budget – The Educated Guess

Leg erases Gov’s ed reforms

John Fensterwald co-authored this article.

The Legislature’s budget package is missing many of Gov. Brown’s controversial education initiatives. A joint Senate and Assembly plan outlined yesterday protects transitional kindergarten, the science mandate, and the AVID program, rejects the weighted student funding formula, and offers districts a choice in how they’re paid for state mandates.

“This budget protects and invests in public education this year, and increases Proposition 98 funding by $17 billion over the next four years,” said Assembly Speaker John A. Pérez during a press conference Wednesday morning with Senate President pro Tem Darrell Steinberg.

The overall budget plan that lawmakers will vote on this Friday would erase California’s $20 billion structural deficit, balance the budget for each of the next three years, and create a $2 billion reserve by fiscal year 2015-16, according to Pérez and Steinberg.

Spending for K-12 education would be $53.6 billion for the 2012-13 fiscal year. That’s about $1 billion more than the governor had anticipated. Because the budget assumes more revenue for education through the passage of Brown’s tax initiative in November, the state is obligated under Proposition 98 to start paying off the “maintenance factor,” the IOUs given to schools during bad times. But if the tax increase fails, the Legislature and governor are in accord on the need for cuts of $5.5 billion for K-12 schools and community colleges. That would translate to a K-12 cut of $450 per student.

About $2.9 billion of that would come from lowering the Prop 98 guarantee due to a drop in state revenues. The rest would be made up through shifting two expenses into Prop 98 that are currently funded outside the guarantee. Those are repayment of general obligation bonds for school construction and the Early Start early education program. (Go here to read more about that in an earlier TOPed article.)

In addition, the legislative package would include trailer bill language allowing K-12 schools to cut 15 additional days from the next two school years.

Weighty issue

The governor’s biggest loss, for now, is the weighted student funding formula. Lawmakers’ refusal to include it in the budget isn’t an outright rejection of the concept of a simpler, fairer finance system that sends more money to districts with high proportions of English learners and indigent students. And Brown is expected to bring up the issue again this summer. But many lawmakers felt that the governor was jamming them to accept sweeping changes without justifying the basis for his formula, while legislators from suburban districts called for restoring all of the money lost to cuts over the past four years before redistributing new money.

Rick Simpson, the deputy chief of staff for Speaker Pérez, said that lawmakers wanted more assurances that the money under a weighted formula would actually reach targeted students. As part of his reform, Brown proposed giving districts total flexibility in deciding how the dollars would be spent. “If you’re going to deregulate the entire school finance system,” Simpson said, “and if you’re not going to regulate inputs, you ought to have an accountability system to make sure you get those positive outcomes. We have lots of disparate pieces that we refer to as accountability, but it’s not a system.”

High school science intact

Brown had proposed eliminating the mandate for more than two dozen K-12 programs, including (the most expensive) requiring schools to offer a second year of high school science. Dropping a mandate would mean that districts could continue offering a program by finding money in their existing budgets. Brown also proposed reimbursing districts a flat $28 per student for the remaining mandated programs.

Science teachers and the business community protested that the state shouldn’t retreat from its commitment to science education (see commentary on this page), and the Legislature agreed, keeping it and all of the current mandates intact. However, lawmakers didn’t increase the reimbursement rate either, so districts can expect to continue accumulating a big IOU for meeting the science mandate. The state has also gone to court, arguing that the $250 million cost on the books for offering a second year of science is way too high, based on a false assumption that high schools had to add a period to the day to accommodate it, according to Paul Golaszewski, an analyst with the Legislative Analyst’s Office.

Applying for a straight $28 per student would be the easiest, quickest way for districts to be reimbursed for mandated costs. However, the Legislature also would continue to allow districts to submit bills detailing the cost of complying with mandates – and hope that the state accepts the claims.

Starting early

The joint budget proposal allowed the early childhood education community to exhale a bit, by denying a number of significant cuts that the governor was seeking. He wanted to cut the reimbursement to preschool providers by 10 percent, raise the financial eligibility requirement, place a two-year cap on families receiving childcare services while attending a school or a job-training program, and eliminate full-day preschool starting next year.

“The Legislature has really stood up for young children,” said Scott Moore, Senior Policy Advisor at Preschool California. No one got away unscathed, however, and childcare will be taking a $50 million cut and losing 6,000 spaces for children in full-day state preschool, the childcare voucher program, and the infant-toddler child development program. That’s on top of a billion dollar reduction and 100,000 spaces lost since 2008. Still, said Moore, “it’s significantly less that we were fearing would be cut.”

Middle class tuition break at UC, CSU

Four Republican legislators crossed party lines in the Assembly on Wednesday, providing the two-thirds vote needed to approve a bill that would create a middle class scholarship program for the state’s public college and university students.

AB 1501 is part of a two-bill package called the Middle Class Scholarship Act introduced by Assembly speaker John A. Pérez, a Los Angeles Democrat, that would reduce tuition by two-thirds for students attending the University of California and California State University whose families earn less than $150,000 a year.

In urging a yes vote, Pérez cited the enormous fee hikes at the state’s public colleges and universities, noting that in the past decade tuition has increased by 191 percent at Cal State, by 145 percent at the University of California, and by 300 percent at community colleges. Meanwhile, state support for UC and CSU has dropped by 21 percent and 26 percent respectively since 2005.

10 year history of changes in CSU tuition. (Source: California State University). Click to enlarge. — Ten-year history of changes in CSU tuition. (Source: California State University.) Click to enlarge.

