A SCHOOL FUNDING PRIMER: A IS FOR ALLIGATOR

By John Fensterwald, EdSource Today | http://bit.ly/MLnkJZ

August 6th, 2012  ::  It’s called “the alligator chart” because it looks like a reptile’s gaping maw. Nicknamed by its creator, the Sacramento-based education consulting firm School Services of California, it’s one graph that voters should clip on their refrigerators to remind them what’s at stake this November when they consider more money for K-12 schools. School Services shared an updated version with district officials recently during its annual budget management seminars around the state.

If the governor’s tax initiative fails, the gap between what is statutorily owed K-12 schools and what they will receive will be a record gap of $1,944 per student: a deficit factor of 28.8 percent. Source: School Services of California, Inc.

California’s school funding law, Proposition 98, is complex, and the Legislature has tortured the language to make it more abstruse. The alligator chart cuts through verbiage to visually capture  how much money has been cut since 2007-08, the last year that the Legislature funded schools without IOUs for lost cost-of-living increases or direct cuts. Since then, the difference between what schools were entitled to receive (tip of the snout of the alligator’s open mouth) and what they have gotten (the yawning bottom jaw) has grown ominously large.

The chart shows that the average unified district should receive $6,748 per student this year in its revenue limit allocation – unrestricted money that districts can use as they choose to keep the lights on and pay teachers. Instead, districts will receive 22.4 percent less, $5,245 – but only if the governor’s tax initiative, Proposition 30, raising the sales tax and income tax on the wealthy,  passes.

And if Prop 30 (or Prop 38, attorney Molly Munger’s tax proposal, promising even more money to schools) fails, then there will be an additional $441 cut – 6 percent more – midyear, lowering per-student revenue this year to $4,804. The deficit factor, the gap between what schools should get by law and what they will get, will be an all-time high of 28.8 percent: $1,944 per student. A little more than half of that is due to unappropriated cost-of-living increases statutorily guaranteed by Proposition 98. The other half is from actual cuts in spending over the past six years.

As the chart shows, schools were also cut dramatically in 2009-10, when the revenue limit per student shriveled to $4,981. But much of that blow was softened by an infusion of federal anti-recession dollars via the American Recovery and Reinvestment Act – money that’s no longer around.

The revenue limit constitutes 79 percent of unrestricted dollars that districts get; other sources include the state lottery, reimbursements for mandated costs, and local sources such as unrestricted parcel taxes.

And unrestricted dollars comprise 73 percent of total dollars that districts receive. The other 27 percent must be spent for designated purposes; they include federal Title I dollars for low-income children, special education money, and state categorical programs, which also have been cut 20 percent.

But revenue-limit dollars are the bread and butter of district spending – what will determine whether districts remain solvent.

The alligator chart will vary for elementary districts, which receive a smaller revenue limit than unified districts, and high school districts, which receive more. Thus, according to School Services, if Prop 30 fails, high school districts would lose $507 per student midyear, compared with $422 per student for elementary districts and $441 for unified districts.

Proposition 98 requires that the state accelerate repayment of IOUs to K-12 schools and community colleges when revenues increase. The  state Department of Finance is projecting that between extra revenues from higher taxes under Proposition 30 and a recovering economy, revenues to schools will increase $17 billion over the next four years, to $64 billion, and the deficit factor will be erased in seven years. But this assumes that the governor and Legislature will follow the spirit as well as the manipulable  requirements of Prop 98. A big “if,” perhaps.