LAO 2004-05 Budget Analysis: Education Issue-By-Issue TOC Analysis of the 2004-05 Budget Bill
Education Issue-By-Issue Contents


Funding Per Student

Historical Perspective on Funding Per Student

Proposition 98

Proposition 98 Allocations

Enrollment Funding

Setting Education Priorities for 2004-05

Crosscutting Issues

Proposition 98 Budget Priorities

Governor's Suspension Proposal Reasonable

How a Proposition 98 Suspension Would Work

Governor's Proposal Would Save at Least $2 Billion Annually for Several Years

Legislature Can Eliminate Prior- and Current-Year Proposition 98 Obligations Through Suspension

Proposition 98 Certification Process in Need of Reform

Credit Card Balance High and Growing

Other Issues

LAO Recommended Reductions

Increase K-12 Local Fiscal and Program Flexibility

CCC Spared From Higher Education Reductions

Additional Budget Options Provided in Perspectives and Issues

K-12 Education

K-12 Introduction

Overview of K-12 Education Spending

Major K-12 Funding Changes

Proposition 98 Spending by Major Program

Enrollment Trends

Budget and Policy Implications

Budget Issues

Governor's Categorical Consolidation Proposal

Governor's Proposal

Programs Proposed for Consolidation

Accountability Requirements

Benefits of the Governor's Plan

Issues and Recommendations

Which Programs Should Be Consolidated?

LAO Alternate Criteria—A Focus on Accountability

Remove Staff Development Programs

Remove Funding for Services to Special Needs Students

Add Three Programs to the New Grant

Impact of the LAO Recommendations

Transition Issues May Result in Unintended Consequences

Proposal May Trigger Collective Bargaining Provisions

Expanded Community Participation Is Unlikely to Occur With 2004-05 Funds

Limit District Discretion During Transition Period

State Information Role Is Neglected

Community Involvement Is a Key Element


Teacher Quality

Shifting Sends Confusing Message

Retaining Existing System Perpetuates Mixed Messages

Consolidate Existing Programs Into Teacher Quality Block Grant

Enhance Accountability for Improving Teacher Quality

Governor's School Safety Consolidation

Problems With Current Situation

Concerns With the Governor's Proposal

LAO School Safety Block Grant Proposal

Benefits of the LAO School Safety Block Grant Proposal

High Administrative Costs Prohibit SDE From Administering Current-Year Grants

Safety Plans for New Schools Program Overfunded

Charter Schools

Details of Governor's Proposal Problematic

Restructure Charter School Funding Model—Simplify and Equalize

Economic Impact Aid

EIA Formula Is Outdated and Problematic

Heavy Emphasis on Poverty Skews Per-Pupil Payments

District Allocations Appear Arbitrary and Unpredictable

Simplify and Refocus EIA Formula

Maintain Key Features of the Current Funding Model

District Allocations Under the LAO Proposal

Merge Other Funds Into EIA


Revenue Limits

Simplify The Revenue Limit Formula

Which Add-Ons Provide General Purpose Funds?

Add-Ons Distort Funding Distribution

Consolidate Add-Ons Into Base Revenue Limits

Delete Equalization Funds

Assess "Size and Type" Funding Distinctions

Reinstate Reductions for Basic Aid Districts


Reform of the Mandate Process

K-12 Mandate Issues

Recognize Offsetting Revenues

Reconsider the STAR Mandate

Revise Statutes to Broaden Federal Exclusion

Eliminate Two Mandates

Federal Accountability And Assessments


Integrate State and Federal School Intervention Programs

Federal Law Requires District Interventions

Federal Funds to Assist Schools and Districts Going Unused

Legislature Should Set Realistic Expectations For Federal Accountability


State Risks Losing Federal Funds

Instructional Materials

Governor's Proposal Contradictory

Governor's Funding Level Too High

Education Technology

County Offices of Education Internet Access


Governor's Proposal—High Cost and Low Benefit



CalWORKs Child Care System

Non-CalWORKs Child Care System

Current-Year Child Care Reforms

Governor's Budget Proposes Additional Reforms

Eligibility Restrictions

Income Eligibility

Age Eligibility

Stage 3 Eligibility Limits

Eligibility Limits for Nonworking Parents

Weighing the Costs and Benefits of Restricting Child Care Eligibility

Provider Reimbursement

Family Fees

Proposition 49: After School Education and Safety Program

When Will Proposition 49 Trigger?

