Action Guide June 2, 1998

DESCRIPTION

This initiative statute (dubbed “95/5") would prohibit school districts from spending more than five percent of funds from all sources for administrative costs, including instructional resources supervision and supervision of instruction. The remaining 95 percent of funds would have to be spent on direct services to students, school site employees and school facilities. Districts would be fined for failure to comply, estimated to be about $175 per student. Districts would have to publish their percentage of administrative costs annually, report expenditure information to the State Board of Education, and do performance audits and fiscal efficiency reviews every five years. They would have to develop systems linking planned expenditures to specific performance objectives. The measure does not allow for any exceptions for emergency or special circumstances. Fines would be paid to the State Board of Education. According to the Legislative Analyst, fines collected would be redistributed to schools which meet the five percent cap on administrative spending through the state budget process.

BACKGROUND

School districts now provide information on how they spend their funds to the State Department of Education each year, including administrative costs now averaging 7.3 percent. About 95 percent of districts now exceed five percent. The Legislative Analyst estimates that this measure would require districts overall to reduce administrative costs by up to $700 million, and result in new administrative costs of about $10 million annually for performance based budgeting and $20 million every five years for auditing. To comply with the measure, districts might track time employees spend on direct services or administration more carefully, or move some tasks now done centrally, such as facilities management or printing, to school sites. Large districts with big budgets and many school sites are likely to be better able to make such adjustments in order to comply, but small districts with lower budgets and limited options would find it more difficult to do, and would be more likely to incur fines.

IMPORTANT POINTS

• Passage of Proposition 223 would not promote efficiency or improve educational programs. Instead it would:
  
  • restrict the flexibility of local school boards to manage their programs in the best interest of their communities
    

  • add to the administrative costs and burdens of local districts through the new procedures it requires in calculating and reporting expenses and performance measures
    

  • generally affect small districts most severely, because the larger districts with bigger budgets would more easily be able to shift or redefine costs
    

  • impose fines for non-compliance that would cost money better spent on students
    

  • adversely affect districts with certain kinds of programs, (e.g. for Limited English Proficiency students or other students with special needs, or court ordered desegregation programs, such as San Francisco) which are funded from state or federal sources and carry special administrative requirements.
    

• Districts are likely to simply restructure or shift spending from one category to another in an attempt to comply with the measure, and may make changes that are neither efficient nor cost effective.
  

• Categories used by the initiative are somewhat ambiguous and differ from those now used by the Department of Education, which is likely to cause problems in compliance.
  

Supporters Signing ballot argument for: Richard Riordan Mayor, Los Angeles Dianne Feinstein United States Senator Tyrone Vahedi, Senior Staff, Board of Equalization, 4th District

Opponents Signing ballot argument against: Rosaline Turnbull, President, California State PTA Stephen C. Bock California Teacher of the Year, 1997 Rusty Herod, President, California School Employees Association

Resources

Parents, Teachers and Educators for Local Control, 400 Capitol Mall, Suite 1560, Sacramento 95814, 916-446-8866, www.jps.net/campaign/no95-5; Bonnie Mertus, Campaign Coordinator.

An analysis of Proposition 223 by the California Department of Education is available at their website listed below. The second site listed provides data on administrative costs for each county.
http://www.cde.ca.gov/ftpbranch/sbsdiv/955final.htm
http://www.cde.ca.gov/ftpbranch/sbsdiv/counties.htm