Education Mandates

The state currently requires LEAs to perform 45 mandated activities, including 4 newly mandated activities approved by the Commission on State Mandates (CSM) in 2008–09. In recent years, the state has not funded the annual costs associated with these mandates, instead deferring payment to future years. Nonetheless, unlike most mandates for other local agencies, LEAs must perform the mandated activities even in the absence of funding. This year, rather than continuing the practice of deferring payment, the administration proposes suspending most K–14 mandates. That is, the state would not require LEAs to perform the mandated activities so the state would not incur any fiscal liability—now or in the future.

The administration’s proposal is at least partly a response to a recent court ruling and partly a reaction to an existing mandate process laden with problems. Below, we summarize these problems, describe the administration’s mandate proposals in more detail, highlight concerns we have with those proposals, and then recommend the Legislature instead undertake substantive mandate reform.

Existing Mandate System Has Well–Recognized, Longstanding Problems

The existing mandate system has four major problems.

Costs Can Exceed Expectations. Frequently, when an activity required by law is deemed a reimbursable mandate, the price of funding the activity exceeds anticipated costs. This mismatch can occur for several reasons. In some cases, the state can end up being required to reimburse LEAs for activities that were not intended to increase total education costs. In other cases, lawmakers do not anticipate the range of activities that eventually will be deemed reimbursable. In addition, costs can vary dramatically depending on the number of districts that file claims, the reimbursement period, the activities deemed allowable, and subsequent statutory decisions and legal rulings. Consequently, legislators cannot always predict the fiscal ramifications of their policy decisions.

LEAs Claim Vastly Different Reimbursement Amounts. The mandate process also allows districts to claim widely different amounts and receive widely different reimbursement levels for performing the same activities. The variation often reflects local record keeping and claim–filing practices more than substantive cost differences in implementing policy objectives. For example, some larger districts have staffing units dedicated to processing mandate claims whereas many smaller districts have one administrator presumably expected to file mandate claims while juggling many other responsibilities. Figure 16 provides an example of the notable variation in reimbursement amounts. As shown in the figure, reimbursements for performing collective bargaining requirements range from $4 to $43 per pupil—a greater than tenfold difference. Regarding the graduation requirement mandate, claims range from $10 to $163 per pupil.

Reimbursement Process Can Reward Inefficiency. Districts also receive more in mandate funding by claiming more activity, not by performing an activity efficiently. Many mandates are reimbursed based on the amount of time devoted to a required activity and the salary of the staff member performing it. In other words, the more time devoted to an activity and the higher the staff member’s rank, the greater the reimbursement.

No Accountability for Results. The state also has little power to hold LEAs accountable for performing mandated activities effectively. The LEAs can claim expenses for performing an activity regardless of whether they achieve its underlying policy objectives. The state cannot avoid mandate liabilities for ineffective implementation of a mandated activity.

Governor Proposes Suspending Most K–14 Mandates

The Governor’s 2009–10 budget includes funding for the annual cost of three K–12 mandates but suspends all remaining K–14 mandates. (The Governor’s budget does not recognize four new mandates approved by CSM in 2008.) Unlike the practice of deferring mandate costs, suspending mandates would relieve the state from the obligation to pay for required activities as well as relieve local schools from performing them. The Governor’s proposed suspensions would reduce associated 2009–10 claims by roughly $200 million.

Three Remaining Mandates Linked With Federal Requirements. According to the administration, the three mandates proposed to be paid in 2009–10 constitute educational activities related to complying with federal law. The first mandate covers activities associated with administering the California High School Exit Exam, a test used for federal accountability. The other two mandates also relate to federal accountability laws, which require that students attending failing schools be allowed to transfer to other schools. State law mandates that districts ensure inter– and intra–district transfers do not adversely affect racial and ethnic balances at a given school. The administration estimates that funding these three mandates in 2009–10 will cost approximately $13 million.

Court Case Provides Extra Motivation for Governor’s Proposal. In December 2008, an appellate court found the state’s practice of deferring education mandates unconstitutional and ordered the state to fully fund mandated programs “in the future.” (The opinion responds to a lawsuit filed in 2007 by five school districts and the California School Boards Association against the Department of Finance [DOF] and State Controller seeking payment of past mandate claims and an end to deferrals.) While constitutional separation of powers lead to the court not forcing the Legislature to make budgetary appropriations, its decision increases pressure on the state to pay the annual ongoing cost of education mandates. By suspending most mandate requirements (and paying for the few remaining mandates), the Governor’s proposal therefore relieves cost pressures and responds to a legal risk.