“This means that for thousands of California families, higher education entails increasingly difficult tradeoffs,” said Pérez; tradeoffs that would either compel parents to make huge sacrifices, or force students to take on massive loan debt. “For many Californians those tradeoffs are too great, and they make the reluctant decision to forego a higher education altogether.”

Student loan debt now exceeds $1 trillion nationally, more than all U.S. credit card debt. Statewide, according to the California Student Aid Commission, there’s been a double-digit increase every year for the past three years in the number of students who qualify for loans and for the state’s Cal Grant awards.

Under AB 1501, eligible Cal State students would save $4,000 per year, or $16,000 over four years, while UC students would save about $8,200 per year, or nearly $33,000 over a four-year period. Students from families earning between $150,000 and $160,000 a year would be entitled to assistance at a lower level; their scholarships would be reduced by 10 percent for each $1,000 in family income over $150,000. California community colleges would receive $150 million to help students defray the cost of textbooks and offset other educational expenses.

Lack of investment “criminal”

Modesto Assemblymember Kristin Olsen, vice chair of the Higher Education Committee and one of the Republicans who broke ranks and supported the measure, defended her position during the floor debate as a vote for the state’s economic prosperity.

“We have slashed state investment in higher education, and that’s criminal,” Olsen said. “One of the only ways we’re going to grow a strong economy over the long term is by investing in our public universities to make sure that we are graduating educated employees who are prepared to compete in a global workforce.”

She noted that wealthy families can afford to pay tuition, and low-income families have various options for state and federal aid, but middle-income families are being hit hard by escalating tuition and the faltering economy.

But her colleague in the GOP caucus, Assemblymember Tim Donnelly from Twin Peaks, wasn’t moved, except to sarcasm. “I see these programs and they sound so nice – middle class scholarship fund – woo-hoo, hallelujah, Praise the Lord! I love it, sounds wonderful, why don’t we give one to everybody?” he quipped. “Oh yeah, there’s a slight little problem: we don’t have the money.”

Donnelly blamed union wage demands and injudicious spending decisions by UC and CSU for their financial problems, especially giving huge pay raises to new campus presidents while increasing student fees. Then he offered this sage advice: “I remember when I went to school. I went to the University of California at Irvine; I got three jobs to pay my way through. My idea of a middle class scholarship is a job.”

Half a loaf

While there is some disagreement among Republicans on AB 1501, they are united in their opposition to its companion bill, AB 1500. This is the half that pays for the Middle Class Scholarship Act.

Pérez wants to fund it by closing a loophole in the 2009 Corporation Tax Law that gave companies operating in both California and another state the option of computing their taxes using either the Single Sales Factor (SSF), which is based on their California sales, or another formula that gives the companies more flexibility on how much taxes they’ll pay. The policy was adopted in one of those never-well-thought-through budget deals reached in the middle of the night.

Requiring those companies to move to the SSF would increase the state’s general fund by about $1 billion in 2013-14, according to the Legislative Analyst’s Office. In fact, the LAO recommended that the state take that action two years ago.

Gov. Brown tried to change the law last year, by getting bipartisan support for AB 40X. The bill would have mandated the SSF and returned the revenue to businesses in the form of job credits as an incentive for hiring Californians. Although it passed the Assembly, the bill did not garner any GOP support in the Senate and died.

One of the sponsors of AB 40X was Assembly Republican Cameron Smyth of Santa Clarita. He’s also one of the four Republicans who voted yesterday for AB 1501. But in a phone call Wednesday afternoon, Smyth said he will not be supporting AB 1500.

“It would be another funding obligation from the state,” said Smyth. “I still think the Single Sales Factor needs to be reexamined, but I do have concerns, because unlike last year, this bill is a tax increase and it creates a new entitlement.”

Kristin Olsen and the other two Republicans who voted for AB 1501 – Katcho Achadjian from San Luis Obispo and Jeff Gorell of Camarillo – have also said they will not support the companion bill, but are willing to work with Speaker Pérez on finding a different funding source, such as savings from the governor’s pension reform proposal.

Assemblymember Olsen said adequate funding for public higher education ought to be a top priority in the general fund if California is committed to maintaining a premier public university system. But she’s not optimistic. “The direction that California is headed today, quite honestly, makes me fearful,” said Olsen, “and makes me question whether I will be able to send my three kids to college.”

CA breaks another bad record

More California school districts than ever before are heading toward insolvency. The State Department of Education’s Second Interim Status Report for 2011-12, released yesterday, named 188 districts with serious financial problems; of those, 12 have negative certifications, meaning they won’t be able to meet payroll and other bills for this academic year.

California schools that may not be able to make ends meet. (source: State Dept. of Education) Click to enlarge — California schools that may not be able to make ends meet. (Source: State Dept. of Education) Click to enlarge.

It’s a steep increase over the first interim report, released last February, which we wrote about here. At that time, there were seven districts on the negative list and 120 in qualified status. With the increases, more than 2.6 million of California’s 6.2 million school children attend schools facing uncertain financial futures.

“This is the kind of record no one wants to set. Across California, parents, teachers, and administrators are increasingly wondering how to keep their schools’ lights on, their bills paid, and their doors open,” said State Superintendent of Public Instruction Tom Torlakson in a written statement. “The deep cuts this budget crisis has forced — and the uncertainties about what lies ahead — are taking an unprecedented and unacceptable toll on our schools.”

Given the years of budget cuts to education, the new numbers didn’t come as a surprise to school finance officials, said Mike Hulsizer, head of governmental affairs for the Kern County Office of Education. But it will get worse if neither of the school tax initiatives passes next November. “There is no question that this understates the risk that districts are facing,” said Hulsizer, because many of the districts counted on funds from Gov. Jerry Brown’s tax increase in planning their 2012-13 budgets.

