PACE Facts Brochure Final[1]

8/2/2019 PACE Facts Brochure Final[1]

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GETTING

DOWN TO

FACTS:FIVE YEARS LATER

MAY 2012


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GETTING

DOWN TO

FACTS:FIVE YEARS LATER

MAY 2012


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Acknowledgments

Founded in 1983, PACE:

n Publishes policy bries, research reports, and working papers that address key policy issues in

Caliornias education system.

n Convenes seminars and briengs that make current research accessible to policy audiences throughout

Caliornia.

n Provides expert testimony on educational issues to legislative committees and other policy audiences.

n Works with local school districts and proessional associations on projects aimed at supporting policy

innovation, data use, and rigorous evaluation.

his report commemorates the h anniversary o the Getting Down to Facts project, whichsought to provide a thorough and reliable analysis o the critical challenges acing Caliornias

education system as the necessary basis or an inormed discussion o policy changes aimed at

improving the perormance o Caliornia schools and students. Te report ocuses on the our

key issues that received emphasis in the Getting Down to Facts studies: governance, nance,

personnel, and data systems. Te authors review what has changed and what has not in the ve years since

the original studies were completed, and rearm the importance o a long-term agenda or reorm in

Caliornias education system that is guided by solid evidence and rigorous analysis.

Te report was produced with support rom PACEs core unders, including the Caliornia Education

Policy Fund (a project o Rockeeller Philanthropy Advisors), the Dirk and Charlene Kabcenell Foundation,

the James Irvine Foundation, and the Stuart Foundation, and we would like to express our gratitude to them.

We would also like to thank Chris Reimann, who provided excellent editorial support; and Melinda Nichols,PACEs Administrator, who cheerully and eciently managed the publication and production process rom

beginning to end.

Te views expressed in the report are those o the authors, and not necessarily those o PACE or our

unders.

Policy Analysis or Caliornia Education (PACE) is an independent, non-partisan research center based

at Stanord University, the University o Caliornia Berkeley, and the University o Southern Caliornia.

PACE seeks to dene and sustain a long-term strategy or comprehensive policy reorm and continuous

improvement in perormance at all levels o Caliornias education system, rom early childhood to

postsecondary education and training. o accomplish this goal, PACE bridges the gap between research and

policy, working with scholars rom Caliornias leading universities and with state and local policy-makers to

increase the impact o academic research on educational policy in Caliornia.


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Table of Contents

I. Getting Down to Facts - Five Years Later 2

II. Recent Developments in CaliorniasEducational Governance: 2007-2011 6

III. Financing Caliornias Public Schools:oward a Weighted Student Formula 16

IV. eachers and Leaders or Caliornia Schools 25

V. Data, Policy Learning, and Continuous Improvement 32


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I. Getting Down to Facts

Five Years Later

Over an 18-month period rom

September 2005 to March 2007,

the Getting Down to Facts Project

brought together scholars rom 32institutions with diverse expertise

and policy orientations. Our goal was to synthesize

what we knew about eective school nance and

governance in general, and about Caliornias school

nance and governance systems in particular. We

hoped that this inormation would serve as a base

or productive public conversations about what we

should do to improve K-12 education in Caliornia.

Te project was commissioned at the request o a

bipartisan group o Caliornia leaders, including

the governors Advisory Committee on Educational

Excellence, the President Pro em o the Caliornia

Senate, the Speaker o the Caliornia Assembly,

the Superintendent o Public Instruction, and the

Governors Secretary o Education. We produced

23 reports on topics ranging rom the costs o

achieving student outcome goals to governance

complexity to data availability and use.

Overall, the reports documented that good

things were happening in some districts, schools,

and classrooms, but that the aws in Californias

school nance and governance systems were

likely hindering the quality of education availableto many students in the State. Most importantly,

education governance in California was unusually

complex and restrictive which kept schools and

districts from responding effectively to state

standards and accountability. Similarly, the nance

system was overly complex, restrictive, and

irrational. Differences in spending across districts

had little to do with differences in costs, needs or

interests, but were instead historical artifacts with

no current rationale. California stood out from

other states in a number of areas including the low

number of educators (fewer teachers per student,

administrators per student, and professionalsupport staff per student) and the poor quality of

information available on student learning and the

effectiveness of programs in the state. While the

project did not draw direct links between these

policies and student achievement, the policies were

likely at least part of the reason that Californias

students did (and continue to do) so poorly on

national achievement tests relative to students in

other states.

We hoped that the Getting Down to Facts

reports would help with the development of

policies to streamline governance and to simplify

and rationalize school nance, in addition to

improving information and ensuring that schools

had sufcient and excellent staff. Our initial

optimism was clearly unwarranted. As discussed

in greater detail in the chapters that follow, the

past ve years have seen only small improvements

on the problems identied in Getting Down to

Facts, though the issues raised in the reports

have penetrated policy discussions and there are

indications that greater improvements may come.

Economic challenges, not structural reforms ofnance and governance, have dominated education

policy in California during the past ve years. The

economic crisis has altered the context of schooling

in California. Nonetheless, many of the conclusions

from the earlier reports continue to have relevance

today. This report seeks to provide an update on

the nance and governance of California schools,

noting progress towards reaching the goals set out

in the original reports and highlighting areas for

2

Susanna Loeb,

Stanford University


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Data

In order to improve schools, district leaders

and other policy-makers need to learn from their

experiences and the experiences of other educators.The original Getting Down to Facts reports

found that California lagged other states in the

development of a longitudinal student and teacher

data system, and that the State had not developed

sufcient analytical capacity to make good use

of educational data, both of which hindered

cycles of improvement. Instead, California had

many unconnected data collections within the

Department of Education, while other important

data, particularly concerning teachers, were

collected by agencies other than the Department.

The lack of a comprehensive educational data

system made it difcult to link key data elements,

preventing systematic analysis of what was

working and wasnt working in classrooms,

schools, and school districts.

David Planks chapter, Data, Policy Learning,

and Continuous Improvement, provides a new

assessment of information use for California

schools. He nds some progress on this front,

most notably that Californias longitudinal student

data system (CALPADS) has been running for

two years, and will soon be fully operational.

CALPADS allows for detailed analyses of student

learning as well as simple descriptions that werent

available before such asaccurate measures of

drop-out and graduation rates. These data are a

step forward but they could be even more useful

if linked to information on teachers, the most

important resource in schools. Governor Brown

vetoed state funding for the state-wide database on

teachers, and chose not to apply for federal funding

to link K-12, higher education and workforce data,

thus limiting the development of a useful data

system for California schools.

Five Years Later

The economic downturn and the consequent

reductions in funding have dominated school

policy during the ve years since the release of the

Getting Down to Facts reports. In spite of these

challenges, however, at least in our optimistic

eyes, there are signs of progress towards the goals

laid out in the initial reports. In particular, the

weighted student formula for funding schools

currently under discussion would increase the

simplicity, transparency, exibility, equity, and

ultimately the level of educational funding. Thenew CALPADS system provides information

on student learning and educational attainment,

previously unavailable, which allows policy-

makers, educators and the public to see what

students are learning and, potentially, which

programs are working. On the other hand, many

of the issues identied in Getting Down to Facts

that were hindering education then, still apply

today. The system is heavy on compliance and

complexity and light on information and related

opportunities for improvement. A number of

districts are breaking this mold, creating their ownsystems for improving education quality; State

policies, however, often hinder rather than help

their progress. It is our hope as part of the original

Getting Down to Facts project and this update

that the next ve years will see fruitful changes

to state policy so that California can provide the

educational opportunities that its students deserve.


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Governance reers to the institutions,

organizations and individuals

involved in the educational

decision making and deliverysystems. Five years ago the Getting

Down to Facts (GDF) research project examined

Caliornias governance system in an attempt to

help rame the education policy conversation.

Te key ndings addressed the manner in which

Caliornias governance system works and how the

system is perceived by key stakeholders.

GDF highlighted the complexities o

Caliornias multidimensional educational

governance structure. Te system is characterized

by many organizational entities -- schools, districts,

and county, state and ederal agencies -- that have

overlapping responsibilities across executive,

legislative, and judicial jurisdictions (Brewer and

Smith, 2006). (See Figure 1.) Te GDF analysis

concluded that Caliornias governance system

oers multiple opportunities to impede change,

but ew opportunities to lead and implement

change (Brewer, Pelayo and Ahn, 2008). Tough

more money is needed to improve education in

Caliornia, increased unding without a sustained

eort to improve governance is unlikely to lead to

substantial improvement in student learning.