Cost of Compliance Significant

As Figure 17 shows, we estimate the total cost of unpaid mandates recognized by the administration will exceed $1 billion in 2008–09 (with annual ongoing costs of roughly $190 million).

Many Potential Activities Now in Mandate Review Pipeline. In 2008, four new K–14 mandates were recognized by CSM and more than a dozen additional mandate claims remain on file with the commission awaiting a decision. Figure 18 displays the four new mandates and their relatively minor associated costs through 2007–08 ($344,000). The pending mandate with the potentially greatest cost involves state high school graduation requirements. This mandate could dramatically increase annual state costs as well as the mandate backlog, as discussed later in this write–up.

New Settlement Agreement Also Would Increase Costs Notably. The administration is finalizing a settlement agreement with districts concerning a disputed mandate related to behavioral interventions for students with special needs. The settlement would provide $65 million in annual ongoing payments, as well as an additional $500 million for back payments (paid over the course of six years). The $500 million is intended to cover roughly one–half of districts’ estimated retroactive claims.

Governor Misses Reform Opportunity, Pushes Off Important Decisions

While the Governor’s plan reduces state mandate payments in the short–term, we believe his plan misses an opportunity to substantively address flawed mandates in the long–term. Specifically, we think the Governor’s plan has two major shortcomings.

Only a Short–Term Solution. Suspending mandates only provides savings in the budget year but does not provide permanent solutions. Given the recent court‘s ruling, pressure to fund the annual ongoing cost of mandates will persist. Moreover, the cost of many mandates can be reduced on a long–term basis with simple amendments to state law. Especially given the relative ease of creating more lasting solutions, the Governor’s budget misses an opportunity to eliminate the costs of ineffective mandates altogether.

Treats All Currently Mandated Activities Alike Regardless of Policy Merits. The Governor’s proposal does nothing to preserve the state policies that underlie some education mandates. For instance, while the graduation requirement mandate in our view would not justify its price tag reimbursed using the existing method, we believe that the state should not weaken its high school science requirements. In the past, lawmakers have found strategies to limit the high cost of some mandates while creating strong incentives for schools to perform valuable educational activities. By suspending mandates, the administration fails to create such incentives.

Create Lasting Solutions on Case–by–Case Basis

Rather than suspend virtually all K–14 mandates in one fell swoop, we recommend reviewing each mandate on a case–by–case basis. Below, we review the costliest K–14 mandates. Figure 19 summarizes our recommendations on these requirements.

Tying Activities to Optional Funding Has Several Benefits. As shown in Figure 19, we do identify some mandated activities that the state might want to continue supporting. In these cases, we search for optional funding sources (such as a voluntary categorical program) that could be leveraged to support such activities. In addition to reducing associated state costs, we believe this approach can be a better method of implementing many policy objectives. In particular, we think three major benefits result from using optional funding sources.

• Fewer Administrative Hassles. As noted above, the existing mandate process creates significant administrative hassles for districts. In contrast, funding activities using voluntary funding streams eliminates the need for a separate reimbursement process. Under such a system, districts not only spend less time on paperwork but also have more freedom in determining how best to undertake an activity.
• Connects With Broader Objectives. Tying activities to an optional funding source also ties them to a broader policy objective. For example, situating teacher reviews in the context of school reform gives those reviews purpose they otherwise lack. Reorganizing mandated activities in this manner could improve coordination among education policies.
• Majority of Districts Still Perform Activity. Voluntary funding sources often are large enough that the majority of districts apply for them and comply with related requirements. Since many of these funding streams target at–risk students, they would help guarantee that California’s policies benefit students most in need of academic and social support.

Notification of Truancy and Habitual Truant

Both truancy mandates have a simple premise: parents should be alerted when their children do not show up for school. Such notification generally is supported by research suggesting that increased parental involvement tends to reduce truancy. Whereas the notification of truancy mandate requires LEAs to notify parents when students miss a certain number of school days, the habitual truant mandate requires notification before the student is classified as “habitually” absent.

