Scott looks to overhaul school-finance system

A longstanding dispute over how to fund California’s public schools has resurfaced this year. Leading the charge is Sen. Jack Scott, D-Alta Dena, who wants to move schools away from the average daily attendance, or ADA, system used to calculate state payments to public schools.

Instead, Scott wants schools to receive public funding based on average monthly enrollment. The state’s largest teacher’s unions support the proposal. Opponents of the plan include Schwarzenegger administration officials who say the plan will lead to a spike in Proposition 98 funding for schools and remove what they call a key incentive for schools to ensure students come to class.

Scott insists the plan is not an attempt to spike education funding. Rather, he says, it’s simply a way to lighten the bookkeeping load on local schools and create a more logical system of public-school finance.

Under current law, schools receive about $5,900 per student for every academic year. That money is prorated on a daily basis, based on attendance. If a student misses a day of school, the school loses out on the money, whether or not the absence is excused or not.

According to Department of Finance figures, there are about 6.3 million public K-12 students in California. In 2006-07 budget year, the state is estimated to pay schools for about 5.94 million students, after factoring in all student absences.

Despite Scott’s claims that his measure would be “revenue-neutral,” the Department of Finance expressed concerns that changing the accounting system could change the state’s obligation to schools.

At the Senate Appropriations Committee hearing this week, department spokesman Tom Sheehy said even the smallest shift in numbers could cost the state billions.

“DOF says a 5 percent difference would result in ongoing Proposition 98 General Fund costs of nearly $1.7 billion [assuming a base revenue limit of $5,700 and an enrollment of 6,000,000],” Sheehy said.

Senate Education Committee consultant James Wilson says those arguments simply are not valid. “This bill would just make it simpler and easier to collect attendance data. There is language in the bill that would ensure it is” revenue neutral.

The largest issue, says Wilson, is a more fundamental split over the role of linking daily attendance to funding. Administration officials have said they believe linking funding to attendance gives an incentive to schools to ensure students come to class. Opponents say there is no logical link between daily attendance and school funding.

Finance spokesman H.D. Palmer said, “While the governor’s office does not take positions on specific legislation being debated in the Legislature, we do have concerns with this approach. We believe the ADA gives you a more accurate snapshot of how many students are actually at school, receiving instruction.”

In fact, Governor Arnold Schwarzenegger vetoed a similar measure by Senate President Pro Tem Don Perata last year. In his veto message, Schwarzenegger said, “I am concerned it could remove fiscal incentives currently in place for schools to maximize student attendance. If such a change were to negatively impact student attendance, it would also undermine student achievement because believe they are better served through rigorous daily classroom instruction.
“If the state were to make such a significant change in how it funds schools it should be done with careful research and review.”

The governor’s office is still digesting mountains of data compiled in new studies overseen by the governor’s committee on education excellence. The studies looked at what schools would need to be adequately funded to provide a quality education to public-school students.

Schwarzenegger has said that while he is preoccupied with health care and prison issues this year, education will be his focus next year. His administration is taking a look at how to revamp the public-school finance system.

Even supporters of Scott’s bill concede this issue will probably stall in the Legislature this year and be part of a larger discussion next year.

Contact Anthony York at

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