Legislation Update - 12/05/2009

By Peter Birdsall
Executive Director of Advocacy & Association Services

Race to the Top is the Big Legislative Issue for December

January 19 is the deadline for state applications in the federal "Race to the Top" competition. California could get between $350 million and $700 million if it is successful in obtaining a grant.

The applications will be scored on a point based system emphasizing the Obama administration's four reform goals. Those are:

1) developing and adopting common standards and assessments; 2) implementing longitudinal data systems; 3) providing high quality teachers and principals; and 4) aggressively intervening in the lowest-achieving schools and districts.

IB and Race to the Top

An important emphasis for Race to the Top applications is to "increase the rates at which students graduate prepared for college and careers." One of the strategies of CAWS for 2009-10 to promote greater awareness and support for International Baccalaureate programs and the IB grant program is to seek to include the state's IB grant program in California's "Race to the Top" plan. This approach seems particularly viable because the federal guidelines specifically reference International Baccalaureate.

Our office has talked with state staff about including IB in the plan and has received encouraging responses. The next step is to meet with state staff and provide them with specific recommendations. We expect those meetings to occur in December and Ed Marquez, Legislative Chair for CAWS, will join us in those meetings.

State Senate Approves Race to the Top Bill

Meanwhile the Legislature will be meeting in December to consider legislation designed to improve California's chances of winning a Race to the Top grant.

The bill sponsored by the Governor, SB 1 (Romero) of the Fifth Extraordinary Session, passed the Senate on November 3 by a vote of 21-12. Interestingly, the bill passed with the bare majority needed for approval. Most the "aye" votes were Republicans, joined by a handful of Democrats.

The bill would make a number of controversial changes to law, including establishment of an open enrollment program for students enrolled in program improvement schools ranked in Deciles 1-3 on the Academic Performance Index, creating a new program of state interventions for "historically" low-performing schools, and repealing the cap on the number of charter schools.

Assembly Member Julia Brownley announced she will be introducing her own bill aimed at enhancing California's chances for winning a big share of the RTTT grant funding. It will be a competing proposal to the Senate bill, SBx5 1 (Romero), which has received widespread opposition from education groups. Brownley said she is working in collaboration with "education stakeholders" to allow California to compete in the federal competition. Details of the Brownley package are expected in the first week of December.

The 2009-10 Budget

On November 18, the Legislative Analyst's Office (LAO) released their report California's Fiscal Outlook: The 2010-11 Budget. The report seems to confirm our expectations that schools will NOT be subject to mid-year cuts this year.

Overall, the report projects a budget shortfall of $20.7 billion over the two years: 2009-10 and 2010-11. The specific projected shortfalls across the two years are $6.3 billion in the current year (2009-10) and $14.4 billion in 2010-11.

Although state revenues are projected to be modestly below projections, the LAO attributes the "vast majority" of the budget problems to the state's inability to implement several major solutions in the 2009-10 budget, notably:

  • The inability to achieve "billions" of dollars in projected savings in prisons and MediCal
  • Inability to sell the State Compensation Insurance Fund (the budget assumed $1 billion in revenues from that sale)
  • Loss of a court case over the ability to use $800 million in transportation funds.

Proposition 98 Funding

Ironically, the decline in 2008-09 revenues means that the year-to-year revenue growth from 2008-09 to 2009-10 is greater than expected—resulting in a higher Proposition 98 guarantee for 2009-10 (the current year). The LAO estimates that the state owes Proposition 98 approximately $1 billion for 2009-10. [Note: Proposition 98 refers to the Constitutional funding guarantee for K-12 education and community colleges.] For 2010-11, the LAO projects a slight decline in the guarantee of $334 million.

What to Expect

  • A higher Proposition 98 guarantee would appear to prevent mid-year cuts to education this year.
  • Don't expect additional funding in 2009-10 just because the projected guarantee is higher. The state can pay this amount, if the figure is accurate, as "settle-up" money in a subsequent year.
  • Don't plan on a cost-of-living adjustment for 2010-11. First, the Prop. 98 guarantee is projected to actually decline slightly. Second, the overall budget is in trouble and it is difficult to imagine obtaining a cost-of-living adjustment in that environment.
  • The relatively flat guarantee figures should help protect schools from significant new cuts. Most importantly, it appears the Legislature and Governor will need to suspend the Proposition 98 guarantee to make deep cuts. Further, the LAO notes that there are federal maintenance of effort provisions that impose significant constraints.
  • The LAO projections are only estimates. Budget planning will be based on the figures released by the Governor and the Department of Finance in January.

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