K-12 schools would receive an extra $2.8 billion if the initiative passes, but Brown is proposing cutting K-12 schools about $5 billion – $441 per student – midyear if it fails. Districts weren’t ordered to budget one way or another. Although some county superintendents wanted schools to budget for the worst-case scenario, others told school districts to plan either way, but make sure they have a Plan B in case of a negative vote at the ballot box. “The county’s position is that a district needs to be able to weather the trigger if it does happen,” said Santa Clara County Office of Education Superintendent Chuck Weis. “If a district is already on the edge, then plan for the worst.”

Joel Montero, CEO of the state’s Fiscal Crisis Management and Assistance Team (FCMAT), told a state Assembly committee two weeks ago that small and rural districts face the largest impact from another round of midyear cuts. “Small and tiny rural districts don’t really have an economy of scale,” said Montero. They don’t have enough money or students to absorb any additional losses, particularly when those losses come in the form of deferrals, the $9 billion-plus that the state owes to school districts.

Options for school districts that have run out of options. (Source: Leg. Analyst) Click to enlarge.

“So the decision that you have to make as a school district is whether or not you can afford to fund that deferral for the term and if you can’t then it becomes a cut for you in a way,” Montero explained to subcommittee members.

Five of the nine districts that received a negative certification fall into the small and/or rural category. The tiniest, La Grange Elementary School District in Stanislaus County, will be shutting down at the end of this school year and sending its six students to other districts.

Two of the districts, Vallejo City Unified and South Monterey Joint Union High School, have already been bailed out by the state and are under a state-appointed administrator. Linda Grundhoffer, the Chief Business Official in South Monterey – formerly King City Joint Union High School District – said ever since the district went under state control in 2009 the onslaught of budget cuts “are just making it harder for this district to recover.” The district is seeking to lower the interest rate on its state loan from 5.44 percent to 1 percent through legislation, but so far Senate bill 1240 and Assembly bill 1858 are on the suspense files in the appropriations committees of their respective houses.

In an unusual twist, this year’s negative list also contains a small but very wealthy district. At a little over $170,000, the median household income in the San Mateo County foothills community of Portola Valley is nearly three times the state average. But the district is now trying to stave off a state takeover after an audit found a shortfall of about $850,000 for this school year plus an additional half-million dollars allegedly misappropriated by the former superintendent, who’s already facing felony charges stemming from his tenure as chief financial officer in the neighboring Woodside Elementary District.

The list of districts on the negative and qualified lists may continue to set somber new records depending on what happens in November. “Second interim certifications are assuming a better budget environment than realistically may be there after November,” FCMAT’s Montero told TOPed. “Without that assumption, it is likely the numbers of qualified and negative districts would have been higher.”

Watching California public schools sink — a preventable Titanic

One hundred years ago last month, the cry “women and children first” echoed on the decks of the ill-fated Titanic. A century later, the ship carrying California’s future is listing in the water. However, it seems that today no one is willing to make a sacrifice: It’s every man, woman, and child for himself or herself.

California was once the envy of the country — beautiful beaches, good jobs, a booming economy, and the promise of the best public education system, including top-notch, affordable state colleges and universities. However, the economic seas became rough in 2007 with the impact of the recession. In an effort to keep California afloat, our leaders in Sacramento — unable or unwilling to right the ship by raising revenue — scrambled for items to dump overboard. The value of education plummeted as other budget items were given priority, and education funding became the primary target for cuts, suffering a disproportionate loss of revenue. From 2007-08 to 2010-11, K-12 education funding sustained 54 percent of the loss of revenue, although it represented approximately 40 percent of the General Fund. In contrast, corrections sustained just a 4 percent loss, despite representing approximately 10 percent of the General Fund.

As the recession persists, the captain and crew – Gov. Brown and the legislators – decide what will be loaded into the lifeboats to survive, but there’s little evidence that the children are first. (Lucky for prisoners, federal law makes sure they are at the front of the line.) Instead, lawmakers and the governor are accusing each other of failing to save the children and the integrity of our state’s educational system Gov. Brown has proposed one solution to right the ship, but it requires the children to stay on board until the voters send help by passing his tax initiative. He seems to have overlooked the fact that children may go overboard before help can arrive — their schools must open months before the actual amount of education funding is determined.

The impact of the recession and the sinking of California are wreaking havoc on the schools, as has been documented this month by reports from both the Legislative Analyst’s Office and EdSource. School districts have been left scrambling, throwing items overboard or rearranging deck chairs in a futile attempt to balance their loads. Many districts are forced to borrow funds to keep schools open when the state sends IOUs, adding to their debt burden. Since 2008, more than 40,000 teachers, counselors, nurses, librarians, bus drivers, etc. have been lost, with an additional 20,000 teachers plus thousands more school employees currently in peril. While some education bargaining units are negotiating to save themselves and their students, others seem willing to let those in third class (lower seniority) and their schoolchildren sink with the ship to save their own skins.

Our schools need adequate funding to open their doors before the tax initiative-funded lifeboat can arrive. And the truth is that even if it passes, the initiative provides little more than current funding levels. Because of the uncertainty of the initiative’s passage, districts are compelled to budget with worst-case funding scenarios. As California continues to pitch in the seas of the recession, it is truly the children who will suffer the most severe, long-term damage. They’ll suffer larger classes, shorter school years, the loss of “less important” programs such as music and the arts, the disbanding of professional learning collaborations with the shuffling of remaining teachers, and so on, leaving 6.3 million schoolchildren with permanent gaps in their learning.

