In 2012 Californians faced a crises in K-12 school funding. 

The aftermath of the Great Recession and decline in tax revenue had decimated school budgets, leaving funding for local districts significantly lower than it had been before the crises.

As a result, we passed Proposition 30, the “Temporary Taxes to Fund Education” Act, which raised taxes to fund better education.  Obviously better funding for schools was a priority for the people in our state.

This immediately increased K-12 funding – and set up the Education Protection Account to apportion those funds among local districts. 

In its first year – 2012-2013 – those taxes produced an additional $6.5 Billion dollars in funding. 

The sales tax portion of Prop 30 expired in 2016 (as planned), the higher income tax rates were extended by approval of Proposition 55 in 2018, through the end of 2030.

Despite the lack of additional sales tax revenue, in the current year – 2019-2020, EPA funds are expected to add $7.9 Billion to education funding.

This, combined with overall tax revenue increases in the state (and a small drop in Average Daily Attendance – ADA) has translated to a huge increase in revenue per child for local districts. 

The California Department of Education tracks data on how much money is being spent per ADA on education in each district in the state.

In 2012, California spent an average of $8383 per child. As of 2019 (the latest data available) that had risen to $13,102 per child.  That is an increase of 56.29%, with a compound annual growth rate of 6.59% per year.

For reference, during this time the California Department of Industrial Relations reports that inflation in the state has averaged 2.34% per year, meaning school funding has increased at a rate 2.78 times faster than inflation.

During the same time, California made major changes in the way it controlled funding to schools, in legislation called the Local Control Funding Formula (LCFF).  The LCFF was proposed in 2012, passed the legislature and was signed by Governor Brown in 2013.

Fundamental to the idea of the LCFF was giving local districts more control over how they spent the revenue sent to them by the state.  “Local Control” replaced a system where the money given to districts was designated to be spent in specific ways, with priorities controlled by state legislation.

This was heralded and lauded by those who feel their district knows the needs of their kids best, and can guide spending themselves in ways that better match the priorities of parents in the district. 

As part of the LCFF law, a process called the Local Control Accountability Plan (LCAP) was implemented.  The LCAP process mandated each district take into account the wishes of stakeholders, including parents, in designing their budget for future years.

For that to work, it is critical for stakeholders to know how the district is currently spending its funding.  Without transparency in past spending, it’s not possible to make informed decisions on future spending and how that may impact our kids. 

As we’ve seen, the seven years since passage of Prop 30 have seen a huge increase in per student funding.  Yet, despite this tremendous rise in revenue, we see districts in the news reporting financial crises and needing to make cuts to programs and services for our kids.

An excellent report by Kristen Taketa in the San Diego Union Tribune from February 2020 details how “Nearly every San Diego County school district may be spending more than it can afford.”  As the reporter points out, “All but one of the 42 school districts in San Diego County are expecting to spend more than they take in, either this year or in the next two school years.  Most are projecting to do so for all three years.”

Which makes it even more important that local stakeholders – again including parents (and their representatives, the local school Board members) be given full information on how their funding is being spent.

In California, several sections of the Civil Code address the transparency required by law to ensure stakeholders are given that information by their district administration. 

Since the majority of expense in any school district is the cost of labor (typically more than 80% of cost is  pay and benefits for employees) several sections of the Code address this.

Almost all education employees are covered by salary schedules of some sort, often called “step-and-column” charts.  Those schedules, defined in contracts with labor groups, typically include annual raises built in for longevity, as well as additional pay for completing various training or education levels.

In most districts, the decisions with the greatest impact on cost that a Board will make are approvals of new agreements that provide additional raises, on top of the scheduled raises (often called “contract increases”) to labor groups.  Often that also includes a separate approval for “me too” raises, given to administration and management. 

Those extra raises can impact the budgets by millions (sometimes tens of millions in larger districts).  Very rarely is there any single decision made by a Board that can change a district’s financial position with the magnitude of a new labor agreement.

With that, the Civil Code has several sections requiring districts to disclose the impact of those agreements on their financial condition, prior to approval.  This disclosure must be made to the County Office of Education (COE) as well as made available to the public (which is usually done in the Board meeting agendas.)

These disclosures are made in a document called the “Disclosure of Collective Bargaining Agreement” form, commonly called the “AB1200 Disclosure” since the AB1200 legislation created this requirement.

As a sample of these agreements, which are done in a standard format, see this disclosure, made by San Diego Unified in July 2019.

