An Opportunity to Improve Transparency in the New K-12 School Funding Formula?

Tomorrow’s State Board of Education (SBE) meeting in Sacramento will focus on California’s new funding formula for K-12 schools — the Local Control Funding Formula (LCFF). The SBE will review proposed changes to the regulations they adopted this past January that govern LCFF spending and stipulate the information school districts must report in their Local Control and Accountability Plans, or LCAPs. All California school districts were required to adopt an LCAP by July 1 using a template that was developed and approved by the SBE earlier this year. Tomorrow’s meeting will review changes that the SBE is proposing to both the spending regulations and the LCAP template in response to more than 2,000 written comments the State Board received this spring. The SBE plans to adopt permanent regulations later this year and those rules, as well as the LCAP template, will determine how school districts are required to report LCFF spending for years to come.

It is critical that the SBE adopt regulations that require school districts to clearly report two pieces of information, so that stakeholders can gauge whether districts are increasing or improving services to support disadvantaged students: 1) a baseline level of spending used to support disadvantaged students in 2013-14; and 2) for each year after 2013-14, the amount spent in the prior year to support disadvantaged students. While the regulations adopted by the SBE in January do require school districts to use prior-year spending on disadvantaged students as a starting point for estimating the level of support going forward, they do not require transparent reporting of this spending level.

On Monday’s KQED Forum program, I had the chance to join SBE President Michael Kirst and others in discussing implementation of the new funding formula. President Kirst suggested during this conversation that the State Board may be willing to require school districts to transparently report how much they spent to support disadvantaged students in a prior year. By establishing a clear, easy-to-understand baseline, such a change would be a welcome step toward improving transparency and enabling stakeholders to understand whether LCFF dollars are being used to support disadvantaged students.

After tomorrow’s SBE meeting, the public will have through July 28 to submit comments on proposed changes to the regulations and the LCAP template. All Californians concerned about making LCFF spending more transparent should use that period to engage in the process and let their voices be heard.

— Jonathan Kaplan

Bending the Prison Cost Curve

Budgets, as we like to say at the CBP, are not just about dollars and cents. At a fundamental level, budgets express our values and priorities as a state. The choices we make through the state budget process help determine whether California is improving outcomes for families and communities and investing in policies that promote broadly shared prosperity. While California has made some major progress in this regard — the state’s robust implementation of federal health care reform is a prime example — in other ways we’ve fallen short.

One way in which we’ve clearly missed the mark is illustrated by the chart below. Under the Governor’s proposed spending plan for 2014-15, California is expected to spend more than $62,000 on each prison inmate — nearly 90 percent higher than in 1994-95, after adjusting for inflation. In contrast, our state is expected to spend slightly less than $9,200 for each K-12 student in 2014-15 — a level that reflects a marked improvement relative to recent years, but which is up by only 30 percent since 1994-95, after adjusting for inflation. In other words, over the past two decades spending per prisoner in California has increased nearly three times faster than spending per K-12 student.

California can do better. “Bending the prison cost curve” — that is, curtailing the persistent trend of rising state prison spending — is a challenging but necessary undertaking that deserves policymakers’ sustained attention. Making progress toward this goal would free up state dollars that could be redirected from the correctional system to essential state priorities in the years ahead.

— Scott Graves

Strengthening California’s Adult Education System Means Targeting Local Needs

California’s adult education system is a vital resource for millions of low- and middle-income individuals, helping them obtain the basic knowledge and skills necessary to advance in their careers and actively participate in civic life. The Senate Committee on Education and the Assembly Committee on Higher Education recently held a joint informational hearing to discuss the future of California’s adult education system and the challenges that many adults in need of additional skills face in climbing the economic ladder.

CBP Executive Director Chris Hoene testified on the importance of a robust adult education system for local economies, and he provided the committees with county-level data on poverty, educational attainment, and English-language proficiency. These data offer different ways of thinking about how California’s adult education system can better help the people it serves and help regional economies grow and prosper.  The data on English-language proficiency and educational attainment are presented below, while the data on poverty was highlighted in a previous blog post.

(Educational Attainment table with full county data and map — PDF)

(English Language Proficiency table with full county data and map — PDF)

These data highlight the importance of California’s adult education system to local needs. Specifically:

• Some California counties need to focus on adult education services for English learners. While adult education is often tailored to adults without a high school degree, a significant share of these students are also English-language learners. In some parts of California roughly a third of adults could be classified as English learners, meaning they speak English less than “very well.”

• Investing in education is a key strategy to promote economic growth in a region, and a robust adult education system should be part of that strategy. The alarmingly high rates of poverty in many California counties underscore the need for investments in workers’ skills and education. Some regions may want to make significant investments in their adult education system as a way to promote long-term economic growth.

You can view the entire testimony, including a more detailed discussion of the data that was presented to the committees, here.

— Luke Reidenbach

Fewer State Prisoners, Higher Cost Per Inmate

California’s prisons, once bulging at the seams, have slimmed down considerably since counties took responsibility for housing and supervising certain low-level offenders as part of a state-to-county “realignment” that began in October 2011. The state’s 33 prisons currently house about 119,600 inmates — 17.2 percent below the September 30, 2011 (pre-realignment) level of 144,456. In fact, the prison population is now roughly the same size as in 1994-95, when it ranged from about 115,000 to just over 121,000.