One hundred years ago, when the Titanic sank, the world was stunned and outraged that so many lives were lost, and new, preventative measures were instituted to save lives. Years later, we are watching another ship, the public school system in California, go under. Where are the safety measures today for the schoolchildren of our state? California was already 50^th in the nation for student-to-teacher ratio in 2008, and that was before education funding suffered $20 billion in losses. How much more water will we allow our schools to take on before we step in to do something? Will we be able to tell the children of California that we did everything to save them, or will we sit by idly, shrug our shoulders, and point our finger at someone else and say that it was his/her fault? Unlike the Titanic, we can stop this disaster. We must call out “children first” to save them and the future of our state.

Tamara Hurley is a California native, a product of the state’s public education system, and a 24-year resident of San Diego. Trained as a scientist, she has spent the past eight years volunteering on behalf of her children’s public schools, from the classroom to PTO and PTA boards as well as on district, community, and school site committees and site governance teams. Tamara is a board member of Educate Our State, a statewide, nonprofit, parent-led, grassroots organization fighting for high-quality public K-12 education in California.

Bill me: Legislative week in review

John Fensterwald co-wrote this article.

One day after Democrats on the Senate Education Committee rejected his sweeping approach to getting rid of poorly performing and badly behaving teachers, Republican leader Bob Huff mentioned an often cited but much disputed quote of the late Albert Shanker in letting the Democrats have it.

“The Senate Education Committee’s actions exemplify the comments made by Albert Shanker, former head of the United Federation of Teachers, who stated, ‘When school children start paying union dues, that’s when I’ll start representing the interests of schoolchildren.’ Once again the Democrats on the committee have chosen to put the demands of some union bosses over the safety of our children,” Huff said in a press release. (Shanker’s wife, Edith, denies he ever made the statement.) UPDATE: I contacted Shaker’s biographer, Richard Kahlenberg, who wrote Tough Liberal: Albert Shanker and the Battles Over Schools, Unions, Race, and Democracy. His email response regarding the authenticity of the quote: “I tried to track down the quotation for my biography of Al Shanker but I was unable to confirm it, so it may well be apocryphal.”

Democrats passed a much narrower bill, SB 1530, that pared away the due-process procedures for teachers being charged with offenses involving drugs, sex, and violence against children. Not that they got much love from union reps, who accused legislators from both parties of “grandstanding” on the issue.

Huff issued a chart showing that the Democrats’ bill wouldn’t alter the sometimes laborious dismissal procedures for teachers accused of a raft of other vile offenses that don’t fall into the new category of “serious and egregious” acts.

The odd thing is that, after the Democrats gutted an identical version of Huff’s bill in the Assembly this week, leaving in only two small reforms, the Republican co-sponsor of AB 2028 waxed poetic on the bipartisan achievement in a press release. “It was great to see Assembly Democrats today set politics aside and work with us to pass these vital reforms to get those who try to harm our kids out of the classroom,” said Assemblymember Cameron Smyth, R-Santa Clarita.

Not wanting to get caught in this dogfight, Los Angeles Mayor Antonio Villaraigosa and Los Angeles Unified Superintendent John Deasy testified for both the Republican and Democratic versions.

Stepping up to community college plate

“I am a community college success story,” proudly proclaimed Jessie Ryan at a news conference Wednesday after the Senate Education Committee unanimously approved the Student Success Act. SB 1456 starts the process of implementing some of the 22 recommendations in the Student Success Task Force report, which was released late last year.

Ryan, the associate director of the Campaign for College Opportunity, grew up with a “struggling, single welfare mother,” and said community college was truly her “gateway to opportunity.” She was admittedly fortunate that her college helped her develop an education plan and held an orientation that put Ryan “on a path to success.”

Sen. Lowenthal, with community college leaders and students, announcing passage of SB 1456. (Click to enlarge)

SB 1456, by Sen. Alan Lowenthal (D-Long Beach), chair of the Education Committee, calls on all the state’s 112 community colleges to provide all students with the type of support Ryan received. More than half of all community college students fail to receive an AA Degree, earn a certificate, or transfer to a four-year college within six years, and the figures for Latino and African American students are even worse.

But the big drivers in the bill for boosting success were tempered amid an outcry from students and the reality of state finances. Provisions requiring students to declare a goal and not to exceed a certain number of units in order to be eligible for Board of Governors (BOG) fee waivers will not take effect unless colleges have the resources to provide the needed support services, said Lowenthal. Just looking at one of those, counseling services is daunting. On average, there are 1900 students for each counselor.

The bill would create a new fund which repurposes the $50 million in the matriculation fund to provide colleges with some money to focus on education planning and advising, but it’s not nearly enough, and the chancellor’s office said they’re looking to schools to develop innovative programs to help students make good decisions about which classes to take.

“These reforms are about doing the most we can with what we have,” said Erik Skinner, Executive Vice Chancellor of programs. “The next step is to make the case for more investment.”

Bus Stop

Gov. Brown’s effort to eliminate funding for home-to-school transportation at the time of the mid-year trigger cuts sparked legislation by Assemblyman Warren Furutani (D-Gardena) to introduce legislation protecting school bus service.

AB 1448 requires transportation funding for next year to be “at least equal to the appropriation provided in the budget for 2011-12.” The bill holds a special place for Los Angeles Unified, which, under a court-ordered desegregation plan must provide transportation.