II. Recent Developments in Californias

Educational Governance: 2007-2011

Richard O. Welsh

University of Southern California

6

Dominic J. Brewer

University of Southern California

FIGURE 1. Major Institutions in Caliornias Educational Governance

Legislature

County Boardof Education

CountySuperintendent

County Oceof Education

State Boardof Education

Superintendent ofPublic Instruction

California Departmentof Education

Local District Boardof Education

Local DistrictSuperintendent

DistrictCentral Oce

Schools

School Site Councils

Teachers

Students and Parents

Governor

Secretaryof Education

Oce ofSecretary

Other State Agencies

Unions and OtherInterest Groups

Other County andCity Agencies


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Brewer and Smith (2008) developed an analytic

ramework o governance eectiveness with ve

specic indicators:

n Stability; n Accountability;

n Innovation, Flexibility and Responsiveness;

n Openness and ransparency;

n Simplicity and Eciency.

Tese indicators are dened in able 1. Based

on a comprehensive review o the research literature

and historical documents, as well as on interviews

with leading academics and key stakeholders,

Brewer and Smith ound the system in Caliornia

lacking on each o the ve indicators o eective

governance. For example, interviewees noted that

revenue fuctuations and sta turnover at all levels

are common. Increased use o categorical unding

over recent decades coupled with requent and

prescriptive policy changes has led to rustration atthe local level. Many o those interviewed elt that

compliance took precedence over creativity, state

regulations were overly burdensome, and special

interests were overly infuential. Te structure was

highly ragmented; stakeholders agreed that there

was a need to clariy the role o institutions in the

system, especially at the state level. Tere was also

a strong desire to give districts greater autonomy

over decisions. GDF recommended relaxing

state regulation, allowing more local control and

increasing capacity to evaluate policies.

TABLE 1. Five Characteristics o Good Governance

Characteristic Denition and Rationale

Stable A stable governance structure is one in which policy is planned, made and implemented

as ar in advance as possible. Revenue is known in advance or planning. Policies are given

an opportunity to work, with ew major changes o direction or new initiatives introducedsuddenly. Leaders have tenures that allow or knowledge development and on-the-job

learning.

Accountable A governance structure with strong accountability has clear lines o authority between the

various parts o the system, with limited duplication o unctions. There are consequencesor good or bad behavior and outcomes. Accountability gives the right incentives or actors

within the system to accomplish their goals. There is alignment between revenue andspending.

An innovative, exible, and responsive governance structure can adapt to changing context

and is able to respond appropriately to new short- and long-term external demands. New

approaches are encouraged; many ideas are generated and spread throughout the system.

In a transparent and open governance system, it is clear to the public and all stakeholdershow decisions are made and who makes them; participation is encouraged at every level.

Transparency allows or the exchange o inormation between the dierent levels o the

system. An open and transparent system is less likely to be captured by special interests orhave corruption and bribery, and most likely to encourage public engagement and support

o schools. There is an open ow o inormation, including monitoring and evaluation odata and mechanisms to communicate perormance to citizens.

In a simple and ecient governance structure, decisions are made in a timely manner

with minimal overlap or conusion among entities. Decision making is located where

knowledge is greatest. Policy is coherent and decisions across multiple domains and levelsare coordinated so that there is minimal duplication and waste. The decision making and

implementation structure is not burdensome to stakeholders in the system. Costs are

minimized.

Innovative,

Flexible and

Responsive

Transparent

and Open

Simple and

Efcient

Source: Updated rom Brewer and Smith (2008)


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Recent Developments in Californias

Educational Governance: 2007-2011

Data rom a new round o interviews

conducted in November 2011 with state-level policyleaders in education are summarized in able 2.

Most interviewees continue to rate the state as weak

8

on every indicator. Tese ndings bring to light

our overarching trends over the past ve years:

scal instability; some simplication in educational

governance in Sacramento; a changing ederal role;and the local dynamic, including parental activism.

TABLE 2. Governance Findings or Caliornia in 2011 Compared to GDTF Findings rom 2008

Characteristic Findings rom Interviews Then (2008) and Now (2011)

Stable PolicyThen:

Policyuctuatesfrequently. Frequentadjustmentsintheareasofstudentassessmentandcurriculumleadto

premature changes in requirements and implementation.

Now: Policyuctuationsarelessfrequent. ADemocraticlegislatureandDemocraticGovernorprovideafoundationfor

consensus, but their agendas remain somewhat unclear.

FundingThen:

Fundsuctuateaccordingtoeconomictrends. Lowerlevelsofoverallfunding,increasedrelianceoncategoricalfunding, latenessof

budget, and inability to raise unding locally lead to unpredictable fnancial planning.

Now Levelsofoverallfundingarelower,budgetsarelate(exceptin2010-11),andrevenue

projections uctuate widely.

State-level decision makingThen:

Reductionofstainstate-levelagenciesandshortertermlimitsreducelong-termknowledge and expertise.

Multipleagenciesservingdierentbosseshindercoherentdecisionmaking. Lackofstudentdatasystemhinderseectivedecisionmaking.

Now: TheOceofSecretaryofEducationunderGovernorBrownhasbeeneliminated. Studentdatasystem(CALPADS)launchedbutfundingforCALTIDESwascut.

LeadershipThen:

Turnoverofstateocials,schoolboards,andsuperintendentsishigh. Highturnoverleadstolackofcontinuityandstabilityofprograms.

Now: Seven new SBE members were appointed in 2011.

Accountable Lines o authorityThen:

Fewintervieweesknewwhowas inchargeofdierentaspectsofthesystemandwhowas responsible or what tasks.

Now: Nochange.


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Clarity o responsibilities

Then: Numerouslocal,regional,andstate-levelentitieshaveoverlappingresponsibilities. Theresponsibilitiesofeachstakeholderinthesystemareunclear.

Now: Nochange.

Then:Innovation

Charterschoolsareoneexampleofarelativelysuccessfulattemptatlocalautonomyandinnovation.

Flexibility Stakeholderssensethatthesystemishighlybureaucraticandmoreconcernedabout

compliance with regulations than about innovation. Localentitiesdonothaveautonomytomakedecisionsorattemptinnovativestrategies. Responsiveness

Statedecision-makershavepreferredone-size-ts-allsolutions,suchasclasssizereduction.Now:

Localauthoritieshavemoreexibilityoverresourcesduetoreductionincategoricalunding streams.

BolderreformsareunderwayinmajordistrictslikeLAUSD.

TransparencyThen:

Littleconcernabouttransparencywasfoundamonginterviewees;nowidespreadevidence o unethical actions or corruption was evident.

NoevidencewasoeredthatCaliforniaisanyworsethanotherstatesinpublicparticipation and voter turnout.

Now: Nochange.

Special interestsThen:

Intervieweesshowedgreatconcernovertheroleofspecialinterestsinstate-leveldecisions.

Particularconcernwasdirectedtowardemployeeunionsandtheirinuenceonsystemdecisions.

Now: Nochange.

SimplicityThen:

Instability,confusinglinesofauthorityandunclearresponsibilitiesleadtoanoverlycomplex system.

Now: Nochange.

EfciencyThen:

Rigid,prescriptivestatelegislationleadstowastedeorttocomplywithamultitudeofmandates.

Intervieweesexpressedaneedformorelocalauthorityandexibilityinresourceallocation.

Now: Changesincategoricalfundinghaveledtomorelocalauthorityandexibilityinresource

allocation.

