K-12 Education – Page 12 – Public Policy Institute of California

More Money, More Challenges for K-12 Schools

The 2015-16 budget agreement between the legislative leadership and governor provides substantial additional funding for the new Local Control Funding Formula (LCFF). The money allows the state to implement the formula more quickly, and some districts will experience very large funding increases. While LCFF significantly expanded district financial flexibility, it also calls for districts to use the new funding to improve local performance. Districts may find meeting various state and local expectations a complex task.

The budget includes $53.1 billion for LCFF, or $6 billion more than appropriated in the 2014-15 budget. To put this into perspective, this represents an increase of more than $1,000 per pupil on average, or 14% more than schools received this year.

When LCFF was enacted in 2013-14, the administration estimated that the transition from old to new formula would take eight years. But funding increases were larger than forecasts in 2014–15 and 2015–16. Since 2013-14, almost $11 billion has been added to LCFF, leaving a gap of only $5.5 billion to fully fund the formula. Depending on the health of the economy, this gap could disappear completely in the next few years—and far earlier than originally forecast.

The LCFF simplified school funding by consolidating several dozen funding streams into a formula that distributes funds based on the number of students in each grade and the proportion of low-income, English-learner, and foster students in each district. The formula also sets district funding targets to equalize per-pupil funding levels across districts. In addition, funding levels for kindergarten and grades 1–3 were enhanced to give districts the incentive to reduce class sizes in the early grades. Similarly, high school funding levels were increased to support vocational classes and other courses to prepare students for college and careers.

Districts must balance how new funds are spent with the various requirements of LCFF and local expectations for spending increases. They must make progress in shrinking class sizes (despite the shortage of available teachers in some areas). They also must pay for improvement plans that are required under LCFF. The law requires districts to assess student and school outcomes in eight state priority areas and develop improvement plans and budgets that address local priorities for improving student performance.

Districts must also accommodate the typical financial pressures of any large organization, such as physical plant maintenance and employee salary and benefit increases. LCFF generally requires that districts use money targeted for high-needs students only for educational services for those students. However, in a recent letter sent to school superintendents, State Superintendent of Public Instruction Tom Torlakson advised that extra funding for high-needs students may be spent on across-the-board salary increases if the expenditure will improve services for those students. This interpretation may allow districts more discretion and increase pressure for larger employee raises.

The coming fiscal year promises significant new funding for schools—and significant demands for those funds. It is important these funds are well spent, in part because districts are unlikely to see increases of this magnitude in the near future. Forecasts from both the Department of Finance and the Legislative Analyst’s Office suggest that school budgets in 2016–17 and 2017–18 are likely to grow at a rate of about 3%. This year’s 14% increase in LCFF funding may represent the largest chunk of new discretionary funding that most districts will see for several years.

Governor’s May Revision Continues Cautious Approach

Governor Brown released his revised 2015–16 budget last week. It includes $8 billion more in new spending than his January proposal but continues his cautious approach to taking on new spending commitments. The new funding proposals are the result of setting modest expectations for future revenue growth. Because actual growth from the improving state economy has far exceeded forecasts, the administration has significant additional funds available.

Only about two-thirds of the $8 billion increase comes from the General Fund. The other third stems from increased special funds and revenues from bonds.

General Fund. General Fund revenues are estimated to increase by about $6.3 billion—$4 billion to reflect the major influx of tax receipts collected since January 2015 and $2.3 billion next year. Almost all of that—$5.8 billion—must be spent on K–12 education and community colleges. This leaves little room for spending in other areas.
Cap-and-Trade Funds. The May Revision proposes to more than double spending of cap-and-trade revenues, going from $1 billion in the January budget to $2.2 billion today. Under the state’s greenhouse gas reduction program, businesses pay fees for the right to emit carbon into the atmosphere. In 2015, producers of transportation fuels joined the program, significantly boosting revenues. As a consequence, revenues are expected to jump $1.2 billion above the level proposed in January. The additional funds would be spent for transportation, housing, energy, and natural resources programs—consistent with the long-term expenditure plan approved by the legislature in 2014.
Proposition 1 Bond Funds. The May Revision also significantly increases spending for water quality and conservation projects. Proposition 1, approved by voters in 2014, includes $7.5 billion in bond funds for a variety of water quality, flood protection, and storage programs. The budget proposes to dedicate $1.8 billion in bond funds over the next three years. This increase builds on $1.9 billion in spending (from a variety of funding sources) approved by the legislature in the spring of 2015.

