LAO 2003-04 Budget Analysis: Education Issue-By-Issue TOC Analysis of the 2003-04 Budget Bill
Education Issue-By-Issue Contents


Funding Per Student

Historical Perspective of Funding Per Student

Proposition 98

Proposition 98 Allocations

Enrollment Growth

Setting Education Priorities for 2003-04

Crosscutting Issues

2002-03 Mid-Year Revisions: Proposition 98

Governor's Mid-Year Budget Proposal

Governor's Recommendations for K-12

Governor's Recommendations for CCC

Using Prior-Year Savings to Reduce Proposition 98 Funding

Mid-Year Revisions Adopted by Legislature

K-12 Reductions Made by Legislature

CCC Reductions Made by Legislature

Additional Reductions Could Be Taken in the Current Year

Deferral May Threaten Federal Funding for Special Education

Proposition 98 Budget-Year Priorities

Building the 2003-04 Education Budget With Due Caution

Reduce the Level of Deferrals—Education Credit Card Maxed Out

Make Ongoing Spending Reductions

Provide Schools Greater Fiscal and Programmatic Flexibility

An LAO Spending Alternative

Highlighting Other High-Priority Issues

Child Care Realignment Merits Consideration

California Community Colleges Face Sizeable Reduction

Addressing Two Overarching Proposition 98 Minimum Guarantee Issues

Estimated Higher Proposition 98 Minimum Guarantee in 2003-04

How Does Proposition 98 Suspension Work?

K-12 Education

K-12 Education Introduction

Proposition 98 Spending by Major Program

Enrollment Trends

K-12 Enrollment Growth to Slow Significantly

Divergent Trends in Elementary and High School Enrollment

Budget and Policy Implications

Budget Issues

Governor's Categorical Program Reform Proposal

Governor's Proposal

Proposal Excludes Some Categorical Programs

Benefits of the Governor's Plan

The Governor's Plan—Problems and Solutions

Proposal Ignores Negative Local Incentives

Categorical Grants Would Become General Purpose Funds

Effectiveness of Accountability Systems Still Unproven

Block Grant Misses Opportunities to Empower Districts

Some Programs Are Excluded Unnecessarily

Improving the Governor's Plan

General Features of the LAO Proposal

Protect Program Areas That Alter Local Incentives

Use Data to Increase Local Accountability

Allow Broad Program Flexibility

Provide Fiscal Flexibility

Focus Funds and Responsibility on Districts

Specific Features of the LAO Block Grants

Academic Improvement Block Grant

Compensatory and Alternative Education Block Grant

Core Services Block Grant

Vocational Education Block Grant

Regional Support Block Grant

Information Needed on Proposed Staff Reductions

Proposition 98 Mandates


Problems With Mandates

Benefits of Placing Mandates in a Block Grant

How Mandates Would Work in a Block Grant

Revenue Limits and Discretionary Funds

Basic Aid Districts

Reduction to Basic Aid Payments

Funding Reductions to Excess-Tax Basic Aid Districts

Class Size Reduction

Evaluations Uncover Three Major Findings

Three Policy Lessons for Developing Future Education Reforms

Include K-3 CSR Program in New Academic and Instructional Improvement Block Grant

Option—Create Pilot Program to Compare Cost-Effectiveness of CSR and Teacher Initiatives


Overview and History of STAR Program

The STAR Program Transitions to Standards-Based Tests

LAO Assessment-Related Recommendations

Reduce Emphasis on NRT

Eliminate Primary Language Test Requirement

Eliminate Golden State Exam

Eliminate Physical Fitness Test Mandate

Appendix 1

Appendix 2


Background on State and Federal Sanction and Intervention Systems


NCLB Act of 2001

Funding for School Accountability Programs

Current Year Changes Adopted by Legislature Create Future Obligations

2003-04 Proposed Budget Reduces Funding for State Interventions

Funding Proposed for 2003-04 Is Insufficient

Fundamental Differences Between State and Federal Accountability Systems

Growth Targets Measure Different Goals

Entity Responsible for Interventions Different

Different Sanction and Intervention Requirements

Differences in Accountability Programs Create Unwieldy System

Use of Both API and AYP Creates Confusion

Multiple Intervention Programs Create Mixed Messages

Cost of Continuing Duplicative Programs High

NCLB Creates Unrealistic Standards

Framework for an Integrated Accountability System

Focus State Interventions at the School District Level

Target State Interventions at the Neediest Schools

Provide Less Intensive Interventions at Higher Performing Schools

Redesign HPSGP to Serve State and Federal Purposes

Transition Schools in State Intervention Programs To New System Expeditiously

Change Definition of Proficiency

Set Aside Funding for Restructured Accountability System

Instructional Materials

Benefits of Recognizing Chapter 481 Materials

Special Education

Budget Threatens Federal Funding

Child Care and Development

Child Care Realignment

Problems With the Current Child Care System

Realignment and the Proposition 98 Minimum Guarantee

Child Care Realignment Merits Consideration

State Operations Reduction Due to Realignment

The CalWORKs Child Care System


Governor's CalWORKs Child Care Budget

Governor Eliminates Funding for Stage 3 in Budget Year

Proposition 49: After School Education and Safety Program

What Are the Spending Requirements of Proposition 49?