Policy Objectives Appear to Have Gotten Lost in Paperwork. Despite the laudable objective, these mandates in practice do not necessarily increase parental involvement. When a student shows up late to class or misses school a certain number of times, for example, districts typically comply with the notification of truancy mandate by sending a letter to the student’s home. Reports from several districts suggest that these letters are formalities and do not increase substantive interaction among educators, parents, and students.

Reimbursement Rules Create Waste. Each time a district sends a letter to a parent, the state reimburses that action at a rate of roughly $17 per letter. This rate was set before the state established mandate review procedures that included a more rigorous process of cost determination. Given the text of the letter changes little if at all from year to year or student to student, the real cost of sending letters is likely far below the $17 rate.

Eliminate Mandates but Meet Overall Objective in Different Way. We recommend that the Legislature eliminate the two truancy mandates but meet their overall policy objective in a different way. The state already has various categorical programs that can be used to support parental involvement of at–risk students. For example, the state currently funds Economic Impact Aid (EIA), a program designed to provide comprehensive support services for at–risk students. In the “Categorical Reform” piece of this section, we recommend consolidating this program, along with several other similar programs, into a large block grant for at–risk students. As a condition of receiving either EIA or block grant funding, the Legislature could require districts to engage parents of at–risk students—with the intent to improve at–risk students’ academic performance and reduce their dropout rates. Compared to mandating specific parental notification requirements, this approach still would ensure districts make good–faith efforts to engage parents while giving districts much more flexibility over implementation.

Stull Act

Passed in 1971, the Stull Act requires school districts to evaluate their teachers on a regular basis. Changes to the law in 1983 and 1999 were eventually deemed reimbursable mandates. The 1983 change requires districts to evaluate teachers receiving an unsatisfactory performance review on an annual basis. The 1999 law requires districts to include a review of student test scores in the evaluation process.

Mandate Does Little to Promote Effective Teacher Evaluations. The Stull Act requirements raise a major policy consideration: What does mandating specific teacher evaluation practices accomplish for the state? In many organizations outside of K–12 education, employee evaluations represent an important management activity that can help improve employee performance. These evaluations typically are part of a broader set of processes and incentives for employees. Many employers link staff salary increases to evaluations. Similarly, in cases where employees fail to meet performance expectations over an extended time period, they may be terminated. In K–12 education, however, evaluations are rarely linked to teacher raises and dismissals. Given evaluations are not linked to these decisions, justifying the cost of mandating them is difficult.

Eliminate Newer Provisions of Stull Act. We recommend eliminating the Stull Act mandate (meaning the relevant 1983 and 1999 amendments). This would not mean eliminating the requirement that schools evaluate teachers. Rather, eliminating only the newer provisions would alleviate reimbursable costs. As mentioned earlier, these provisions relate primarily to the yearly reviews of teachers with poor performance records and using student test scores in the evaluation process. Thus, removing the mandate does not remove basic evaluation requirements like annual reviews for untenured instructors (as these were established by the original 1971 Stull Act, which predates the state’s existing mandate process). It also in no way prohibits districts—at their discretion—from following good management practices and evaluating teachers for the purposes of better supporting and rewarding them.

Increase Value of Specific Evaluation Practices by Tying to School Improvement. The state also could meet the general objectives of the 1983 and 1999 laws by linking yearly evaluations of struggling teachers to federal school improvement funding. Currently, schools that fail to meet certain student benchmarks can receive federal school improvement funding. As a condition of receiving these funds, schools must submit an improvement plan to the state. California could require that these plans include both annual performance reviews of teachers whose students miss benchmarks (the general intent of the 1983 law) and the analysis of student test scores to support instructional improvements (the general intent of the 1999 law). Beyond eliminating related state costs, embedding specific evaluation practices in school improvement plans would give them a clearer objective and tie them to the broader consequences of the accountability system.

Collective Bargaining

California’s K–14 employees gained the right to bargain collectively by passage of the Rodda Act in 1975. In 1978, the Board of Control (the predecessor to CSM) found that the act imposed a state–reimbursable mandate on K–14 districts. Specifically, the board determined that the provisions of the law requiring districts to meet and negotiate constituted a higher level of service and were therefore reimbursable.

