Local Accountability

Finding 4: Despite 1,000 locally elected district boards and a professed preference for local control, California's schools are run by the State -- directly through mandates and indirectly through fiscal constraints.

The history of schools in California is one of local control, beginning in the early days before statehood when settlers pooled resources to hire a teacher for the one-room schoolhouse they had built as a community project. But court rulings, voter initiatives and legislative mandates have steadily pushed the State into controlling ever increasing portions of the education system. While dominance by the State in education fiscal matters has been seen as the best route to equity, many believe the shift from local to state control has eroded financial resources for schools, public support for the education system and meaningful accountability.

Unlike the other issues in its study of school finances -- each of which prompted a variety of often-conflicting perspectives -- the Little Hoover Commission found universal support on its advisory committee for local control of schools. For most, this position translated into a desire to provide a new local-option funding mechanism for communities. At the same time, proponents expressed concern about balancing local control with the overriding need to ensure equity of opportunity for all students, regardless of where they live.

This finding summarizes the viewpoints shared with the Commission and found in education literature, as well as outlining proposals for reinvigorating local control of schools.

Who's in Charge?

Prior to the Serrano decisions and Proposition 13, school districts adopted a budget each year and set a local property tax rate that would raise enough revenue to support that budget. The local community could see where the decisions were made and how those decisions affected the community. Those who wanted a better education system might lobby the school board for improvements; those who wanted to keep a lid on taxes might argue for fiscal restraint.

In the cause of statewide equity, the Serrano court decisions stimulated a slow movement toward centralized, state-dominated school funding. The movement was dramatically accelerated when Proposition 13 effectively turned local property taxes into a statewide system. Now rates were universal throughout the State -- 1 percent with a 2 percent annual cap on valuation increases. The State became the director of who would receive what share of the property tax revenues and it became the banker for all of the educational needs beyond those that could be purchased for the new limited property tax revenues.

Today, as described in Finding 1, the State's education system is largely financed through state resources and directives. Although local districts complain that their options are now severely limited by their inability to raise revenues independently, they still control many aspects of schooling. They have substantial control over curriculum, classroom techniques, types of personnel hired and other day-to-day management issues. But once funding is exhausted, they are no longer free to make decisions or take action in response to community concerns unless they can muster the two-thirds vote necessary to approve a parcel tax (a flat tax not pegged to the property value) or a county-wide local option sales tax.⁽¹¹⁶⁾

Between Serrano and Proposition 13, the taxing and spending decisions for schools have been separated. This means that taxpayers have little incentive to participate in local school board matters since their rates are not affected by school board decisions. And local school board officials have little reason to feel accountable to local taxpayers since funding comes from the State.⁽¹¹⁷⁾ Instead, they may blame any problems with performance or services on the State's failure to provide adequate funding.

Intuitively, one might guess that making state government the major source of education funding would enhance the prospects for increased resources since a state has far more revenue-raising ability than a school district. But states also have far larger demands to meet, and the experience documented by researchers has been slower growth in education funding once primary responsibility shifts to the state. The reasons are multiple: Urban legislators who fight to keep needed social services flowing to their areas may have to trade diminished public school funding to protect their other priorities. Decisions about education funding are made by a much smaller group of people and thus are more easily influenced when the major decisions are made at the state level. And greater reliance on state funding places schools at greater risk when a state's economy sours.⁽¹¹⁸⁾

Some experts have suggested that in an era of equity and broad-based standards, local control is an anachronism that should be allowed to fade away. The quality of education should not be allowed to vary either because of the accident of location in a poor district (as addressed by Serrano) or the uncontrollable element of taxpayer willingness to vote for a higher level of taxation (even when the financial reward is controlled for equity by state grants to poorer districts).⁽¹¹⁹⁾

But others argue that states have too much on their minds to give education adequate support and lack the intimate knowledge of local conditions and needs necessary to make good decisions. One academic expert wrote:

Centralization of educational finance is no sign of success for education. California is a perfect example. With the Serrano decision and Proposition 13 together, California has a nearly totally centralized system of finance. Has that done well for education in California? Are California schools thriving because they now have a high level of state finance? The answer is obviously no. They've gone from an exemplary position to average or below. In my judgment, centralizing financing at the state level is no guarantee of equal educational opportunity, but even more it is not a guarantee of adequate resources.⁽¹²⁰⁾

No one is more aware of the decline in California's educational fiscal fortunes than advocates for school finance reform. Many have pushed for measures to return to greater local control of school finances.

Support for Change

As part of a series of recommendations called Making Government Make Sense, the Legislative Analyst's Office has urged policy makers to add a local funding option to the school finance structure. Such an option would be in line with three principles established by the Legislative Analyst: aligning funding responsibility with spending control, providing local control over local revenue levels and ensuring that local-option revenues are wealth-neutral. Under the Legislative Analyst's plan, districts could win added property tax revenue with majority voter approval. The additional funding would be limited by a statewide cap and the State would guarantee, through matching grants, that districts would receive equal revenue for equal tax rates, regardless of the assessed value of property varying between districts.

A similar plan was supported by the Little Hoover Commission's Education Finance Advisory Committee. Advisory committee members emphasized that local control is important because California is a diverse state with many different types of needs. Community involvement in and support for schools is important to make sure that diverse needs are met and that local concerns are addressed. While advisory committee members conceded that schools retain considerable control over many issues, their decisions are constrained by:

• State mandates that are only partially funded.
  
  

• State program directives from policy makers that limit flexibility.
  
  

• The difficulty of and limited number of options for raising revenues independently from the State.

The advisory committee said that the first priority should be high enough base funding for all schools so that adequate educational opportunities can be provided to all students. But the group also advocated the creation of a local-option revenue source -- such as an increase in the local property tax rate -- that could be approved by a majority vote, with a cap and an equalizing mechanism to forestall equity problems. That means that the State would provide extra funds to communities who voted to tax themselves but who have too low property values to raise the revenues available to wealthier districts who might vote to impose the same tax rates.

The support for a local revenue option was echoed in testimony to the Commission during its public hearing. One advocate said that such an option would bring real decision-making closer to the public:

With spending decisions determined locally and revenues determined at the state level, local taxpayers are understandably at a loss as to who to blame when available resources fall short of desired expenditure levels. With a funding system in which marginal revenues are raised locally, there would be no question as to where the responsibility rested.⁽¹²¹⁾

Providing a local revenue option would also address other negative consequences of the state-driven funding system, he told the Commission. The State would no longer find itself having to bail out districts that have made bad fiscal decisions, as the courts have ruled it must do regardless of the irresponsibility of a district. The ability of large unions, such as the California Teachers Association, to influence policy at the state level would be diluted if more decisions were made and funded locally. And the statewide consensus and large budgetary commitment that now must exist before reform can be implemented would no longer be a stumbling block if districts had the resources to make changes locally.

Other witnesses at the Commission's public hearing decried a pending initiative that would further constrain decisions by local school districts. The initiative would require 95 percent of all education funding to be spent at school sites, leaving only 5 percent of funding for district offices and activities. While many education reform movements advocate increasing decision-making ability and budgetary authority at school sites, no research has anointed the 95-5 percent split as the most efficient and effective means of allocating resources. Such an arbitrary split continues the pattern of holding educators accountable for process and inputs rather than academic results. And far worse, it presents the likelihood that school spending will become less efficient as districts artificially move chores to the school level to comply.

Other organizations have pressed for greater local control. Policy Analysis for California Education includes local-option revenues in its package of needed school reforms.⁽¹²²⁾ And the California Constitution Revision Commission recommended two amendments to the Constitution to re-empower school districts: