Senators on the Budget and Fiscal Review Committee generally praised the rationale and framework of Gov. Brown’s proposal to overhaul school funding in a four-hour hearing Thursday but questioned the details, timing, and the disparate financial impacts on school districts. One message came across clearly: They won’t be rushed into adopting Brown’s weighted student formula.

“These are worthwhile approaches, but I am troubled we are moving quickly without knowing the full impact,” said Sen. Alan Lowenthal, D-Long Beach. He and others called for turning the governor’s budget item into a full-blown policy bill – code for a two-year process. Brown wants the changes adopted now, so they can begin to be incorporated in next year’s budget.

Brown proposes a six-year transition, in which districts would receive a base amount per student, with substantial extra dollars for every English learning and low-income student. He would abolish nearly all categorical programs – funded programs for designated purposes, like class-size reduction and career technical education – and let districts spend all of the dollars however they see fit. (Go here to see how the formula would work.)

Districts with few disadvantaged students would receive little supplemental money, but the Brown administration is projecting that the base would rise over six years from $4,920 to about $7,000 as additional revenue from a revived economy flows into Proposition 98. Districts with large numbers of targeted kids could get $3,000 to $5,000 per student in addition to the base.

Extra funding for disadvantaged students is “the right, just, and morally responsible approach for the youth of California,” testified Los Angeles Unified Superintendent John Deasy, for it recognizes that program costs for English learners and low-income students are higher. And adding even more money to districts with concentrations of poverty is necessary, Deasy said, “to break the cycle of poverty.”’

Plan needs more work

But Deasy also had plenty of suggestions for changing the weighted student funding formula. His and others’ criticisms included the following areas:

What does “hold harmless” mean? Brown wants to start slowly, redistributing 5 percent of the weighted formula to poor districts next year. He’d guarantee that no district would get less money than they get now – but only for next year. Beyond that, when the formula really kicks in (15 percent in 2013-14, 40 percent in 2014-15), he’d count on new Prop 98 money to make the “loser” districts whole.

But, said Sen. Joe Simitian, D-Palo Alto, “we are struggling to get revenue  projections over the next six months, not to mention the next six years. Six years ago (budget estimates) were projecting growth of $1,000 per pupil. We are rather wide of that mark …” he said with understatement.

Brown is starting with a low base of $4,920, with no assurance that all districts would restore money lost since 2008 by the time the formula is fully phased in. But Nick Schweizer, budget manager for education with the Department of Finance, said that Prop 98 revenues should be enough to cover nearly all districts’ yearly COLAs. If revenues fell short, the administration would adjust the formula.

Formula adjustments: Elementary, unified, and high school districts currently receive different funding allocations per grade out of recognition that older students, who need to take labs, are more expensive to educate. Brown’s weighted formula doesn’t differentiate by grade, although Schweizer said the administration would consider a change.

Schweizer was less open to the idea of a regional cost adjustment, which Simitian and Committee Chairman Mark Leno, D-San Francisco, pushed. A 2008 version of a weighted student formula, co-authored by current President of the State Board of Education Michael Kirst, did include a regional cost of living factor. Since 85 percent of a district’s budget goes to personnel, regional costs of living are a huge factor for districts in high-cost areas, Simitian said. Heather Rose, an associate professor at the University of California-Davis, and co-author of a 2008 study on California funding formulas, reinforced that, telling the Budget Committee that overall wages in Santa Clara County were 54 percent higher than in the North Coast and 32 percent higher for teachers, reflecting a need to compete in the local marketplace.

Schweizer said that low-cost rural regions have complicating factors, too, like high busing expenses; determining which factors affect regions is complicated. That prompted Leno to remark, “Just because you don’t know, you should not ignore, throw up your hands and say you cannot deal with the complexity.”

Busing students to school is currently a $500 million categorical program. Brown would preserve it one more year, then throw it into the mix, along with other categoricals. Districts without large numbers of poor students would lose most of the funding. Both Deasy, an urban superintendent, and Sen. Noreen Evans, who represents rural Northern California, oppose that idea. Busing is “fundamental to students’ civil rights and access to school,” Deasy said.

Accountability question: Brown would impose no requirements on how districts spent the extra dollars for disadvantaged students. He is proposing to hold districts accountable for results, and has charged the State Board of Education to come up with new measures, beyond state standardized test scores, within the next year. Schweizer said that districts that raise achievement and meet targets would get 2.5 percent funding rewards, starting in 2013-14.

But some senators and the Legislative Analyst’s Office were uncomfortable with adopting a formula without new accountability measures in place. “I’m not comfortable with the existing accountability system to know how we are doing. This makes me very nervous,” said Sen. Lois Wolk, a Democrat from Davis.

Rachel Ehlers, who analyzes education for the nonpartisan Legislative Analyst, testified that district progress is particularly difficult to measure with English learners, because higher performing English learners are reclassified, only to be replaced with new non-English-speaking immigrants. Tracking individuals with the use of CALPADS, the new statewide database, will help eventually. Meanwhile, “we have a ways to go on oversight before turning (total flexibility) over to districts.”

Hybrid model: Concerned that simply giving districts more dollars for disadvantaged children won’t ensure that they’ll be spent on them, the LAO recommends that the Legislature consider block grants, which allow discretion over money for broad purposes with audits and public hearings to ensure the intent is followed. Assemblymember Julia Brownley, who chairs the Assembly Education Committee, takes this approach, using different weights, in AB 18, a weighted formula bill she’s been working on for a year. Besides a basic all-purpose amount, the bill would have a block grant for teacher training and development and an equity fund, directing dollars to English learners and low-income children. Brownley would consider setting aside money for adult and career technical education.

At the hearing, a dozen Oakland high school students called for accountability for money that should be spent on them. Their escort, Katie Valenzuela, with Public Advocates, said enforcement should be in place before a weighted formula is enacted. “Needs-based funding does not make sense unless it meets students’ needs,” she said.

Gaming the system: Giving premiums for English language learners creates incentives to overclassify children, who already comprise a quarter of the state’s students, and then not strive to move them along quickly to fluency. “Will you be an English language learner forever?” asked Sen. Jean Fuller, a Republican from Bakersfield and former school superintendent. “The weakness of the model is that there is no real defined exit and incentive for exit.”

In a comment in yesterday’s post, Rob Manwaring, who was a consultant for Gov. Schwarzenegger’s Committee on Education Excellence, noted that the Committee “proposed phasing out the funding for English learners after four years of funding with a full phase-out after six years as an EL student. This type of approach would counter any incentive to not redesignate EL students.” Since three-quarters of English language learners (the latest figure, according to Schweizer) are also low-income, they’d be covered by the formula anyway.