Total overhaul sought in funding for schools

By Deb Kollars, Sacramento Bee December 11, 2003

Gov. Arnold Schwarzenegger's top education adviser is calling for a complete and dramatic overhaul of the way California pays for public schools. Education Secretary Richard Riordan said Wednesday that in light of The Bee's recent investigation of school financing, the new Republican administration is expanding its proposals for education reform to include a new kind of student funding formula.

Under the approach Riordan has in mind, students would trigger uniform "weighted" dollar allotments for their schools, based on their learning needs, rather than the random and inequitable amounts they now generate for their districts.

Such a shift would mark the first time in three decades that California has fundamentally addressed one of the most convoluted, political and deeply entrenched aspects of state spending -- and the biggest, at $41 billion a year.

"We need to start from scratch and do a systematic reform of the entire system," said Riordan, the former mayor of Los Angeles, who has long been involved in school reform efforts.

Earlier this week, the education secretary visited the Edmonton school system in Alberta, Canada, which uses a weighted formula that provides all students a uniform amount of basic education money, then adds on a standard supplemental amount for those with greater needs, such as the poor. The system stands in stark contrast to California's, which has a thousand different base funding amounts for children -- one for every district -- and then adds uneven amounts of money for other needs.

Riordan said Edmonton puts much of the money directly into the hands of school principals, something he and Schwarzenegger would like to see in California to reduce bureaucracy and encourage greater personal accountability for student achievement.

Riordan stressed that the administration is in the early stages of exploring the idea of a weighted student funding formula.

"The governor will be studying it and looking at all the options," Riordan said.

The notion, he added, is consistent with the governor's overall goal of streamlining school funding.

Margita Thompson, press secretary for Schwarzenegger, said it is too soon for the governor to comment on the possible change in student funding. Given the state's deep financial problems, she said, all options for greater efficiency -- both short term and long term -- will get a good, hard look.

"Everything has to be on the table because the fiscal crisis is so severe," she said.

As a key step on the road to change, Riordan is advocating the appointments of two prominent education leaders to a panel that will spend the next year studying school finance in California. Called the Quality Education Commission, the group was supposed to have begun its work last July. But the appointments came slowly -- former Gov. Gray Davis completed his seven choices just before he left office.

Schwarzenegger canceled those appointments and is refilling the slots himself. Riordan is recommending the first two be Ted Mitchell, president of Occidental College, and David Davenport, research fellow at the Hoover Institution.

The Quality Education Commission was created in response to the state's new Master Plan for Education, released last year, which called for finding a more sensible way to pay for schools.

Mitchell said Wednesday that any significant changes to the system would require thorough study and research, and then consensus among the many layers and bodies invested in education, including the Governor's Office, the Legislature, the Department of Education and the state Board of Education.

"All will need to come together to form solutions that will be effective and durable," he said.

Such reform is badly needed, based on a yearlong investigation by The Bee, called "Paying for Schools." The newspaper's review covered three distinct areas of school finance -- known to insiders as categoricals, mandates and revenue limits -- and found them loaded with inequities, politicking, red tape, and confusing and outdated rules and formulas.

The three areas also have big price tags.

The state spends more than $11 billion a year on its categorical system, a confusing maze detailed in a collection of articles published in February. California has more than 100 of these special pots of money earmarked for specific purposes, such as teacher training, violence prevention, gifted education and services for poor children.

In addition, California spends a sizable but shifting amount on mandates, which reimburse schools for tasks imposed on them by the state. Over the past five years, nearly $1 billion has gone out for education mandates, including such routine things as teaching biology to sophomores, according to a Bee investigation published in May.

Finally, there is the $29 billion revenue limit system, which provides per-student dollar amounts for every child in the state to cover the basics of education: teachers and other staff, utility bills and supplies ranging from pencils to microscopes. The public may expect those amounts to be even, but they actually range from $4,300 to more than $8,200 a student(Alameda County Base Revenue Limit by School District). They are accompanied by layers of funding that increase the inequities, according to the most recent slice of the investigation, published Nov. 30-Dec. 3.

"The system is so mind-boggling," Riordan said. "It is impossible to understand."

During the campaign and again during his early weeks in office, Schwarzenegger took aim at the categorical mess, saying the separate pots should be eliminated to reduce bureaucracy and provide more strings-free money to districts.

That alone would be an enormous political battle. Some of the categories of funding date back 30 to 40 years and have constituencies who believe deeply in their purposes. Periodically, state politicians have attempted -- without success -- to rein in the unwieldy system. Just last year, Davis tried and failed.

Now, the new administration is talking about going much further in restructuring the underlying funding process.

Riordan said he wants to create a fairer financial foundation for schools by setting up the weighted student formula, as Edmonton and a number of U.S. states are doing.

Oregon, for example, has used a weighted approach for the last 10 years. There, a typical student, regardless of where he or she lives, brings a school a standard $5,280 a year.

Six other groups of children with special needs trigger an additional sum for their districts in Oregon. A student not proficient in English receives an extra weight of .50, meaning the child brings in an extra $2,640 to a district. The other five weighted groups are: special education; pregnant and/or parenting students; those in poverty; kids in foster homes; and those classified as neglected or delinquent.

That approach "would put the money at the student level," Riordan said, adding that he also wants to get rid of many of the other complex funding streams of the revenue limit system. One antiquated source, called "Meals for Needy Pupils," brings millions of extra dollars to some districts every year while bypassing many others.

State Sen. Dede Alpert, D-San Diego, said Wednesday that the Quality Education Commission would play a critical role in reshaping school funding. The commission has been asked to develop a new "adequacy" model that determines what a quality education actually costs.

The new master plan recommended retaining a handful of categorical funding streams to address the needs of special populations of children -- which Alpert said would have the same effect as using a weighted approach.

"The weighted formula would be an interesting alternative," she said.

Scott Plotkin, executive director of the California School Boards Association, said he worries that weighted formulas might not address California's numerous demographic and geographic differences.

"My intuition doesn't support a simple, one-size-fits-all approach," he said, adding that he also was concerned about the administration latching onto a single approach to the exclusion of other promising options.

"But I am excited by the prospect of someone in high authority taking a look at the question," Plotkin said. "The existing system is filled with inequities."

The 13-member Quality Education Commission will begin meeting in late January at the earliest, said Mary Weaver, its interim director. The William and Flora Hewlett Foundation of Menlo Park and the Bill and Melinda Gates Foundation of Seattle have together donated $500,000 to pay for staffing, travel and other costs for the first year of the commission's work, she said.

The meetings will be public, and Web-based public forums also are planned.

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Last modified: December 13, 2003

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