Budget uncertainty marked many bills that came before the committees this week leading to one surprisingly stinging exchange between two lawmakers. During the debate on AB 1448, Assemblymember Shannon Grove (R-Bakersfield), asked fellow education committee member Das Williams (D-Santa Barbara) why the democrats were trying to protect the school transportation funds when they were the ones who supported putting it in the trigger cuts when they approved the governor’s budget plan last year. Williams retorted almost before she could finish, noting that republicans forced their hand. “With all due respect,” said Williams, “that wouldn’t have happened if you had the courage to vote for taxes to support our education system.”

Click here for a list of education bills and their status

Layoff notices reach 20,000

Cynthia Dalmacio has a mnemonic device to keep track of how long she’s been teaching in Brisbane Elementary School District; one pink slip for each of her four years. The latest one came yesterday, the state deadline for notifying teachers that they may not have a job in the next school year.

Brisbane teacher Cynthia Dalmacio received her fourth layoff notice in as many years. (photo by Mike Myslinski). Click to enlarge.

The small hillside city of just over 4,000 residents, overlooking San Francisco Bay, has three schools with 550 students and 30 teachers. The district sent out eight layoff notices this week. Previous cuts left one principal for the two elementary schools, and one superintendent for Brisbane and neighboring Bayshore Elementary School District.

“I spend the last few months of each school year in a deep depression because teaching isn’t just a job for me, it’s who I am,” Dalmacio told reporters and a handful of teachers and parents at a news conference organized by the California Teachers Association (CTA).

As of Thursday afternoon, the CTA had heard from more than 200 local unions – including the largest districts in the state – and reported that about 20,000 California teachers were facing the same uncertain future as Dalmacio.

The ten districts issuing the most layoff notices, according to the CTA, are:

Los Angeles Unified – about 9,500
San Diego Unified – more than 1,600
San Juan Unified – 458
Capistrano Unified – 392
Sacramento City Unified – 389
Moreno Valley Unified – 332
Long Beach Unified – 309
San Bernardino City – 251
San Francisco Unified – 210
Sweetwater High School District – 209

Not counted in these numbers are first- and second-year teachers who, because they’re not tenured, can be laid off without notice. That number could reach into the thousands, but it’s hard to know, because the state doesn’t keep track of it.

Skipping Seniority

This year, however, the trend is shifting and pink slips are reaching teachers way up the seniority ladder. One Brisbane teacher who received a pink slip has been there for eight years. San Juan Unified in Sacramento sent notices to some teachers with eleven years in the district.

“Teachers with less than three years were gone the first year (of recent layoffs),” explained Ron Bennett, president and CEO of the consulting firm School Services of California. “As districts have had to ratchet down, they’ve had to go up in seniority.”

Seniority is also being sidestepped in some cases, as more districts turn to provisions of the State Education Code to prevent high turnover rates at academically fragile schools. It started on a large scale in Los Angeles Unified School District two years ago. A lawsuit, filed on behalf of students at three low-performing schools serving mostly students of color, argued that they were being denied an equal education as a result of instability caused by massive layoffs.

In big urban districts, “almost every junior teacher will be assigned to a low-performing inner city school, and as they gain seniority they move out to suburban schools,” said School Services’ Bennett. “In some low-performing schools every single teacher was getting a layoff notice and in higher-performing schools there were no layoffs.”

Since the settlement in Los Angeles Unified, several other large urban districts have used the exemptions in the Ed Code to protect some schools from disproportionate layoffs, including Long Beach, San Francisco – where the union is fighting the move – and Sacramento City Unified. Last year, an administrative law judge allowed the district to protect jobs at nine schools under the Ed Code exemption for teachers who have undergone special training to improve academic achievement and use different teaching methodologies.

CTA Vice President Eric Heins releasing layoff numbers at news conference in Brisbane. (Photo by Mike Myslinski) Click to enlarge.

CTA Vice President Eric Heins finds the argument unconvincing and suspects it’s a political move by districts to ease out veteran teachers who are active in the union and keep younger teachers who are less involved. “If we have schools that are so bad that nobody wants to teach there, then it’s not right to put a new teacher there or any students,” said Heins.

This year is different

For the most part, districts have been able to rescind many of the preliminary layoff notices as the state budget picture became more clear. Last year, the Governor’s May budget revise suggested (erroneously as it turned out) that revenues would be high enough to prevent further cuts. But districts still had money left from the Obama Administration’s American Recovery and Reinvestment Act (ARRA) which kept thousands of teachers in the classroom.

This time there’s no federal safety net, and school funding is riding on passage of a tax initiative in November. “This year may be a little bit different just because of the sheer size of the cuts combined with structural issues inside school districts,” said Arun Ramanathan, Executive Director of The Education Trust—West. Then he chided the governor and legislators for abdicating their responsibility by focusing solely on the November election.

“The disconnect between the pain at the local level and what they’re doing in Sacramento is fundamental, and is basically what has been happening for the last four years,” said Ramanathan, “Nobody loses their job up there.”

Sacramento City Superintendent Jonathan Raymond was even more blunt in his criticism. “We have to be honest that education is not a priority in California; if it was how come we let things get like this?” he wondered, citing cuts in everything from smaller class sizes and libraries, to music, art and athletics.

When Raymond first took the job as superintendent in 2009, he said a friend thought he was crazy. “He said it’s like hitting the beaches of Normandy wearing an orange jumpsuit,” recalled Raymond. It may have seemed hyperbolic at the time, but not so much today after the state has dropped to 47th in per pupil spending on education; nearly $3,000 below the national average. “This is our Normandy today. If we don’t educate our children what kind of society are we going to have?” he asked with exasperation rising in his voice. “For the life of me I don’t understand why these people in Sacramento don’t fix it.”

