By Laurel Rosenhall and Robert Faturechi | The Sacramento Bee
Published: Tuesday, Feb. 24, 2009
Summer school. Art and music. Classes for gifted children.
Buying textbooks. Training math and English teachers. Tutoring students for the high school exit exam.
For decades, a large portion of California's school funding has been strictly designated for such categories.
Not any more.
In the budget deal crafted last week, the Legislature and Gov. Arnold Schwarzenegger combined many of the pots of money known as "categoricals." The result is that for the next five years, principals and district administrators will have more spending flexibility than they've had in recent history.
It's a move education reformers have been pushing for years, saying a bit more freedom with the checkbook would help schools meet their students' needs.
The new state budget cuts about $2.4 billion from schools this year and changes the payment terms of another $5 billion. The reductions get even deeper next year, when schools will face an additional cut of $400 million.
About $1 billion of the cuts will be taken out of categorical funding – which makes up one-third of the money California spends on education and funds more than 60 individual education programs.
Categorical funding became popular in the 1960s as politicians tried to help disadvantaged children by spending money specifically on them and ensuring the additional cash didn't wind up in teachers' paychecks, according to a new report by UC Berkeley's law school.
As categoricals proliferated over time, however, they created a bureaucratic web of obligations for educators, who couldn't target funds where they were needed most. Money for buying new technology couldn't be used to buy books for a library. Money for checking kids' teeth couldn't be spent on counseling. Money for training principals couldn't be used to train a teacher.
"Principals said they spent a God-awful amount of their time filling out compliance forms," said Bruce Fuller, a UC Berkeley education professor who surveyed principals for a recent study.
"They've got to keep receipts, keep billing information. … Principals become mini-bureaucrats rather than working with teachers and being in classrooms."
The findings led him to recommend – in the massive "Getting Down to Facts" report Schwarzenegger released with fanfare in March 2007 – that the state consolidate categorical funding.
And that is just what the new plan does. It collapses 42 categorical programs into one block of money, and trims it by about 15 percent, or $1 billion. Schools can now use that money for any purpose.
"They could do less on school safety and more on career tech," said Jennifer Kuhn, director of K-12 education with the Legislative Analyst's Office. "They can do less counseling and have smaller class sizes. They can do less adult ed and more K-12 ed."
Or, she said, they can skip spending on those programs and give teachers a raise.
COMPROMISING PAST PROMISES/COMPROMISING THE FUTURE: Under the "Budget Compromise" reached in Sacramento, Schools can now use money from these categorical programs for any purpose: [smf: "for any purpose" is somewhat misleading - see Informative (following)]
• Summer school/supplemental instruction• Regional Occupational Centers and Programs
• High school counseling
• Specialized secondary programs
• Immediate intervention/underperforming and high achieving/improving schools programs
• Gifted and talented education (GATE)
• Mathematics and reading professional development
• Principal training program
• American Indian Early Childhood Education Program
• California Indian education centers
• Adult education
• Education technology
• Deferred maintenance
• Instructional materials
• Community day schools program
• Bilingual teacher training program
• National Board for Professional Teaching Standards Certification Incentive Program
• California School Age Families Education Program
• California High School Exit Exam
• Center for Civic Education
• Teacher dismissal apportionments
• Charter schools
• School safety
• Class size reduction, grade nine
• International baccalaureate diploma program
• California Association of Student Councils
• Pupil Retention Block Grant
• Teacher Credentialing Block Grant
• Professional Development Block Grant
• Targeted Instructional Improvement Block Grants
• Library Improvement Block Grant
• School Safety Consolidated Competitive Grant
• Physical Education Block Grant
• Arts and Music Block Grant
• County Office of Education Williams Audits
• Certificated Staff Mentoring Program
• Oral Health Assessments
• Commission on Teacher Credentialing
Schools must continue to pay for these programs with categorical funding:
• Child Development
• Child Nutrition
• Economic Impact Aid
• Special Education
• Home-to-School Transportation
• After School Education & Safety
• Class Size Reduction, kindergarten – third grade
• Quality Education Investment Act
The plan has the potential to revolutionize school funding in California, said Michael Kirst, a Stanford education professor and former state Board of Education president.
But it doesn't do away with categorical funding altogether. About 20 categorical programs remain intact, including some of the biggest – special education and K-3 class-size reduction.
Because the restrictions on many of the biggest categorical programs have not been eased, the new flexibility won't help cash-strapped districts very much, said David Gordon, Sacramento County's superintendent of schools.
The changes might have been more useful during a time of surplus, he said. But without money, flexibility is of little use.
"To me it's more like, 'Do you cut your arm off or your hand off?' " Gordon said. "We have a bare-bones program already going in. That basic core – the reading, the math and so on – is something you can't trade off."
Other educators said the eased restrictions will give them some welcome wiggle room.
Patrick Godwin, superintendent of Folsom Cordova Unified, expects the relaxed rules will allow his district to avoid painful staff cuts.
"The district here already had a strong music and arts program," Godwin said. "So we'll be able to use those monies to keep more counselors or keep more electives in the high schools."
