(Oakland) – The Assembly Education Committee yesterday approved AB 2008, the Oakland Unified School District Financial Solvency Protection Act on a vote of 6-3. "I greatly appreciate the Committee's recognition of the pressing need to protect the financial health of the Oakland Unified School District," Assemblymember Swanson said.

"Oakland's public schools face increasing financial challenges, most troubling of which is its continuing declining enrollment. The District has lost over 14,000 students in the last seven years, and with funding dependent on enrollment, it is becoming increasingly difficult for the District to provide a quality education for our kids while continuing to repay its loan from the State. One area that exacerbates this instability is the opening of new Charter schools, which creates a permanent drain on the District, making it increasingly difficult to maintain fiscal stability," Assemblymember Swanson stated.

AB 2008 would prevent the State Administrator and any other Chartering authority (which includes the Alameda County Board of Education and the State Board of Education) from approving a Charter within the Oakland Unified School District's boundaries until the District has completely paid off its loan from the State, and the School Board has reassumed full governing authority.

"Oakland's School Board has just received decision-making authority over facilities and personnel. The Board and the Superintendent it hires deserve the opportunity to address the challenges facing our schools without the additional fiscal strain of an even faster rate of declining enrollment. AB 2008 will prevent the approval of new Charters until the District is on sound fiscal footing, and the community once again has a full voice in the decisions of the District," Assemblymember Swanson said.

Charter schools are privately run institutions that receive public funding from the State, depending on the number of students enrolled at the school. Enrollment in Charter schools increased gradually in the early part of this decade, to about 2,300 students shortly before State receivership of the District began in mid-2003. Since that time, however, the number of Charter schools has increased dramatically, and enrollment more than tripled to about 7,000 students in the '06-'07 school year, or approximately half the total number of students lost to declining enrollment.

According to EdSource, a non-partisan organization that focuses on state education policy, funding from the State is tied to each student in the form of Average Daily Attendance, with Oakland Unified School District receiving approximately $6,000 per student in Average Daily Attendance monies. Charter schools are separate from the District, so the funds follow the student, resulting in the District losing revenue whenever a student leaves a District school for a Charter school. Based on these figures, the District lost at least $42,000,000 in '06-'07 due to Charter schools, an amount that is nearly half the total of the State loan.

Two factors highlight the difficulty of balancing the budget during declining enrollment. First, the District is obligated by law to make payments to the state for the $100 million loan it received as part of the State takeover before budgeting for any other expenditure. Second, many of its other expenditures are constrained by the logistics of teacher to student ratios, facilities, and other fixed costs, which can not be smoothly scaled down to match the drop in student numbers. For example, until enrollment reaches a certain point, a school must continue to fund a fixed number of teaching positions, forcing the District to cut in other areas to balance its budget.

"Since our schools' funding is determined by the number of students, declining enrollment is perhaps the largest budgetary challenge facing schools. This is even more true for Oakland, which is operating under a large debt. Opening new Charter schools will send more children out of the public schools, and force the District to make drastic cuts in order to balance its finances. Nursing and counseling services, as well as Physical Education, Art, and after school programs will be slashed, with some schools possibly resorting to larger class sizes in order to keep the District solvent. Approval of additional Charters at this point would further threaten the quality of our schools, and put at risk the State's investment in the District," Assemblymember Swanson noted.

The bill is scheduled to be heard next in the Assembly Appropriations Committee. A hearing date has not been set.