Slow track for finance reform

AB 18, Assemblywoman Julia Brownley’s major overhaul of education finance, flew through the Assembly with near unanimity (74-2) last month. Passage seemed too easy, and it was. With union opposition and questions about a lack of specificity stirring, Brownley last week pulled the bill from its scheduled hearing in the Senate this week and has made AB 18 a two-year bill, with hearings to come next year.

That shouldn’t be surprising. Brownley, a Santa Monica Democrat who chairs the Assembly Education Committee, continued to describe the bill as a work in progress. It sailed through the Assembly based on its promise: to simplify a convoluted finance system, make funding more equitable, and eventually steer more money to high-needs children. On those points there is general agreement, at least in concept.

In reorganizing many funding streams and categories into three, AB 18 would vastly simplify the current system. But equity is in the mind of the beholder. In promising to hold all districts harmless, AB 18 would initially lock in disparities in legacy funding and idiosyncratic differences in special-purpose funds known as categorical programs. Some districts, for example, get much more adult education funding than others. Los Angeles Unified gets a disproportionately large allocation of Economic Impact Aid for minority children.

Equalization – the process of making similar funding streams more uniform  – was to be put off for another time. But AB 18, to its credit, would spell out the current winners and losers in ways that have not been apparent. Once districts see the differences spelled out, underfunded districts will likely push for dealing with equalization sooner than later.

AB 18, as I have explained before, would divvy up Proposition 98 funding into three large piles of money, based on student enrollment, with special education funding treated separately. Districts would have flexibility over how to spend categorical funds that would be rolled into the three funding areas:

  • Base spending, including the  current revenue limit funding and two dozen categoricals, would be the largest.
  • Quality Instruction Funding, combining the class-size reduction program and eight teacher-training-related  programs, now funded at $1.8 billion, would be spent on professional development and teacher and principal recruitment and retention.
  • Targeted Student Equity Funding would include eight categorical programs, including Economic Impact Aid. It would be aimed directly at low-income students and English learners. Brownley has said the goal of AB 18 would be to make increasing this fund over time a priority. How much hasn’t been decided.

The California Teachers Association had opposed the bill, on the grounds that there should be more time to explore the unpredictable impacts of the bill. That argument won out, in extending the bill to another year. But CTA was also unhappy to see class-size reduction, a categorical program it has championed, folded into Quality Instruction Funding, in which districts could choose not to fund smaller classes. The California School Employees Association, representing bus drivers, will lobby to have the transportation categorical fund pulled out of base spending. And other interest groups will advocate excluding other categorical funds from the mix – defeating the primary purpose of the bill – simplicity – and limiting how much will be available for needy kids.

Other issues

A finance overhaul should also consider questions not as yet covered by the bill:

  • What should be the funding differentials between unified, elementary, and high school districts?
  • Should incentives for consolidation of small districts be included?
  • Should the finance system recognize cost of living differences among regions of the state? (It costs more for teachers to live in San Francisco than Clovis.)
  • How much extra should districts get to educate a disadvantaged student: 10, 20, 25 percent?

Brownley said last week that she would look forward to “continuing our discussions” with education groups. Credit her for taking on an ambitious goal. It won’t get any easier in the second year.