from the California Legislative Analysis's Office
May 4, 2010 | FULL REPORT
Video with Jennifer Kuhn of LAO
This report highlights the major findings of a survey we distributed to all California public school districts in the fall of 2009. The survey was designed to gather information about the impact of recent state and federal actions affecting school district finance and operations. Below, we (1) provide background information on these recent developments, (2) present major findings from the survey, and (3) offer recommendations that the Legislature could implement in 2010–11 to provide school districts with additional flexibility. The report also has an Appendix that contains a complete listing of survey questions and results.
As part of the February and July 2009 budget packages, the state adopted various proposals designed to provide school districts with additional flexibility. During the same period, the federal government provided California with substantial stimulus funding that could be used for K–12 education. In the fall of 2009, we distributed a survey to all public school districts in California to better understand the effect of these recent state and federal actions. Most significantly, we sought information regarding the degree to which school districts were making use of the newly granted flexibility to shift funds among, as well as away from, approximately 40 state–funded categorical programs. In addition, we asked how districts were changing services as a result of having freedom from the associated state program requirements. We also asked when and how districts were spending their federal stimulus funds. Finally, we asked districts to identify additional types of flexibility they would find helpful.
Categorical Flexibility Having Positive Impact on Local Decision Making. We found that the newly granted categorical flexibility was having a positive impact on many school districts’ ability to make certain decisions. Specifically, two–thirds of responding districts reported that categorical flexibility made developing and reaching agreement on a strategic plan easier, with three–fourths of districts indicating that categorical flexibility made implementing their strategic plan easier. The vast majority of districts also reported that categorical flexibility made it easier to develop and balance a budget, dedicate resources to local education priorities, make staffing decisions, and fund programs for struggling students.
Districts Relying Heavily on Categorical Flexibility. Most districts also indicated that they were relying heavily on their newly granted authority to shift funds away from the “flexed” categorical programs. In particular, districts reported shifting some funds away from flexed programs that did not support direct K–12 classroom instruction (such as adult education, deferred maintenance, professional development, and school safety) as well as from flexed programs that might be considered enrichment or supplemental student support (such as art and music, gifted education, supplemental instruction, and counseling). Few districts reported shifting funds into flexed programs. Thus, the majority of districts generally appear to be using freed–up categorical funds to support core classroom instruction.
Some Flexed Programs Already Discontinued, Others Protected. Apart from the general trend of shifting some funds from flexed programs to the core instructional program, some districts already have discontinued (that is, entirely defunded) some flexed programs while protecting other flexed programs. Most significantly, one in three responding districts reported that they discontinued Ninth–Grade Class Size Reduction (CSR) in 2009–10. One in five responding districts discontinued programs for art and music, counseling, and adult English tutoring. One in ten responding districts discontinued programs for struggling veteran teachers, professional developments institutes, gifted education, and general school and library improvement activities. In notable contrast to these programs, about half of responding districts reported making no programmatic changes and shifting no funds away from Community Day Schools, a program for teenage mothers, and an alternative pathway program for teachers.
Districts Differ Regarding When, but Generally Not How, They Are Spending Federal Stimulus Funding. Given the more than $6 billion in federal stimulus funding for K–12 education that California received last year, our survey also contained questions intended to help the Legislature better understand how this funding affected districts’ overall staffing levels and categorical activities. The survey contained associated questions relating to both timing and use of these monies. With regard to timing of expenditures, our survey revealed notable differences among districts. While districts, on average, reported using 20 percent of federal stimulus funds in 2008–09 and 60 percent in 2009–10, with 20 percent reserved for 2010–11, the survey revealed that about 40 percent of districts were spending virtually all their stimulus funding in 2009–10 alone. In contrast, about a quarter of districts were splitting stimulus funds about evenly between 2009–10 and 2010–11. Despite differences in the timing of expenditures, the survey revealed that most districts were using the stimulus funds for generally the same purposes—with roughly two–thirds of the funds being used to minimize teacher layoffs and the remainder used to backfill reductions to categorical programs and make various one–time purchases.
Recommend Providing School Districts With Additional Flexibility. Based on our survey findings, coupled with our ongoing assessment of the state’s categorical programs and statutory requirements, we conclude this report by laying out several recommendations for providing school districts with more flexibility. Specifically, we recommend the Legislature convert three now stand–alone programs (K–3 CSR, Home–to–School (HTS) Transportation, and After School Safety and Education) into flexed programs. As is the case with the other currently flexed categorical programs, this would allow districts to use associated funding for any high priority and exempt them from the programs’ underlying statutory requirements. We also recommend consolidating two other stand–alone programs—merging the smaller, more narrowly focused English Language Acquisition Program (ELAP) into the much larger, more broad–based Economic Impact Aid (EIA) program. In addition, we recommend consolidating five K–12 career technical education programs and eliminating the associated programmatic requirements in favor of monitoring related student outcomes. Furthermore, we recommend the Legislature remove certain statutory restrictions that relate to contracting out for noninstructional services, substitute teaching, state school improvement activities, and mandated education activities. Each of these recommendations is designed to give school districts additional flexibility not only to help weather the economic downturn but also to help maximize program effectiveness and eliminate inefficiencies.