CA Government Code 3547.5 (a) requires the district to disclose, in this form, the major provisions of any agreement, including its cost for the next few years.  Section (b) goes on to require that the district that those costs can be met during the term of the agreement, and requires any “budget revisions” necessary to meet those costs be itemized, so that the Board and the public will know the potential impact of approval.  The text of this section of the law is below.

Specifically, the AB1200 Disclosure form, in question C, asks the district to disclose “… the specific impacts on instructional and support programs to accommodate the settlement. Include the impact of changes such as staff reductions or increases, program reductions or increases, elimination or expansion of other services or programs (i.e., counselors, librarians, custodial staff, etc.)”

In conjunction with this, the state also has a process for flagging a district’s budget as being in trouble – in danger of not being able to pay it’s bills for each of the next three years, and maintains a list of districts that are in such danger.

That process requires the district to “certify” its budget in one of three categories – “positive”, “qualified”, and “negative”.

“Positive” means the district’s budget is projected to be sufficient meet it’s obligations in all of the next three years.

“Qualified” means the district’s budget may not meet it’s financial obligations in one of the next three years.

“Negative” means the district’s budget is projected to be unable to meet it’s financial obligations  in the current or next fiscal year.

If a district is certified as “Qualified”, or “Negative”, additional disclosure requirements apply.

[For a current list of such districts throughout the state click here…]

For example, Civil Code 3540.2 (a) requires such districts to submit their disclosure to the County 10 business days in advance of any vote by their Board, for review and comment.

Section (c) requires the County  Superintendent to notify “the school district, the county board of education, the district superintendent, the governing board of the school district,  and each parent and teacher organization of the district within those 10 days if, in his or her opinion, the agreement reviewed pursuant to subdivision (a) would endanger the fiscal well-being of the school district.”

In other words, the intent is to make sure everyone involved knows if the district is about to enter into an agreement that could put a distressed district into even further financial trouble. 

Before that agreement is approved, of course.

Which makes total sense, right?

The Problem….

Which brings us to the current problem – lack of disclosure by school districts when those agreements are likely to create further financial problems, and lack of enforcement by the County office of their oversight in this.

As part of my research into this, I requested, through the California Public Records Act, copies of all disclosures by San Diego County districts from July 2016 to date, as well as the COE’s response letters for each. 

For anyone who is interested, I have posted a repository of those documents in case anyone would like to read them.

Even a cursory examination of these shows that the requirements for disclosure of “specific impacts”, as required by 3547.5 (c) are almost completely ignored. 

The most common entry is “NA”, however leaving a blank is somewhat common as well.  And, even when some limited form of disclosure is made, it is often vague “budget solutions will be identified”.

Nothing, of course, to tell the Board or public exactly (the “specific impacts” asked for in the question) what they might be cutting in the future to accommodate the increased cost of the agreement.

Which is the entire point of this question.

This is the case even when the district is also proposing to give themselves “me too” raises – raises for themselves (administrative, confidential, and management employees) – based on approval of the agreement with their labor groups.

In other words, districts are often asking for raises for themselves, which will require the district to cut programs and services for our kids, without disclosing that this will happen.

Ashley McGlone of the Voice of San Diego did an excellent article on this a few years ago, “Poway Schools Execs Get the Same Raises They Negotiate With Teachers”

As she points out, “That means the same district officials tasked with seeking the best possible deal for local taxpayers and students have a personal financial incentive to give more money to teachers. Basic legal and ethical principles should prevent Poway’s administrators from negotiating agreements that affect their own pockets, experts say.”

Anyone.  Literally, anyone in private industry would see the ethical problem here.  Having the Boss offer a raise to you, knowing that the bigger the raise he gives you the bigger the raise he will get, is clearly wrong.  No question, right?

Yet also clearly an accepted practice in K-12 education.  It happens in almost every labor negotiation I’ve looked at in San Diego County in the last four years.

And, in my analysis of these agreements, we can often see districts that failed to disclose cuts needed (when asking for raises for themselves) later – sometimes within weeks or months – putting budget cuts on the board agenda, or having such need identified in the media.

In the folder with the disclosures are a set of Word documents with my notes on the analysis I’ve done on this.  I haven’t looked at every process for every district, but have looked at a number of them.  Particularly those that later made the news for needing budget cuts.

After this disclosure is made to the COE, the COE then responds, with a “response letter.”  Copies of these are in the folder referenced above as well.

These letters often let the district know that the COE feels cuts will be needed in the budget to accommodate the increased costs, called “budget solutions” or “budget revisions”.  Those letters are typically dated either the day of the Board Meeting for approval or a few days beforehand.

Meaning, of course, that even if the district’s own financial departments are not competent to realize their proposed agreement will drive their district closer to the fiscal cliff, the COE letter should make this a known issue prior to the Board meeting at which the agreement is submitted for approval.

