Background

Most of the employees of K–12 school districts are referred to as “certificated” employees. These consist mainly of teachers but also include instructional specialists, counselors, and librarians. All of these employees must have some type of license (or certificate) prior to being employed by a district to show basic qualifications in their job area.

Job Status of Certificated Employees. Under current state law, certificated employees serve a probationary period during their first two years of service with a school district. During the probationary period, state law currently requires certificated employees to be evaluated at least once a year. At the end of the employees’ first or second year, school districts may choose not to rehire them without offering specific reasons. If not rehired, probationary employees do not have the right to challenge the decision. At the start of their third year, certificated employees are considered permanent (or tenured). (See the nearby boxes for some additional information related to California’s probationary policies for certificated employees, primarily teachers.)

Dismissal Process for Permanent Employees. Under current state law, permanent certificated employees may be dismissed for unsatisfactory performance as well as a variety of other reasons (such as dishonesty and unprofessional conduct). Most permanent employees must be evaluated at least once every two years. If, however, they receive an unsatisfactory evaluation, they must be assessed annually until they achieve a satisfactory evaluation or are dismissed. Regardless of the reason for a dismissal, the dismissal process (also set forth in state law) consists of about a dozen stages. The process begins with a school district specifying reasons for dismissal and providing a 30-day notice of its intent to dismiss. If requested by the employee, the process includes a formal administrative hearing and the right to appeal to a Superior Court and then a Court of Appeal. Before being dismissed for unsatisfactory performance, the school district must first provide employees a 90-day period to allow them an opportunity to improve their performance.

Proposal

Proposition 74 would change existing state law in the following ways.

Extends Probationary Period to Five Years. The proposition extends from two to five years the probationary period for new certificated employees.

• Provide the 90-day period currently given to permanent employees to allow them to improve their performance.
• Provide as much initial documentation identifying specific instances of unsatisfactory performance (beyond that included in the evaluations themselves).

The effect of these changes would be to reduce requirements in the initial stages of the dismissal process and potentially place greater focus on the evaluation process. Although these changes would apply to all certificated employees, their primary effect would be on teachers.

Fiscal Effects

The proposition would affect costs relating to teacher compensation, performance evaluations, and other activities.

Effect on Teacher Compensation Costs
The proposition would affect school district teacher costs in a variety of ways. The net impact would depend on future district actions, and these effects would vary significantly by district. For example, districts would experience reduced teacher costs in the following cases:

• Given the longer probationary period, districts could dismiss more teachers during their first five years. This could result in salary savings by replacing higher salaried teachers toward the end of their probationary period with lower salaried teachers just beginning their probationary period.
• Similarly, due to the proposition’s modifications to the dismissal process, school districts might experience greater turnover among permanent teachers. This too would result in teacher-related savings from replacing higher salaried veteran teachers with lower salaried, less experienced teachers.

In contrast, districts would experience increased teacher costs in the following instances:

• The supply of teachers could be reduced because the longer probationary period and modified dismissal process might be perceived as increasing job insecurity. This would have the effect of putting upward pressure on teacher compensation costs.
• The longer probationary period could lead districts to retain some struggling new teachers beyond the current two-year period to give them additional chances to succeed. By retaining these teachers—instead of replacing them with lower-cost entry level teachers—this would have the effect of increasing teacher salary costs above what they otherwise would have been.

As noted above, the net impact on a school district could vary significantly, depending on such factors as the local labor market, the perceived desirability of working in the district, and district actions in response to the measure.

These costs would also vary significantly from district to district. The costs could range from minor (for districts meeting these additional tasks with existing administrative staff) to more significant (for those adding additional staff to meet these responsibilities). Depending on how districts respond, the statewide costs could range from relatively minor to the low tens of millions of dollars annually.

Administrative and Legal Costs. The proposition’s effect on school district administrative and legal costs is unknown. On the one hand, the proposition simplifies the dismissal process by requiring slightly less documentation and eliminating the special 90-day notice required for dismissals due to unsatisfactory performance. This would likely result in some administrative savings. On the other hand, given the somewhat simplified dismissal process, teacher dismissals might become more frequent. As a result, the number of teacher requests for administrative hearings and appeals, and their associated costs, could increase.

Bargaining Costs. Collective bargaining costs could increase as a result of the proposition. Evaluation procedures are subject to collective bargaining and are commonly found in teacher contracts. To the extent the evaluation process became higher stakes, related negotiations might take longer and be more costly. These costs would be associated with revising the evaluation process, refining evaluation standards, and/or defining unsatisfactory performance. The state would pay any additional costs, as it currently reimburses local school districts for their collective bargaining expenses.

Recruitment and Training. To the extent that districts have more or less teacher turnover as a result of this measure, their recruitment and training costs would be affected accordingly.