Please contact Chris Kahn if you would like additional information (cwkahn@shjlobby.com).  You can also reach Chris by phone at 916-446-3007. 

 

The new 2005-06 Legislation session kicked off on January 3, 2005.  The Governor delivered his State of the State Address the week of January 10^th and released his 2005-06 State Budget that same week.  The first major deadline, the bill introduction deadline, passed last week.  We expect over 3,000 bills, resolutions, and constitutional amendments to be introduced this year.   

 

In preparation for the new two-year session, the CASP board adopted an updated legislative platform.  The purpose of the 2005-2006 Legislative Platform is to support CASP’s mission statement by establishing the Association’s legislative agenda for the upcoming legislative session.  The platform forms the “backbone” of CASP’s legislative efforts.  The platform will not list every issue the Association is concerned about or involved in, but rather it will describe those issues that the Board of Directors, Legislative Committee and the membership deem to be CASP’s priority issues for the 2005-2006 Legislative Session.

 

Governor’s Proposed Budget

 

On January 10, 2005, Governor Schwarzenegger released his proposed 2005-06 State Budget.  Vehicles to accomplish his proposals will include constitutional amendments, budgetary proposals, and statutory changes.  The following are highlights relative to Proposition 98 and K-12:

 

Proposition 98 Repeal

Via a voter-approved constitutional amendment, the Governor proposes to radically alter the voter-approved Proposition 98 as part of his “Budget Spending Reform” package.    He has indicated that he would like to work his reform agenda through the Legislature, but he has also indicated he will call a special election this fall and go straight to the ballot if the Legislature does not act quickly.  His Proposition 98 proposal has three parts:

1. Eliminate Maintenance Factor: The Administration proposes to eliminate the “Test 3” funding option under Proposition 98.  This includes the “maintenance factor” whereby reduced funding must be paid back in future years.  For 05-06, the maintenance factor is $3.9 billion.  The Administration proposes to freeze the 05-06-maintenance factor and pay it back in various one-time installments over a 15-year period.  Future maintenance factors would no longer appear. 
2. Subject Prop 98 to Across-the-Board Cuts: Prop. 98 would be subject to mid-year and end-year cuts every time overall state expenditures exceeded revenues.  The Legislature and Governor would have 30-45 days to reach agreement on which areas to cut.  If no agreement is in place by the deadline, all program areas are subjected to an across-the-board proportionate cut. 
3. Eliminate Suspension Section: The Administration proposes eliminating future suspensions of Prop. 98.  

STRS Shift

The Administration proposes to shift $469 million of annual STRS state contributions – the amount the state General Fund pays for STRS retirement benefits – over to LEAs.  This essentially is a funding hit to districts and COEs since they would have to cover the cost of this benefit for their employees.  The $469 million amount represents approximately 2 percent of statewide payroll.

To mitigate this hit, the Administration proposes to allow employees to discontinue a 2 percent contribution to STRS Defined Benefit Supplement Program.  Per agreement between an LEA and its employees, the program could be discontinued.  If agreement is reached to discontinue this, employees receive a 2 percent pay increase.  The impact of this could be that employees contribute less to their retirement.

Special Education

The Budget provides $172.7 million in additional funding for special education programs - $156.6 million for a 3.93 COLA and $31.4 million for growth.  The budget also shows a $65.1 million increase in federal funds, of which $24.6 million is passed through to LEAs.

This proposal continues an alarming trend of supplanting State special education dollars with federal dollars.  There appears to remain $40.5 million in federal funds that are going to the State general fund.  

The Administration continues the practice of utilizing prior federal increases for AB 3632 Mental Health program funding as well as continuation of the federal funding deduct by not passing thru previous increases to LEAs.  

Early Mental Health Initiative (EMHI)

 

This year, the Governor has proposed funding the EMHI program at $5 million.  This was consistent with last year’s funding, allowing existing grants to continue without funding new grants.  The problem, however, is that this sets the stage for elimination of EMHI funding by June of 2006. 

 

The Governor proposed the same funding level last year, (if you remember Governor Davis proposed eliminating the program).  Working with many supporters, we were able to get the funding level raised to $10 million.  We will need to do the same thing this year.  As most of your know, EMHI funded programs are a low-cost method of directly helping children become ready to learn.  Under this program, the State awards grants to Local Education Agencies to implement early mental health intervention and prevention programs for students in K-grade 3.  Schools that receive grants must also provide at least a 50 percent match to the funding provided by the Department of Mental Health.  Schools use the funds to employ child aides who work with students to enhance the student’s social and emotional development.  Students must have parental permission to participate in the program.  The intervention provided by EMHI can have immediate impact on the child, the classroom, and the school environment.  The long-range effects can last a lifetime.  Maintaining a level of funding will ensure the continuity of critical support offered to elementary school children. 