Given an email from the person in charge of this process at the COE would get immediate attention from the district CBO, every single district in this position who has not disclosed their need to make cuts to their budget in their AB1200 disclosure knows – before the meeting occurs – that those cuts will be needed. 

And still fails to disclose that.  Not even verbally, in those meetings (I’ve been to many…)

Particularly districts that almost immediately after this – or at least within several months – then announced that they, sadly, were going to need to cut services and programs for the kids.

Why would they do this?

Perhaps because it’s easier to get a raise when you don’t have to say “and if approved, our financial numbers show we’ll need to make cuts to the education of your kids in the future”, to the parents and Board?

Naaaawwww……. Right?

Right?

Case Studies

An example of this process from real life…

In San Ysidro Elementary school district, a proposal was put before the Board in the June 6^th, 2019 Board Meeting to give extra raises to the San Ysidro Education Association (item 13.5.)

With that, an AB1200 disclosure was included.  The form was, curiously, signed by the CBO (one of the required two signatures) on 6/10/19, meaning it’s questionable whether the document was even legal on 6/6, but we’ll set that aside given it’s a minor technicality.

The COE’s response letter, also dated the same day, 6/6/19, indicated they identified a need to cut $1.2M from the 2019-20 budget and $3.8M from the 2020-21 budget to maintain the 3% reserve required by the state.

Despite this, the Board was presented with a Disclosure in which Question C was left blank.   No disclosure of any of this was made to the Board or the public in writing.

The Board approved this extra raise, which added a cost of about $500,000/year to the district’s budget.

Question E, which is the source of funding for these extra raises, indicates “General fund, child development fund, and cafeteria fund” will provide the money for them.  So some of the money needed for these extra raises is coming from child development. Nice, but if the parents of SYESD are good with that at least they were told.

Then, at the June 13^th, 2019 Board Meeting, we see the district asking for Board Approval of the exact budget cuts indicated by the COE in their letter (item 13.16.)  This was approved.

And, lastly, during the July 11^th, 2019 Board Meeting we see the Board asked to approve “me too” raises for the administration and management staff (item 13.12.)  A separate AB1200 Disclosure was filed for this request, but again Question C was left blank – despite the fact that just a few weeks before they had actually voted on such cuts.

Finally, in December 2019 the news broke.  Another excellent article by Kristen Taketa in the SDUT, “San Ysidro School District faces budget cuts to deal with deficit spending” detailed the cuts that were now going to be needed, quoting them as saying they “may need to cut between $1.5 million and $2 million from next year’s budget” and “The district, which serves about 4,200 students, plans to report a “qualified certification” to the County Office of Education by the March deadline”

Surprise, surprise. 

We have yet to see what services and programs they’re going to cut from our kids’ education to support their extra raises.

Moving on….

When a district is already in financial danger – “qualified” in EdSpeak – some additional requirements apply, as outlined above. 

Browsing the actual disclosures, we see they are rarely provided to the County 10 days prior to being approved, and the County never (to our knowlege) fulfills it’s obligation to notify “each parent and teacher organization of the district within those 10 days”

Again. Notifying parent organizations, those with the greatest stake in the financial well-being of their schools,has never, to my knowledge, been done.  Despite the legal requirement that it happen.

In an email conversation with the San Diego County Office of Education, I was told….

“As for the portion of the Gov. Code referenced below, “endanger the fiscal well-being of the district”, every settlement has a fiscal impact and determining whether it would make the district negative and in danger of going into receivership in the current fiscal year would trigger that language.   That hasn’t been the case with the districts you’ve reference, therefore we’ve sent our letters to the district Superintendent and Board President. “

In other words, even though a “qualified” district is by definition unable to meet it’s financial obligations in at least one future year, adding additional cost to their budget does not qualify as “endanger[ing] the fiscal well being of the district”, at least not sufficiently to let parents know.

Because somehow that language is being interpreted not in the way it’s written – which is whether the agreement “endangers the fiscal well being” of the district – but in a way that requires the agreement to put the district “in danger of going into receivership in the current fiscal year”.

Kind of like if you didn’t have the income to pay the mortgage on the house, you were using your savings to make that up, you knew if that continued you’d run out of money NEXT year and your house would be foreclosed, but you decide that buying a new car THIS year is OK, even though it creates an even bigger problem – because that problem is NEXT year…

So you can ignore it…

Hunh?

