November, 1998

Proposition 8
Public Schools. Permanent Class Size Reduction. 
Parent-Teacher Councils. Teacher Credentialing. 
Pupil Suspension for Drug Possession. Chief Inspector's Office.



This measure makes various changes to the state's education system (grades kindergarten through twelve--K-12). Specifically, it:

Office of the Chief Inspector

Background. The State Department of Education (SDE) provides guidance and support to the state's 8,000 public schools. As part of its duties, SDE staff visit school sites every four to five years to see whether schools are using certain state and federal funds as required by law and to measure the success of these programs. The department also maintains data on school and student performance. The department spends about $34 million in state funds annually on all of its operations.

Proposal. The measure creates the Office of the Chief Inspector of Public Schools, which would report each year on the quality of public K-12 schools. This office would operate independently from SDE. The Governor would select a Chief Inspector, who would serve a ten-year term managing the new office.

The measure requires the office to collect annual data on the quality of each school and inspect all public K-12 schools in the state at least once every two years. With this information, the office would issue an annual report ranking the quality of public schools, identifying strengths and weaknesses of each school, and providing data about student achievement.

Cost. We estimate that performing the duties assigned to the Office of the Chief Inspector would cost about $15 million to $20 million annually. (This is about half of the department's current operating budget.) The initiative directs the state to support the Office of the Chief Inspector by shifting funds that otherwise would pay for SDE staff and expenses. While some of the funding could come from shifting a portion of the current SDE budget, the state would probably provide additional funds to the office given the cost of this new function in relation to the department's total budget.

School Site Governance

Background. Local school boards determine how school districts and school sites (that is, individual schools) operate. For instance, school boards establish school curricula, employee hiring and transfer policies, and how district funds are used. Principals are generally responsible for the day-to-day operation of school sites. Most schools in the state have school site councils that assist school administrators in determining how to spend certain funds and improving the school's educational program. The specific responsibilities of principals and site councils vary significantly from school to school based on district policies.

Proposal. This measure changes the way decisions are made in many schools. First, the measure requires each school--as a condition for continued receipt of state funds for special programs (such as class size reduction)--to establish a school site governing council of parents and school site teachers. Since virtually all schools currently receive such funds, almost all schools would have to establish a school site governing council. Each of these councils, with support from its principal, would determine the curriculum used at the school and the use of funds made available to the school by the school board.

Second, the initiative grants principals the authority to hire or remove any school site employee (teachers and nonteachers). Employees that are released by a school site would become the responsibility of the district. Under current law, districts would have to find another job for many of these employees.

Cost. The changes in school site governance would result in annual costs to school districts, but these could vary greatly by district. For instance, districts that have already shifted school decisions to the site level would experience smaller cost increases than districts that do not have school site councils. If, however, each school site spent $1,000 a year to comply with the governance changes, the statewide cost would be about $8 million. Unless the state provided additional funds for these activities, any new costs would be paid for by redirecting funds from other educational programs within the school or district.

Teacher Credentialing and Assignment Requirements

Background. To become a teacher, individuals must demonstrate to the state that they have a thorough understanding of the subject areas they will teach. There are currently two ways a teacher can demonstrate competence: (1) pass specific courses approved by the state Commission on Teacher Credentialing (CTC) or (2) pass a CTC subject-matter test. About half of the 240,000 existing teachers fulfilled this requirement through courses and half through a test. Under certain circumstances, teachers who are credentialed in one subject area may teach in another subject area where they are not credentialed.

Proposal. This measure eliminates the option for new teachers to take courses to fulfill subject matter requirements. Thus, all new teachers would have to pass a subject matter test to demonstrate competence. In addition, all existing teachers would be required to pass a subject matter test before they could be given an assignment to teach in a given subject area. The term "assignment" is not defined in the initiative or in current law.

Cost. The fiscal impact of these requirements would depend in large part on the way the state defines "assignment." Possible definitions include:

Costs would occur for two main reasons. First, if a significant portion of existing teachers failed to pass the subject-matter test, districts would likely have to pay more to fill all positions (for example, by attracting persons from out of state or who are currently not teaching). Second, districts could be required to find other jobs for existing teachers who were unable to pass the CTC tests.