Innovative,Flexible andResponsive

TABLE 2. Governance Findings or Caliornia in 2011 Compared to GDTF Findings rom 2008 (Continued)

Transparentand Open

Simple andEfcient

Sources: Brewer and Smith (2008); Authors


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state, wondering whether unding reductions will

continue. Tough districts have increased fexibility,

there are still variations and disparities in unding

across school districts that raise equity concerns.Additionally, policy-makers and district ocials

have expressed concern about unds being used

to increase teacher salaries and benets. Tere are

unintended consequences o the fexible use o

categorical spending, such as reductions in adult

education unding. Te fexibility in categorical

dollars may have drastic eects on dropout

recovery programs and other eorts to increase the

capacity o the labor market. Overall, fexibility has

challenged districts to seek eciency and reassess

spending priorities while remaining committed to

programs (Fuller et al., 2011).One o the rst steps Governor Brown

took upon entering oce was to choose not

to appoint a Secretary o Education. Whether

this change is permanent is unknowable, but it

refects a simplication o the state level landscape

although some interviewees also noted the

unintended consequence o the Governor not

necessarily having enough sta capacity. Governor

Brown also signaled his intent to make the State

Board o Education (SBE) a stronger policymaking

entity. He appointed as president o the SBE his

major education policy advisor, Michael Kirst,

who served on the state board during Browns

earlier time as governor (1975-1983). Due to the

legislatures ailure to conrm some o Governor

Schwarzeneggers SBE appointees, Governor

Brown took advantage o an unusual opportunity

to appoint seven members in January 2011. In

one o his rst ocial acts, the governor replaced

several vocal proponents o charter schools, parent

empowerment and teacher accountability (Mehta,

2011). His new appointees have transormed

the state board to one more closely aligned withtraditional educational interests. As o early 2012,

there are still three state board openings that

Governor Brown has yet to ll on the 11-member

board, and the term o the current student board

member is set to expire in July 2012. Te two-

thirds vote in the Senate required to approve a

SBE nominee, coupled with the upcoming ballot

initiative, may partly explain the Governors

cautious approach. Although the new appointments

may make it easier to build consensus, the board

still aces several challenges with an increasingly

overburdened sta.

An Expanded Federal Role

Te Honeymoon is over with

the Obama administration.

Interviewees agreed that there has been

an increase in ederal infuence in educational

governance over the past ve years, but they

disagreed on whether it will have lasting impact.

Te ederal role in education policy has been

increasing since the enactment o No Child Le

Behind (NCLB). Te American Recovery andReinvestment Act, which provided approximately

$1000 per pupil rom 2008-09 through 2010-11,

increased ederal support to Caliornia schools by

nearly 45 percent in 2009-10 compared to 2007-

08. Additionally, the aggressive reorm agenda

pursued by the Obama administration through the

competitive Race to the op (R) initiative has

had a signicant impact on ederal-state relations

(see, or example, Hess and Kelly, 2012). R is

a ederal system o incentives used by the Obama

Administration to induce states to make particular

educational reorms. Caliornias R application

resulted in a furry o legislative activity as the state

sought to improve its prospects o winning R

unds. In January 2010, Governor Schwarzenegger

signed an R legislative package that included

standards and assessments that embrace the

national common core standards; the use o data in

instruction and teacher evaluation; and the parent

trigger, a school-turnaround law that allows

parents to petition or the conversion o ailing

schools into charter schools (Oce o Assembly

Speaker Karen Bass, 2010).Although Caliornia lost its bid or R

unding, the legislative package committed the state

to linking teacher evaluation to student test scores;

student achievement would now account or at

least 30 percent o a teachers evaluation. However,

Caliornias R application was not signed by

any o the big districts, such as Los Angeles Unied

or Long Beach Unied, or by the major state

unions (Blume, 2010). Tough R did result


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in new laws regarding education reorm, there is

little money to implement many o the proposed

changes, and it is not clear whether there is much

appetite to do so.In early 2012, Caliornia was mulling whether

to apply or an NCLB waiver or greater fexibility

and dierent conditions than those stipulated

by the Obama administration (Cavanagh, 2012).

One o the major points o contention in NCLB

is a ederal provision requiring states to include

standardized test scores in the perormance

evaluations o teachers, a policy option repeatedly

opposed by teachers unions in Caliornia. Te

state also wants the ederal government to relax

several o NCLBs biggest sanctions, as well as

the waiver eligibility requirement o establishinga new accountability system. Te active ederal-

state dynamic is a signicant new development in

educational governance and is likely to persist or

some time. Indeed, ederal initiatives combined

with parent activism may be the external catalysts

that initiate educational reorms at the local level.

The Local Dynamic, Parental Activism and the

Role of Special Interests

One interesting, i subtle, change in

perceptions o governance over the 2007-

2011 period has been the growing visibility o

local activism around some important policy

developments. Several o our interviewees noted

this phenomenon, which was absent rom the data

collected during the original GDF interviews.

Interviewees generally believed that local activism

was having an impact; some believed that it might

even be a game changer. In particular, upheavals

in the Los Angeles education landscape have

reverberated in Sacramento. In 2009, Los Angeles

Mayor Antonio Villaraigosa supported parents,

reorm groups and school board vice presidentYolie Flores in an attempt to open more o the

LAUSDs new and reopened schools to competition

rom charter groups. In response, United eachers

Los Angeles (ULA) mounted a campaign to put

many o those schools in the hands o teacher

groups backed by the union. Since then, several

changes have been made to the Public School

Choice initiative. It will be interesting to see how

the reorm eorts in Los Angeles unold, and how

they impact educational governance in Caliornia.

Additionally, in 2010 the Los Angeles imes

published perormance measures or existing

teachers based on value-added estimates thathighlighted perormance at the classroom level.

Tis public airing sparked union outrage and added

uel to the debate over teacher accountability.

Interviewees also mentioned the shiing nature

o special interest politics in the states educational

governance. Tere is at once more division within

the education coalition, more players and active

advocacy, and a greater eort to collaborate

and align interests. As one interviewee put it,

the CA (Caliornia eachers Association) is

the gorilla, but there are other special interests

that are coalescing around particular issues andshaping the ormulation and implementation o

education reorms. Some stakeholders believe that

special interests eel pretty urious, as i they are

ghting over a smaller pie. In the current unding

climate, everything seems like a zero-sum game as

the winners win what the losers lose and interest

groups battle over shrinking resources.

Parent Revolution, a reorm- minded

community organization launched in January 2009

to help implement the parent trigger policy in

Caliornia, played a prominent role in organizing

the parent petition to takeover McKinley

Elementary School in Compton. In December 2010,

the parent trigger was invoked or the rst time at

McKinley. Te parents were eventually deeated

on a petition technicality in a contentious battle

that saw the intended charter school opening a ew

blocks away but being lled with ew students rom

McKinley. In early 2012, Desert rails Elementary

School in Adelanto was the site o a second

attempt at a parent takeover. A group o parents

backed by Parent Revolution is hoping to enact

the parent trigger on low- perorming schools, butit aces opposition rom another group o parents

supported by state and local teachers unions.

Although the staying power and uture nature o

parent activism is unclear, the interactions between

local districts, parents and the legislature will play a

substantial role in the states educational reorms.

Prospects for the Future

Most stakeholders participating in this study


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believe relatively little has changed in Caliornias

educational governance; one described the past

ve years as being in a holding pattern; another

asserted that the budget situation hijacked any realconversation about policy reorm. Te extent and

uncertainty o revenue cuts presents numerous

challenges at all levels. In general the mood among

many in Sacramento has been that until there

is more money, no real reorm (e.g., more local

fexibility, changes to accountability systems) can

happen.

Amid the chaos that pervades Caliornias

school nance and governance systems, there is

some hope. Education remains a top priority on

the state policy agenda and local concerns have

a growing impact in Sacramento. Moreover, thebudget crisis has provided some opportunity or

progress notably changes in categorical unding

that have led to more local fexibility. Tere will

likely be one or more ballot propositions in

November 2012 to increase unding or public

schools by raising taxes. Te USC Dornsie/Los

Angeles imes poll suggests that the majority o

Caliornians are in avor o increased unding or

public schools even i it means a tax increase. Tere

is an ongoing attempt to cra a single measure, but

competing propositions are quite possible.

Competing initiatives would each raise extra

revenue but would likely dier on important issues

such as who bears the burden o the tax increase,

whether all o the money goes into the states

general und, the degree o structural changes

required as well as the level o unding or schools

and whether it is temporary or permanent. Te

governor has called or $6.9 billion in temporary

new taxes, but the Legislative Analysts Oce

(LAO) has questioned some o the assumption

in the governors proposal (Yamamura, 2012).

More important, $6 billion o the revenues in thegovernors initiative will go to balancing the budget,

with only about $1 billion devoted to increasing

unding or schools. Alternative proposals may

result in a more permanent and greater increase

in unding or schools. A measure proposed

by Molly Munger (Our Children, Our Future)

suggests a 12-year initiative splitting $10 billion in

the rst our years between state bond repayment

($3 billion) and K-12 schools ($7 billion); in the

nal eight years the proposal would add $10

billion a year toward K-12 and pre-kindergarten

programs. Overall, a crowded and dynamic ballot

initiative landscape is emerging; there may be moreconsolidation o coalitions as the election date

draws nearer.

