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The following analysis sets forth the specific recommendations contained in the final reports of the Finance and Facilities Working Group, organized by the categories contained in the two reports. The staff comments and questions that follow each section are intended to illuminate those recommendations, the deliberations that led to those recommendations, and/or important information that should be considered in evaluating those recommendations.

Goals of the Working Group

The Finance and Facilities Working Group organized itself into two task groups to separately consider the financing and facility needs of California's K-12 public schools and its public colleges and universities. The K-12 Sub-Group paid particular attention to the unique financing obligations of the state that derive from the constitutional guarantee to free public schooling and compulsory attendance laws of the state, and the resources needed to ensure high quality teaching and learning conditions that serve to reduce achievement gaps and promote achievement of all children across the state. It was guided by the goals of achieving greater simplicity in the financing of public schools and achieving a rational financing system aligned with instructional, governance, and accountability structures for public schools. The Postsecondary Sub-Group paid particular attention to financing of California's colleges and universities that would enable them to accommodate anticipated enrollment demands over the next two decades while continuing efforts to enhance quality. The Sub-Group was guided by the goals of achieving access, affordability, choice, quality, efficiency, cooperation, accountability, and shared responsibility.

The K-12 Sub-Group proposes 23 major recommendations for California's K-12 educational system. The first concerns establishing a process for determining what funding is adequate to ensure high quality educational opportunities for all schools. Recommendations two through seven focus on the equitable distribution of resources. Recommendations eight through ten offer local revenue generation options for local school districts. Recommendations 11 through 13 focus on the allocation of sufficient resources to ensure effective delivery of services. And recommendations 14 through 23 focus on new approaches to meeting the facility needs of public schools.

The Postsecondary Sub-Group proposes five major recommendations for California's colleges and universities. The five recommendations address finance, accountability, technology, fees, and facility needs in California colleges and universities. Sub-recommendations have been included where it helps clarify the main recommendation or offers steps to achieve the recommendation.

Public K-12 Schools

Assuring Adequate Funding

Recommendation 1.1:

Develop a California Quality Education Model, and use that model to determine an adequate level of funding necessary to support a high quality education for every student. In furtherance of this recommendation, we urge the Legislature to establish a 13 member Quality Education Commission, representative of business, parent and education community leaders from throughout the state.

Staff Comments/Questions

Distributing Resources Equitably

Recommendation 2.1:

Authorize a limited set of differential cost adjustments, primarily geographic in nature, that are not under the control or influence of the school district, by establishing a District Characteristic adjustment. The additional revenue provided to school districts in recognition of these uncontrollable cost factors would result in similar levels of real resources available to all school districts in the state.

Recommendation 2.2:

Establish block grants for allocation to school districts on the basis of student characteristics that mark the need for additional educational resources. Further, we strongly suggest that the adjustments in this category be limited to additional funding for (1) special education, (2) services for English language learners, and (3) resources provided in recognition of the correlation of family income level with student achievement.

Recommendation 2.3:

Establish a category of K-12 grants that will be clearly identified as initiatives. These initiatives will be limited in duration and will serve one of two purposes:

Recommendation 2.4:

Adopt specific guidelines and criteria for the Legislature to use in evaluating proposed initiative programs.

Recommendation 2.5:

Provide funding for state agencies, or other appropriate entities, to develop material describing best practices for the administration and delivery of categorical programs. This includes the development of standardized cost models that local agencies can use to assess program implementation.

Recommendation 2.6:

Every new initiative program be required to have a comment period on all administrative and supervisory controls proposed by the administering agency. Alternatively, an advisory committee representative of those agencies that must administer the program may be used to develop administrative guidelines.

Staff Comments/Questions

Exploring Local Revenue Options

Recommendation 3.1:

Approve a ballot initiative to reduce the voter approval threshold for parcel taxes from two-thirds to 55 percent.

Recommendation 3.2:

Authorize school districts in counties where a majority of school districts wish to join together, to propose to the electorate a sales tax increase, within the local option SUT levy limitation, to take effect with the approval of 55 percent of the voters in a countywide election. Revenue would be divided among the schools on a population (per pupil) basis, or as delineated in the tax measure. Establish a mechanism to equalize tax yield to assure each county can raise the statewide average per-pupil amount corresponding to the imposition of similar tax rates.

Recommendation 3.3:

Approve a ballot initiative to amend the Constitutional provisions governing the property tax to authorize school districts and other local public educational agencies to propose for approval by the electorate, with 55 percent of the voters concurring, a property tax override for the exclusive use of the public schools in the community. Assure a minimum, state-guaranteed yield per pupil through state financial assistance to communities where a self-imposed tax rate does not yield the minimum state-determined per-pupil amount for that rate.

Staff Comments/Questions


Allocating Revenues to Support the Effective Delivery of Services

Recommendation 4.1:

Continue to emphasize the development of performance standards, and that those standards be based both on key inputs to the educational system, as well as outcome measures, and that the input standards are aligned with the California Quality Education Model.