The $8 billion growth in revenues and expenditures represents a 4.8% increase from January, and an 8.1% increase from the 2014–15 budget passed by the legislature last June. So how can this be considered cautious? The answer is that the administration uses modest assumptions about future growth in revenues—until there is solid evidence of additional available resources.

The pattern of projected revenues for 2014–15 reveals how this strategy works. The following chart illustrates how recent budget projections have grown as revenues have increased.

In January 2014, the administration estimated revenues of $106 billion—up 6% from 2013–14 anticipated revenues. The 2014 May Revision boosted that figure to $107 billion. Actual revenue collection was up significantly in the fall of 2014, which led to a January 2015 estimate increase to $109.7 billion. From January to April 2015, revenues exceeded expectations by $3.2 billion, bringing the most recent estimate of General Fund revenues to $112.9 billion. This is truly exceptional revenue growth. Compared to 6% growth projected in January 2014, the May Revision figure for 2014–15 translates into General Fund revenue gains of 12.8%.

Despite the projected gains for this year, the current May Revision continues to take a cautious approach to revenue estimates for the coming year. The administration’s initial revenue estimates for 2015–16 are quite modest—the May Revision anticipates 4.1% growth in General Fund revenues. This low growth estimate limits the amount of new spending that can be added to the base budget. At the same time, the large increase in current-year revenues gives the governor flexibility to boost support for education and other critical areas. In this way, Governor Brown can significantly increase spending today while maintaining a cautious approach to the future.

Chart Source: California Department of Finance, 2015-16 May Revision.

Local School Funding & the Exclusive Electorate

State funding for K-12 public education has been rising, but 70 percent of public school parents say it is “not enough” in our April PPIC Survey. Are California voters likely to heed these parents’ calls and support local ballot measures for school funding?

It doesn’t look likely. To begin with, likely voters are much less likely (54%) than public school parents to say that the state’s funding for their local schools is not enough. More important, in our recent poll likely voters and public school parents have starkly different views about specific ways to increase funding—local bonds and local parcel taxes—for their local public schools. Specifically:

When it comes to local school bonds, 75 percent of public school parents would vote yes if their local school district had a bond measure on the ballot to pay for school construction projects. But only 53 percent of likely voters would do so—lower than the 55 percent required to pass a local school bond.
As for funding schools through local parcel taxes, 61 percent of public school parents would vote yes. But just 49 percent of likely voters would. A two-thirds majority yes vote is needed to pass a local parcel tax for schools.
What about lowering the majority needed to pass local parcel taxes—from two-thirds to 55 percent? This tax reform is rated as a good idea by 57 percent of public school parents. Only 44 percent of likely voters agree—less than the majority required to make this change.

The poll’s findings reflect the fact that California’s “exclusive electorate” controls the fate of ballot measures for local school funding. Today, many public school parents are nonvoters. And most likely voters are not public school parents. According to a PPIC report, likely voters are disproportionately white and tend to be homeowners, older, college graduates, and affluent.

Latinos, renters, and the younger, less educated, and less affluent are strong supporters of local bonds and local parcel taxes for local schools. They also favor lowering the vote threshold for passing local taxes. But these groups are outnumbered among those who cast ballots in elections.

It’s not impossible to pass local bonds and parcel taxes for school funding. CaliforniaCityFinance.com reported last December that eight in 10 local bonds and 6 in 10 local parcel taxes for local public schools have passed since 2001. But funding advocates have to carefully pick and choose the timing and location of these local school funding measures in deference to the higher vote thresholds required and the propensities of California’s exclusive electorate. A PPIC study concludes that the overall fiscal impact of parcel taxes has been fairly limited statewide.

