Evaluation of the Continuation School Funding Formula, AB 2274 (Leach)

California Continuation Education Association Document

Title: Evaluation of the Continuation School Funding Formula, AB 2274 (Leach)

Author: CCEA (Peter Birdsall and Associates)

Date: February 1998

Evaluation of the Continuation School Funding Formula:

AB 2274 (Leach)

February 1998

HISTORY OF CONTINUATION FUNDING

For historical reasons, there are enormous disparities in funding for continuation high schools among school districts depending on whether the continuation school was established pre- or post-1979. Continuation schools established prior to 1979 were receiving a revenue add-on. The idea of providing add-on funding for continuation schools was to provide funding, in addition to the revenue limit, to recognize that continuation ADA are expensive to serve because of the need for smaller class sizes, additional counseling, and more individualized attention.

These pre-1979 schools had their funding rolled into the Proposition 13 base revenue limits that were established at that time. However, after 1979, the state once again offered districts a revenue limit add-on to support the costs of creating new continuation high schools.

Huge disparities also exist under current law because the revenue limit add-on a district receives is calculated only once, in the first year of the school's operation. After that, the calculated add-on allowance, plus any applicable COLA, is simply added to the district's total revenue limit each year. The law does not call for any annual adjustment of the add-on to reflect increases or decreases in the number of students or staffing at the school.

The result is that some districts receive no separate, additional funding to operate a continuation high school, while others receive revenue limit add-ons in amounts exceeding $30,000 per ADA served in a continuation school. These disparities reflect a funding formula which is deeply flawed in several ways.

LEGISLATIVE ATTEMPTS AT EQUALIZATION

In 1996, the Legislature approved $2 million to begin the process of equalizing funding for continuation high schools. The Legislature also altered the formula for allocation of the cost-of-living adjustment (COLA) to provide for a, more equitable distribution. The Governor approved the COLA formula, but vetoed the $2 million for equalization. His veto message expressed support for the concept and a willingness to revisit the issue.

In 1997, the California Continuation Education Association (CCEA) sponsored legislation, AB 792 (Havice), which would have provided a formula for equalizing funding to continuation high schools, The Department of Finance, in its analysis of AB 792, indicated that the formula did address the Governor's previous concerns for a comprehensive reform of continuation school funding. Unfortunately, the Department of Finance still recommended a veto of AB 792 for two reasons: (1) it would place additional pressures on Proposition 98 funding, and (2) an evaluation of continuation high schools is needed.

In his veto message of AB 792, it was clear that the Governor considered the evaluation to be a priority before any equalization funding would be allocated. Following is an excerpt of the veto message:

"We don't have basic information on what impact, if any, the different rates of funding are producing in student outcomes, The problem needs to be identified in terms of student achievement, not just discrepancies in funding, before a request for more resources can be discussed."

CONTINUATION FUNDING EVALUATION LEGISLATION

In response to the Governor's veto message of AB 792, CCEA drafted language for an evaluation bill, AB 2274 (Leach), with input from both the Legislative Analyst's Office and Legislative staff. The following are several issues which will be addressed in the evaluation:

1. discrepancies in the funding formula

2. efficacy of continuation high school dropout prevention

3. correlation between funding and program quality

4. relationship between length of the school day and program quality

The evaluation of the continuation funding formula would be completed by March 1999 and would provide recommendations for an appropriate formula to equalize continuation high school funding. This timeline will allow the Legislature to consider the issue of equalization funding in the 1999-2000 state budget.

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