If the provisions apply to all teachers, these costs could be significant--easily in the tens of millions of dollars annually. Under the more narrow interpretation of the provisions, the costs would likely be modest. Unless the state provides additional funds to school districts for these purposes, districts would have to make spending reductions in other areas of operations to pay for any new costs.

The CTC would incur annual costs in the millions of dollars to provide subject-matter tests to all new K-12 teachers. The measure would also result in a one-time $20 million cost to CTC if the state interpreted the initiative to require testing of current teachers that have never taken a CTC subject-matter test in the subject area that they teach. These new costs would be funded with fees paid by teachers who take the subject-matter tests. (These fees currently average about $200 per test.)

Lesson Plan Requirement

Background. Teachers often create lesson plans to ensure that classes cover the important subject-matter content during the school year. While state law currently contains no requirement that teachers maintain these plans, some districts require teachers to maintain lesson plans for the classes they teach.

Proposal. The initiative requires teachers to have approved lesson plans before they can receive an "assignment" to a class. As discussed in the previous section, the number of teachers that are affected by this provision depends on how the state interprets "assignment." Standards for assessing lesson plans would be developed by CTC. The measure does not identify who would be responsible for reviewing lesson plans to determine whether the plans meet the new standards.

Cost. Reviewing lesson plans could result in costs for school districts--probably in the range of several millions of dollars annually. Districts that do not currently require teachers to maintain lesson plans, or do not review lesson plans, would experience new costs. Unless the state provides additional funds for these purposes, any new costs would require districts to make spending reductions in other educational programs.

Class Size Reduction (CSR) Funding

Background. In 1997-98, the state provided $1.5 billion for K-3 CSR. This funding level assumed that all K-3 students would participate in the program and that a small number of students would participate in smaller classes for only half of the school day (the state provides a lower funding level for these students). In fact, many schools (comprising about 15 percent of eligible students) did not participate in the program. Program savings, however, were redirected by the state to other educational purposes.

Proposal. The measure prevents the state from reducing funding for the existing K-3 CSR program. This would require the state to budget for the program as if all students participated in the CSR program for a full day. Every two years, the Department of Finance would review school district claims for the program and would transfer any unused funds to other educational programs.

Cost. This provision would likely have little or no fiscal impact, as the state currently provides adequate funding for the program. This full-funding requirement, however, would limit the state's ability to reduce annual appropriations for the CSR program in the future.

Student Expulsion Policies

Background. Under current law, a school principal or district superintendent may expel a student for drug possession. Current law also requires the district to continue educating expelled students in a different setting. These alternative settings cost more than regular school programs. According to SDE estimates, approximately 17,000 students are caught each year possessing drugs at school or at a school activity off school grounds.

Proposal. The initiative mandates the expulsion of students who unlawfully possess drugs at school or at school activities off school grounds. The only exception to this requirement is if it is a student's first offense for the possession of a small amount of marijuana.

Cost. We estimate this requirement would result in additional state costs of around $15 million each year to educate expelled students. Additionally, there would be costs--in the millions of dollars--to districts to process expulsion cases.


Summary of Fiscal Effects

State Costs

We estimate the initiative would create up to $60 million in new state programs (Office of the Chief Inspector, CTC testing costs, and the student expulsion policy). Some of these new costs, however, probably would be paid from within the state's existing education budget or be offset by increased fee collections. As a result, the new costs to the state would be substantially less than $60 million.

District Costs

The initiative would result in new costs to school districts. These costs would be due primarily to the new teacher testing requirements, but also due to various other provisions in the measure. Statewide, the costs could be in the high tens of millions of dollars annually. The actual costs, however, could be significantly less depending on how the state implements the measure (particularly the teacher credentialing requirement). The additional costs would vary significantly by district. Any new costs would require districts to make spending reductions in other areas of operation.

The state also could provide additional funds to districts to pay for new local costs of the initiative. This would reduce the level of spending reductions made by districts. It would, however, increase the state's cost of the measure.


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