LAO 2005-06 Budget Analysis: General Government

Analysis of the 2005-06 Budget Bill

Legislative Analyst's Office
February 2005

Governor's Vocational Education Reform

The 2005-06 budget proposes $20 million in support of a broad-based reform of vocational education in K-12 education. We believe the Governor's proposal addresses a significant problem, but lacks the level of detail necessary for the Legislature to fully evaluate it. We therefore recommend the Legislature direct the Department of Finance to provide to the budget subcommittees prior to budget hearings (1) the details of the proposed plan and (2) responses to our initial concerns about the proposal.

The 2005-06 Governor's Budget proposes to strengthen vocational education in high schools to ensure "that all students have educational opportunities that lead to successful employment." According to the administration, the proposal builds on successful programs that are currently in place to create a "renewed emphasis" on vocational education in high schools.

The administration's reform package has two key elements. First, the proposal would dedicate $20 million in one-time Proposition 98 Reversion Account funds to encourage high schools to work with local California Community Colleges (CCC) to expand and improve vocational courses available to high school students. The plan seeks to build on successful "2+2" programs, in which students take two years of high school vocational courses that lead into a two-year CCC vocational credential or diploma program. Funds could be used for a wide variety of local activities, including curriculum development and equipment purchases.

Second, the plan calls for all middle school students to take a new vocational awareness class. The administration proposes to mandate middle school introductory vocational courses to (1) help students consider their long-term career goals and (2) provide information about available vocational options. According to the administration, the new course would replace an existing elective course.

The reform plan includes several other supporting changes, including:

Proposal Addresses an Important Problem

We think the Governor's budget has identified an important problem. In a forthcoming report (expected later this year), we discuss how a strong secondary vocational education system can mitigate several major problems in high schools.

May Help Reduce Dropouts. By giving students a greater range of choices in high school, improving vocational education could help address the state's high dropout rates. About 30 percent of students who begin ninth grade drop out before finishing high school. Low academic achievement is a major factor in dropping out. Convinced that academic success is unlikely, many low-performing students see little reason to stay in school. A range of academic and vocational choices could help keep students in school by giving them greater control over what they study and help them use high school to achieve their postgraduation goals.

Increase Financial Returns to Students. Successfully restructuring vocational programs into sequences of high-level courses would increase the value of these courses to students. Research suggests that most existing high school vocational courses deliver students few benefits (such as higher wages or higher rates of employment). This is because the courses taken by students do not build on each other. Research shows that sequences of high-level secondary or community college courses lead to higher-level occupational skills, which in turn can generate significant payoffs for students.

Create Better Alternatives to a College Diploma. Vocational sequences that prepare students for high-level jobs may encourage students to pursue more realistic postgraduation goals. Perhaps because high school vocational programs have low returns, high school students see college as virtually the only road to success. Surveys show that 56 percent of California's tenth graders want to attend a four-year university and 22 percent plan on attending a two-year college after graduating from high school. Only about 10 percent of students plan on going directly into the workforce.

Data show a disconnect between these aspirations and actual experience. Less than one-half of those tenth graders attend university or college in the two years after graduating, and fewer than one in five earn a university or college degree. Most students who go to CCC drop out before receiving a diploma or transferring to a four-year institution.

When students fail to complete a rigorous academic or vocational program in high school or college, they enter the labor market with fewer saleable occupational skills. Strong secondary vocational programs expand the number of attractive options available to high school students. This can help students enter the labor market as adults with skills that improve their long-term job prospects.

Proposal Not Fully Developed

At the time this analysis was prepared, few details on the proposed changes were available. From the information that was available, the plan appears to address many of the critical areas that we see as problems for vocational education in high schools. The proposal, for instance, promotes an early focus on careers and the options available to high school students who are interested in specific occupation areas. The eighth grade "exploratory" class would help students (and their parents) develop a plan for taking the courses needed to achieve the students' postgraduation goals. We also think increasing the number of students involved in CCC vocational programs is a worthy goal—research shows very high wage returns to students who graduate from community college vocational programs. Finally, by adding data on the quality of school vocational programs into SARC, the proposal addresses the need to increase local accountability.

In concept, therefore, we think the proposed plan is headed in the right direction. We have several areas of concern with the reform plan, however, that warrant further legislative discussion.

