature's flexibility to use child care carryover funds to meet its K-14 education priorities. Depending on the Legislature's assessment of education needs in any given year, this could include child care and development or other priorities.
Please see our 2001-02 Analysis, page E-153.
Melissa Eiler White: 319-8336
Consolidate five revenue limit adjustments into district base revenue limits. These adjustments or add-ons include: Meals for Needy Pupils, longer day/longer year incentive payments, Interdistrict Attendance, unemployment insurance, and the Public Employees' Retirement System reduction.
Revenue limit funds support the basic educational program for each student. Each district's allocation includes a large base revenue limit grant plus up to 11 smaller add-on grants. The state appropriated $110 million in the 2004-05 budget package to partially equalize base revenue limit grants. There are also large inequities in the add-on grants, ranging in the hundreds of dollars per pupil. Our proposal would merge funds provided through five add-on programs into base revenue limits. This would greatly simplify the computation of general purpose funding, make school funding easier to understand, and allow the state to equalize over time the amount of general purpose funds districts actually receive.
Please see The Distribution of K-12 Education General Purpose Funds (December 2003) and 2004-05 Analysis, page E-88.
Paul Warren: 319-8307
Simplify the EIA formula so that district allocations are predictable and meet local needs for serving both poor and English learner (EL) students.
The EIA program uses a complex formula to support district efforts to increase the achievement of low-performing students. Our analysis found that the EIA formula appears to distribute funds in an arbitrary and unpredictable manner. The formula appears arbitrary, for instance, because it provides very different funding levels to districts with similar numbers of EL and very poor students.
Because of its complexity, the formula can also yield unpredictable results. For example, we found that 300 districts received an increase in funds in 2003-04, even though the number of students in the target population fell. We also identified 16 districts that experienced an increasing target population, but declining funding. We recommend a simplified formula that provides more predictable and transparent funding rates based on the number of EL and poor students in each district.
Please see our 2004-05 Analysis, page E-80.
Robert Manwaring: 319-8333 and Paul Warren: 319-8307
Certify Proposition 98 funding levels for fiscal years 1995-96 through 2002-03 using information on key Proposition 98 factors that was available at the close of each fiscal year.
Current law requires the State Department of Education, California Community Colleges, and the Department of Finance to jointly certify the Proposition 98 spending levels within nine months of the end of a fiscal year. The agencies have met this requirement only once.
Inputs to the Proposition 98 formula—such as state population—are sometimes revised years later when new information comes to light. These revisions, if incorporated into Proposition 98 calculations, can result in a higher guarantee for past years. Alternatively, if timely certification occurs as required by statute, these technical revisions would not affect the guarantee.
Consistent with the intent of Proposition 98, we
recommend that the Legislature statutorily certify the guarantee for
1995-96 through 2002-03 based on the data that was
available nine months after the close of each fiscal year.
Please see our 2004-05 Analysis, page E-18.
Robert Manwaring: 319-8333
Revise the formula for calculating the charter school categorical block grant so that it results in comparable funding rates between charter and noncharter schools. Expand the base block grant to include additional categorical programs.
The charter school block grant is intended to provide comparable levels of categorical funding for charter schools and regular schools. In practice, however, the block grant has become overly complicated, and per-pupil funding rates for charter schools are well below those of regular schools.
Our proposal would simplify the block grant formula to ensure it yields comparable funding rates for charter and noncharter schools. We also recommend expanding the number of programs in the block grant to provide charter schools with additional fiscal flexibility, reduce overall administrative workload, and better meet the original legislative intent of the block grant.
Please see our report, Assessing California's Charter Schools (January 2004).
Jennifer Kuhn: 319-8332
Permit school districts, under certain conditions, to opt out from their current requirement to authorize charter schools. Allow charter schools to select among a greater range of agencies which can authorize charter schools.
In general, only school districts may authorize a charter school. When that happens, the district assumes specific oversight responsibilities for the charter school. Under narrow statutory exceptions to this policy, about 10 percent of charter schools are authorized by county offices of education or the State Board of Education. This restrictive authorizing system creates two problems: (1) school districts may be unable to exercise meaningful oversight and (2) the lack of competition among charter authorizers can result in higher district oversight costs and lower quality oversight.
We recommend the Legislature allow charter schools to access a broader range of authorizers by creating a district opt-out option (for small or struggling districts) and authorizing other agencies to become authorizers (such as neighboring school districts, county offices, the state, or colleges and universities).
Please see our report, Assessing California's Charter Schools (January 2004).
Jennifer Kuhn: 319-8332
Develop a comprehensive teacher data system to assess teacher training programs and better inform public policy.
Currently, at least seven state agencies collect information on the state's K-12 teacher corps. These agencies, however, do not coordinate or link these independent data collections.
The failure to link these data dramatically reduces the usefulness of existing teacher information. For example, the state currently cannot determine which professional development programs enhance teacher quality or result in higher student achievement. Nor can the state study which recruitment, retention, and compensation strategies are most effective in promoting teacher quality.
We recommend the Legislature require the State Department of Education to develop a comprehensive teacher-level data system that is aligned with the state's student-level database. This would improve the Legislature's ability to develop informed policy on staff development programs and policies.
Please see our 2004-05 Analysis, page E-62, and 2003-04 Analysis, page E-158.
