Proposition H - Public Education Fund

What it does

"The Great Schools Charter Amendment" mandates that over a five-year period, starting in Fiscal Year 2005-06, the City will phase in an annual funding of $60 million from the General Fund for preschool and K-12 public-school enrichment programs. Funding can be reduced when the City faces deficits or if State funds are allocated that would replace City funding.

Why it is on the ballot

While California once led the nation in public school spending and performance, investments have greatly declined. Despite its high cost of living, San Francisco per pupil spending ranks 34th among 43 comparable central city public school districts of similar size. San Francisco Unified School District (SFUSD) enrollment has dropped in recent years as families have left the city in search of affordable neighborhoods with high quality schools.

Since the mid-1980s, the City has transferred General Fund monies to the school district in many years. (In addition, the Board of Supervisors established a ticket tax on Candlestick Park admissions to fund high school sports.) However, the amounts have not been consistent. The result has been reductions in enrichment programs, hiring freezes, a shortage of pre-school slots, and other problems.

Pros

Those who support this measure state:

• The School District has made strong improvements over the last three to four years. However, declining State support has resulted in a reduction in funding for enrichment programs, general program cuts, hiring freezes, a shortage of pre-school slots and an enrollment drop as middle income families leave the city. While money alone cannot improve the schools, it is surely a necessary ingredient.
• This measure will provide the funds necessary over the full implementation period to restore art, music and sport programs, ensure universal preschool and hire enough librarians to bring the student-librarian ratio up to the national average. It will not fully fund the District, but it is a major contribution.
• Relative to the $2 billion dollar General Fund budget, the $60 million amount is small and can be absorbed through revenue growth and a reprioritization of City expenditures. There are plenty of opportunities to improve the efficiency of local government, to come up with the savings to make up the $60 million.
• Writing in the sunset clause in 2015 is responsible, and will allow us to consider if this measure is working as intended.
• Although technically this doesn't need to be on the ballot because the Board of Supervisors can appropriate funds for the SFUSD in the normal budget process, in reality, if the SFUSD is going to be able to plan and develop programs, it needs a stable funding source that it can count on each year.

Cons

Those who oppose this measure state:

• The set-aside issue remains the strongest argument against Prop. H. The City will be confronted with difficult budgets for the next few years and most likely again during the life of this measure. If we continue to tie up ever larger portions of the City budget into rigid spending formulas that can only be changed at the ballot, our elected leaders will have their hands tied as they try to respond to emerging policy priorities and social problems.
• This is not the responsible way to establish set-asides. Where other set-asides, like those for Muni and Rec & Park, are defined as a percent of the General Fund, Prop. H institutes a fixed, hard-dollar-amount obligation.

SPUR's analysis

Prop. H would require the City, starting in 2005, to phase in an annual contribution in addition to the amount appropriated in the 2002-03 fiscal year. The baseline appropriation is approximately $8 million. The enrichment fund would grow from an additional $10 million in 2005 to $60 million in 2009. It continues at the $60 million level, plus or minus any changes in General Fund revenues, through Fiscal Year 2014-15. At that point, funding would have to come back to the voters to be reauthorized.

Under Prop. H, one-third of the funds must be appropriated to art, music, sports and libraries; one-third to pre-school programs; and one-third (or equivalent in-kind services) to the District for general educational purposes. Expenditure plans and audits are required and the Supervisors can place reserves on any appropriations made pursuant to this Charter amendment

The Controller is charged with identifying structural budget changes that equal the funding required to be transferred to the School District in any year. If, in any year, a budget deficit of $100 million or more is projected by the City, the funding required by this amendment may be reduced by up to 25%. Any reduction would be repaid to the District between 2015 and 2018. The amounts can also be reduced by any amount of new State or locally dedicated funding for the School District.

Although SPUR has reservations about budget set-asides, it has become a fact of life in the Charter and set-asides are now a normal way of setting priorities for City expenditures. (There are set-asides for parks, transit, and libraries, among others.) In this case, our judgment is that education is an area of public spending that needs to increase relative to other areas. The quality of life for many San Franciscans is directly tied to the quality of public education. A fixed revenue stream from the General Fund to the District will allow for program improvements. The fact that this will force cuts to other parts of the budget may, in fact, result in positive changes. It sets the right priorities and should be approved.

SPUR recommends a "Yes" vote on Proposition H.