Report of the Working Group on
Finance and Facilities - K-12 Education
TABLE OF CONTENTS
A World Class Finance System for a World Class Education
Part 1. Adequacy in School Finance
Distributing Resources Equitably
Part 2. Categorical Program Adjustments
Linking the Community and the School: Raising
Part 3. Exploring Local Revenue Options
Program Effectiveness and Accountability
Part 4. Allocating Revenues to
Support the Effective Delivery of Services
A Place to Learn and to Work
Part 5. Developing and Maintaining
Adequate and Appropriate Educational Facilities
Appendix A: Price Differences
Appendix B: The Personal
Appendix C: Responsibility
of State Agencies in Education Facility Delivery
Appendix D: Funding
Contribution Models Considered by the Facilities Work Team
The Joint Committee to Develop a Master Plan for Education set before the
Finance and Facilities Working Group specific goals and objectives to address in
its report to the committee. These are shown in the description of our charge
from the committee, following this summary. In brief, we were asked to make
recommendations to simplify the system of school finance, to foster and support
local flexibility in the use of resources, and to support adequate funding for
the educational program and facilities.
We make recommendations in each
of five major policy areas: (1) what funds are needed for a high quality
education; (2) other funding provided in recognition of special district and
student circumstances; (3) meaningful options for local communities to get money
to their schools; (4) balancing flexibility in spending funds with strong
accountability for how funds are spent; and (5) resources to assure that
education facilities meet high standards.
Our recommendations are
grouped according to these five major policy areas. They do not, however, each
stand alone, and it is vitally important to understand that we are recommending
a fundamental shift in the way we finance schools in California. Central to this
change is our recommendation that California develop and implement a Quality
Education Model. Such a model will do two things of importance: It will act as a
benchmark for knowing how much we should expect to spend if we are serious about
achieving the world class educational standards to which we aspire. In many
ways, this will be the first time we will draw a direct, explicit link between
our expectations and the resources needed to achieve them. Second, although not
prescriptive in its application, a Quality Education Model will nonetheless
serve as an example of research-based best practices in education, updated over
time to reflect what we learn.
A Quality Education Model that leads to
adequate funding for a high quality education also can promote local flexibility
and autonomy for schools to respond to the unique needs of their local
community. It establishes a basis for a rational accountability system because
the model is built on the performance standards California has set for its
schools. Local revenue options balance the statewide emphasis on meeting uniform
standards by providing communities with the ability to supplement and enrich a
quality education in response to their own priorities. Finally, school
facilities are integrated into the characteristics of a quality education
because the link between facilities, teaching and student achievement can be
made explicit in the model.
The following section summarizes the
recommendations contained in our report.
Assuring Adequate Funding
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.
2. Distributing Resources Equitably
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.
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.
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
- Pilot and evaluate proposed new programs before they are implemented
statewide. Once implemented statewide, the funding for such a program would be
consolidated into the base funding for schools, or one of the two major
categories of adjustments – student characteristic and district
- Meet immediate, but temporary, needs for additional funding targeted to
specific districts to mitigate the effects of transitory, but possibly
unforeseen, shocks to the instructional program.
Adopt specific guidelines and criteria for the Legislature to use in
evaluating proposed initiative programs.
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.
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.
3. Exploring Local Revenue
Approve a ballot initiative to reduce the voter
approval threshold for parcel taxes from two-thirds to 55 percent.
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.
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
4. Allocating Revenues to Support the Effective
Delivery of Services
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.
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.
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.
5. Developing and Maintaining Adequate and
Appropriate Educational Facilities
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.
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.
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.
Establish clear, concise and workable state facility standards that are
characteristic of facilities providing a high quality/high performance teaching
and learning environment.
Require each school district to prepare and, with appropriate public review,
adopt a five-year Facilities Master Plan to meet or exceed state facilities
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
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.
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 –
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
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.
FINANCE AND FACILITIES WORKING
The Joint Committee to Develop a Master Plan for Education established goals
and objectives for the Finance and Facilities Working Group in its August 2000
publication, Framework to Develop a Master Plan for Education. The
overarching theme governing the work of the Finance & Facilities Working
Group is to simplify the system of school finance. Two key features characterize
simplification: First, the school finance system must be understandable by
educators, policymakers, families and the general public. Second, the system
must be rational, meaning it is aligned with the instructional, governance, and
accountability structures of the public school system. Put simply, the system
must make sense.
The goals for our working group fall into five major policy areas:
Assure Adequate Funding
Determine an adequate level of resources necessary to provide each student
with a high quality education. Characteristics of a system that provides
adequate funding include:
- All educational agencies receive funds necessary to provide students with
similar needs the services essential to meet those needs.
- Differing levels of resources are provided when needed to attain an
equitable education for students with differing circumstances.
Distribute Resources Equitably
Assure that resources are equitably distributed among educational agencies,
so that students with similar needs are provided comparable levels of resources
to meet those needs.
- Funds set aside for K-12 education are distributed equitably among local
- School districts distribute resources among schools in ways that assure
individual student needs are equitably met.
Explore Local Revenue Options
- Local revenues are raised to meet local priorities.
- Local revenues are generated in ways that preclude the development of
wealth-based inequities in educational offerings.
Allocate Revenues to Support the Effective Delivery of Services
Establish appropriate methods of allocating funds to support the effective
delivery of educational services. The Master Plan framework includes the
following objectives in support of this goal:
- Provide incentives for the efficient and effective use of resources.
- Reduce state restrictions so as to support local flexibility.
- Foster a culture of assuring sufficient resources are provided to meet new
expectations established by the state.
- Provide state support for school districts to operate with sound financial
and management practices, and impose interventions when sound practices are not
maintained. Accountability measures should apply to all participants in the
process of budget development and management.
Develop and Maintain Adequate and Appropriate Educational
The Master Plan framework sets the following objectives in the area of school
- Establish high statewide standards for facilities to ensure that they are
safe, clean, modern and conducive to learning.
- Share fiscal responsibility for new facilities and modernization among the
state, local districts, and communities.
- Promote shared / joint use of facilities by schools, colleges and
- Contain costs through measures that promote efficiency.
- Develop a plan to reduce and eliminate the maintenance backlog.
- Recognize ongoing maintenance as a local responsibility.
- Develop a system of accountability so the state can assure that standards
are met. The system should include support, inspection and intervention when
- Develop a statewide technology infrastructure to link educational