School funding proponents want a state bond measure on the November 2016 ballot. The presidential election will attract the largest and most diverse electorate. It would take a simple majority vote to pass a state school bond. Our poll finds that 55 percent of likely voters and 77 percent of public school parents would vote yes on a state bond for school construction projects.

Meanwhile, the governor has stated that local voters should be deciding if they want more local school funding and that state voters should not be asked to pass state school bonds. This idea of local control resonates with Californians, who generally distrust the decisions made in Sacramento. But as our survey suggests, likely voters are unwilling to lower the local two-thirds threshold for passing local parcel taxes, leaving it easier to pass school funding measures at the state level than at the local one.

In other words, the state is likely to continue to play an oversized role in local school funding—until the California electorate reflects the will of the people who are relying on local public schools to improve their children’s futures.

Video: Californians and K-12 Education

The annual PPIC Statewide Survey: Californians and Education comes at a time when there are major policy changes underway in the state’s K–12 system. They include implementation of the Local Control Funding Formula, Common Core standards, and the Smarter Balanced standardized tests. The survey was released last week and presented at a briefing in Sacramento by research associate Lunna Lopes.

The survey offers a good look at public reaction to the changes and attitudes toward education more broadly. About three-quarters of adults said they knew nothing about the Local Control Funding Formula, which gives districts more flexibility in spending state funds and gives additional money to districts with more English language learners and lower-income students. When survey respondents were read a description of the funding formula, most favored the idea.

About 58% said they had heard about Common Core, the new set of English and math standards. But only 47% favored the idea and 31% opposed it. The poll also found a high level concern more generally about the quality of K–12 education and funding.

Video: The Future of Local Taxes

The parcel tax is unique to California, said economist Jon Sonstelie, because it is a revenue alternative that navigates the constraints of Proposition 13. Sonstelie, PPIC Bren Fellow and a professor at UC Santa Barbara, evaluated the tax in his new report Parcel Taxes as a Local Revenue Source in California and presented the results last week in Sacramento. He noted that between 2003 and 2012, cities, school districts, and local districts put 691 parcel tax proposals to fund services on the ballot, and 53 percent received the two-thirds vote required for passage. Most of these taxes were relatively small. The median was $60 for cities, $96 for school districts, and $68 for special districts.

Following the presentation, a panel discussed the future of local taxes in an era of increasing local authority. Patrick Murphy, PPIC research director, moderated the discussion. Participants included Michael Coleman, principal fiscal advisor to the League of California Cities; Robert Gutierrez, director of the California Tax Foundation; and Marianne O’Malley, managing principal analyst on state and local finance at the Legislative Analyst’s Office

Video: Online Testing and Learning in California Schools

California is rolling out a new online testing system in K–12 schools this year in conjunction with the new Common Core curriculum standards. Are schools prepared?

At a recent briefing in Sacramento, PPIC researcher Niu Gao answered the question with findings from her new study. She found that there is a wide variation in readiness across the state. Many district technology officers express confidence in the quantity and quality of their hardware and network capabilities. But they are much less confident of their ability to handle software issues, such as the installation of secure browsers, distribution of IDs, and quick log-ins for students. Most districts also report that they do not have enough staff to provide technical support or do not provide sufficient training for teachers and IT staff.

Gao concludes that in the longer term, virtually all schools will need to upgrade their technology to adopt and fully benefit from digital learning—video conferencing, virtual field trips, and personalized audio-visual instruction.

Gao’s report is titled Are California’s Schools Ready for Online Testing and Learning?

Video: Implementing California’s School Funding Formula

The success of California’s new funding formula hinges on whether school districts can improve achievement for students, especially those who are high need. New PPIC research focuses on the issues raised so far by implementation of the new formula—a process that will take eight years.