The Eighth Grade Career Exploratory Course Would Create a Reimbursable State-Mandated Local Program. The Governor's plan would require districts to provide a middle school vocational course, which likely would result in a new state-mandated local program. In general, we advise against creating new programs through state mandates for two reasons. First, under the state mandate reimbursement process, it takes several years before the state begins to reimburse district costs. Second, the state has little control over the cost of new mandates, and our review of district mandate claims shows that local per pupil costs vary tremendously.

In addition, the Governor's proposal does not include an estimate of the likely costs of the new middle school course. An existing mandate that accomplished a similar goal—altering the courses needed to graduate from high school—costs about $13.5 million annually. There also may be additional one-time district costs to create a syllabus for the new exploratory course, obtain needed materials or textbooks, and train teachers.

We think the Legislature needs additional information on why the administration proposes to implement the middle school exploratory course through a state-mandated local program. In addition, the Legislature needs better information on the projected costs—one-time and ongoing—of the new course requirement.

Uses for CCC Funding Should Be Specified. As noted earlier, the Governor's proposal would provide $20 million to CCC for aligning vocational curricula between K-12 schools and community colleges' economic development programs. While we recognize the need for better alignment between vocational offerings in these two systems, we cannot determine the extent to which this funding would advance that goal. The administration could not provide us with many specifics about what kinds of activities would be funded with this money, on what basis it would be distributed, and what accountability provisions, if any, would be implemented. As a result, the administration could not explain why $20 million is the correct amount of funding to provide at this time.

The administration also proposes budget bill language that would make the allocation of the $20 million by CCC dependent on the submission of an expenditure plan that would be approved by the Department of Finance (DOF). In other the words, the Governor is asking the Legislature to approve the $20 million without knowing how the money will be spent. From our perspective, the budget process should allow the Legislature to review the administration's expenditure plan and include its own priorities for the use of the state's money. We believe a sufficiently detailed expenditure plan can be developed and reviewed within normal budget process timeframes.

The Legislature needs the details of how the $20 million fits into the overall reform plan. Without an expenditure plan that includes details on the proposed uses of the new funds, we would recommend the Legislature delete the $20 million appropriation.

Regional Occupational Programs and Centers (ROC/Ps) Have No Explicit Role in the Reform Program. About 40 percent of vocational courses taken by high school students are provided through ROC/Ps. These agencies provide regional support for vocational education. Most ROC/Ps are operated by county offices of education.

The Governor's proposal makes no mention of the role of ROC/Ps. From our perspective, ROC/Ps would contribute significantly to a strengthened system of secondary vocational education. Several changes to the mission of these agencies may be necessary, however. Switching the focus of ROC/Ps from administering individual low-level training classes to participating in sequences that result in two- and four-year skill certificates would align the goals of these regional agencies with the proposed reforms.

Reducing the number of adults served by ROC/Ps also would increase the amount of vocational resources available to high schools. In 2002-03, about one-third of ROC/P students were adults. Bringing all ROC/P resources to support vocational options for high school students would strengthen the proposed reform plan significantly. For these reasons, we think the Legislature needs more information on the role of ROC/Ps in the Governor's reform plan.

Students Need Better Information About the Likelihood of Success in College. As noted above, most high school students see college as virtually the only road to success in life. Research shows many high school graduates enroll in CCC without the academic skills needed to do college-level work. These students assume they are ready for college because they received reasonably good grades in high school. When they arrive at college, however, many students are required to retake courses they took in high school. Not surprisingly, perhaps, these students are less likely to earn a CCC degree or transfer to a four-year institution.

These findings indicate that students need early and ongoing information about whether they are "on track" for gaining the academic skills needed for college. Students and parents need data other than grades (which follow no statewide standard) with which to evaluate a student's likelihood of success in an academic college or university program. In addition, the information would help students and parents assess the academic requirements of the different vocational choices available at a high school.

Legislature Needs Details

While we think the broad outlines of the proposal hold promise, key details of the plan are unavailable. Therefore, we recommend the Legislature direct DOF to provide prior to budget hearings the specifics of the proposals contained in the proposed reform package, including responses to the specific concerns raised in this analysis.

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