Financially strained districts on rise

Nearly a third of California students attend school in a district facing dire financial circumstances. A report released yesterday by the State Department of Education shows that 127 of California’s 1,037 school districts are now designated as either in negative or qualified budget territory. And that’s before taking the January trigger cuts into account.

2011-12 California school districts in financial distress. (Source: Calif. Dept. of Education). Click to enlarge.

Seven districts in the First Interim Status Report for 2011-12 received a negative certification, meaning they might not have enough money to get through the rest of this academic year or the next one. They include Vallejo City Unified, which was on the verge of bankruptcy in 2004 and is still paying off a $60 million bailout loan from the state.

Another 120 districts – 17 more than last year – landed in qualified status. They range from Los Angeles Unified, the largest district in the state, to La Grange Elementary School District in rural Stanislaus county, with 7 students. These districts will get through this year, but may not be able to pay their bills in the next two years.

“The financial emergency facing our schools remains both wide and deep,” said State Superintendent of Public Instruction Tom Torlakson in a written statement. “The deep cuts made to school funding – and looming uncertainties about the future – are driving school districts to the brink of insolvency.”

For a second straight year school districts are planning their budgets without knowing whether they’ll have to take another mid-year cut. If voters reject all of the tax increase measures on the November ballot, funding will fall by about $450 per student next year. In the meantime, the March 15 deadline for preliminary layoff notices to teachers is three weeks away.

“I don’t think this list accurately reflects how serious the situation is,” said Michael Hulsizer, head of governmental affairs for the Kern County Office of Education. “Imagine one of these districts facing a $450 per student cut on top of where they are; they have no place to go other than to make cuts right now.”

That’s what Superintendent Kent Taylor is working on in Southern Kern Unified School District. A year ago the district was on the negative list, facing insolvency. This year, after renegotiating all its vendor contracts and getting the unions to accept some furlough days and reduced medical coverage, the district has moved into the positive zone. Taylor intends to keep it there, and that means getting into the weeds himself, looking for any place to save money.

2010-11 California School Districts in financial distress. (Source: Calif. Dept. of Education) Click to enlarge.

“Superintendents nowadays, if they want their districts to survive, have to spend a lot of time on business. Half my day is spent on finances, and that’s how we’re going to stay strategically planned for the future.”

Even the best plans can’t compete with the recession. In San Bernardino County, where the unemployment rate is nearly 12 percent, a quarter of the school districts are on the qualified list. Riverside County, with 12.5 percent unemployment, has 40 percent of its districts in qualified status. But it’s the school districts around the state capital that are reeling the most. More than 95 percent of students in Sacramento County attend one of the eight school districts that ended up with qualified certification.

It falls to the county offices of education to monitor the districts and try to help them get back on sound footing. “I send them a letter which gives them the steps we think they need to take,” explained Dave Gordon, superintendent of the County Office of Education. “Our role of fiscal oversight is not to tell them what to cut; our role is to tell them what it will take to maintain their solvency.”

One of the most dramatic downturns in the county is in Elk Grove Unified, where Gordon spent nearly a decade as superintendent. During his tenure, Elk Grove was one of the fastest growing districts in the state; they couldn’t build schools fast enough. Since then, the housing market tanked, growth stopped, the district’s enrollment fell, and, of course, the state made huge cuts in education.

Gordon said one of the biggest problems is the state deferrals that push billions of dollars in Proposition 98 funding into the following fiscal year. The state shortfall gets erased that way, but districts are left scrambling for cash to cover their expenses, and as they run out of reserves they turn to loans, often with high interest rates.

That’s why there’s so much riding on the governor’s tax initiative. Gov. Brown said the first thing he’d do with the additional funds for education would be to start to pay down the deferrals.

County offices are advising districts to again prepare for the worst, but “worse is a matter of degree nowadays,” said Gordon. “It’s all a question of how much you’re willing to prepare for the sort of doomsday cuts. What we keep saying to people is that hope is not a strategy.”

Will the real TK stand up?

It’s getting so that understanding the budgetary machinations of Transitional Kindergarten requires a master’s degree, or maybe a Little Orphan Annie Secret Decoder Pin.

In the month since Gov. Brown released his 2012-13 budget plan and recommended canceling Transitional Kindergarten (TK), supporters have found it hard to keep track of what the administration is proposing and where the savings would come from.

They were further confounded yesterday, when the State Legislative Analyst’s Office released its review of the governor’s education budget. Although the LAO seconded the governor’s call to eliminate funding for TK, it seemed to contradict some of the administration’s figures. (See John Fensterwald’s article today for the LAO’s review of the entire education budget proposal).

“At this point, it seems like the Department of Finance is making it up as they go along; we’ve had three different versions of the program in the last four weeks,” said State Senator Joe Simitian.

His bill, SB 1381, which the Legislature passed in 2010, moved up the entry age for kindergarten to September 1 from December 1, phasing it in over three years beginning next fall. It also created the TK program for the children who turn five during that three-month period and are no longer eligible for kindergarten. Instead, they would get TK one year and regular kindergarten the next.

By keeping the age change but eliminating funding for TK, Gov. Brown estimates the state will save about $224 million in ADA dollars next year in reduced kindergarten enrollment. When Sen. Simitian pointed out at a legislative hearing a few weeks ago that districts would still get the same amount of money for another year under the declining enrollment program, a Finance Department official said that had been factored in. Not so, according to yesterday’s LAO report. It said the Legislature would also have to “make a corresponding change to the ‘declining enrollment’ adjustment.” In other words, eliminate that, too.