The following is from an LAUSD Office Of Government Relations informative to the Bd of Ed & Superintendent dated February 19, 2009
SUBJECT: STATE BUDGET APPROVED WITH MAJOR REDUCTIONS TO EDUCATION CATEGORICAL PROGRAMS
Determining the Categorical Program Reductions
Categorical programs are being funded on the basis of three tiers, with the funding for Tier 1 being the most protected. In 2008-09, the Tier 2 and 3 categorical programs are cut by 15 percent or $944 million. In 2009-10, Tiers 2 and 3 are cut by an additional 4.9 percent or $268 million. Page | 2
1. Tier 1 – No reductions and no flexibility options on the use of these dedicated funds (there are flexibility options within the Class Size Reduction program itself, which are described later). The following are the protected programs in this tier:
| Budget Item | Title |
| Tier 1 | |
| 6110-161-0001 | Special Education |
| 6110-196-0001 | Child Development |
| 6110-234-0001 | K-3 Class Size Reduction |
| 6110-128-0001 | Economic Impact Aid (EIA) |
| 6110-649-0001 | After School Programs |
| 6110-601-3116 | Home-to-School Transportation |
| 6110-203-0001 | Child Nutrition |
| Quality Education Improvement Act (QEIA) | |
| 6110-130-0001 | Advancement Via Individual Determination (AVID) |
2. Tier 2 – 15 percent reduction in 2008-09, and an additional 4.9% reduction in 2009-10. There are no flexibility options with these programs.
| Budget Item | Title |
| Tier 2 | |
| 6110-113-0001 | Student Assessment Testing |
| 6110-224-0001 | Year Round Schools |
| 6110-125-0001 | English Learner Student Assistance |
| 6110-220-0001 | Charter School Facility Grant Program |
| 6110-166-0001 | Partnership Academies |
| 6110-103-0001 | Apprentice Program |
| 6110-119-0001 | Foster Youth Programs |
| 6110-158-0001 | Adults in Correctional Facilities |
| 6110-182-0001 | K-12 Internet Access |
| 6110-167-0001 | Agricultural Vocational Education |
3. Tier 3 – 15 percent reduction in 2008-09 and an additional 4.9 percent reduction in 2009-10. For these programs, there is complete flexibility for a district to use these funds as it wishes.
| Budget Item | Title |
| Tier 3 | |
| 6110-246-0001 | Targeted Instructional Improvement Block Grant (TIIG) |
| 6110-156-0001 | Adult Education |
| 6110-105-0001 | Regional Occupational Centers and Programs |
| 6110-247-0001 | School and Library Improvement Block Grant |
| 6110-104-0001 | Supplemental Instruction |
| 6110-189-0001 | Instructional Materials |
| 6110-188-0001 | Deferred Maintenance |
| 6110-245-0001 | Professional Development Block Grant Program |
| 6110-108-0001 | Supplemental School Counseling Program |
| 6110-211-0001 | Charter School Categorical Block Grant |
| 6110-244-0001 | Teacher Credentialing Block Grant |
| 6110-123-0001 | High Priority Schools Grant Program |
| 6110-265-0001 | Arts and Music Block Grant |
| 6110-232-0001 | Class Size Reduction - 9th Grade |
| 6110-228-0001 | School Safety Block Grant (8-12) |
| 6110-243-0001 | Pupil Retention Block Grant Program |
| 6110-204-0001 | CA High School Exit Exam (CAHSEE)-Support and Services |
| 6110-198-0001 | CA School Age Families Education |
| 6110-137-0001 | Math and Reading Professional Development |
| 6110-124-0001 | Gifted and Talented |
| 6110-190-0001 | Community Day Schools |
| 6110-227-0001 | Community -Based English Tutoring Program |
| 6110-260-0001 | PE Teacher Incentive Program |
| 6110-193-0001 | Peer Assistance and Review |
| 6110-248-0001 | School Safety Competitive Grants |
| 6110-107-0001 | County Offices of Education - Fiscal Oversight |
| 6110-267-0001 | Certificated Staff Mentoring |
| 6110-266-0001 | County Office of Education - Williams Audits |
| 6110-122-0001 | Specialized Secondary Program Grants |
| 6100-144-0001 | Principal Training Program |
| 6110-151-0001 | American Indian Education Centers |
| 6110-268-0001 | Child Oral Health Assessments |
| 6110-195-0001 | National Board Certification Incentives |
| 6110-240-0001 | Advanced Placement Programs |
| 6110-193-0001 | Bilingual Teacher Training |
| 6110-150-0001 | American Indian Early Childhood Education Centers |
| 6110-193-0001 | Reader Services for the Blind |
| 6110-208-0001 | Civic Education |
| 6110-209-0001 | Teacher Dismissal Apportionment |
| 6110-242-0001 | CA Association of Student Councils |
| 6110-123-0001 | Sanctions |
| 6110-144-0001 | Chief Business Officers Training Program |
| 6360-101-0001 | Local Assistance - Commission on Teacher Credentialing |
Additional Flexibility Options
1. School districts now have the option of increasing the K-3 Class-Size Reduction (CSR) Program from the present 20:1 restriction without completely losing this specific categorical program funding. Districts would be subject to the following penalties with these new flexibility options:
Class Size Penalty
20.5 to 21.5 (less than) 5 percent
21.5 to 22.5 (less than) 10 percent
22.5 to 23.0 (less than) 15 percent
23.0 to 25.0 (less than) 20 percent
25 or over 30 percent
2. Deferred Maintenance: The .5 percent statutory match for deferred maintenance would be eliminated for the period of 2008-09 to 2012-13.
3. Routine Maintenance Reserve: The requirement for a 3 percent reserve for routine maintenance would be reduced to 1 percent for the period of 2008-09 to 2012-13.
4. Transfer of Categorical Program Balances: The District would have the authority to transfer the 2008-09 categorical balances for any educational purposes, except for balances in the following programs:
Special Education
QEIA
EIA
TIIG
Instructional Materials
CAHSEE
Supplemental Instruction
Transportation
Program Elimination
The High Priority Program is eliminated in 2009-10.
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