Until recently the governor has given relatively

ew clear signals o an education policy agenda.

Tis has begun to change. In his 2012 State o the

State speech, Governor Brown declared, we should

set broad goals and have a good accountability

system, leaving the real work to those closest to

the students, and I embrace both reorm and

traditionnot complacency. Te governor proposes

to replace categorical programs with a new

weighted student ormula with additional undingor disadvantaged students and struggling English

learners that simplies unding streams and reduces

bureaucracy. (See the chapter on school nance.)

Additionally, the governor stressed the importance

o timely data and called or a reduction in the

number o tests, with results returned more quickly

to teachers, principals and superintendents. He

also signaled his intention to work with the SBE

to develop a proposal or a qualitative system

o teacher assessments that includes school and

classroom visitations. Changes to accountability,

more local authority and increased transparency

are in line with the GDF recommendations, but it

is not clear what the path to implementation may

be. Finally, the governor has indicated a desire to

attack a looming public employee pension shortall.

Te Caliornia State eachers Retirement System

(CalSRS) and the CA want the legislature to

approve $4.1 billion a year that CalSRS needs to

level up its pension plan. Resolving this shortall

may oer an opportunity or other state level

reorms.

We reiterate the two policy changes that mayhelp acilitate improved educational governance in

Caliornia: the development o a comprehensive

statewide data system and changes to the system o

state nancing. Action on both recommendations

is necessary to build local capacity. CALPADS,

the student element o state data system, is

operational but restoring unding or CALIDES

will enhance Caliornias long term data capacity.

Some interviewees noted that schools need local


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Sources:LegislativeAnalystsOce,SacramentoBee,LATimes,EdSource.

Timeline o Major Events in Caliornia Governance and Finance, 2007-2011

K-12 PPF = $8,235

School Year 2007-08

2008

K-12 PPF = $8,415

School Year 2008-09

2009

K-12 PPF = $7,933

School Year 2009-10

2010

K-12 PPF = $7,830

School Year 2010-11

2011

K-12 PPF = $7,713

Budget Decit $21B Budget Decit $19BBudget Decit $16B Budget Decit $25B Budget Decit $9B

School Year 2011-12

2012

February 2009

Budget Act relaxedspending restrictions

on over 40 categoricalprograms through

2014-2015

Federal stimulusfunding oset budget

reductions by $6B($3.2B from SFSF, $2.8B

from ARRA)

July 2009

Payments towardsQEIA adjusted to

save $450M

January 2010

Special RTTT inspiredlegislative packageincluding parenttrigger provisionembracing commoncore standards andusing student testscores and teacherevaluation is passed

August 2010

California lostbid for RTTT

December 2010

First use of parenttrigger at McKinleyElementary Schoolin Compton

June 2011

AB 114passed that

limits districtsoption to

respond tobudget cuts

October 2011

State $654M shortin revenue

Governor Brownvetoed SteinbergsAccountability Billwith neweducation index

January 2012

Governor BrownState of the Statespeech called forlocal authority andincreasedtransparency inpublic education

October 2009

GovernorSchwarzenegger

calls special sessionof legislature to

address obstaclesto competitive

RTTT application

November 2010

Jerry Brownelected CA

Governor

Voters passedballot measure that

now allows

budgets to bepassed with the

simple majority asopposed to

two-thirds

June 2011

Budget triggerprovision enactedwith automaticspending cuts tiedto revenueprojections

December 2011

Triggers pulled atlower than expectedamount $1B inadditional cuts

sources o revenue and believed that long term

solutions or state nancing lie in removing local

revenue generation constraints. Tese changes

can help solidiy the oundation or continuousimprovement in the perormance o Caliornias

public schools and ensure that all Caliornia

students have the opportunity to succeed.


18/42

15

References

n Blume, H. (2010, August 24). Caliornia loses

bid or ederal Race to the op education grant.Los Angeles imes. Retrieved on December 15,

2011 rom http://www.latimes.com/

n Brewer, D.J., & Smith, J. (2006). Evaluating

the Crazy Quilt: Educational Governance

in Caliornia. Los Angeles, CA: University o

Southern Caliornia.

n Brewer, D.J., & Smith, J. (2008). A ramework

or understanding educational governance.

Education Finance and Policy, 3(1), 20-40.

n Brewer, D.J., Pelayo, I., & Ahn, J. (2008).

Revisiting the Crazy Quilt: Recent

Developments in Caliornias EducationalGovernance. PACE.

n Cavanagh, S. (2012, February 29). Caliornia

asks or NCLB waiver, but without strings.

Education Week. Retrieved rom http://blogs.

edweek.org

n EdSource. (2011, May). Caliornias Fiscal

Crisis: What does it mean or schools?

Retrieved rom http://edsource.org

n Fensterwald, J. (2012, March 1). Cutting

it close to a quorum: Brown has three

State Board openings. Toughts on Public

Education. Retrieved on March 10, 2012 rom

http://toped.sveoundation.org

n Fuller, B., Marsh, J., Stecher, B., & imar,.

(2011). Deregulating School Aid in Caliornia:

How 10 Districts Responded to Fiscal

Flexibility, 2009-10. RAND and PACE

Research Network.

n Governor Brown State o the State speech 2012:

Caliornia on the Mend.

n Hess, F., & Kelly, A. (2012). Carrots, Sticks and

the Bully Pulpit. Harvard Education Press.

n

Institute or Research on Education Policy andPractice. (2007). Getting Down to Facts: A

research project examining Caliornias school

governance and nance systems. Retrieved on

June 12, 2008 rom http://irepp.stanord.edu/

projects/canance-studies.htm

n Mehta, S. (2011, January 8). Many see infuence

o teachers union in Gov. Jerry Browns

shakeup o Caliornia board o education. Los

Angeles imes. Retrieved on January 15, 2012rom http://www.latimes.com/

n Oce o Assembly Speaker Karen Bass. (2010,

January 6). Assembly passes Race to the op

Legislation.

n University o Southern Caliornia Dornsie

College o Letters, Arts and Sciences

and the Los Angeles imes Poll. (2011,

November).

n Yamamura, K. (2012, January 11). LAO:

Browns budget restores balance, but estimates

questionable. Te Sacramento Bee. Retrieved

on January 12, 2012 rom http://www.sacbee.com

n Yamamura, K. (2011, December 23). Molly

Munger changes tax initiative to address

budget decit. Te Sacramento Bee. Retrieved

on January 1, 2012 rom http://www.sacbee.

com


19/42


20/42

17

resource levels. Consistently over the last decade,

Caliornia has had ewer sta per pupil than other

states only three-quarters as many teachers

per pupil and only hal as many counselors perpupil compared with other states.8 Tis resource

deciency motivated a strand o the GDF research

that attempted to estimate how much revenue

schools would need or students to achieve the

states academic goals. Tese studies suggest that

the relationship between resources and outcomes

is unclear there is no magic dollar amount that

would ensure that students succeed academically.

And, although more unding may help students,

without systematic reorms to several aspects o

education in Caliornia additional revenue alone is

unlikely to improve student achievement.Not only the research community has been

critical o Caliornias current school nance

system. Te system is under attack through

legislative, public initiative, and legal avenues. wo

current lawsuits, Robles-Wong v. State o Caliornia

(2010) and the Campaign or Quality Education v.

Caliornia (2010), claim that the current nance

system is unconstitutional and demand that the

state develop a new system that is better aligned

with the States academic goals. In November 2011,

the Advancement Project led a ballot initiative or

2012. Te measure, titled Our Children, Our Future:

Local Schools and Early Education Investment Act,

would increase the state income tax to create the

Caliornia Education rust Fund, raising additional

unding sooner rather than later or Caliornias

education system. Finally, the legislature and

governor are developing alternatives to the current

system.

Te GDF research and subsequent work by

Rose, Sonstelie, and Weston (2010) have identied

ve key principles that Caliornias school nance

system should embody:

n Adequacy: Provide students with enough

resources to the meet the state standards.

n Cost dierentiation: Recognize that costs vary

depending on student need and other specic

district actors. A district, however, should not

be able to manipulate those cost actors.

n ransparency: Design unding ormulas thatare straightorward and transparent. Formulas

should adjust or key cost dierences without

trying to adjust or every slight dierence

between districts.

n Equity: Allocate the same per-pupil revenue to

all districts with the same cost actors.

n Local fexibility: Provide more local authority

in how revenue is used, so districts can address

their local needs given their mix o available

personnel and other resources.