Last week, Laura Hill, PPIC senior fellow and one of the reports’ co-authors, provided an overview of PPIC’s findings in Sacramento. Her presentation was followed by a panel discussion that looked at the challenges and opportunities presented by the new funding formula. Panelists were Carolyn Chu of the Legislative Analyst’s Office; Jonathan Raymond, president of the Stuart Foundation and former superintendent of the Sacramento City Unified School District; PPIC research associate Paul Warren; and Riverside County school superintendent Kenneth Young. Patrick Murphy, PPIC research director moderated.

The PPIC reports are listed below:

Implementing California’s School Funding Formula: Will High-Need Students Benefit?

Implementing Local Accountability in California’s Schools: The First Year of Planning

Low-Income Students and School Meal Programs in California

Local Decisionmaking in California’s Schools

California schools and districts are in the early stages of implementing the state’s new school finance system, the Local Control Funding Formula (LCFF). The new system involves much more than a new way of allocating state money to schools. At the heart of LCFF is the handing over of decisionmaking power to local districts—as well as responsibility for meeting the state’s educational goals. Results from the California sample of the national Schools and Staffing Survey (1999‒2011) point to some of the challenges the state will have in implementing the new system.

Goals. LCFF prioritizes student achievement, as measured by scores on standardized tests, performance in Advanced Placement exams, and college and career readiness. However, the Schools and Staffing Survey indicates that principals put more weight on basic literacy than on advanced skills such as academic excellence and college readiness. In other words, principals seem to be setting a lower bar, and aligning their goals with the state’s priority areas is going to be a challenge.

More than half (54%) of principals see building basic literacy skills (reading, math, writing, speaking) as their most important goal. This view is slightly more prevalent among principals of elementary schools, schools with high percentage of minority students, and urban schools.
College and career readiness—one of the eight LCFF priority areas—is not a big priority for principals, even in middle and high schools. Just 2 percent of principals consider college preparedness to be their most important goal and just 4 percent prioritize occupational or vocational skills.

Parental involvement. The law requires that parents be involved in LCFF planning and implementation. However, very few schools involve parents in their decisionmaking processes. A real cultural shift will be required to engage parents in a meaningful way.

Most schools rely on open houses, parent-teacher conferences, and special subject-area events to communicate and interact with parents.
Very few schools involve parents in school instructional planning—for example, developing learning activities or soliciting feedback on curriculum. And few schools involve parents in governance—through PTA or PTO meetings or parent booster club—or budget decisions. Urban schools are the most likely to engage with parents, but parental engagement is going to be a significant challenge, particularly in large and rural schools.
Only half of schools have staff assigned to work on parental involvement—this is more common in schools with high percentages of minority students and schools in urban areas.

LCFF is an ambitious overhaul of California’s school finance system, designed to help districts meet clear educational goals. As the results of the Schools and Staffing Survey show, successful implementation is going to require major cultural changes in schools throughout the state.

TOP CHART SOURCE AND NOTE: Schools and Staffing Surveys (1999‒2011).”Secondary” includes both middle schools and high schools. High minority schools have student populations that are more than 75 percent minority; in high-poverty schools, more than 75 percent of students are eligible for free or reduced-price meals. Bottom chart source: Schools and Staffing Survey (2011).
BOTTOM CHART SOURCE AND NOTE: Percentages reflect principals’ responses to the following question: “What percentages of students had at least one parent or guardian participating in the following events?”

Video: January PPIC Statewide Survey Briefing

State residents are feeling more optimistic than they have in years—about California’s elected leaders, the direction of the state, and their own economic futures. Dean Bonner, associate survey director, presented these and other key findings at a briefing last week in Sacramento. In addition to asking about government and fiscal issues, the January survey gauged opinions on four important issues being debated at the state and federal level. Among the findings:

Crime, police, and race relations. A solid majority of Californians say the police are doing either an excellent job or good job controlling crime in their communities. But blacks are much less likely than others to hold this view.

Water and drought. A majority of Californians say the supply of water is a big problem in their region, and most say the state and local governments are not doing enough to respond to the current drought.

Health care reform. A record-high 51 percent of Californians have a generally favorable view of the 2010 health care reform law, while 41 percent have an unfavorable view.