Trailing language

The administration has been similarly vague on the options for those four-year-olds whose families first thought they’d be going to kindergarten, then to Transitional Kindergarten. As we reported here, at that same legislative hearing in January, Finance Department officials initially said that districts could provide TK, but wouldn’t receive any state funds to pay for it. Then they said the state would provide ADA funds once the children turned five.

Sen. Simitian again asked for clarification and it came last week in the budget trailer language, which once again left Sen. Simitian perlexed. It keeps the age cut-off dates, but lets individual districts decide if they want to run Transitional Kindergarten programs. Then the trailer bill says something that both Sen. Simitian and the group Preschool California suspect the administration never intended. It allows school districts to “admit to a kindergarten at the beginning of the school year, a child having attained the age of five years at any time during the school year with the approval of the parent or guardian.”

It also apparently makes the districts eligible for ADA funds even for the four-year olds. That’s how it seemed to Sen. Simitian, and that’s how it appeared to the Legislative Counsel when he asked that office for an interpretation.

According to Preschool California, more than 100 school districts have either started TK pilot programs on their own or indicated that they plan to launch them in the fall despite the governor’s proposal. At least one district, San Francisco Unified, told parents not to bother enrolling their children for TK, because there won’t be a program without state funding.

That could create unequal access to education for children, with one district offering a version of TK while a neighboring district does not. If the latter district is low-income, then there may be an equal protection violation. At the very least, said Sen. Simitian, it’s going to create chaos and anxiety up and down the state.

“I don’t mean to say this with attitude, but I’ve got so much frustration at this point,” said the senator. The Legislature already debated and approved the bill, “and now the administration is trying to revisit the issue through the budget process. That’s completely inappropriate,” said Sen. Simitian, adding that if the governor wants to change policy, he should introduce a bill like everyone else.

Budget: more control, little cash

California schools could gain billions or once again face the threat of a midyear budget cut under the 2012-13 budget proposal released in Sacramento yesterday by Gov. Jerry Brown.

At a hastily called news conference, held after the budget was accidentally posted days ahead of schedule on his finance department’s website, the Governor presented a plan for closing the

Gov. Brown presents 2012-13 budget in Sacramento

state’s $9.2 billion budget gap that’s contingent upon approval of his $7 billion tax initiative. And he presented the evil-twin plan in case the tax measure is defeated.

Brown said if voters support his plan to raise sales and income taxes in November “we will eliminate the budget deficit, finally, after years of kicking the can down the road.”

For K-12 schools and community colleges new tax revenues would bring an increase of $4.9 billion in 2012-13, for a total Proposition 98 funding level of $52.5 billion. That would boost per-pupil spending from $7,096 this year to $7,815 next year. But even if the tax plan wins, most of that money will be little more than a specter in classrooms. Brown’s proposal would use $2.1 billion to backfill this year’s deferral and another $2.1 billion to start paying off the $10 billion in deferrals already accrued.

What’s more, the plan still doesn’t provide for a cost of living increase of 3.1 percent, which would be added to a growing multi-billion IOU known as the maintenance factor.

Past, current and proposed per pupil funding. (source: Governor's budget summary: 2012-13). Click to enlarge. — Past, current, and proposed per-pupil funding. (Source: Governor's budget summary: 2012-13). Click to enlarge.

Dan Troy, the Community College Vice Chancellor for Fiscal Policy, says he understands strategically why the governor wants to bring down the debt before funding new programs, but, at the same time, he says the colleges could really use the money after losing $102 million in last month’s midyear trigger cuts, raising fees by 77 percent in less than two years, and receiving no cost of living increase since 2007-08.

“Technically the $218 million does count,” said Troy, referring to the amount of money the state’s community colleges would gain under the budget plan. “We just can’t buy anything with it.”

Still, it’s better than more cuts, and that’s what will happen if voters don’t approve the governor’s tax plan, or one of the other initiatives to fund education that are currently competing for ballot space.

Two things would happen if the revenues don’t pass, said state Finance Director Ana Matosantos. First, it would trigger a $4.8 billion reduction in Prop 98 that would amount to the equivalent of three weeks of school. That doesn’t mean that the school year would be shortened by three weeks; it’s meant to illustrate how much money is at stake.

The other cut is more convoluted. It would shift or “rebench” the debt payments from the state’s K-14 general obligation bonds from the General Fund to Prop 98, giving schools and community colleges a brand new $2.4 billion expense. Ah, but it’s not all bad; Matosantos said that would preclude a suspension of Prop 98.

Consolidation consternation

Lost in much of the rollout yesterday was a sweeping change proposed to how schools are funded. The governor wants to move to a weighted-student formula, which you can read about today in John Fensterwald’s column.

Brown also wants to give local districts more decision-making power over how they spend their money, and he aims to do that by increasing flexibility for most remaining categorical programs (with the exception of federally-mandated programs, such as special education and foster care), even seemingly sacred cows like class size reduction.

“That means if they think they can save some money by adding a few kids to a class instead of something else then they can do that, that’s their choice,” said Brown. “I have confidence that the local democracy is at least as vigorous and as responsive as our statewide democracy.”

Some advocates and legislators are alarmed by the possible unintended consequences this could have on hard-won programs. Senator Joe Simitian’s (D-Palo Alto) legislation that just became law in 2010, which increases the kindergarten entrance age but provides funding for the younger children to attend transitional kindergarten, could be wiped out before it really gets going.