Te current system ails to some extent in each

o these areas, and any reorm proposals should be

judged against these criteria. Tis paper provides

an overview o the steps Caliornia has made in

the last ve years that adhere to these elements

o school nance reorm. Most o the concrete

reorm discussions have ocused on the structure

o the system, rather than the level o unding.

Nonetheless, the economic conditions o the state

certainly act as an important backdrop to thesediscussions.

A New Approach: Weighted Student Formulas

Soon aer the release o the GDF studies, two

groups proposed alternative systems embodying

many o the ve principles and crystallizing how

a new system could look. Bersin, Kirst, and Liu

(2007) and the Governors Committee on Education

Excellence (2007) both proposed consolidating the

current array o unding programs into just three

simple programs and using a ormula to distribute

those unds equitably.9 Te base program wouldconstitute the majority o unding, which would be

disbursed on an equal per-pupil basis and would

be unrestricted in its use. Both the Bersin, Kirst,

and Liu and GCEE proposals allow or dierent

base unding rates by grade level, although the

8 For example, see Rose et al. (2003), Loeb, Grissom, and Strunk(2007), and EdSource (2010).

9 Rose, Sengupta, Sonstelie, and Reinhard (2008) and Reinhard,Rose, Sengupta, and Sonstelie (2008) analyze the eect o thesetwo proposals on the distribution o resources across schools.


21/42

18

Governors Committee makes it a more explicit

part o its proposal. An additional program would

provide unding or Special Education. Tis

revenue would also be allocated on an equal per-pupil basis, but would be restricted or the use

o special education programs. Te last program

would target additional unds to economically

disadvantaged students and English learners.

Both proposals incorporated a targeted program

because economically disadvantaged students

disproportionally ail to achieve prociency on the

state standards, and many experts believe they may

need additional resources to meet the states goals

(Figure 1).10 Te Legislative Analysts Oce (2008)

proposed a similar restructuring approach, with

one additional program that distributes unds on anequal per-pupil basis but restricts that money to be

spent on sta proessional development.

FIGURE 1: English-Language Arts Profciencyon the Caliornia Standards Test and the PercentEconomically Disadvantaged, Elementary

Schools, 2007.

ormulas are simple and transparent, adjusting

or only a ew key dierences in cost. Tey supply

similar students with similar unding amounts,

and they provide much more local discretion inhow unds are spent by removing the categorical

program restrictions. Trough their targeted

programs, these proposals take a big step toward

linking revenue to student need.

Te Bersin, Kirst, and Liu proposal also adjusts

unding in the three programs or the dierential

costs o labor around the state. About 85 percent o

school district expenditures go toward personnel

compensation, and the geographic variation in

that compensation is highly correlated with the

geographic variation in the salaries o college-

educated non-teachers, in large part because school

districts must compete with other employers or

their stang needs. Bersin, Kirst, and Liu suggest

augmenting revenue in regions with high non-

teacher wages so that schools can hire the same

number o sta per pupil as schools in areas with

lower non-teacher wages.11

Although these proposals all take important

steps toward meeting the principle o cost

dierentiation, their ormulas violate one

aspect o that principle. Tey provide additional

unding or students who are classied as EnglishLearners. Because schools districts use their own

criteria to classiy students as English Learners,

basing unding on this classication creates scal

incentives or districts to prevent students rom

being reclassied as procient in English. Providing

a more standardized measure o English Learner

status or the purpose o unding could still direct

resources to these students who have additional

needs while keeping this cost adjustment more in

line with the principles o reorm.

All three proposals ocus extensively on the

structure o the school nance system, providing

an improved ramework or the distribution o

additional school unding as it becomes available.

Te Governors Committee on Education

Excellence takes their proposal one step urther,

10 Chambers, Levin, and DeLancey (2006), Imazeki (2006), Rose,Sonstelie, and Richardson (2004), and Sonstelie (2007).

Source: Public Policy Institute o Caliornia (Rose et al., 2008).

Note: Every dot represents an elementary school. The line

represents the average relationship between the two actors,

profciency and economic disadvantage.

Tese unding ormulas all into the class called

weighted student ormulas, because they essentially

provide all students with the same base level o

per-pupil revenue while weighting certain student

groups more heavily with additional revenue. Te

PercentPro

cient

200 40 60

Percent Economically Disadvantaged

80 100

100

80

60

40

20

0

11 Rose and Sengupta (2007) develop the regional wage indexused by Bersin, Kirst, and Liu (2007) and Reinhard, Rose,Sengupta, and Sonstelie (2008) show how districts in regionswith higher non-teacher wages end up with lower stang ratios.


22/42

19

suggesting that that the state would need to spend

an additional $5 billion to achieve its education

goals.

Moving Toward Reform Amidst Californias

Budget Crisis

The California Budget Crisis

Te Getting Down to Facts research,

subsequent policy proposals, and analysis rom the

research community created potential momentum

or school nance reorm. Unortunately, these

ideals collided with a severe budget crisis in

Caliornia. In 2008-09, the Caliornia government

cut state general und spending a dramatic 12

percent. Spending continued to decline the nextyear, ending the decade 15 percent lower than its

2007-08 peak. Given that Caliornia public schools

receive most o their unding rom the states

general unds, it is not surprising that total state

contributions to school unding also ell.12 Tis state

revenue to schools ell 12 percent during the last

three years o the decade.

Despite the reduced state unding, an inusion

o ederal unds helped temporarily insulate total

school district revenue. Te American Recovery

and Reinvestment Act o 2009 (ARRA) providednearly $1,000 per pupil, spread out over the three

years rom 2008-09 through 2010-11.13 Te bars

in Figure 2 show total school district general

und revenue by source. Federal unding, the top

segment o each bar, was about 50 percent higher

in 2008-09 and 2009-10 than it was in 2007-08.

Te ederal support meant that total school district

general und revenue ell only 7 percent, rather than

12 percent, between 2007-08 and 2009-10.

Te school district revenue in Figure 2 comes

rom the SACS accounting data that districts report

to the state. Although these data nicely track total

school district revenue rom state, ederal, and

local sources, they are not available aer 2009-10.

Te Legislative Analysts Oce (2012) reports

that the portion o revenue rom state school

unding rebounded slightly in 2010-11 but was

still 8 percent below the 2007-08 peak, where it

FIGURE 2: State General Fund Expenditures and K-12 School District General Fund Revenue

Sources:ThestatesgeneralfundexpenditurescomefromtheCaliforniaDepartmentofFinancesChartJ,HistoricalData,Growth

in Revenues, Transers and Expenditures, General Fund. The data on school district revenue come rom the states standardizedaccounting data (SACS) as reported in Ed-Data Statewide Financial Reports o school district general und revenue. Enrollmentcomes rom the department o education and is used to compute per-pupil unding levels. Revenue to county oces is excluded.

12 Proposition 98 earmarks about 40% o the states generalund or K-14 education, with about 90% o that going to K-12education and about 10% going to community colleges.

RevenuePerPupil($)

$Millions

2003

-04

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

Federal Categorical

Local

State Categorical

Revenue Limit

Total School District

Revenue from State

Sources

State General FundExpenditures (Right Axis)

10,000

8,000

6,000

4,000

2,000

0

100,000

80,000

60,000

40,000

20,000

0

13 In addition, the Federal Education Jobs program providedabout $200 per pupil spread over the years 2010-11 and 2011-12.


23/42

20

is expected to hover this year (the dashed gray

line refects these data).14 Although this slight

recovery o state unds is welcome, it is somewhat

counterbalanced by a reduction in ederal supportas ARRA and the Education Jobs program wind

down.

Te revenue data rom the SACS and LAO in

Figure 2 obscure another important issue acing

schools. Tey include revenue deerrals, essentially

IOUs rom the state to school districts. In 2011-12,

the state issued $350 per pupil in new deerrals.15

In the uture, the state will need either to increase

the unding it provides schools to cover this annual

decit or acknowledge this deerral as a cut which

would translate into another 5 percent decline

in state unding o schools. Te short-term pathCaliornia takes will surely depend on the states

economy, but also on whether Governor Jerry

Browns proposed tax hikes are approved at the

ballot box in November 2012. I voters approve

Browns tax increases, state support o schools

will remain relatively fat in 2012-13. I the ballot

measure is not approved, the LAO estimates state

unding per pupil will drop 4.4 percent that year.