Yet, even as the number of prisoners has dropped since realignment, the cost per inmate – adjusted for inflation – has continued to climb and is substantially higher than in the mid-1990s, as we show in our recent report on state corrections spending. California is expected to spend about $60,000 for each inmate in 2013-14 — 82.3 percent higher than in 1994-95, when the state spent slightly less than $33,000 per inmate, after adjusting for inflation. In stark contrast, California’s spending per K-12 student has risen by just 17.9 percent during the same period — from an inflation-adjusted $6,971 in 1994-95 to a projected $8,219 in 2013-14. In other words, spending per prisoner in California has increased nearly five times faster than spending per K-12 student over the past two decades.

Our report identifies a number of factors that have contributed to this substantial increase in spending per inmate. Staffing levels – including correctional officers and other prison-related employees — are significantly higher today than in the mid-1990s, even though the number of inmates is about the same. Salary increases have also contributed to the rising cost per inmate, as has the dramatic growth in health care spending — an increase driven by various court orders and settlements. California is expected to spend $2 billion on medical, dental, and psychiatric services for inmates in 2013-14, more than triple the $590 million the state spent on those same services in 1994-95, after adjusting for inflation. In addition, the difficulty of reducing fixed costs — such as utilities, leases, and support staff — over a relatively short period likely has contributed to rising spending per inmate since realignment took effect, as our report explains.

This rising cost per inmate is troubling and deserves greater scrutiny by state policymakers, since every dollar directed to the prison system leaves one less dollar to spend on other public systems and services. Certainly, increases in corrections spending may be warranted in some cases, such as to expand and improve rehabilitation services. In other cases, higher spending may be unavoidable, particularly for inmate health care, which remains under the direct management of a court-appointed federal Receiver. On balance, however, policymakers do have choices about how much funding is allocated to the state corrections budget and how those dollars are spent. Reducing — or at least holding the line on — corrections spending over time would free up scarce state dollars that could be redirected to education, health care, transportation, and other essential state priorities in the years ahead.

— Scott Graves

Governor Delays Controversial Plan to Restructure Adult Education, Yet Concerns Remain

California’s adult education system is a vital resource for millions of low- and middle-income individuals, helping them obtain the basic knowledge and skills necessary to advance in their careers and participate in civic life. This system helps Californians achieve educational goals such as learning to speak English; passing citizenship exams; earning a high school diploma; boosting their job skills; and obtaining the proficiency needed in reading, writing, and math to succeed in postsecondary education.

For the past several years, California’s adult education system has operated with a significantly decreased level of funding, due to the combination of severe budget cuts and a policy change that has made previously dedicated funding more flexible. In 2007-08, the year before the economy hit bottom and the Great Recession deepened, adult education received more than $700 million in dedicated funding. Due to declining revenues, the state implemented two consecutive years of double-digit cuts to adult education beginning in 2008-09. Also in 2008-09, legislators gave school districts the flexibility to shift funding specifically dedicated to adult education to other educational uses as they saw fit, magnifying the impact of the spending cuts. Subsequently, many districts redirected either significant portions or all of their adult education funding into other program areas. In fact, the Legislative Analyst’s Office (LAO) estimates that as little as 40 percent — roughly $250 million — of the money currently allocated to adult education is actually being spent for that purpose, a decline of well over 50 percent from the 2007-08 level.

In January, Governor Brown called for a restructuring of the state’s adult education system. This plan would have shifted significant responsibility and funding for adult education away from K-12 school districts, where adult schools have traditionally resided, to community colleges, which often have little experience providing courses similar to those offered at adult schools. The Governor’s January proposal also included $300 million in dedicated adult education funding for community colleges in 2013-14, roughly in line with the LAO’s estimate of current adult education spending but still less than half the 2007-08 level.

Faced with significant criticism from advocates and educators regarding the adult education restructuring in his January proposal, and a rejection of the plan by a key Assembly budget subcommittee in March, the Governor issued a re-worked proposal for adult education in his May Revision. The revised proposal would essentially put the restructuring plan on hold for two years, during which time the Governor proposes to allocate $30 million to help transition to a new regional partnership program composed of community colleges, school districts, and other adult education providers. Yet while the proposal promises $500 million of dedicated funding in 2015-16, the May Revision includes no dedicated program funding during the two-year transition. As an incentive for school districts to continue funding adult education programs during this transitional period, the Governor proposes that 70 percent of the $500 million promised in 2015-16 — or $350 million — would go to current providers, as long as they maintain their current spending levels for the next two fiscal years.

As the budget deliberations in the Legislature move forward, two key questions will shape the policy debate around adult education in California:

• Would the Governor’s incentive for school districts to maintain adult education funding be enough to stem further program cuts and closures? While some districts have already acted to restore some adult education funding in response to the Governor’s May Revision, others have not, and — in the climate of cutbacks to adult education in recent years — there is no guarantee that adult education spending and programs would be maintained during the two-year transition period.
• Who would have ultimate responsibility and accountability under the new adult education regional partnership structure envisioned by the Governor? While many of these details would likely be worked out during the two-year transition period, some in the adult education arena have raised initial concerns about community colleges being designated as the fiscal agents, with promised future adult education funding flowing through community colleges to K-12 districts and other providers.

The debate on the future of adult education comes at a time when the need for adult education remains high. Nearly one in five adults in California have yet to earn a high school diploma or pass the GED exam. Additionally, nearly 25 percent of California’s adult population is functionally illiterate, lacking basic skills necessary to accomplish ordinary tasks such as filling out job applications or understanding and accessing public services. Furthermore, federal immigration reform could result in millions more California residents seeking help from adult education programs, such as basic skills, civic education, and English-as-a-second-language (ESL) courses .

Adult education is a critical but often overlooked part of our state’s system of education and career preparation, especially for low-and middle-income Californians. A strong adult education system that meets the needs of these residents would benefit all Californians and contribute to a better-trained workforce and a stronger economy.

— Phaelen Parker