January 31, 2000

 

MEMORANDUM

 

To:                  CCEA Executive Committee

From:                 Peter Birdsall and Theresa Inslee

Subject:                 Governor’s Proposed Budget

On January 10, Governor Davis released his proposed budget for 2000-01.  The budget proposal is fueled by a strong economy which continues to yield large increases in state revenues.  The rapidly growing state revenues allowed the Governor to propose fully funding the cost-of-living adjustment (COLA) required by state law.  That COLA is estimated to be 2.84%.  The Governor also proposes to fully fund enrollment growth as required by state law.  It is encouraging to note that both COLA and growth are provided for school district and county revenue limits and for all the major categorical education programs.  It should be noted, however, that the 2.84% figure is an estimate only.  The figure could go up or down when the final cost-of-living adjustment figure is released at May Revision. 

The proposed budget does include a 2.84% COLA for the continuation high school revenue limit add-on.  It also includes the language to allocate the COLA as an equal amount per continuation high school ADA.  The COLA (at 2.84%) should provide over $17 per ADA.  Also of particular interest is the Governor’s proposal to appropriate $31.5 million to implement and expand the CalSAFE program for pregnant and parenting teens.  The Governor’s press materials described this proposal as follows:

“California School Age Families Education Program ($31.5 million)

CalSAFE is a program to enhance the level of high quality supportive and child care services provided for pregnant and parenting teens.  This augmentation will support the conversion of existing programs to a new statutorily-established service model in the budget year.”

There are a number of proposals in the budget that are of particular interest to high schools.  Clearly, the proposals to offer merit scholarships for students who perform well on the STAR and AP exams will be of interest to high schools. 

In addition, the budget proposes a series of U.C. based staff development activities that could impact high school teachers.  These include $17.5 million provided to train 2,500 middle school and high school algebra and pre-algebra teachers, $60 million to provide training for high school math and English teachers and to expand the U.C. subject matter projects, and $10 million to provide training for an additional 5,000 teachers of grades 9 through 12 in effective methods of teaching English to English language learners.  Another $8 million dollars are provided to conduct staff development and teaching advanced placement programs.  Finally, $164 million are provided to fund the fourth and final round of digital high school grants.   

MERIT SCHOLARSHIP PROGRAM

The Governor proposes $111 million to establish a merit scholarship program for high school students who perform well on the STAR test and on AP math and science tests.  This proposal is also expected to generate significant discussion in the state legislature.  A number of legislators have expressed concerns that these funds should be allocated more on the basis of economic need than on test scores on the STAR exams. 

In discussions with the Governor’s staff, it was indicated that the specifics of the Governor’s proposal are as follows.  Students in grades 9, 10, and 11 could receive a $1,000 scholarship each time they scored in the top 10% statewide or top 5% within their school on the STAR exam.  Thus, a student could potentially earn $3,000 in scholarships.  However, the 10% and 5% measures are significantly different.  The 10% figure refers to the top 10% statewide on the standards-based items in the STAR exam.  The 5% figure refers to the top 5% by high school on the norm-referenced (SAT 9) portion of the STAR exam.  Thus, not only are the calculations different in terms of statewide versus high school comparisons, but are applied to significantly different portions of the STAR program. 

Although the specifics of this proposal will likely be controversial, they clearly indicate the Governor’s continuing commitment to the STAR exam. 

U.C. OPERATED STAFF DEVELOPMENT INSTITUTES

The Governor is proposing a $118.7 million expansion of staff development programs.  It is anticipated that this staff development proposal will be the subject of debate during the legislative budget deliberations.  The Governor’s model consists entirely of providing funds to school districts to pay stipends to teachers to send them to staff development institutes administered by the University of California.  This would represent a dramatic change in the staff development model for K-12 education.  It should be noted that this dollar amount, in combination with the $25 million for educational technology, would be adequate to pay for approximately two additional staff development days. 

EDUCATIONAL TECHNOLOGY

Of the Governor’s new initiatives, the largest in terms of dollar value is educational technology.  This represents $364 million in funding.  $164 million of this amount is to complete the digital high school initiative.  This amount is projected to fund all the remaining high schools to receive digital high school grants. 

The remaining $200 million is divided into two parts: $175 million to purchase computers for use in the public schools and $25 million for education technology staff development.  An interesting point concerning this proposal is that the Governor proposes that this categorical program would be administered by the Governor’s Office of Education rather than the Department of Education.  The Governor’s proposal was not specific concerning which schools or school districts would receive the computers.  The Governor’s staff has indicated that the $25 million would be allocated to the California State University for them to offer educational technology staff development programs for K-12 education teachers.  The purpose of this staff development would be to help fully integrate educational technology into the core curricular areas. 