Te states unding crisis initially caused many

in the education community to ocus immediate

eorts on maintaining current educational

programs and unding levels. Although this ocus

on unding preservation may naturally divert

some attention away rom long-run school nance

reorm, the crisis has actually caused the legislature

to adopt changes in line with some key principles

or structural reorm.

The Flex Item: Reform in the Absence of

Revenue

In February 2009, the legislature eliminated the

restrictions on about 40 state categorical unding

programs, essentially consolidating them into one

unding stream and allowing the revenue to be used

or any legitimate education expense.16 Te state

granted this unding fexibility to help districts dealwith the severe budget cuts. Tis new aggregate set

o programs, commonly reerred to as thefex item,

represented about 40 percent o the categorical

unding (LAO, 2011).

Although the fex item simplies the nance

system and grants districts more local control, it

violates other important reorm principles. It is

neither equally distributed nor highly related to

student need.17 On average, elementary districts

tend to have the lowest per-pupil fex-item unding

rates while high school districts tend to have the

highest, although this discrepancy would changei K-3 Class Size Reduction unds were included

in the fex item. Even within each type o district,

per-pupil unding varies substantially. Although

fex item unding increases slightly as the level o

student need increases, the relationship is loose.

Finally, the share o fex item unds that a district

receives is primarily based on the share it received

near the time the unds were originally fexed; a

districts allocation is not explicitly related to the

number o pupils it serves. Tis allocation method

does not account or enrollment growth or declines,

and so has the potential to urther exacerbate per-

pupil unding dierences in the long run.

Te fex item was a reactive rather than

proactive policy. Although this temporary

program is set to expire in 2014-15, it has already

been extended once; the LAO suggests there is

no clear exit strategy,18 and interviews with

Caliornia policy-makers suggest it may be

dicult to backtrack rom this fexibility.19 With a

more strategic design o programs included (e.g.,

including K-3 class size reduction and excluding

adult education) and a mechanism to equalize per-pupil unding rates over time, the fex item could

represent a much bigger step toward school nance

reorm.20

14 Te LAO school revenue data include the portion o stateunding required by Proposition 98, which is about 88% ogeneral state aid, property taxes, and state categorical programs(CDE, 2011). Examples o non-Proposition 98 unding includeexcess taxes above the revenue limit, state lottery unds, and insome years, pupil transportation unding (Weston, 2011). Teannual changes in LAOs state unding are very similar to thosein the SACS data. Figure 2 applies the LAO changes to the SACSlevels to extrapolate state revenue.15 LAO (2012). Tese accounting maneuvers highlight yet onemore aspect o the states complex nance system that makes itdicult to track money rom the state to school districts.

16 SBX3 4 and ABX4 2 established these new rules and extendedthem to 2014-15.17 Weston (2011), Figure 5.18 LAO, 2011, pp. 19.19 Fuller, Marsh, Stecher, and imar (2011), pp. 2720 LAO (2009, 2010, 2011) and Weston (2011) proposealternative program groupings and analyze these.


24/42

21

Education Finance Reform Act

(Assembly Bill 18)

A more proactive legislative approach to school

nance reorm is Assembly Bill 18, the EducationFinance Reorm Act, which would consolidate about

36 categorical programs into just three streams

o unding. Tis proposal meets several o the

principles o good nance reorm. It simplies the

current system and allows or more local fexibility

in how unds are used. Te bill also ocuses a

stream o resources on disadvantaged students,

recognizing that their educational cost may be

higher. However, the bill ails to address all o the

principles o nance reorm. Its argeted Pupil

Equity program to help low income and English

Learners is susceptible to nancial manipulation

by school districts because districts dene which

students are English Learners. Although this bill

represents a more thoughtul approach to reorm,

the unds to be aggregated represent only about

$1,000 per pupil in 2010-11. Furthermore, the bill

does not currently provide a mechanism to equalize

the per-pupil amount districts get in each stream.

Te current disparity in unding across districts in

the categorical programs to be aggregated would

still exist in the aggregate program. Tis bill is a

work in progress, and uture iterations certainlycould include an equalizing mechanism.

From Program Consolidation to Equal Per-

Pupil Funding Rates

All these eorts have laid the groundwork

or Governor Browns recent education nance

proposal, which puts many o these pieces together

to create a weighted student ormula.21 In the

Governors plan, each student would generate

a base unding amount or example $5,000.22

Disadvantaged students (dened as students

either eligible or the ree or reduced price lunch

program or classied as English Learners) would

each generate an additional 37 percent o that base,

or $1,850 in the example. Once a districts share

o disadvantaged students reaches 50 percent or

higher, disadvantaged students generate even more

revenue. Te additional amount is proportionalto the percentage o disadvantaged students in the

district. Figure 3 shows the relationship between

the percentage o disadvantaged students and the

districts total revenue per pupil, when all revenue is

spread out across all students.

FIGURE 3: Revenue per Pupil under Governor

Browns School Finance Proposal

21 See the Weighted Student Formula [422, 424]railer BillLanguage or the Education area o the 2012-13 Governorsproposed budget, accessed 2/15/12 rom http://www.do.ca.gov/budgeting/trailer_bill_language/education/documents/22 Te bill does not include an actual base amount. Te basewould be set so that the programs cost would not exceed what isavailable through Proposition 98 unding levels.

Revenue

perPupil($)

0.20 0.4 0.6

% Disadvantaged Students

0.8 1.0

9,000

8,000

7,000

6,000

5,000

4,000

Tis sweeping reorm attempts to adhere to the

ve key principles. I enacted, it would substantially

simpliy Caliornias school nance system. Aside

rom a handul o categorical programs (such

as special education and programs beyond the

control o the legislature), all state unding would

be distributed through this ormula with very ew

strings attached. Schools would be monitored

based on what they achieve, not how they spend

their money. Te plan improves transparency and

local fexibility, and the weights target substantial

additional resources to districts with needy

students. Furthermore, the ormula equalizes per-pupil unding across districts with the same cost

actors within a six-year time span, so that similar

students are treated similarly sooner rather than

later.

Tis reorm proposal is a dramatic opening bid

rom the Brown Administration to move Caliornia

toward a weighted student ormula. Representatives

rom the administration have indicated they would

consider adjusting some technical aspects o this

Source: Authors calculation based on hypothetical baseunding o $5,000 per pupil.


25/42

22

ormula. Tis bold new proposal has already

attracted close scrutiny o its technical details as

well as its broader policy changes.

During a recent Caliornia Senate Budgetand Fiscal Review Committee hearing, Senators

generally avored the concept o a weighted student

ormula but questioned some elements o the

plan.23At the oreront o their concerns was the

lack o cost adjustments or regional dierences

in labor cost, or student grade level, and or the

potentially higher transportation costs acing some

districts. Te LAO (2012) has pointed out that

although districts receive additional unds based on

their population o disadvantaged students, districts

are not required to spend those supplementary

unds on those students. Te Caliornia State

Senate Republican Caucus is concerned about

classiying English Learners as disadvantaged

students and would like to see cost adjustments

based solely on actors outside the control o

schools districts.24 (Te Governors proposal does

not double count English Learners i they are also

poor, so this concern pertains to the 15 - 25 percent

o English Learners who do not participate in the

ree and reduced price lunch program.) Tere

are related issues about how exactly to measure

whether a student is classied as low income andwhether the weights or disadvantaged students are

appropriate.25

Tese technical concerns can all be addressed

while maintaining the integrity o the proposal.

A more undamental issue, however, is that the

Governors proposal would drastically change

how revenue is distributed, producing winners

and losers.26 Tis issue is particularly salient in the

short run. Te six-year timeline or phasing in the

new unding system means that, i additional state

unding is not orthcoming or schools, revenue

will be redistributed rom some districts to others.Although the Department o Finance projects

ample revenue growth to insure that six years rom

now almost all districts will have higher revenue

under the new ormula than they currently have,

Caliornias recent recession has certainly madesome observers wary o optimistic budget orecasts

and particularly attuned to the possibility o even

more budget cuts.

Despite these immediate nancial concerns,

the state economy is cyclical, and state coers

will eventually rebound and grow. Demographic

projections suggest the student population will

grow at a slower rate than the adult population. I

taxpayers continue to spend the same share o their

income on public schools, these concurrent trends

suggest per-pupil spending could rise by about 30

percent in the next twenty years.27 Yet, even i the

new ormula is phased in over a longer horizon,

some districts will receive substantially less o the

additional revenue than others, a eature that will

likely cause some o them to challenge the proposal.