I’ve also been told, in an email exchange with the state’s Fiscal Management Assistance Team (FCMAT, the organization brought in to help districts in distress), that part of the problem is also that “County supts just ignore the existing language” because “the term parent and teach organizations is not defined.”

This despite the fact that EdCode 52063 clearly defines the District Parent Advisory Committee saying “The governing board of a school district shall establish a parent advisory committee to provide advice” and various parts of various codes are very clear on defining exactly which organization is allowed to represent teachers.

I guess the COE doesn’t know DPAC’s exist?  Or perhaps they just don’t want to take responsibility for doing their part in oversight?

And my last example, which puts it all together, from my home district – Oceanside Unified.

In March 2017 (2^nd interim FY17), OUSD’s budget was certified “qualified”, meaning they could not demonstrate the ability to meet it’s obligations in at least one future year.

In Fall/Winter of 2017-2018 OUSD was engaged in a very contentious negotiation with its certificated labor group, represented by the Oceanside Teacher’s Association (OTA).

In January 2018, the COE sent a letter to OUSD indicating they felt the district needed to cut $8.48M from the current year, $10M for 2018-19, and $24.5M from 2019-20.

During the March 14^th, 2018 Board Meeting the District presented a new agreement with OTA for approval (item 2.B.).  This agreement would add approximately $4M/year to the district’s costs.

Despite the well documented financial distress of the district at the time, having been told officially only a few weeks prior they needed to cut $8.48M from the budget, Question C was answered “N/A”.

At the time, I was also a parent representative in the district’s LCAP committee (my third year serving on that committee), where we were discussing the need to use data to identify future cuts we would have to make in programs and services for the kids.

Because we knew – based on what we had already been told by the District – that we were running out of money.

None of this was disclosed.

The COE’s response letter, dated March 13^th, 2018, indicated the Disclosure had been received by them on March 8^th, 2018.  No mention was made of the fact that this did not meet the statutory requirement for qualified districts that they be provided 10 days before being presented for approval.

The COE’s response also indicated the need for budget cuts, indicating $17.83M would needed to be cut from 2019-20.

The COE also made no effort to notify parents of this, as required by statute for qualified districts as well. 

I know this for a fact because I was the co-leader of the District’s Parent Advisory Committee at the time and no notice was received. 

And, despite the qualified nature of the budget and the fact that the district had been notified – twice – before the meeting, that cuts would be needed, no disclosure was made of this at the meeting. 

The agreement was approved unanimously. No Board member even questioned the District’s disclosure.

On May 8^th, 2018 at another Board Meeting, the District presented a proposal to give a “me too” raise to administrative and management employees (item 6. A.)  No additional AB1200 disclosure was presented (I was later told the cost of these extra raises had been included in the prior disclosure.)

Only three board members were present, the extra raises were approved 2-1. Again, no questions raised.

The revised OTA agreement, negotiated by the OTA and approved March 14th, 2018, contained some provisions affecting healthcare insurance, moving employees onto a new plan that was more cost-effective (an HMO), but allowing employees to keep their old PPO coverage if they wanted to pay a small amount toward the difference in cost.

On May 22^nd, 2018, the Board was presented with a proposal by the district to absorb that cost as well.  

Apparently the OTA did not know that the language they crafted would result in some employees needing to pay something for their health insurance and now objected.

This was projected to cost an additional $250,000/year.  No revised AB1200 disclosure was filed.

The Board, of course, approved. No questions were asked.

And then, throughout 2018 and 2019, we periodically heard of various needs to cut various things from the budget – Teachers On Special Assignment (TOSA’s), administrative support for Principals, the “College Bound” program, school psychologists, and bus service for disadvantaged Latino kids in a specific neighborhood.

Which was totally predictable.

How can we allow this to happen?

Is it somehow disputable that the District must let the Board and parents know if agreements made – to put more money into the paychecks of adults in the district – may result in cuts to programs and services to our kids?

Is it too much to ask that our districts put together a plan for fiscal responsibility as a part of their job?

Are we all happy having this hidden or swept under the rug?

I’m not, how about you?

Parent power is what it takes – join us at San Diego Schools to help leverage that power and share ideas on how to do it across all San Diego County school districts.

https://www.facebook.com/groups/sandiegoschools/

Todd Maddison
Oceanside, California
March 2020

CA Government Code section 3547.5

(a) Before a public school employer enters into a written agreement with an exclusive representative covering matters within the scope of representation, the major provisions of the agreement, including, but not limited to, the costs that would be incurred by the public school employer under the agreement for the current and subsequent fiscal years, shall be disclosed at a public meeting of the public school employer in a format established for this purpose by the Superintendent of Public Instruction.