Subsequent Court Rulings Suggest Collective Bargaining No Longer Qualifies as a Mandate. Since the passage of the Rodda Act, California appellate courts have decided several relevant cases that affect mandate determinations. Specifically, cases in 1987 and 1990 ruled that a state mandate is only reimbursable if it imposes a unique requirement on local governments that does not apply generally to residents and entities in the state. In other words, since public and private employees both have collective bargaining rights, the Rodda Act has not shifted responsibilities to local governments so much as extended rights available to many employees. While K–14 collective bargaining does have unique requirements, most activities associated with the K–14 collective bargaining process are, in all likelihood, no longer reimbursable under law based on these recent court decisions.

Request CSM to Reconsider Mandate; Would Not Impact Collective Bargaining. We recommend the Legislature request CSM to reconsider the K–14 collective bargaining mandate. Even if CSM determines the Rodda Act is no longer reimbursable, the law still would preserve all rights of K–14 employees to bargain collectively. In contrast, the Governor’s proposal would suspend all activities associated with the Rodda Act that are reimbursable.

High School Science Graduation Requirement

As part of major education reform legislation in the early 1980s, the Legislature increased the state’s high school graduation requirements. Among other changes, the law required that all students complete two high school science classes prior to receiving a diploma (the previous requirement was one science class). This change raised the total number of state–required courses from 12 to 13. The costs associated with providing an additional science class were the basis of an eventual mandate claim. In 1987, CSM determined that providing an additional science class imposes a higher level of service on districts and, therefore, constituted a reimbursable mandate.

Court Interpretation Has Led to Great Increase in Estimated Mandate Costs. The primary factor contributing to high mandate costs relates to a statutory provision that provides school districts with discretion in implementing the high school science graduation requirement. This provision was interpreted differently by various parties, until a 2004 court ruling indicated that school districts had full discretion to increase their total graduation requirements and total instructional costs. Based on this ruling, CSM decided the state could not increase the number of courses it requires for graduation above 12 courses without providing reimbursement. As a result, the state could need to pay the full cost of every additional science course for most districts as far back as 1995–96.

Absent Action, State Will Face High Price Tag. We estimate the state would face annual ongoing mandate costs of roughly $200 million if it were to pay the full cost of an additional science course for every applicable LEA. In addition, we estimate retroactive costs would total approximately $2 billion (resulting in part from the formula chosen by CSM to be the basis for reimbursement).

Amend Statute to Avoid Prospective Costs. We recommend the Legislature avoid prospective science graduation requirement costs by clarifying how districts are to implement the graduation requirement. Specifically, we recommend language clarifying that school districts shall ensure that any modification of coursework relating to the second science course requirement results neither in students needing to take a greater total number of courses for graduation nor higher district costs. Such an approach has been used in previous test claims and affirmed by a California appellate court.

Statutory Change Would Have Minimal Programmatic Impact on Districts, Provide Flexibility in Containing Costs. In practical terms, this change would have minimal programmatic impact on districts. This is because districts typically require at least a dozen additional year–long courses on top of the state’s requirements for 13 year–long courses. Thus, even with our recommended statutory change, school districts still would have substantial discretion both to increase academic requirements beyond the state requirements and require electives. For example, a district could require four year–long courses each in math, science, English, social science, and foreign language (for a total of 20 courses) and still have room within its existing base program to require several additional year–long elective courses. The statutory change also would provide districts with substantial discretion in determining how best to offset any potentially higher costs associated with a science course within their existing base program (consistent with the intent of the original legislation).

Addressing Retroactive Costs Is More Complicated. While eliminating costs prospectively is relatively straightforward, addressing retroactive costs is somewhat more complicated. This is because the Legislature generally cannot apply clarifying statutory language retroactively, even when associated mandate costs have grown far beyond legislative intent. As a result, options available for addressing the $2 billion backlog of graduation requirement claims are limited. Given these constraints, we suggest the Legislature consider three possibilities: (1) support the administration’s efforts to appeal CSM’s decision, (2) request CSM to base claims on documented costs rather than a formula, or (3) pay all claims within available Proposition 98 resources.

Behavioral Intervention Plans

Federal law entitles children with disabilities to a “free and appropriate education” (FAPE) tailored to their unique needs. Toward this end, districts are responsible for providing special education and related services pursuant to an Individualized Education Program (IEP), which is developed by a team with special education expertise and knowledge of a child’s particular needs. As part of the IEP process, Chapter 959, Statutes of 1990 (AB 2586, Hughes), sought to regulate the use of behavioral interventions and encourage the use of positive behavioral strategies with special education students. To this end, the law required SBE to adopt regulations that (1) specified the types of behavioral interventions districts could and could not use; (2) required IEPs to include, if appropriate, a description of positive interventions; and (3) established guidelines for emergency interventions.