Immigration reform. A solid majority of residents support President Obama’s executive action to shield as many as 4 million immigrants from deportation, while about a third are opposed.

The Debate Over Extending Proposition 30

One of the most controversial issues that the governor and legislature face in 2015 is what to do about the Proposition 30 tax increase. This citizens’ initiative passed with a 55% yes vote in November 2012. The governor says this tax increase is meant to be temporary. But others say that the state budget situation has improved because of Proposition 30, and it could deteriorate if we allow the sales and income tax increases to fully expire in 2018. In the most recent PPIC Statewide Survey, 52% of likely voters would favor a Proposition 30 tax extension. We found identical results in our December 2014 poll. A slim majority of support suggests that a tax extension is in the realm of the possible but far from a sure thing.

Why the sense of urgency? Tax proponents say that the November 2016 presidential election offers the last chance for a high turnout among voters who are likely to support a Proposition 30 tax extension before its sunset in 2018. Our most recent poll confirms this view. Support for the tax extension falls short among the likely voter groups with the highest propensity to vote: Republicans (30%), whites (49%), homeowners (48%), age 55 and older (50%), and those with annual incomes of $80,000 or more (45%). Support is highest among these lower-propensity likely voter groups: Democrats (69%), Latinos (68%), those under age 35 (61%), renters (61%), and those with annual incomes under $40,000 (59%). As these numbers suggest, it would be a riskier proposition to wait until the 2018 gubernatorial election for a tax extension vote.

Many observers think that the voters will take their cues from Governor Brown if they are asked to weigh in on this issue. After all, it was the governor who brought this tax measure to the voters when the legislature failed to act. In our latest poll, most likely voters—58%— approve of the governor’s job performance, and most who approve of Brown also favor a tax extension (69%). Also, those who prefer Governor Brown’s approach to the state budget over their Democratic and Republican legislators overwhelmingly favor a tax extension (75%). In sum, Brown’s position on the tax extension will matter. But no one is certain whether he will actively support or openly oppose a tax extension in 2016.

Some are looking to tweak the current Proposition 30 tax increase to gain more favor with the voters. There are calls, for example, for the creation of another temporary tax increase instead of making the Proposition 30 increases permanent. That may help gain voter support, but we have no PPIC polling data suggesting that voters supported Proposition 30 because it was temporary. Others argue that the tax on earnings over $250,000 should continue while the one quarter cent sales tax is allowed to expire. This might well improve the chances of passage and is consistent with our past polls, which show majority support for raising taxes on wealthy Californians and majority opposition to a state sales tax increase.

What is missing from this political calculus? A selling point of the Proposition 30 tax increase was its beneficiary: K-12 education. In our past polling, Californians have ranked K-12 education as their highest spending priority. However, relatively few (correctly) perceive that K-12 education is now the largest area of state spending.

Our recent poll shows that the knowledge gap is wide when it comes to the state budget: 57% of likely voters say that K-12 education is their highest priority for state spending, but just 19% are able to cite K-12 education as the largest area for state spending today. Among the likely voters whose top spending priority is K-12 education, 54% are in favor of a tax extension. Among those who think the state’s top spending category is something other than K-12 education, 56% are in favor of a tax extension. But among those who accurately say that K-12 education is the state’s top spending area, just 35% favor extending Proposition 30.

Our survey also asked what is the one issue facing California today that is most important for the governor and legislature to work on this year. Among the likely voters who named K-12 education, 65% are in favor of a Proposition 30 tax extension. In sum, the fate of a Proposition 30 tax extension in 2016, as was the case for Proposition 30 in 2012, will likely depend on how the voters perceive its effects on K-12 education.

The November 2016 presidential election offers the best chance to include the most voters in this contentious issue. And, as our recent poll shows, Californians want a role in fiscal decisionmaking. An overwhelming 76% of likely voters say they prefer that voters make some of the decisions about spending and taxes at the ballot box, while just 21% say that they want the governor and legislature to make all of these decisions. Why not give the voters a chance to hear the pros and cons in a debate that can also help increase knowledge about the budget and give them the role they want to determine California’s future?