(b) The superintendent of the school district and chief business official shall certify in writing that the costs incurred by the school district under the agreement can be met by the district during the term of the agreement. This certification shall be prepared in a format similar to that of the reports required pursuant to Sections 42130 and 42131 of the Education Code and shall itemize any budget revision necessary to meet the costs of the agreement in each year of its term.

(c) If a school district does not adopt all of the revisions to its budget needed in the current fiscal year to meet the costs of a collective bargaining agreement, the county superintendent of schools shall issue a qualified or negative certification for the district on the next interim report pursuant to Section 42131 of the Education Code.

http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=3547.5.&lawCode=GOV

CA Government Code section 3540.2

(a) A school district that has a qualified or negative certification pursuant to Section 42131 of the Education Code shall allow the county office of education in which the school district is located at least 10 working days to review and comment on any proposed agreement made between the exclusive representative and the public school employer, or designated representatives of the employer, pursuant to this chapter. The school district shall provide the county superintendent of schools with all information relevant to yield an understanding of the financial impact of that agreement.

(b) The Superintendent shall develop a format for use by the appropriate parties in generating the financial information required pursuant to subdivision (a).

(c) The county superintendent of schools shall notify the school district, the county board of education, the district superintendent, the governing board of the school district, and each parent and teacher organization of the district within those 10 days if, in his or her opinion, the agreement reviewed pursuant to subdivision (a) would endanger the fiscal well-being of the school district.

(d) A school district shall provide the county superintendent of schools, upon request, with all information relevant to provide an understanding of the financial impact of any final collective bargaining agreement reached pursuant to Section 3543.2.

(e) A county office of education, or a school district for which the county board of education serves as the governing board, that has a qualified or negative certification pursuant to Section 1240 of the Education Code shall allow the Superintendent at least 10 working days to review and comment on any proposed agreement or contract made between the exclusive representative and the public school employer, or designated representatives of the employer, pursuant to this chapter. The county superintendent of schools shall provide the Superintendent with all information relevant to yield an understanding of the financial impact of that agreement or contract. The Superintendent shall notify the county superintendent of schools, and the county board of education within those 10 days if, in his or her opinion, the proposed agreement or contract would endanger the fiscal well-being of the county office.of the district within those 10 days if, in his or her opinion, the agreement reviewed pursuant to subdivision (a) would endanger the fiscal well-being of the school district.”

http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=GOV&sectionNum=3540.2.

Education Code – EDC
TITLE 2. ELEMENTARY AND SECONDARY EDUCATION [33000 – 64100]
  ( Title 2 enacted by Stats. 1976, Ch. 1010. )
DIVISION 4. INSTRUCTION AND SERVICES [46000 – 65001]
( Division 4 enacted by Stats. 1976, Ch. 1010. )
PART 28. GENERAL INSTRUCTIONAL PROGRAMS [51000 – 53315]
  ( Part 28 enacted by Stats. 1976, Ch. 1010. )
CHAPTER 6.1. Public Schools Accountability Act of 1999 [52050 – 52077]
  ( Chapter 6.1 added by Stats. 1999, 1st Ex. Sess., Ch. 3, Sec. 1. )

ARTICLE 4.5. Local Control and Accountability Plans and the Statewide System of Support [52059.5 – 52077]
  ( Heading of Article 4.5 amended by Stats. 2018, Ch. 32, Sec. 60. )

52063.  

(a) (1) The governing board of a school district shall establish a parent advisory committee to provide advice to the governing board of the school district and the superintendent of the school district regarding the requirements of this article.

(2) A parent advisory committee shall include parents or legal guardians of pupils to whom one or more of the definitions in Section 42238.01 apply.

(3) This subdivision shall not require the governing board of the school district to establish a new parent advisory committee if the governing board of the school district already has established a parent advisory committee that meets the requirements of this subdivision, including any committee established to meet the requirements of the federal Elementary and Secondary Education Act, as amended by the federal Every Student Succeeds Act (Public Law 114-95), pursuant to Section 1116 of Subpart 1 of Part A of Title I of that act.

(b) (1) The governing board of a school district shall establish an English learner parent advisory committee if the enrollment of the school district includes at least 15 percent English learners and the school district enrolls at least 50 pupils who are English learners.

(2) This subdivision shall not require the governing board of the school district to establish a new English learner parent advisory committee if the governing board of the school district already has established a committee that meets the requirements of this subdivision.

http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=EDC&sectionNum=52063

A PDF version of this document can be downloaded here – https://drive.google.com/open?id=1t7iahiPrJcKHbbkLQ_uty7uCUBqdkRBv

March 7th, 2020