Recommendation 4.2:

Establish a consistent and straightforward way for local schools to describe their expenditure and programmatic decisions, to compare them with the state's guidelines, minimum standards, and outcome goals, and to clarify the trade-offs implicit in budget decisions.

Recommendation 4.3:

To support local accountability, confirm a procedure for complaint appeal and resolution, where citizen groups may establish their case for a school failing to meet state standards, with the county office authorized to investigate the complaint. This provides a mechanism for public scrutiny and pressure to correct actions of schools and districts in the event they are unable to resolve problems on their own.

Staff Comments/Questions

Developing and Maintaining Adequate and Appropriate Educational Facilities

Recommendation 5.1:

Replace the current school facilities financing system with stable and reliable annual state per-pupil allocations that are restricted to assisting school districts in meeting their capital and major maintenance needs.

Recommendation 5.2:

Adopt a ten-year transition plan during which the reliance on state General Obligation bond proceeds allocated on a project basis to fund facilities will be phased out and funding through annual per-pupil allocations from the state General Fund will be phased in.

Recommendation 5.3:

Consider authorizing a limited number of adjustments to supplement the state base facilities per-pupil allocation. As with our recommendations for adjustments to school operating fund allocations (see the Part 2: Categorical Program Adjustments), we believe special circumstances related to geographic, land use and unique school district factors may warrant consideration for additional funding beyond the annual per-pupil grant.

Recommendation 5.4:

Establish clear, concise and workable state facility standards that are characteristic of facilities providing a high quality/high performance teaching and learning environment.

Recommendation 5.5:

Require each school district to prepare and, with appropriate public review, adopt a five-year Facilities Master Plan to meet or exceed state facilities standards.

Recommendation 5.6:

Adopt necessary policy and statutory changes so that the annual budget for each school district will include a capital spending component that is reviewed and assessed as part of the AB 1200 financial and management accountability process. Technical assistance, which may be warranted based on such a review, shall be made available to school districts through regional and state agencies.

Recommendation 5.7:

Create a statewide school facilities inventory system that will assist decision makers to determine state and local short and long term school facilities needs; collect only the most critical, basic information needed to make necessary management decisions; utilize information contained in existing data collection reports before requiring school districts to report additional information needed for the school facilities inventory system.

Recommendation 5.8:

Give local districts autonomy to expend state and local funds as appropriate insofar as such expenditures of funds enable the district to meet or exceed statewide standards for adequate facilities. Local districts would conduct required self-assessments against their Facilities Master Plans, and be required to publicly share the results of those assessments with members of their communities - students, parents, and community leaders - annually.

Recommendation 5.9:

Provide financial incentives to school districts to promote joint or shared use of facilities. We also recommend that the state develop a technology infrastructure among, between and within educational entities that would promote improved education delivery and access to a wider range of education resources.

Recommendation 5.10:

Ensure timely adoption and implementation of OEHHA's guidance document by DTSC and other state and local agencies for assessing exposures and health risks at existing and proposed school sites.

Staff Comments/Questions



Postsecondary Education

Recommendation 1:

Adopt policies to provide more stability for finance and dampen the "Boom and Bust" swings of state appropriations for higher education, by (1) committing to annually fund "core" needs and enrollment growth, (2) adopting a consistent and rational student fee policy, and (3) restoring community colleges historic share of the Proposition 98 guarantee.

Staff Comments/Questions

Recommendation 2:

Improve the state's accountability framework by modifying and expanding the "partnership" budget approach, currently applied to UC and CSU, to (1) include all higher education, (2) clarify the link between performance and funding, and (3) adopt realistic alternatives for times of revenue downturns.

Staff Comments/Questions


Recommendation 3:

Change the way state government funds electronic technology to provide more access and choice for students.

Staff Comments/Questions

Recommendation 4:

Reform the state's approach to student charges in the public segments and maintain the Cal Grant need-based financial aid entitlement. (Sub-recommendations include: allow statewide student charges to rise in a gradual, moderate, and predictable fashion for CSU and UC; allow CSU and UC to charge differential fees; allow the Board of Governors to set statewide fees and district boards of trustees to supplement fees locally; and leave student fee revenue with the institutions)

Staff Comments/Questions

Recommendation 5:

Review the state's methodology for determining and funding facilities in California higher education, and, as appropriate for each segment, make changes to emphasize, comprehensive space planning, multiple use facilities, sharing of space among institutions, and incentives to maximize other sources of capital outlay. (Sub-recommendations include: full state support for summer sessions at CSU and UC; increased use of off-campus centers; creation of a sinking fund managed by each system to promote capital renewal and extend useful life of buildings; and having segments collaborate to determine split from General Obligation capital outlay bonds.)

Staff Comments/Questions

General Staff Comment