Association of Low Wealth Schools December 2, 2006

1. Association of Low Wealth SchoolsDecember 2, 2006 Presented by: Caryn Payzant, Board Member, Alta Loma Elementary School District Joe Condon, President, Association of Low Wealth Schools and Superintendent, Lawndale Elementary School District Michael F. Dillon, Lobbyist, Association of Low Wealth Schools

2. Equality In Funding: It’s Déjà vu All Over Again! “de ja vu” \: 1 (a) the illusion of remembering scenes and events when experienced for the first time, (b) : a feeling that one has seen or heard something before.

3. ASSOCIATION OF LOW WEALTH SCHOOLS • For over 30 years, dedicated ALWS members have been tackling another curious definition found in Webster’s dictionary…

4. EQUALIZATION • “equalize” • (1) : to make equal, • (2) (a) : to compensate for, (b) to make uniform; esp. : to distribute evenly or uniformly.

5. Today we hope to share with you the story of K-12 “equalization” funding. What it is? And, how a lawsuit called Serrano v. Priest, which was ruled upon more than 30 years ago, still affects the way your school is funded today.

6. Today we also want to share with you a new concept of school funding called “Gradespan,”: developed this year by the Assembly Education Committee. • What will it mean to your elementary, high school, or unified school district?

7. What does the Administration think of “Gradespan” versus “Equalization?” We will share what we have learned from the Governor’s Education representatives.

8. Lastly, when you leave here today, we will give you tools for what YOU can do to educate your legislator regarding • “equalization” • “Gradespan,” • the need for fair funding for schools or …how YOU can get your “fair share” for your district.

9. EQUALIZATION – THE BEGINNING • In 1968, the Western Center on Law and Poverty filed a lawsuit on behalf of John Serrano Jr., against the State Treasurer, Ivy Baker Priest. The suit became known as: Serrano v. Priest

10. John Serrano’s son was a student in the Baldwin Park Unified school district. At the time, Baldwin Park was only able to spend about: • $800 per pupil with a district tax rate of $5.00 per assessed valuation. • In contrast, nearby Beverly Hills Unified was able to spend $1600 per student, at a tax rate of only $2.50 per $100 of assessed valuation.

11. Because of its tremendous property tax wealth (assessed value) advantage, Beverly Hills Unified was able to generate TWICE AS MUCH MONEY PER STUDENT as Baldwin Park, at ONE-HALF THE TAX EFFORT.

12. In 1971, the State Supreme Court, recognizing that wealth related disparities, REVERSED the lower court decision, and ordered a new trial. • The Supreme Court also declared: “That a system of school finance which conditions educational opportunity upon the accident of school district wealth, violates the equal protection clause of the California Constitution.”

13. In June of 1973, the Association of Low Wealth Schools was formed. We established an Executive Board. We hired a lobbyist – Mike Dillon - who continues as our advocate at the State Capitol more than 30 years later. • ALWS believed that a slight variance in funding, meant a great deal to our students. The state had equal expectations for our students, but was not providing equal resources.

14. SERRANO V. PRIEST • In 1974 came a landmark ruling by Judge Bernard Jefferson, in Serrano v. Priest, when he declared that: “the state financing system for K-12 education was unconstitutional under the equal protection clauses of the California Constitution.”

15. SERRANO V. PRIEST • The state had until 1980 to reduce spending disparities to “insignificant differences,” that he defined as “considerably less than $100 per pupil.”

16. SO WHAT? • Contrary to Judge Jefferson’s intent, a later judge determined that the $100 per pupil could be inflated. Several years ago the Legislative Analyst’s Office estimated the actual inflated amount to be $335 – still a significant per pupil difference!

17. LEGISLATIVE REMEDIES • After Judge Jefferson’s ruling, our focus shifted to the legislature, where it continues today. • SB 1499 sponsored by ALWS, sought to equalize school funding through the concept of “power equalizing” of the property tax. The idea was: all school districts would be able to generate the same amount of revenue, with the same tax rate effort.

18. AB 65-Greene, put the “Serrano Squeeze” on school funding, when the legislature adopted this concept in 1977. This formula gave high wealth districts a COLA of $85 per ADA and low wealth districts $150 per ADA. • Unfortunately, Proposition 13 nullified this action.

