Proposition 20

Title:			California State Lottery: Cardenas Textbook Act of 2000.
Sponsor:			Assemblymember Tony Cardenas
Legislative History:			AB 1453 (Chapter 800, 1998). Legislative Initiative Amendment AB 2408 of 1988 by Assemblymember Jim Morrissey (withdrawn)

Major Provision:

• Allocates 50% of the increase in public education's share of California State Lottery revenues for the purchase of instructional materials.

Background:
In November 1984, voters approved Proposition 37, which enacted the California State Lottery Act to serve as a school-funding mechanism without raising taxes. Under this Act, approximately 50% of lottery revenues are designated as prize money, 34% or more is for public education, and 16% or less is to be used for lottery expenses. Additional money from lottery funds allocated to schools includes interest on lottery revenues, unclaimed prize money, and any other surplus revenues. The Act specified that the education revenues would be used exclusively to educate children and not for non-educational purposes.

In the Legislative Analyst's analysis of the lottery ballot initiative, it was estimated that education lottery revenues would be dispersed accordingly: 2% to the University of California, 5% to state universities, 13% to community colleges, and 80% to K-12 schools.

Although the LAO estimated that 80% of education lottery revenues would be funneled to K-12 classrooms, and the governor dedicates hundreds of millions of dollars for instructional materials each year (approximately $250 million for instructional materials in the 1998-99 budget), recent reports suggest that schools still have an insufficient supply of instructional materials, specifically textbooks. According to Assemblymember Cardenas:

• California is ranked 47th among states in per-pupil textbook spending.
• In a recent survey, over 50% of California's teachers reported not having enough textbooks for classwork and homework assignments.
• California has no exclusive funding source for student textbooks.
• In a recent statewide poll, 87% of California voters indicated support for funding student textbooks by reallocating 3% of lottery prize money.

Consequently, the author has placed this initiative on the ballot to dedicate at least 50% of the growth of education's share of lottery revenues to instructional materials.

Prior legislation (AB 2408 by Assemblymember Jim Morrissey of 1998) would have designated all new public education lottery revenues to instructional materials. It was withdrawn by its author.

Policy Considerations:

• Since instructional materials comprise a vital part of student's ability to learn, and it appears that California school children are facing a textbook crisis, shouldn't some education lottery revenues be earmarked exclusively for this purpose? Could this measure force schools to spend lottery education dollars more practically by designating a portion of education lottery funds specifically to instructional materials?
• What does the author mean by "instructional materials"? Since they are not defined in this initiative, is there a guarantee that schools will spend lottery revenues on textbooks to mitigate shortages? If funds are not exclusively dedicated to the purchase of textbooks, is this initiative really necessary since the intent of the California State Lottery Act is to provide funds to be used exclusively for the education of pupils and students -- and not the acquisition, construction or financing of property or the use of other non-instructional purposes. Without specific guidelines or definitions of "instructional materials," could this initiative allow schools to waste vital education dollars on ineffective or impractical materials that they view as instructional aids?
• Could this initiative be setting a future precedent? Is it possible that subsequent initiatives will appear on the ballot to dedicate a portion of lottery education revenue increases to music, sports, field trips, math and science classes, etc.? If this occurs, isn't it possible that all education lottery increase revenues could get locked up, preventing schools from having any discretionary funds from this particular funding source?

Fiscal Impact:
According to the Legislative Analyst, in the near term, tens of millions of dollars in annual lottery revenues that go to public education would be earmarked for instructional materials. Amounts earmarked in future years would depend on changes in the level of overall lottery revenues.

Support Arguments:

• California has an alarming textbook shortage. Prop. 20 will guarantee that students have a consistent source of funding for textbooks, without increasing taxes or expanding the lottery. When it comes to academic achievement, textbooks are second only to competent teachers.
• When voters approved the Lottery in 1984, the California Department of Education strongly recommended that districts use lottery funds for one-time costs such as textbooks, computers and field trips. The Department discouraged the funding of ongoing costs with fluctuating lottery revenues. However, districts continually spend lottery funds for ongoing costs.
• A recent statewide survey indicates that the majority of Californians support increased funding for textbooks: 72% believe it is "important" or "very important" that all California public school students have current textbooks; 65% believe the state, not the local governments, should fund the purchase of new textbooks; 60% believe it is more important to provide funds for current textbooks than to fund class-size reduction and new classrooms.

Support Arguments Signed By:
Tony Cardenas, California State Assemblymember, 39th District; Nell Soto, California State Assemblymember, 61st District; Manny Hernandez, trustee, Sacramento City Unified School District; Judith Cochrane, teacher; Carol S. Horn, parent.

Opposition Arguments:

• Our state budget already provides ongoing funding for textbooks. In addition, a new state program is providing $1 billion for textbooks over the next four years.
• Presently, the use of the lottery dollars that come to local schools is left to the decision-making of local school boards and allocated for local priorities. Prop. 20 takes away this local control - just one more way for Sacramento politicians and bureaucrats to meddle in local school decision-making.
• Because lottery funds fluctuate every year, many local districts dedicate these "unstable" funds to one-time only expenditures. Allowing each district to choose what they need most is the best use of lottery funds.

Opposition Arguments Signed By:
Assemblymember George R. House, Jr., Assembly District 25; Assemblymember Steve Baldwin, Assembly District 77; Wayne Johnson, president, California Teachers Association; Sandy Clifton, president, Association of California School Administrators; Leslie DeMersseman, president, California School Boards Association.

Cal-Tax Position:
Oppose. This measure would take away local discretion to spend lottery revenues by unnecessarily earmarking the lottery education funds.