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Costing Out |
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Historical Background
Serrano v. Priest
In 1971, the California Supreme Court ruled education
a fundamental constitutional right and remanded Serrano
v. Priest, 487 P.2d 1241, for trial in what is
generally regarded as the first of the modern-era education
finance litigation decisions. In 1976, in Serrano
v. Priest (Serrano II ), 557 P.2d 929, the same
court affirmed the lower court's finding that the wealth-related
disparities in per-pupil spending generated by the state's
education finance system violated the equal protection
clause of the California constitution. The court distinguished
the U.S. Supreme Court's 1973 Rodriguez
decision, which applied only to the federal constitution.
When the subsequent Serrano remedy was challenged in
1986, 93% of California students were in school districts
whose per-pupil spending was within $100 of each other.
The court held, in Serrano v. Priest, 226 Cal. Rptr.
584 (Court of Appeal, 2d District 1986), that this level
of disparity satisfied California's equal protection
requirements.
Williams v. State
In 1999, several California organizations filed a school
funding case, Williams v. State, in state superior
court on behalf of a class of students attending substandard
schools. The complaint cited inadequate, unsafe, and
unhealthy facilities, a shortage of qualified teachers,
missing libraries, a lack of instructional materials,
and overcrowded schools that resulted in a staggered
and shortened school year (together known as Concept
6). The state filed cross-claims against 18 school districts,
but in 2000 plaintiffs won a motion to sever and stay
proceedings on the cross-claims.
The court granted class certification in 2001, the Williams
plaintiffs released their experts' reports in 2002,
and the trial was scheduled to begin in 2004. Instead,
in August 2004 the parties announced a settlement –
later approved by the court – to: (1) provide
$800 million over the next several years for school
repairs; (2) create a School Facilities Needs Assessment
program; (3) create standards for instructional materials
and facilities; (4) require a complaint process for
inadequate instructional materials, teacher vacancies,
and emergency facilities problems; (5) intervene in
schools ranked in the bottom 30% under the 2003 Academic
Performance Index if instructional materials and facilities
standards are not met; (6) streamline California credentialing
for out-of-state credentialed teachers; (7) allocate
about $140 million for instructional materials in 2004-2005;
and several other provisions.
While the parties were optimistic about the settlement,
leaders of some education organizations were concerned
that it might focus too much on monitoring and compliance
and not enough on educating every child, and that the
amount of the settlement may be insufficient to repair
every school and provide books to all children.
Plaintiffs were represented by a team of organizations,
led by Public
Advocates, Inc., the ACLUs of Northern
and Southern
California,
Morrison & Foerster, LLP , and the Mexican
American Legal Defense and Educational Fund (MALDEF).
Renee v. Duncan
In Renee v. Duncan, a coalition of parents,
students, community groups, and legal advocates sued
the United States Department of Education in federal
district court in San Francisco in August 2007 because
it allows novice teachers in training to be considered
“highly qualified,” the central teacher
qualification requirement under NCLB.. The plaintiffs
claimed that classification of intern teachers as highly
qualified harms students, especially the “large
numbers of poor and minority students” served
by these “intern teachers.” “A primary
purpose of NCLB was to address this problem,”
said one plaintiff.
In July 2009, the U.S. Court of Appeals for the Ninth
Circuit ruled
that the plaintiffs lacked standing to challenge the
regulation. While trial court had upheld the Department’s
interpretation of the statute, the appeals court did
not even reach the substantive issues, since they held
that plaintiffs had not shown sufficient legal injury
to qualify them to bring the case. The reasoning was
based on the fact that under the amorphous NCLB definition
of “highly qualified,” which leaves it to
the states to define the requirements for “full
State certification,” the State, even in the absence
of the challenged federal regulation, could hold that
teachers participating in alternative internship programs
were credentialed.
Recent
Events
Reed v. State of California
In February 2010, families of three Los Angeles Unified
School District (LAUSD) filed
suit against the State and district over the State’s
decision to reduce education funding levels in response
to the fiscal crisis and LAUSD’s subsequent choice
to layoff thousands of teachers. The plaintiffs’
schools, which primarily serve students of color, children
from poverty backgrounds and English Language Learners,
suffered greater reductions in staff than many of their
affluent counterparts due to seniority rules.
Due to the layoffs, the plaintiffs’ schools lost
teachers whose efforts had resulted in significant increases
in student performance, as well as entire departments
in core subject areas. According to the complaint, vacancies
were filled by long-term substitutes and permanent teachers
from the rehire pool, including many without credentials
to teach in their assigned subject areas and grade levels.