Tese challenges, however, stem rom the

inequities and irrationality inherent in Caliornias

current school nance system a system that

has consistently been assaulted on all ronts by

researchers, legislators, the judiciary and the

public. Te Governors proposal is to date the most

comprehensive attempt to x this system.Tis momentum toward developing a

weighted student ormula or Caliornia is

consistent with what the original GDF research

envisioned. Eventually, any nance system will

need to come to terms with uncertainty about how

resources actually translate into higher academic

achievement. But one message is clear: without

a stronger nance system, reaching Caliornias

academic goals will be an uphill battle. Pouring

more money into the current system is akin to

pouring a concrete oundation without putting

the orm boards in place. It consumes substantial

resources, makes a mess, and doesnt improve the

stability o your house. Te groundwork has been23 Caliornia Senate Standing Committee on Budget and FiscalReview Budget Overview Hearing (February 16, 2012), availableat http://www.calchannel.com/channel/viewvideo/3330.24 Caliornia State Senate Republican Caucus (2012).25 For more inormation on these cost actors, see Reinhard,Rose, Sengupta, and Sonstelie (2008) and Rose, Sengupta,Sonstelie, and Reinhard (2008).26 Rose, Sonstelie, and Weston (orthcoming 2012) analyze thesechanges.

27 Rose, Sonstelie, and Weston (2010) provide the assumptionsbehind this growth rate and model pathways the state couldtake to transition rom the current nance system to a moreequitable system over the next two decades. In the scenariosthey model, the equalization mechanism unnels new growth inschool unding to districts that are currently below their targetedunding rates under the new ormula.


26/42

23

laid or reorm, and it is time to continue working

in that direction. A strong nance oundation is the

rst step in a stronger education system. But even

with a rational mechanism or allocating moneyto school districts, those districts need to use their

revenue wisely to improve academic results. Only

then can Caliornia schools resume their place

among the best in the nation.

References

n Bersin, A., Kirst, M., & Liu, G. (2007). Getting

Beyond the Facts: Reorming Caliornia School

Finance, Chie Justice Earl Warren Institute

on Race, Ethnicity, and Diversity, University o

Caliornia, Berkeley. n Caliornia Department o Education. (2011).

2010-11 Budget ables. Retrieved on February

29, 2012 rom http://www.cde.ca.gov/g/r/eb/

budtables2010.asp

n Caliornia State Senate Republican Caucus.

(2012, February 15). Brieng Report: Weighted

Student Formula. Retrieved on February 29,

2012 rom http://www.cssrc.us/publications.

aspx?id=11860

n Chambers, J., Levin, J., & DeLancey, D. (2006).

Eciency and Adequacy in Caliornia School

Finance: A Proessional Judgment Approach.

Getting Down to Facts Project: Stanord

University.

n EdSource. (2010, September). How Caliornia

Ranks. Retrieved on February 14, 2012 rom

http://www.edsource.org/pub10-how-ca-ranks.

html

n Fensterwald, J. (2012, January 9). How

weighted unding would work. Educated

Guess. Retrieved on January 10, 2012 rom

http://toped.sveoundation.org/2012/01/09/

how-weighted-unding-would-work/ n Fuller, B., Marsh, J., Stecher, B., & imar,

. (2011). Deregulating School Aid in

Caliornia: How 10 Districts Responded to

Fiscal Flexibility, 2009-2010. RAND and PACE

Research Network.

n Governors Committee on Education

Excellence. (2007). Students First: Renewing

Hope or Caliornias Future.

n Imazeki, J. (2006). Assessing the Costs o

K-12 Education in Caliornia Public Schools.

Getting Down to Facts Project: Stanord

University.

n

Legislative Analysts Oce. (2008). Analysis othe 2008-09 Budget Bill.

n Legislative Analysts Oce. (2009). Analysis

o the 2008-09 Budget Bill: Proposition 98

Education Programs.

n Legislative Analysts Oce. (2010). Year-One

Survey: Update on School District Finance and

Flexibility.

n Legislative Analysts Oce. (2011, February).

Te 2011-12 Budget: Year-wo Survey. Update

on School District Finance in Caliornia.

n Legislative Analysts Oce. (2012, February).

Te 2012-13 Budget: Proposition 98 EducationAnalysis.

n Loeb, S., Bryk, A., & Hanushek, E. (2007).

Getting Down to Facts: Getting Down to

Facts: School Finance and Governance in

Caliornia. Getting Down to Facts Project:

Stanord University.

n Loeb, S., Grissom, J., & Strunk, K. (2007).

District Dollars: Painting a Picture o Revenues

and Expenditures in Caliornias School

Districts. Getting Down to Facts Project:

Stanord University.

n Reinhard, R., Rose, H., Sengupta, R., &

Sonstelie, J. (2008). Funding Formulas or

Caliornia Schools II: An Analysis o a Proposal

by the Governors Committee on Education

Excellence. Public Policy Institute o Caliornia.

n Rose, H., Sonstelie, J., Reinhard, R., & Heng, S.

(2003). High Expectations, Modest Means: Te

Challenge Facing Caliornias Public Schools.

Public Policy Institute o Caliornia.

n Rose, H., Sonstelie, J., & Weston, M. (2010).

Pathways or School Finance in Caliornia.

Public Policy Institute o Caliornia. n Rose, H., Sonstelie, J., & Weston, M.

(orthcoming 2012). Funding Formulas or

Caliornia Schools III: An Analysis o Governor

Browns Weighted Pupil Funding Formula.

Public Policy Institute o Caliornia.

n Rose, H., Sonstelie, J., & Richardson, P. (2004).

School Budgets and Student Achievement in

Caliornia: Te Principals Perspective. Public

Policy Institute o Caliornia.


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n Rose, H., & Sengupta, R. (2007). eacher

Compensation and Local Labor Market

Conditions in Caliornia: Implications or

School Funding. Public Policy Institute oCaliornia.

n Rose, H., Sengupta, R., Sonstelie, J., &

Reinhard, R. (2008). Funding Formulas

or Caliornia Schools: Simulations and

Supporting Data. Public Policy Institute o

Caliornia.

n Sonstelie, J. (2008). Financing Caliornias

Public Schools. Conditions o Education in

Caliornia. PACE, Stanord, CA.

n Sonstelie, J., Brunner, E., & Ardon, K. (1999).

For Better or For Worse? School Finance

Reorm in Caliornia. Public Policy Institute oCaliornia.

n Weston, M. (2011). Funding Caliornia

Schools: Te Revenue Limit System. Public

Policy Institute o Caliornia.

n Weston, M. (2011). Caliornias New Funding

Flexibility. Public Policy Institute o Caliornia.


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26

educational credits and experience are not

well-correlated with teacher quality, almost all

districts used these measures as the primary

determinant o salary. A closely relatedproblem was inequity in the distribution

o eective teachers across schools, with

high-need schools acing greater challenges

attracting and retaining high-quality teachers.

n Reorms inhibited by state policies. Several

o the concerns pertaining to the evaluation,

assignment and retention o teachers were

strongly infuenced by district-specic

collective bargaining agreements, but these

contracts were constrained by state policies

that determined what districts can and cannotdo.

n Lack o program evaluation. Finally, the

GDF investigators noted that even when

innovative programs were in place, there was

little attempt to assess or evaluate them. Tus,

although many o the problems were well-

documented, and prior research could suggest

avenues or reorm, little direct evidence as to

whether a particular policy actually works was

collected or analyzed.

What has changed since 2007

and what hasnt

Many o the problems identied ve years

ago continue to pose challenges or Caliornia.

Schools still have low levels o adults per student,

and there has been little progress at the state level

in policies related to administrator training or to

the hiring, evaluation, compensation or retention o

teachers. However, recent initiatives at the ederal

level have changed the national conversation about

measuring and rewarding teacher eectiveness.Within Caliornia, a number o individual districts

may provide important examples o new ways to

evaluate and compensate teachers.

A shrinking state budget has forced layoffs

and professional development cuts

Caliornia still ranks close to last among

all states in the number o teachers, sta and

administrators per pupil. (See Figure 1.) As

highlighted in the 2007 GDF studies, thatlower adult-student ratio means larger classes

and ewer services, such as instructional coaches

or counseling or students. Tat low ratio also

means school principals have to spend more time

on issues that in other states assistant principals

or district administrators might handle. As a

result, principals are less engaged in working on

curriculum and teacher development. For example,

in one survey Caliornia principals were much

less likely than principals in other states to report

that they work with teachers to change teaching

methods where students were not succeeding

or work with aculty to develop goals or their

practice and proessional development (Darling-

Hammond, 2007). In another survey (Fuller et al,

2007), Caliornia principals reported spending as

much time on compliance paperwork as they spent

on teacher evaluation and support. Furthermore,

Caliornia principals were less likely to have had an

internship as part o their training, to have received

mentoring or coaching rom more experienced

administrators, or to engage in proessional

development with teachers (Darling-Hammond,2007). In 2007, Caliornia had ew programs or

leadership development.