When Will the State Be Required to Increase Funding?

Commission on Teacher Credentialing (6360)

Major General Fund Budget Proposals

New Federal Accountability Provisions Further Raise Stakes

Improve Coherence, Maximize Flexibility, and Increase Accountability Among CTC's Local Assistance Programs

Leverage Federal Funds to Expand Services for Emergency Permit Holders

Other K-12 Issues

Academic Volunteer and Mentor Service Program

Enhance State's Teacher Information System

Higher Education

Higher Education introduction

Major Budget Changes

Student Financial Aid

Budget Issues

Intersegmental: LAO Alternative Budget Proposal

Student Fees


Financial Aid

LAO Alternative

LAO Proposal Preserves Instructional Programs and Promotes Access

Intersegmental: Student Fees


Governor's Fee Proposal

CPEC Recommendations for Long-Term Resident Student Fee Policy

Implicit Student Fee Policy Has Hidden Costs to State, Difficult for Students

New Financial Aid Guarantee Insulates Needy Students From Fee Increases

Students and Families Pay Only a Small Share of Costs

LAO Alternative to Governor's Fee Increase


Intersegmental: Enrollment Growth

Higher Education Enrollments

Governor's Budget Proposal

Concerns With Governor's Proposal

Inconsistent Treatment of Enrollment Growth

FTE Versus Headcount Enrollment

No Rationale for Providing Excessively High Budgeted Enrollment Growth

More Effective Ways Available to Promote "Access"

No Need to Increase Funding for Students Already Enrolled at UC and CSU

Recommend 4 Percent Growth Funding

Intersegmental: Financial Aid

Governor's Scholarship Programs

Eliminate Governor's Scholarship Programs

Option—Convert Entirely to Pay-As-You-Go System

Cal Grant Awards for Private-College Students

UC and CSU's Institutional Aid Programs

Reexamining the Rationale for Institutional Aid Programs

Governor Proposes Massive Augmentation to UC and CSU's Institutional Aid Budgets

Appropriate Augmentation in Budget Act, Specify General Policy Guidelines

Fee Assistance for First-Year Cal Grant B Recipients

California Postsecondary Education Commission (6420)

Analysis of the Governor's Proposal for CPEC

Report Examines CPEC's Mission, Governance, and Data and Analysis

LAO Recommendation

CPEC Eligibility Study

University of California (6440)

First Student Fee Increases in Eight Years

UC Alternative Budget Proposal

UC Can Minimize Impact of Unallocated Reduction on Instruction by Increasing Student-Faculty Ratio

Outreach Programs


LAO Recommendation

Other Issues

Additional Funding for Unopened Campus Not a Clear Priority

Avoid Dismantling Subject Matter Projects

California State University (6610)

Major Budget Proposals

General Fund Support Per Student

LAO Alternative Budget Proposal

Remedial Education

Determining College Preparedness

Many CSU Students Arrive Unprepared for College-Level Coursework

Establish Accountability in Remedial Education

Require CSU to Assess the Effectiveness of Precollegiate Services

Fund Precollegiate Courses at the Community College Credit Rate

K-12 Outreach Programs

State's Overall Outreach Strategy

Target Proposed Outreach Reductions

General Fund Carryover

Previous Carryover Amounts and Uses

Carryover Language Weakens Legislative Oversight

California Community Colleges (6870)

Major Budget Changes

Proposition 98 Spending by Major Program

Student Fees

What Share of Their Educational Costs Should Community College Students Pay?

How Large of an Increase Is Appropriate?

What Can Be Done to Minimize the Negative Effects of a Fee Increase?

Governor's Proposed Fee Increase Is Reasonable

Enrollment Funding

Concurrent Enrollment

LAO Recommendation—Approve $80 Million Reduction, Modify Concurrent Enrollment Statute

Partnership for Excellence

Withhold Recommendation Pending CCC Report.

Student Aid Commission (7980)

Major General Fund Budget Changes

Augments Funding for Cal Grant A and Cal Grant B Programs

Increases Funding for APLE Program by Almost Half

Reduces Cal Grant C Program Funding to Slightly Below 2001-02 Level

Reduces Cal Grant T Program Funding by About 50 Percent

Eliminates Work Study Program

Intersegmental Financial Aid Issues