19. In 1983, with the passage of SB 813-Hart, the concept of bringing low wealth districts up to the statewide average was created. • The bill also provided for inflation adjustments at the statewide average, rather than at a district’s own revenue limit.

20. The “Settle-Up” Years: • In the 1995-96 and 1996-97 Budget cycles, the legislature had “extra” money remaining in the Proposition 98 account • With the help of Senator Jim Brulte and Assemblywoman Kerry Mazzoni and the lobbying efforts of ALWS, between 1995 & 1997 low wealth schools received approximately • $600 MILLION

21. In spite of the settle up years, there were still a number of school districts that were able to spend substantially more than their neighboring school district by • …as much as $500 or even $1,000 MORE per pupil because of their historical wealth related advantage.

22. 90th PERCENTILE • In 1999, Assemblywoman Lynne Leach proposed a new approach suggested by the Legislative Analyst’s Office. • A new formula would be established so that revenue limits are increased until 90 percent of the state’s ADA received the same revenue limit.

23. “REBENCHING” • In 1997 the legislature and the Governor also created the “problem of unintended consequences” when it enacted SB 727 by Senator Rosenthal. SB 727 was intended to encourage school districts to do a better job of increasing attendance by no longer allowing excused absences.

24. To adjust, SB 727, provided for the increase of each district’s per pupil revenue limit (“rebenching”) to compensate for the district’s unique (1996-1997) percentage of excused absences. • Now, districts are credited with less ADA, but receive more for each remaining unit of ADA, thereby suffering no fiscal loss.

25. However, this new calculation left every district with a DIFFERENT per pupil revenue limit due to differences in excused absence rates. • Now differences in school district revenue limits are no longer entirely property tax wealth related. Instead, they are also due to the absence rate of a district, or how good the district was (or was not) at getting excused absences.

26. Legislative success in 2002-2003 • $203 million!

27. Governor Schwarzenegger also believes in bringing districts to the 90th percentile • ALWS lobbied the Governor’s Administration when he first arrived in office, and stressed the importance of increased funding for K-12 equalization. The Governor agreed, and with the assistance of Assemblywoman Lynn Daucher, a Republican, and Senator Joe Simitian, a Democrat: • $110 million was included by the Governor in the 2004-05 Budget for low wealth schools! This amount is built into the base and is ongoing.

28. THANKS GOVERNOR! • In 2006 the Governor included funding for equalization in the January version of his Budget, calling it a “priority” for his Administration. • We celebrated when the January Budget contained $200 million for K-12 equalization.

29. By the time Budget negotiations had concluded this year, and thanks to the Assembly and Senate Republicans who held out for higher funding levels for equalization, when the Governor finally signed the Budget bill, it contained: • $350 MILLION FOR K-12 EQUALIZATION!

30. $600 MILLION • $200 MILLION • $110 MILLION • $350 MILLION • $1.26 BILLION IN ALWS SUCCESS FOR LOW WEALTH SCHOOLS!

31. What does this money mean for your district? • It is built into the base and is ongoing. • It could mean the restoration of programs you previously had to cut. • It means the legislature continues to recognize the inequities that have existed for so many years and is seeking to correct them.

32. “GRADESPAN” FUNDING – WHAT IS IT? • Assemblyman Gene Mullin led the Assembly Education Working Group assigned to examine School Finance. Their goal was to be innovative and take more of a global look at how we fund our elementary, high school, and unified districts. • They also wanted to examine the history of equalization – and there’s the “de ja vu” again – as ALWS was called to testify before Assemblyman Mullin’s Task Force as expert witnesses on the subject matter.

33. Ultimately, compiling countless testimony from numerous school funding experts, the Working Group crafted what they termed “Gradespan” funding. The new concept was amended into AB 2531-Mullin. • AB 2531 called for revising the method for calculating school district revenue limits to reflect differences among “gradespan” costs.