“The Administration’s budget proposal is a $700 million hit to K-12 education at the expense of 4-year-olds and their families,” said Simitian, referring to the three-year implementation costs for the program. “The notion that 250,000 parents and their 125,000 kids are no longer eligible to begin school in the fall is a non-starter.”

Another program that may be eliminated is Advancement Via Individual Determination, or AVID, which provides extra study skills and support to help prepare high school students who could be the first in their family to attend college.

Higher Ed remains flat

The budget plan for the University of California and California State University is essentially status quo, which doesn’t sit well with CSU Chancellor Charles Reed. In a statement on the Cal State website, Reed said the governor’s proposed $2 billion for CSU is the lowest state support for the system in 15 years, even though Cal State enrolls 95,000 more students today than it did back then.

“We cannot continue down this budget path and expect that we can offer the same number of courses to the same number of students and maintain quality,” said Reed, adding that “we are just about out of options, and if the state does not begin to reinvest in the CSU, we will need to take more drastic measures including cutting enrollment and programs, raising tuition, and reducing personnel.”

Gov. Brown made a point of saying that he thinks higher education has been hit too hard already and he’d like to find a way of getting them more money to avoid any further tuition increases. So far, his budget plan doesn’t contain any specifics on how to do that, but it would chop another $100 million each from UC and CSU if the tax plan fails.

Rationing for community colleges

The days of the so-called professional student at California’s community colleges may be coming to an end. After nearly a year of studying ways to improve graduation and transfer rates, with dwindling resources, the 21-member Student Success Task Force on community colleges is considering changes to some of the historic tenets of the nation’s largest public college system.

For example, the standard practice of using state funds to subsidize all students, including those with no apparent career goals and those dabbling in art, music, and other non-degree courses, is poised to take its place in history class. Students not on the academic or career track would also be sent to the back of the registration line.

“You’re no longer a continuing student if you signed up for 100 credits and only completed 30,” said Jack Scott, Chancellor of the California Community College system. “In this day and age, when the money is scarce, we’re really rationing our seats, so we’ve got to recognize those who are serious. We’re not against lifelong learning but those students are not our priorities.”

Recommendations get public airing

Earlier this week, State Senator Carol Liu (D-Pasadena) held a hearing on the task force’s draft recommendations before her Subcommittee on Education Policy Research. Liu authored the 2010 bill, SB 1143, which called for the panel to be created at the start of this year.

Liu had seen an advance copy of the report, but was still struck by how substantial it is, said Suzanne Reed, the senator’s chief of staff and a member of the task force. Liu was also very interested in hearing about concerns with some of the recommendations, said Reed.

One controversial issue surrounds giving community colleges more flexibility in how they spend funds currently designated for programs like educating prospective foster parents and career technical education. “The concern is that if you put that in the flex, the colleges could choose to use the money for something else,” said Reed. If the categorical flex given to K-12 school districts is any indication, then the colleges will almost certainly redirect the funds.

There’s also push back against a proposal that would give the Chancellor’s office more authority, as well as a recommendation for performance-based funding, essentially allotting money based on student outcomes instead of funding based solely on enrollment.

“One of the big issues here is that a lot of this is a cultural change,” said Reed. “It’s a reorientation of how people feel about the delivery of education to community college students.”

Billions spent on dropouts

Until a few years ago, the goal had been to get more students into college, and community colleges were the front lines of that effort. But a recent confluence of reports warns that states are spending billions of dollars on students who drop out or languish for years in a series of unrelated, unfocused courses.

“We’ve been on the access agenda for 20 years or more now, but haven’t figured out how to get as many students out the door when they walk in,” said Mark Schneider, vice president of the American Institutes for Research and author of “The Hidden Costs of Community Colleges.”

State spending on community college students who drop out. (Source: American Institutes for Research) Click to enlarge

There are more than six million community college students – an increase of about 25 percent over the last decade – and about 20 percent never return after their first year of school, according to the report. AIR followed a cohort of students over five years and found those dropouts cost taxpayers about $4 billion in state funding and local, state, and federal grants. California’s share is about $130 million.

“Part of the problem is that we are only beginning to take this problem seriously, and as a result our playbook for fixing this problem is pretty much empty,” said Schneider.

Agreement on solutions

It’s no coincidence that California and the AIR are both tackling this issue at the same time. Schneider credits President Obama with elevating college to a level not seen since the Sputnik crisis, and for much the same reason, to reignite America’s competitiveness.

“Already, we’ve mobilized business leaders to train 10,000 American engineers a year, by providing company internships and training. Other businesses are covering tuition for workers who learn new skills at community colleges. And we’re going to make sure the next generation of manufacturing takes root not in China or Europe, but right here, in the United States of America,” said the President last month in a speech before a joint session of Congress.

The Student Success Task Force has developed 22 recommendations to improve graduation and transfer rates, and over the next few months, the panel will solicit feedback on its proposals from community college faculty and administrators, business leaders and the public.^* Then the plan goes to the community college Board of Governors. Even if they agree, some changes will require legislative approval, and some will have to wait until the state’s economy improves.

Chancellor Scott said there are programs that can be implemented right away, such as making better of use of technology to advise students; and there are reforms already approved, including SB 1440, a 2010 bill that creates an associate degree for transfer that must be accepted by California State University without requiring students to take additional classes. And Gov. Brown just signed a bill to develop a common placement exam for community colleges.

Each change makes incremental improvements in the success rate said Chancellor Scott. “We’ll never have 100 percent completion, but we can do a lot to ensure the completion rate is higher.”

^* Three town hall meetings are scheduled. October 27th in Los Angeles, November 2nd in Fresno and November 16th in Oakland. They’ll also be broadcast live on the web.