Five years later, little has changed. Some o the

lack o progress can be blamed on the budget crisis.

Certainly the budget situation has contributed to

layos across the state, and many districts have

cut back on non-core services such as proessional

development and training in order to protect core

classroom instruction (Fuller et al, 2010). In this

FIGURE 1: Adults in Caliornia Schools, 2004-2011

Source: Caliornia Department o Education

Personnelper1,0

00

students

2004-05

Teachers (10s)

Administrators

Pupil Services

2005-062006-07

2007-082 00 8-09 201 0-1 1

2009-10

5.0

4.8

4.6

4.4

4.2

4.0

3.8

3.6

3.4

3.2

3.0


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1 For example, among the programs that were fexed werethe Proessional Development Block Grant, the eacherCredentialing Block Grant and AB 430 Administrator raining,the only dedicated state training or principals still le.

scal environment, statewide reorms to improve

hiring practices or provide training or new

personnel are moot.

Several targeted categorical programs related toteacher distribution and proessional development

were included in the group o programs granted

budgetary fexibility in the 2008 budget package,1

but unding or these programs was reduced by

30 percent. A survey o district nancial ocers

(Fuller et al, 2012) suggests that in many districts

these proessional development unds were swept

into district general unds to help oset overall

cuts and maintain stang levels and instructional

activities.

Teacher education gets a closer look

Although there has been little progress

in proessional development or teachers and

administrators once they are on the job, there is

some reason or optimism that teachers may soon

get better training beore they enter the classroom.

In 2010, a scathing report rom the state auditor

prompted a shake-up o the Caliornia Commission

on eacher Credentialing (CC). Since then, the

CC has ocused on improving oversight o the

states teacher education programs, particularly

through better assessments o the specic skillsgraduates are supposed to acquire. At the same

time, the U.S. Department o Education has

been pushing or reorms in teacher education,

including stronger institutional reporting and state

accountability. However, all o these eorts were

hindered by the Governors decision not to und

the Caliornia Longitudinal eacher Integrated

Data Education System (CALIDES). Te statewide

longitudinal teacher database would have been

invaluable or determining which teacher education

programs produce eective teachers, as well as

where those eective teachers are placed.

Teacher effectiveness moves into the national

spotlight

At the time o the GDF studies, ew districts

had eective processes or evaluating either

prospective or current teachers. Most relied upon

easily observable characteristics that are not

necessarily correlated with teacher eectiveness.Furthermore, although research has established

that generic requirements like educational credits

and experience are not well-correlated with teacher

quality, almost all districts used these measures

as the primary determinant o salary. Tere was

thereore no nancial incentive or teachers to

engage in activities that have been ound to improve

teacher quality, such as targeted proessional

development (Loeb and Miller, 2007).

ARRA and RTTT. In the last ew years,

teacher evaluation and compensation have

become key issues in education policy across thecountry, largely driven by initiatives o the Obama

administration. One o the our ocus areas or

the American Reinvestment and Recovery Act

(ARRA) and the accompanying Race to the op

(R) competition was recruiting, developing,

rewarding, and retaining eective teachers and

principals, especially where they are needed most.

More specically, state applications needed to

address several related reorm eorts, including

attracting and keeping great teachers and leaders

in Americas classrooms, by expanding eective

support to teachers and principals; reorming and

improving teacher preparation; revising teacher

evaluation, compensation, and retention policies to

encourage and reward eectiveness; and working

to ensure that our most talented teachers are placed

in the schools and subjects where they are needed

the most (White House R Fact Sheet). A

related ocus area was the development o statewide

longitudinal data systems, which the Obama

administration has emphasized are necessary or

providing the type o data that will allow standards-

based teacher evaluation.o qualiy or ARRA unds, states had to

provide assurances that they are advancing the

our reorms described in the statute and complying

with maintenance o eort requirements. States

also needed to provide baseline data on their

current status in each o these areas and basic

inormation on how the unds will be used. In

addition, to compete or R unds, states needed

to adopt systems that tie educator evaluations to


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29

Action at the state level may become even more

important in the wake o a lawsuit aimed at holding

districts accountable or existing requirements or

teacher evaluation. Te Stull Act, originally passedin 1971, is the primary state law governing teacher

evaluation. It specically requires that schools

evaluate teachers based, at least in part, on student

perormance on state tests. According to EdVoice,

an education advocacy group, ew districts are in

ull compliance and a lawsuit (Doe v. Deasy) is now

pending against LAUSD to orce compliance. Te

success o such a suit would have ramications or

other districts as well. It will be important or the

state legislature to provide clarication o exactly

what is, and is not, required o districts.

One concern that has been raised in Caliorniaabout value-added measures is that the tests being

used to calculate them were never intended to be

used in this way. Te Caliornia Standards ests

were not designed to compare student perormance

rom one grade to the next, a very real problem

in using them or value-added models. However,

Caliornia is now part o the SMARER Balanced

Assessment Consortium, a group o states working

on assessment systems aligned with the Common

Core. Tese eorts may eventually lead to more

accurate measures o the value added by teachers.

Teacher distribution is still inequitable

Critics o the traditional step-and-column

teacher salary schedule point out that not only

does the system base compensation on actors that

have no proven correlation with teacher quality, it

also contributes to inequities in the distribution o

eective teachers across schools within districts.

When teachers with identical education and

experience earn the same pay across a district,

there are likely to be shortages in some elds and at

schools with more challenging working conditions.Although this is oen blamed on the transer and

seniority rules in collectively-bargained contracts,

Koski and Horng (2007) ound no evidence that

those rules aected the within-district distribution

o teachers. Teir ndings suggest that policy-

makers need to look elsewhere or ways to address

the diculties that some schools ace in hiring and

retaining eective teachers.

Although layos due to budget cutbacks

have prompted renewed concern about the role

o seniority in teacher retention and transer

decisions, Caliornia has done little in this area

either. In 2010, parents at three Los Angeles schoolsbrought a suit against the state and LAUSD, arguing

that their schools suered disproportionately rom

layos (Reed v. State o Caliornia and LAUSD).

Te plaintis schools served large numbers

o minority and low-income children and had

many novice teachers who were rst in line or

layos. Ultimately, an agreement was reached in

which the district agreed to exempt teachers at

45 schools rom the last hired, rst red layo

rules. SB1285 (Steinberg) attempted to address this

problem statewide by requiring districts to balance

distribution o new teachers so that the percentageo teachers laid o at a districts lowest-perorming

schools would be no higher than the average or all

schools in the district. However, aer an intense

battle the bill was deeated.

Te one state-level policy change aimed at

improving the distribution o teachers within

districts took place in 2006. SB 1655 (Scott) allows

principals o schools in the lowest 30 percent to

reuse voluntary transers and does not allow

seniority to be the dominant priority over other

qualied applicants or transers aer April 15.

Pockets of Progress: Districts are taking the

lead in innovation

Although Sacramento has done relatively little

on issues o training, evaluation and distribution

o personnel, several individual districts have been

developing programs on their own. For example,

Los Angeles Unied Superintendent John Deasy

has made teacher and administrator evaluation

a top priority; LAUSD is currently piloting an

evaluation system that incorporates multiple

measures. One component o the evaluation isacademic growth over time, a orm o a value-

added test score measure. Te evaluations also

include direct observations, stakeholder eedback

rom parents and students, and contributions to

community, although the district is still working

out how exactly to capture each o those actors

and how much weight to give to each. Te district

is starting with a small voluntary pilot and plans to

scale up over time. Any change to the evaluation


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process district-wide will need to be negotiated

with the local teachers union, and such a radical

change will likely be contentious.

San Francisco Unied School District (SFUSD)is taking a very dierent approach. In 2008, San

Francisco voters passed Proposition A, the Quality

eacher and Education Act. Proposition A is a

parcel tax largely dedicated to increasing teacher

salaries, including bonuses or hard-to-sta schools

and subjects. It also supports other reorms to

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