Higher Education

Higher Education Introduction

Total Higher Education Budget Proposal

Major Funding Sources

Funding by Segment

Major Cost Drivers for Higher Education

Major Budget Changes

Enrollment Growth

Student Fees

Student Financial Aid

Budget Issues

Intersegmental: Preserving Student Access In Tough Fiscal Times

K-14 Outreach


Student Fees

Financial Aid

Intersegmental: K-14 Outreach Programs

Governor Proposes Outreach Reductions

What Is Outreach?

Outreach Programs Rapidly Expanded in Late 1990s

Funding for Some Outreach Programs Recently Declined

LAO Assessment of Current Outreach Efforts

Focus Outreach Efforts Where They Are Most Needed

Minimize Program Duplication Within Outreach

Specify Clear Program Goals That Directly Link With Services Provided

Make Better Use of Other Education Funding

Outreach Should Focus on Needs of K-12 Students

LAO Recommendations

Establish College Preparation Block Grant For K-12 School Districts

Redirect Some Community College Outreach Funds To Proposed Block Grant

Expand Uses of Remaining Community College Financial Aid Outreach Funds

Preserve Selected UC and CSU Outreach Programs

UC's ASSIST Program and Graduate and Professional School Outreach

CSU's Early Assessment Program

Redirect Funds to Support Outreach

Intersegmental: Higher Education Admissions and Enrollment

Governor's Budget Proposal

Segments Have Base Enrollment Funding To Serve Additional Students

UC Has Funding in Its Base Budget To Enroll Additional Students in 2004-05

CSU Plans to Enroll Fewer Students Than Proposed in Governor's Budget

Can the State Maintain Its Commitment To the Master Plan?

Master Plan's Principles for College Access

No Need to Abandon Master Plan Commitment

Segments Can Accommodate Additional Eligible Students

Task of Defining Eligibility Under the Master Plan Has Largely Been Delegated to the Segments

Recommendations to Ensure Continued Access

Redirect Lower Division Students to Community College

Return to Master Plan's Special Admission Caps

Implement Policies to Preserve Access for State's Eligible Students

Reexamine Existing Eligibility Standards


Intersegmental: Student Fees

Undergraduate and Graduate Fees


Set Fees at Fixed Percentage of Students' Total Education Costs

Use New Policy to Develop Budget-Year Plan and Out-Year Implementation Plan

Encourage Higher Fees for Higher-Cost Graduate Programs at CSU

Score Additional $9.5 Million Associated With CSU's Summer Term

Professional School Fees

Critical Budgeting Assumption Reduces Potential General Fund Savings by $56 Million

New Fee Surcharges

Excess Unit Surcharge

Aggressively Pursue Option, Link With Reporting Requirement

Baccalaureate Surcharge

Intersegmental: Financial Aid

Concerns With Projected Cal Grant Cost Estimates

Excess Funding Should Be Used for Identified Cal Grant Needs

Income Ceilings

Adhere to Existing Policy for Adjusting Cal Grant Income Ceilings

The Private University Cal Grant

Link Private University Cal Grant to Standard Subsidy

The Public university Cal Grant

Retain Existing Policy Basis Used to Set Value of Public University Cal Grant

The Institutional Aid Set Aside

Maintain Integrity of Cal Grant Program Before Further Expanding Undergraduate Institutional Aid

Eliminate Small, Specialized Institutional Aid Programs

University of California (6440)

Student Fee Increases

Intersegmental Issues Involving UC

Other Issues

Restoration of One-Time Reduction From 2003-04

Merced Campus

California State University (6610)

Student Fee Increases

Intersegmental Issues Involving CSU

Restoration of One-Time Reduction From 2003-04

California Community Colleges (6870)

Major Budget Changes

Proposition 98 Spending by Major Program

Student Fees

Enrollment Funding

Special Treatment of Noncredit Instruction Not Warranted

Governor Proposes Categorical Reform

Description of the Proposal

Benefits of Categorical Reform

Proposal a Step in Right Direction, But Falls Short

Some Categorical Consolidations Are Largely Symbolic

Proposal Lacks Adequate Accountability Measures

Governor Proposes $80 Million for Equalization

Budget-Year Funding Should Be Directed To Existing Obligations

Overdue Reports Hinder Accountability

Report on Allocation of $25 Million Concurrent Enrollment Reduction

Report on Allocation of Apportionment Funding

Student Aid Commission (7980)

Major Budget Proposals

Retain Existing APLE Priorities

The EdFund Surplus

Use EdFund Operating Surplus to Relieve General Fund

Intersegmental Financial Aid Issues