 

Legislative Analyst Report (LAO)

 

In the last week, the LAO has released her analysis on the Governor’s Proposed budget.  The LAO estimates that the revenues will be significantly higher and expenditures will be slightly lower than forecast by the administration.  They believe that adoption of the Governor’s budget would result in a $2.9 billion reserve, or $2.4 billion more than assumed by the Governor.  It is encouraging that revenues are up beyond projections.  This increase of funding may be used to offset some of the cuts in the Governor’s budget.  It is important to note, however, that education, health and welfare programs, transportation programs, and many others will be lining up for the money.

 

Towards the end of this report is a detailed look at the Governor’s proposed budget plan.

 

 

Legislation

 

The bill introduction deadline has recently passed and we are in the process of going through the introduced bills and creating a universe of bills for CASP to track this year.  We will be sharing this list with the CASP Legislative Committee and will ask for feedback in order to take positions in the Legislature.  A preliminary look reveals the following bills of note:

 

AB 171 (Yee):  Comprehensive Pupil Learning Support System.  Assemblyman Yee has reintroduced this bill and has reached out to CASP and the PSC to help craft the language.  We are also working with him to incorporate our proposal to encourage the creation of Pupil Support Service Teams in school districts.   

 

AB 1306 (Liu):  Assessment of available Pupil Support Services in the student accountability report card.   This is a re-introduction of McPherson’s bill for last year and the language is broad to include all pupil support personnel. 

 

SB 724 (Scott):  Current statute allows the CSU to offer joint doctorates with the University of California or accredited independent universities.  This bill will authorize the independent (i.e. not joint) award of professional and clinical doctorate degrees by the CSU consistent with its graduate education experience, faculty expertise, resources, and the need for such professionals in the workforce and accreditation and licensure requirements. 

 

This could be a remedy to ensure that more capacity of student support services training programs are available at CSU.

 

AB 29 (Nava):  Reinstatement of the teacher tax credit.  This bill provides an opportunity to define the credit per AB 956. 

 

AB 430 (Nava): Extension of the Principal Training program until January 1, 2013.

 

AB 829 (Daucher)

AB 1092 (Daucher)

AB 1417 (Daucher)

            These three spot bills are to serve as vehicles for implementation of IDEA.

 

AB 1608 (Liu)

AB 1609 (Liu)

SB 794 (Scott)

SB 845 (Scott)

These four bills are to serve as vehicles to implement changes to vocational education. 

 

 

 

Budget Year Spending Proposal

Proposition 98 Guarantee – The 2004-05 budget reflected a $2 billion reduction to Prop. 98 funding per the agreement reached with the Education Coalition.  During the current year, funding for Prop. 98 grew due to increases in General Fund revenues.     Concurring with the LAO’s recommendation, the Administration proposes to not fund the current year Prop. 98 increase.  This is contrary to the 2004-05 agreement with the Education Coalition.  Under the agreement, the Governor promised to fund future increases to Prop. 98. The Administration scores the $1.1 billion in Prop. 98 funds as savings.

The Governor argues that even with the above proposal, his budget includes a $2.9 billion overall increase for K-14 education.  This would cover increases to growth, COLA, and $328 million to repay almost half of the outstanding deficit factor.  Total 2005-06 Prop. 98 funding would be $50 billion.  The Administration argues that this is a 6.1 percent increase over last year.  The General Fund would make up 73 percent, or $36.5 billion of the total K-14 funding.  The 2005-06 proposal will fund prior year program levels in addition to COLA and growth.

Enrollment Growth – Estimated at 0.8 percent for the budget year.  The budget provides $394.7 million increase to fully fund statutory ADA growth.

COLA – The budget funds COLA at 3.93 percent estimated at $1.6 billion - $1.2 billion for revenue limits, $156.6 million for Special Education, $50.8 million for child care and development, $14 million for CSR, and $206.4 million for various categorical programs.  As with 2004-05, the Administration proposes to provide that the statutory COLA to most categorical programs.

Deficit Reduction – The budget provide $328 million in deficit reduction, or roughly 1 percent on the revenue limit (We’ll be checking our numbers on the percentage and verify in our next update).  This would leave approximately $312 million in remaining deficit reduction funding. 

Other Budget Issues

STAR Exam – The budget proposes an augmentation of $4.5 million for the STAR program.  This amount is to cover higher than expected test takers.  An additional $57 million is also provided to backfill one-time federal funding used to support the program in 04-05.  The budget notes that the Administration and CDE will sponsor legislation to remedy the inconsistencies in last year’s STAR reauthorization (SB 1448).

2004-05 Apportionment Adjustments – The budget provides an increase of $122.6 million in Prop. 98 General Fund to districts and COEs revenue limit apportionments for the 2004-05 year.  This reflects increases of $114.3 million for greater enrollment growth in the current year and $29.5 million to backfill a decline in local property taxes. 

Proposition 98 Reversion Account – One-time Prop. 98 Reversion Account funding of $138.6 million will go out per the following:

Governor’s Program Initiatives

As has become practice, the Governor includes a number of policy and program initiatives in his budget proposal.  These will be addressed via trailer bill and statutory proposals.  We expect to see language on these proposals sometime after February 1 and note that most do not include funding augmentations to pay for them.  The following is a list of proposals outlined in the budget:

Merit Pay- The Governor has announced his plans to enact a merit pay pay-for performance system for K-12 teachers. 

