March 12, 2002 

Members of the Joint Committee:

My name is Phillip Escamilla. I am here today representing CSBA—the California School Boards Association. CSBA represents approximately 1,000 school districts from all over the state, from small, rural districts to large, urban districts. I have four main topics I would like to address with you today with regard to the Finance and Facilities K-12 Report: the Quality Education Model, Comparing the Funding Models, Transitioning from One Model to Another, and Local Decision Making.

Quality Education Model

In the Executive Summary, the report says that it draws a "direct, explicit link between our expectations and the resources needed to achieve them." The state has spent a lot of time and resources raising the bar of expectation for achievement for all students. However, by raising the bar for students, the state also raises the bar for itself in terms of the supports that it must now provide to students. For the protection of the state’s children, the state must now puts its resources where its expectations are in order to achieve its goal of success for all students. With this caveat, we would agree with the report’s statement that the Quality Education Model promotes "local flexibility and autonomy for schools to respond to the unique needs of their local community" and therefore would help ensure that all children in the state receive the supports that they need to succeed. 

Comparing the Funding Models

The annual per-pupil funding model for meeting district capital and maintenance needs advocated by the Committee’s report and by the Legislative Analyst Office (LAO) in their report entitled "A New Blueprint for California School Facility Finance" has much merit. An ADA-based "pay as you go" model where funds are allocated on an ongoing basis provides predictability for districts in their financial and modernization planning that state General Obligation bonds do not. CSBA agrees when the report says that such a system would ensure that "state funding is stable, reliable, and available when needed."

There are, however, benefits to financing capital and maintenance needs with bond initiatives. General obligation bonds produce more money, more quickly for districts than an annual per-pupil funding model would, and the benefits to taxpayers and future generations are more direct and tangible. In addition, despite "stopgap" measures in the report designed to equalize funding, small districts remain disadvantaged under the per-pupil funding model in that it provides them with less money up front for long-term capital and maintenance projects. For example, a small district with 120 students may determine that they need $3 million for immediate costs in order to meet their capital needs over the next twenty years. A general obligation bond would allow the district to raise the money when it is needed, whereas a per-pupil funding model may leave a district waiting long into the twenty-year period before being able to access the necessary funds. In the meantime, the district’s needs may change, forcing them to reassess their long-term objectives and start the clock on implementing their long range plans all over again.

Transitioning from One Model to Another

While the report recommends a transition plan for shifting from state General Obligation bond reliance to an annual per-pupil allocation, the goal of "‘leveling up’ all facilities in the state to a comparable standard of adequacy" via the transition plan may be more difficult to realize than it appears at first glance. The budget could easily impact the state’s ability to carry out the plan. In addition, while the transition plan calls for starting with modernization rather than construction projects, the state would still be paying debt service on the bond and paying out of general fund monies under the annual per pupil allocation at the same time. Finally, the LAO report referenced above (which the Committee’s report also references) acknowledges that "calculating the actual school facility expense for every school would be immensely complicated." 

Local Decision-Making

There has been discussion today about the possible need for county offices to intervene at the local level in decision-making regarding the spending of funds on facility needs. This suggested reform does not reflect the spirit of the report, which speaks highly of the need for local control and flexibility at the district level with regard to decision-making. While there is a need for accountability, having county offices serve in a hierarchical position to school districts is not the answer. County offices are partners with districts, and like districts, have their own LEAs over which they have primary jurisdiction. County offices do not have the capacity, nor were they intended for an oversight role. Therefore, CSBA opposes giving county offices of education more oversight responsibility over local school districts than currently provided for in law.