Since the case was filed in February, over 20,000 teachers
have received pink slips.
Plaintiffs charged the State with violating the equal
protection, education and privileges and immunities
clauses of California’s constitution. In addition
to declaratory relief, the plaintiffs requested that
the Court prohibit defendants from laying off teachers
at Gompers, Liechty and Markham in the 2010-2011 year,
laying off a greater percentage of teachers at these
schools than at the average LAUSD school, contributing
to a higher rate of turnover at these schools than in
the average LAUSD school, and inflicting any “further
educational harm.”
On May 13, 2010 the Court issued an order granting a
preliminary injunction. The Court accepted many of plaintiffs’
allegations and held that the school system “could
not bargain away students’ constitutional rights.”
The order enjoined the school district from implementing
any budget-based layoffs of classroom teachers at the
three schools that were the subject of the litigation
during the pendency of the case.
Two New Cases Challenge Inadequacy to State Finance
System
The plaintiffs in Robles-Wong,
et al. v. State of California, an adequacy
case filed in May, 2010, argue that the State’s
current funding scheme is entirely divorced from educational
realities and actual costs, and the State’s continued
reliance upon it constitutes a violation of the state
constitution. In addition to taking the more traditional
tack of arguing that inadequate funding infringes upon
students’ fundamental right to education and violates
the equal protection clause, the plaintiffs also contend
that the State’s failure to align funding with
its academic requirements and expectations amounts to
a failure to provide a functioning “system”
of schools as required by Article IX of the state Constitution.
In addition, they assert that Art. XVI, which states
that “from all state revenues there shall first
be set apart the monies to be applied by the state for
the support of the public school system” means
that the State must treat financial support for schools
differently from other spending decisions and “intentionally
and rationally” determine and provide for the
actual costs of its comprehensive education program.
The complaint provides a very detailed and dismal overview
of the state of public education, which persists in
spite of California’s aspirational “comprehensive
educational program.” In 1995, the legislature
outlined the specific content and skills that public
schools must impart to all students so that they can
“succeed in the information-based, global economy
of the 21st century.” The legislature also mandated
a range of programs, including targeted services for
at-risk groups, which schools must provide in order
to ensure that all students are able to meet state standards.
However, only 50% of all students—and 37% of African
American and Hispanic students—demonstrated proficiency
in English Language Arts in 2008-2009, and the graduation
rate hovers below 70%. These disappointing outcomes,
plaintiffs contend, are directly related to the failure
of the State’s finance system to provide school
districts the funds to ensure that students have access
to, among other inputs, quality teachers, small class-sizes,
and supplemental or remedial services if needed. (For
example, the complaint asserts that California ranks
49th both in providing computer access and in its teacher-student
ratio.)
Plaintiffs have asked the Court to declare the system
unconstitutional, enjoin the state from using the current
funding formula and mechanisms, and require that the
legislature act to craft a new, constitutional finance
scheme.
A coalition of advocacy groups, parents and students
filed
a second education adequacy case against the State
of California and Governor Arnold Schwarzenegger in
June 2010, seeking to counter the impact of a state
fiscal crisis that so far has resulted in over 16,000
teacher layoffs and cuts to core academic programs.
The four grassroots organizations—the Alliance
for Californians for Community Empowerment (ACCE), Californians
for Justice (CFJ), San Francisco Organizing Project
(SFOP) and the Campaign for Quality Education (CQE)—represent
thousands of students of color and children from poverty
backgrounds. The case, Campaign for Quality Education,
et al. v. State of California, relies on the same constitutional
clauses, and many of the same basic facts and statistics
in their complaints as do the plaintiffs in Robles-Wong.
The new case differs in its focus on the unique needs
of students from disadvantaged backgrounds, and its
emphasis on pre-school services and on the creation
of data systems to ensure the most effective use of
funds.
The plaintiffs are represented by Public Advocates,
counsel in the seminal Serrano v. Priest litigations.
They have asked the Court to declare the existing school
financing system unconstitutional, “provide injunctive
relief as necessary to achieve compliance with the Constitution,”
and retain jurisdiction.
Costing-Out
In 2002, the State passed a law establishing the California
Quality Education Commission to develop a Quality
Education Model (QEM) for pre-K through grade 12, in the
image of a similar commission in Oregon.
The Commission was to be appointed by the governor, legislative
leaders, and the Superintendent of Public Instruction,
and was charged with determining the "educational
components, educational resources, and corresponding costs"
necessary "so that the vast majority of pupils can
meet [state] academic performance standards." The
law required the Commission to involve parents, educators,
school board members, and the public in the design of
the QEM, and to issue a report in July 2004.