Fitness and Nutrition Initiative – The Governor proposed three things in this initiative:

1. Improve the nutritional quality of food and beverages available in schools.  This will likely include a ban on soda at high schools and increased food and a la carte standards.
2. Increase physical fitness opportunities.  No details available on this.  
3. Sponsor legislation to establish a program to provide more fruits and vegetables to students.  No details provided.

Alternative Authorizers for Charter Schools – The Governor wants more charter schools.  DOF staff noted that they are targeting an additional 100 charter schools over the next two years.  The Administration will propose legislation to allow entities such as colleges and universities to be designated as alternative regional authorizers of charter schools, subject to SBE approval.

Local Control Pilot Program – Last year, Secretary of Education Riordan called for a sweeping proposal to shift more control and decision-making to the school site.  The budget includes a pilot program to be established whereby volunteering districts would place more control and resources, as prescribed, at the school site level.  This would be a 5-year program with review at the end of the pilot time.  No additional budget augmentation is included for this proposal.

LEA Fiscal Health – the Administration continues to stress its emphasis (from their point of view) on LEA fiscal health.  The budget proposal touted AB 2756 (Daucher) from last year and called for the establishment of a CBO training program authorized by the SBE.  This would be a three-year program to train 1,000 LEA CBOs.  The budget proposes $1.1 million in reversion monies to pay for this.  Emphasis would be on CBOs from qualified and negative districts, plus those with a State-appointed administrator or trustee.

Categorical Reform – The Administration follows in the footsteps of last year’s AB 825 categorical reform bill.  The Governor will propose to include additional programs into the Professional Development Block Grant established by AB 825.  Specifically, $113.1 million from the following programs:  Teacher Credentialing Block Grant ($83.9 million), PAR ($27.3 million), Bilingual Teacher Training ($1.9 million), and Teacher Dismissal Apportionment ($43,000), are added to the new Professional Development and Teacher Credentialing Block Grant.  Total funding would be $361.7 million.

In addition, the Administration plans to reform the Charter Schools Categorical Block Grant to provide “simpler and clearer methods” of calculating the block grant appropriation.  The budget increases funding for this block grant by $10 million to a total of $62 million.  

Career Technical Education Reform - 

1. The Administration proposes to expose middle school students to career technical education by requiring an introductory course covering a variety of career fields in lieu of a current elective course.
2. In order to increase the number of middle and high school teachers teaching in career technical courses, the requirements for credentialing are changed so there is parity between the credentialing requirements in community colleges and K – 12.
3. $20 million in Reversion Account funds are used to increase the coordination between community college Tech Prep programs (2 plus 2 model) and K – 12.  The Tech Prep program involves two years of high school level programs in core proficiency areas and technical knowledge related to specific career fields.  These prerequisite requirements for articulation to a community college allow students to progress into career specific training, which culminates in an associate degree or certificate. 
4. Revise the School Accountability Report Card (SARC) to include additional measures evaluating career technical education courses, qualified technical education teachers and student achievement in these courses.

Alternatives for Failing Schools - Under the federal No Child Left Behind program and the state’s High Priority Schools Grant Program, the state has options of how to proceed if schools fail to improve.  The Governor is proposing that the State Board of Education either convert schools into charter schools or assign School Recovery Teams (SRTs) to manage the schools.  School Recovery Teams are leadership teams providing targeted assistance whose main focus is to manage the school.  They will take over the duties of the existing principal, vice principals, academic deans, district coordinators, reform coordinators and teacher leaders.  The Principal Leadership Institutes at UC Berkeley and UCLA, along with other leadership programs will work with the State Board to develop a list of qualified SRT members.  In addition, the Governor’s budget includes $271.4 million for II/USP and High Priority Schools grant programs.

Accelerated English Language Acquisition Program - A new program targeted at English learners in grades 4 – 8 is established to improve reading skills of English Language Learners.  This program provides intensive teacher professional development on reading instruction and use of standards aligned instructional materials; reading coaches to support teachers; the use and support of assessment data in the classroom; and classroom reading materials.  This program is modeled after the Reading First Program and funded at $58.6 million.

School Size Reduction - The Governor proposes converting the largest schools into smaller ones or schools-within-schools.  The Secretary of Education will develop partnerships with foundations to fund the transition to smaller learning environments.  $20 million in bond funds beginning in 2006 will be used to fund pilot programs for construction of small high schools.

Professional Development - Funding the Mathematics and Reading Professional Development Program at $31.7 million and the Principal Training Program established under AB 75 at $5 million is maintained outside the Professional Development and Teacher Credentialing block grants. 

Streamlining Teacher Credentialing - The Governor proposes developing a streamlined accreditation process for teacher preparation programs.  The purpose is to better align the teacher preparation programs at colleges and universities with our content standards and curriculum frameworks.  The goal is to increase the number of qualified teachers for employment in our schools.  In addition, all colleges must submit credentialing applications electronically for their students.  This would ensure timelier processing of applications and a workload savings.  Because of this efficiency, a reduction of six positions is proposed for the CTC.