Regulations Exceed Legislative Intent. Regulations adopted by SBE go beyond what the Legislature intended—being both more extensive and more prescriptive. Specifically, SBE regulations require districts to conduct one particular type of behavioral assessment—a “functional” assessment—followed by a particular type of behavioral intervention plan (BIP)—a systematic positive BIP—for any special education student exhibiting serious behavior problems that interfered with the implementation of his or her IEP. In addition, the regulations require districts to train staff on these strategies. In 1994, three school districts filed a claim arguing that BIP–related requirements constituted a reimbursable mandate. In reviewing the claim, CSM staff found that state statute, “on its face, does not impose any reimbursable state mandated activities,” however, regulations adopted pursuant to state law do.

Tentative Settlement in the Works. In 2000, CSM heard the BIP test claim and ruled in favor of the districts. The administration, however, appealed the decision. Rather than proceeding with the appeal, the administration has reached a settlement with districts outside of the legal process. Under the terms of the settlement, districts would receive $65 million annually to defray the ongoing cost of BIPs, in addition to a lump sum payment of roughly $510 million to settle the outstanding claims. (The settlement amounts are based on results from district and SELPA surveys conducted by DOF.)

Federal Law Now Largely Achieves Original Legislative Goals. At the time BIP–related regulations were implemented, federal law was silent on the use of behavioral interventions. In 1997, however, federal law was amended to include behavioral interventions in the IEP process. Specifically, federal law now requires IEP teams to consider behavioral interventions, including positive behavioral interventions, when a student’s behavior impedes his or her learning or that of others. Additionally, if an IEP team determines that a behavioral intervention is needed to ensure a child receives a FAPE, the IEP team must include an intervention in that child’s IEP. Federal law, however, does not prescribe the type of behavioral intervention that IEP teams may include.

Eliminate Mandate by Better Aligning Regulations to Federal Law. Given that activities mandated by federal law are not reimbursable mandates for the state, the state could eliminate future BIP–related costs by more closely aligning state regulations with federal law. Under this approach, IEP teams would have to consider positive intervention strategies and would be obligated to include them in an IEP when teams deem them necessary for a child to meet his or her IEP goals. The state also could continue to limit the types of interventions that districts may use in an IEP and in case of emergencies. It would not, however, require a specific course of action be taken in all instances. Districts therefore would have more discretion in addressing individual behavior problems. They also would achieve savings by the repeal of current assessment, training, and procedural requirements. Any remaining costs could be covered by existing federal and state special education funding. This approach would save the state the $65 million in estimated annual ongoing costs.

State Likely Liable for Retroactive Claims. While the state can eliminate future BIP–related costs by amending regulations, it is likely still liable for past claims. Even if the Legislature takes action to amend existing regulations, districts have the right to pursue reimbursement for BIP–related costs incurred between 1993, the year regulations were implemented, and the date regulations are repealed. Since these activities occurred in the past, the state would likely be liable for the claim costs. The administration estimates retroactive claims could reach $1 billion. They have, as mentioned above, tentatively negotiated the amount down to $510 million, which would be paid to districts in $85 million increments over the course of six years, beginning in the 2011–12 fiscal year.

Integrated Waste Management Mandate

Chapter 764, Statutes of 1999 (AB 75, Strom–Martin), requires state agencies (including locally governed CCC districts) to divert from landfills a specified percentage of their solid waste through reduction, recycling, and composting activities. State agencies must develop an integrated waste management plan and report annually to the California Integrate Waste Management Board (CIWMB) on their ability to meet solid–waste diversion goals.

Districts Now Required to Offset Claims. In March 2004, CSM determined that these activities constitute a state–reimbursable mandate for community college districts. In March 2005, CSM adopted “parameters and guidelines,” which determine the methodology for reimbursing the mandate. As we discuss in the 2007–08 Analysis of the Budget Bill (E–281), CSM found that savings (avoided landfill disposal fees) and revenues (from the sale of recyclable materials) could not be used to offset districts’ cost claims. In March 2007, CIWMB and DOF sued CSM over its decision. In June 2008, the court ruled against CSM, and ordered it to amend the parameters and guidelines to require districts that are claiming reimbursable costs to identify and offset from their claims any savings and revenues realized from the mandate. The CSM revised the parameters and guidelines in September 2008. Districts have until March 2009 to submit amended claims for reimbursement by the state.

