Louis Freedberg, education reporter for California Watch, reports today on a study just released by the RAND Corporation and UC Berkeley's Policy Analysis for California Education on the dispersal of state funds to public school districts in a program known as "categorical funding."
In 2009, the Schwarzenegger Administration decided to conduct an "experiment" with the money, giving school districts "complete flexibililty" in how the money is spent -- allowing them to divert the funds from "students with special needs" (see definitions below) to "other purposes."
Categorical funds—monies allocated for specific programs or to serve categories of students with special needs—have traditionally represented about a third of school district income on average. But the recent state and national economic crisis has resulted in significant changes to California's categorical programs.
In February 2009, to help districts deal with budget cuts, lawmakers made substantial changes to many of the state’s categorical programs, allowing districts the flexibility through 2012–13 to use funds from about 40 state categorical programs for other purposes. These newly flexible programs total about $4.5 billion statewide in 2009–10 (nearly 20% lower than their 2008–09 funding level). Prior to implementing this new flexibility, a district or county office of education (COE) must discuss proposed changes at a public meeting.
And so, what happened? According to Freedberg's report:
Over the years...school officials have complained that the programs involve too much bookkeeping and red tape. Two years ago, as part of a compromise to get Republican support for passage of the state budget, the state lifted the requirements on how funds for 40 of those programs are spent, at least through the 2012-13 school year. Gov. Jerry Brown has proposed extending that timeline by an additional two years...The study found that districts tended to "sweep" revenues previously intended for specific programs into their general funds to help them cover other costs.
The survey was conducted among 90 public school principals, 70% of whom said they were not involved in the decisions as to how categorical funds would be spent.