Jennifer Kuhn: 319-8332
Enact in statute an explicit student fee policy for all public colleges and universities which provides that students and the state each pay a fixed share of educational costs, thus ensuring gradual and moderate year-to-year changes in student fees.
California lacks a consistent fee policy for postsecondary education. Typically, changes to student fee levels have been influenced more by the availability of state funds in any given year than through an established policy for sharing the cost of higher education between the state and students. The lack of an explicit fee policy can make it difficult for students, their families, and the state to plan effectively. By statutorily linking fees to a fixed share of educational costs, student fees would change much more gradually. Moreover, students would have a financial incentive to hold the segments accountable for cost increases. The Governor proposed a fee policy in his 2004-05 budget proposal, but the Legislature did not adopt it. An alternate proposal adopted by the Legislature was vetoed by the Governor.
Please see our 2004-05 Analysis, page E-198, and our A Share-of-Cost Student Fee Policy analysis presented to the Assembly Higher Education Committee on April 19, 2004.
Jennifer Kuhn: 319-8332
Establish a College Preparation Block Grant targeted at K-12 schools with very low college participation rates.
The state maintains over 35 different K-14 outreach
programs that focus on preparing students from disadvantaged
backgrounds for college. Most of these programs are
administered by the University of California (UC) and the California
State University (CSU). In reviewing these programs, we found
that (1) some programs do not provide direct services to
students, (2) some programs have overlapping goals and services, and
(3) K-12 schools have very little control over the amount
and type of outreach services provided to their students.
Alternatively, our proposal would leverage districts' knowledge of
their students' needs to determine the best mix of outreach
interventions. Schools could use their funds to implement
their own programs, or contract with UC, CSU, an
independent college, or whichever provider can best meet their local
needs. Schools would be accountable for the use of their block
grant funding, ensuring that limited resources are in fact used to
serve students most in need of additional assistance.
Please see our 2004-05 Analysis, page E-160.
Anthony Simbol: 319-8334
Expand competitive Cal Grant programs by consolidating them with institutional aid programs.
Although the state guarantees financial aid for all recent high school graduates who meet financial and academic requirements, it limits the number of awards (22,500) for older students. In 2003-04, about 136,000 students competed for these awards—thus, the program served fewer than one in six eligible applicants. The competitive Cal Grant programs could be expanded without new costs by consolidating them with existing institutional financial aid programs. The University of California, California State University, and California Community Colleges together spend about $500 million on such programs. Each of these programs operates under different rules. Thus, students with similar financial need are treated differently based on the campus they attend. Consolidating these grants under a single program would result in consistent policies that treat similar students alike. Statewide consolidation also would improve accountability because institutional aid policies are currently developed outside of the Legislature's direct purview.
Please see our 2002-03 Analysis, page E-202.
Jennifer Kuhn: 319-8332
Establish a statutory formula linking the value of private university Cal Grants with the subsidy the state provides for needy students at public universities.
Private colleges and universities are an important part of the overall capacity of the state to ensure access to higher education. In 2004-05, the Cal Grant awarded to needy students attending these private institutions was reduced by 14 percent, while Cal Grants for students attending public universities was increased. We recommend that the amount of the private university Cal Grant be set as a weighted average of the General Fund subsidy provided for each additional public university student plus the weighted average of the public university Cal Grant. This formula is a simple means by which the state can ensure that it provides about the same amount of support for all financially needy students, thus promoting fairness and permitting fuller access to both the public and private segments of higher education.
Please see our 2004-05 Analysis, page E-223.
Jennifer Kuhn: 319-8332
Clarify how the University of California (UC) and the California State University (CSU) should define freshman eligibility as called for in the Master Plan for Higher Education.
The Master Plan calls for UC and CSU to admit freshmen from the top one-eighth and one-third of public high school graduates, respectively. In order to achieve these targets, the segments have adopted their own admissions criteria. Students meeting these criteria are considered "eligible" for admission. These definitions of eligibility therefore affect access to and the quality of the state's higher education systems, yet they have been made with minimal legislative oversight. The Legislature also has little information about how well existing admissions criteria are aligned to its K-12 education priorities. For instance, the segments now define the state's top high school graduates based on data that is not available for all high school graduates (such as voluntary tests like the SAT). Instead, the Legislature could specify that UC and CSU determine eligibility solely based on measures available for all students, such as high school grade point average and scores on the California Standards Tests (taken in the 9th, 10th, and 11th grades).
Please see Maintaining the Master Plan's Commitment to College Access (February 2004).
Anthony Simbol: 319-8334
Fund all precollegiate courses at a uniform rate—the community college credit rate.
Currently, the state funds precollegiate courses at the University of California (UC), California State University (CSU), and California Community Colleges at different rates. We are not aware of any policy basis for this disparity. We recommend, therefore, that the state fund these courses at a uniform level, using the community college credit rate (which is approximately $4,300 per full-time equivalent student). Using this uniform rate would help ensure that the systems appropriately use the community colleges to share the responsibility for providing precollegiate education. Several campuses—including UC Davis, UC San Diego, and CSU Northridge—already rely on community college instructors to teach many of their precollegiate courses. In these cases, the courses already are funded at the community college credit rate.
Please see our 2003-04 Analysis, page E-242, Improving Academic Preparation for Higher Education (February 2001), and Are Entering Freshmen Prepared for College-Level Work? (March 2004).
Anthony Simbol: 319-8334
| Acknowledgments
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