Recommend Legislative Action Depending on Statewide Cost Estimate. Because districts have until March 2009 to submit their claims, a statewide cost estimate for this mandate will not be known until this spring. According to CIWMB, it is possible that savings and revenues could fully offset any costs that districts incur. If so, we recommend the Legislature retain this mandate. If the statewide cost estimate shows a significant net cost to the state, however, an alternative would be for the Legislature to treat community colleges the same as K–12 school districts, which are encouraged—but not required—to comply with diversion goals. We believe most colleges, like K–12 schools, would participate in waste–diversion programs.

Enrollment Fee Collection and Waivers Mandate

Existing law requires CCC districts to collect enrollment fees, as well as waive fees for certain students (usually based on financial need). In April 2003, CSM determined that these requirements constitute a state–reimbursable mandate for districts. Last year, CSM concluded that total costs for the mandate (which include costs for staff to collect fees and prepare a receipt for students) reached approximately $162 million between 1998–99 and 2007–08. This amount takes into account $31 million in revenues over the decade that the state provided to districts for purposes of offsetting fee/financial aid administrative costs. Annual costs total about $18 million, which includes about $4 million in offsets. (As part of the 2008–09 budget package, the Legislature amended statute to clarify an additional state–provided revenue source is a partial offset to district costs.)

Recommend Elimination of Mandate. We recommend the Legislature eliminate this mandate and instead rely on fiscal incentives for districts to perform these activities on their own. Under current law, the state budget specifies a total amount of apportionment funding (general–purpose monies) that is provided to community college districts. Apportionment funding comes from three main sources: the state General Fund, local property taxes, and student fee revenue. Local property taxes and student fee revenue are retained by community college districts and counted toward their apportionment entitlement. The General Fund provides the additional funding needed to meet each district’s apportionment amount. To the extent that districts decline to collect fees, we recommend that the Legislature reduce districts’ General Fund support by an equal amount. This would create a strong incentive for districts to perform these administrative functions.

Health Fees/Services Mandate

Community colleges provide varying levels of on–campus health care to students. Generally, CCC health centers are funded by health fees. State statute restricts the amount of the fee that colleges may charge. Currently, the highest allowable charge is $16 per semester, which a district may increase to keep pace with inflation.

Current law also contains a MOE provision for community college districts related to health centers. Specifically, each district is required to provide students at least the level of health services it provided in 1986–87. Thirty–five of the system’s 72 districts provided health care to students in 1986–87 and therefore must continue to offer these services. Districts subject to this requirement are eligible to claim reimbursement for these costs. The remaining 37 districts are not subject to this mandate, although many choose to provide health services even without state reimbursement. The 2008–09 Budget Act provides $4 million for this mandate, which partially offsets claimants’ total costs (roughly $10 million annually after accounting for offsetting revenues from the collection of student health fees).

Recommend Elimination of Mandate. We recommend that the Legislature eliminate this mandate by no longer requiring districts to provide a particular level of care to students. Student characteristics and access to health care off–campus (such as through one’s parents) vary within the CCC system. As such, student demand for on–campus services can vary by college. We therefore believe that locally elected boards should be charged with making decisions about the type and scope of services offered to students. By eliminating the health mandate, districts that are subject to the MOE would be able to make these decisions just as non–MOE districts currently do. Alternatively, the Legislature could increase the cap on health fees so that districts can fund the full cost associated with the MOE. This, too, would eliminate the mandate costs.

Other Existing Mandates

While the costliest K–14 mandates have been reviewed in this section, the review is far from exhaustive. During the spring budget process, we recommend the Legislature continue to review remaining mandates on a case–by–case basis to determine if each fulfills a compelling state purpose at a reasonable cost. If a currently mandated activity is determined to be of notable statewide benefit, then we recommend the Legislature explore ways to both contain associated costs and improve incentives. In many cases, we believe the Legislature has opportunities to link requirements with optional funding streams, thereby providing cost containment as well as a voluntary fiscal incentive to undertake critical activities.