34. The current revenue limit funding by the 6 size and type classifications would be changed to funding by weighted ADA within three “gradespan” ranges. • Small elementary, high school and unified types would be eliminated. • Kindergarten and Grades 1-5 would have a weight of 1.00. • Grades 6-8 – a weight of 1.04 • Grades 9-12 – a weight of 1.20

35. The primary rationale: The current system does not account for the changing costs in unified districts, resulting from changes in the distribution of students among grade levels. • Examples of “Gradespan” impacts: • Elementary – Small benefit if K-8 • High School – Status quo • Unified – Benefit if “bubble” in higher grades • No one loses.

36. Statewide Average Base Revenue Limit per ADA 2006-07 • Elementary $5,265 • Unified $5,498 • High School $6,332 • * includes average equalization aid

37. ADD-ONS FOLDED IN • The add-ons are: *Instructional time incentives *Beginning teacher salary incentives *Adjustments for unemployment insurance costs *Meals for Needy Pupils *PERS employer contribution offsets

38. AB 2531, while providing for equalization of the new revenue limits within grade span types, still aims for the 90th percentile equalization target, dependent on additional state funding. • AB 2531, according to one chief consultant, “Makes transparent the differential in funding for different grades in the current system and, most importantly, establishes a basis for equalizing base revenues per pupil that is truly comparable across all school districts.”

39. What happened to AB 2531? • Passed the Assembly 57-20 • Passed the Senate 21 – 14 • Vetoed by the Governor

40. THE ADMINISTRATION: EQUALIZATION V. GRADESPAN – AND OTHER ALTERNATIVE SCHOOL FUNDING OPTIONS ON THE HORIZON • Reasons for Governor’s Veto: • Current revenue limit formulas for different size and type districts are appropriate. • Significant changes to school funding model should not be made until the Governor’s Advisory Committee on Education Excellence finishes its work.

41. Next Steps • Uncertain if a version of AB 2531 will be reintroduced. • Education organization’s were silent on AB 2531, knowing veto likely. • Governor’s position not likely to change pending completion of Advisory Committee recommendations.

42. Equalization Still a Priority!!! • With or without “Gradespan” funding, equalization is still a priority with the Governor and many legislators. • Available state funding beyond Growth and COLA is always key to equalization funding.

43. Other School Funding Efforts Under Way • “California School Finance And Governance: Getting Down To Facts” • A research project requested by Governor Schwarzenegger, Senate President pro Tem Don Perata, Assembly Speaker Fabian Nunez, and Superintendent of Public Instruction, Jack O’Connell. • A project to review more than 20 studies being done under the Institute for Research and Education Policy and Practice – Stanford University. Funded by the Gates Foundation, the Hewlett Foundation, Irvine Foundation, and the Stuart Foundation.

44. THE PROJECT ADDRESSES THREE BROAD QUESTIONS: • 1) “What do California school finance and governance systems look like today?” • 2 ) “How can we use the resources that we have more effectively to improve student outcomes?” • 3) “To what extent are additional resources needed so that California’s students can meet the goals that we have for them?” Results will be made public early in 2007. Hope for bi-partisan consensus after research information is released.

45. WHAT CAN YOU DO TO GUARANTEE FAIR FUNDING? • Know the situation in your district. • Where does your district stand in relation to the statewide average. • How has your district benefited as a result of ALWS’ efforts. • Request a copy of your district’s computer run from ALWS.

46. OUTREACH TO YOUR LEGISLATOR IS CRITICAL • Is your legislator familiar with the issue of “equalization” or “Gradespan”? • There are 35 new legislators entering the Assembly or the Senate this year. Do you have a new legislator in your district? • Schedule a meeting with your legislator in the district or invite him or her to your school.

47. OUTREACH TO BOARD MEMBERS & PARENTS • Educating Board Members, Superintendents, Parents, and Teachers in the District is important. Prepare a packet of information. ALWS can assist you with some of this. • Information is also available on the ALWS website. • Timely grass roots campaigns when legislation is pending at the Capitol can really make the difference.

48. WHAT CAN THE SCHOOLBOARD DO? • Make sure that they have an ALWS liaison to remain informed. • Pass a resolution in support of full funding for K-12 equalization. • Support future funding efforts that “do no harm” to districts that typically benefit from equalization funding.

49. Equality In Funding: It’s Déjà vu All Over Again! Thank you for joining us!