SUMMER SCHOOL/INTERVENTION PROGRAMS

Perhaps the best news for school districts is the Governor’s proposal to increase the hourly rate for summer school and intervention programs from $2.50 to $3 per hour.  This would apply to all of the summer school and intervention programs, including core academic summer school and intervention programs related to pupil promotion and retention, as well as the Governor’s K-4 reading institute.  It is our belief that it is highly likely that the legislature will approve this increase in the hourly rate and that it is reasonable for school districts to anticipate this rate being in effect for the 2000-01 fiscal year.  Indeed, the pressure within the legislature may lead to a higher hourly rate.  School advocates and legislators continue to argue that a higher funding rate is necessary in order to allow intensive instruction for students who are falling behind on grade-level standards.  In addition, the Governor proposes to add a new summer school intervention program.  This one would be targeted at sixth, seventh, and eighth graders who need help with pre-algebra and algebra.  The funding formula proposed by the Governor’s office would be 4% of enrollment grades 6, 7, and 8 multiplied by 120 hours multiplied by the $3 per hour rate. 

Finally, the Governor has indicated he will support some consolidation of some summer school programs.  Specifically, the Governor proposes to consolidate the core academic summer school program, the grades 2-6 pupil promotion and retention, and grades 7-12 proficiency/pupil promotion retention programs.  Instead of these three separate programs, school districts would be entitled to funding based on the following schedule: elementary districts – 16% of enrollment; unified districts – 18% of enrollment; high school districts – 22% of enrollment.  These enrollment numbers would be multiplied by 120 hours and by the hourly rate of $3 per hour. 

In combination, this proposed change would impose a cap where none currently exists for grades 7-12.  However, it should be noted that the state appropriation for these grade levels is capped.  Thus, it is unclear that school districts are giving up a large advantage with this provision.  At the same time, they would obtain substantial flexibility by having a single figure applied across all of the grade levels within the school district.  All of these funds could be used for summer school, intersession, before school, or after school programs. 

RECRUITING TEACHERS TO WORK IN HARD-TO-STAFF SCHOOLS.

The Governor proposes two programs to specifically address the issue of recruiting teachers to work in hard-to-staff schools. One is the Teachers as a Priority (TAPS) program which would provide a bonus of $2,000 to fully credentialed teachers who agreed to work in low performing schools.  This proposal would be administered by the Commission on Teacher Credentialing, not by the Department of Education.  It is likely to be controversy in the legislature in terms of the specific allocation formula and mechanics of the program.  However, it should be noted that there is broad-based support for some state initiative to encourage fully credentialed teachers to work in hard-to-staff schools.  The major concerns about the proposal are the following:

1.         The definition of low performing in the Governor’s proposal is the bottom 50% of schools in the state.  Some legislators think that a smaller number of the lowest performing schools require special assistance and should be the focus of the initiative.

2.         The bonuses would be available only to new-hires in these schools.  Many argue that this is unfair to fully credentialed teachers who are already working in those schools.

3.         The bonus is not a salary bonus, but is available only for expenditures on materials and supplies within the classroom.  Some have argued that this incentive is inadequate to make a significant impact on the problem. 

4.         The other element of the Governor’s initiative is a teacher housing assistance program which would provide $50 million to help support loans for fully credentialed teachers in low performing schools to purchase their first home.  This program would be administered by the California Housing Finance Authority.

OTHER PROGRAMS AND COMMENTS

1.         The Governor proposes to provide planning grants for an additional 400 immediate intervention/underperforming schools.  This is in addition to continuing to fund the grants for the 430 schools that were approved as part of the first group to enter the new school accountability program.

2.         The Governor proposes to expand preschool by an additional $23.8 million.  This is part of a large increase in child development and preschool programs.  Indeed, increases in preschool and child development programs use 12.7% of the new Proposition 98 general fund revenues. 

3.         The Governor maintains, but does not expand, the various instructional materials programs including the school library program and the K-4 classroom library program.

4.         The Governor continues the school safety program enacted in 1999.  However, he does so by maintaining the on-going funding level of approximately $30 per ADA, rather than the total funding level provided for 1999-00 -- which was slightly over $40 per ADA. 

The next major step in the state budget process will be the review of the proposed budget released by the Legislative Analyst in late February.  Budget subcommittee hearings will start in early March.