However, soon after he took office, Gov. Schwarzenegger
withdrew the appointments made and has chosen not to appoint
members to the commission.
A number of cost studies, utilizing differing methodologies
were undertaken as part of “Getting
Down to Facts,” an extensive collection of studies
of California’s education system released in March
2007. Two of the main studies were performed by Jay Chambers,
Jesse Levin, and Danielle DeLancey of the American Institutes
for Research (AIR) and by Jon Sonstelie of the Public
Policy Institute of California (PPIC).
Jennifer Imazeki of San Diego State University also produced
a cost function study
to determine how levels of spending should vary amongst
districts depending on their student populations. Her
study takes an econometric approach by looking at spending
as a function of outcomes, and outcomes as a function
of spending. It uses data on per-pupil school expenditures,
student performance, and various characteristics of students
and school districts. These methods result in a very broad
range of possible results, largely because of inefficiencies
in the present California education system.
In addition, the AIR study, a professional judgment study,
asked panels of superintendents, principals, teachers,
and business officials from “beating-the-odds”
schools to outline the resources necessary for providing
children an adequate education, in accordance with the
state’s performance standards. California, the researchers
found, had incredible resource gaps, ranking 25th among
all the states in regard to tdotal per pupil expenditures,
but falling to 44th when expenditures were adjusted for
geographic cost differences. In addition, 42 percent of
all students came from language minority backgrounds and
25 percent of students were classified as English learners.
The state spent $45 billion annually on education, and
the study concluded that $24 to $32 billion more –
a 53 to 71 percent increase – was needed for all
schools to reach adequacy. Most of the increased costs
came from extending the school day and/or year, hiring
more teachers to reduce class sizes, hiring more specialists
to work with special-needs students, and more high-quality
professional development time for educators.
The spending increase recommended by the PPIC study was
slightly lower, coming in at $17 billion, or 40 percent,
but the authors noted that this amount was not the full
amount required to meet the state’s education goals,
which California calculates as an Academic Performance
Index (API).
The PPIC study utilized a new costing-out methodology.
Instead of asking panelists to design schools, researchers
gave electronic surveys to almost 600 educators. Each
educator, working independently, was given a hypothetical
school and a maximum budget, and was asked to allocate
resources and estimate the API for that school. The authors
then extrapolated the costs necessary for each of California’s
schools to reach the state goal of an API of 800.
The authors found, however, that to reach an API of 800
many schools would have to exceed the highest maximum
budget provided to participants in the study. Not wanting
to extrapolate the cost-achievement relationship outside
the bounds they studied, they truncated estimated costs,
resulting in a maximum per pupil cost for any school of
about $11,500. This truncation, the authors noted, left
fully half of schools below an API of 797. The $17 billion
increase, therefore, was not the full cost of adequacy,
but only an estimate of what was needed to start California’s
climb towards adequacy. “Getting Down to
Facts” also included studies looking specifically
at the resource needs of special education students and
English learners. Both of these studies concluded that
conventional “costing out” techniques shed
little light on the true costs of educating these groups
of students. The special education study, for example,
found that the actual per pupil expenditures for students
receiving special education services was greater than
estimates derived through various costing-out methodologies.
In addition, while current levels of spending may be enough
for students to meet the goals outlined in Individualized
Education Programs, they may be insufficient for reaching
federal targets under the No Child Left Behind Act.
“Getting Down to
Facts” “Getting Down to Facts,”
the unprecedented education finance study in California
that brought together researchers from 32 institutions
was released in March 2007, after 18 months of planning
and preparation. The final 1700-page report encompassed
20 separate studies that touched on virtually every aspect
of the education finance and governance structures in
California.
The California project, overseen by Dr. Susanna Loeb and
others at Stanford University, was exceptionally broad
in scope, including studies of the state’s school
finance systems, education governance, personnel issues,
and data systems, as well as more traditional “adequacy”
cost studies. The
over-all conclusion of the studies was that California’s
education system is substantially under-funded, but that
funding increases must be accompanied by major governance
reforms and elimination of regulatory and contractual
impediments to efficient functioning and the implementation
of meaningful reforms, if the extra funds are to really
matter. Yet, despite strong recommendations, the study
has received little attention.
Useful Resources
EdSource
Online is a comprehensive source of information on California's
education system. Their overview of the state's very complicated
finance
system is especially useful.
Last updated: August 2010
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