Amid Bumps, New School Funding System Rolls Out in California
Districts frustrated by a short timeline, unavailable testing data, and shifting state regulations
One California educator compares keeping up with the rules in California’s historic new school funding system to a cat chasing a laser pointer’s beam—a shifting target always just out of reach.
Educators say the state was slow to roll out rules for the system, which gives schools their first significant authority over spending since the late 1970s, when the state took over education funding after a taxpayer revolt and lawsuits challenging funding disparities.
The state gave districts just a few months to prepare a detailed planning document and is already considering changes that could erode their newly minted local control before the first round of spending programs has been reviewed.
Child advocacy groups such as Children Now, meanwhile, say some districts didn’t follow the intent of the new system by expanding services for high-needs students, didn’t set measurable goals and didn’t clearly identify the programs they will use to achieve those goals.
Still, despite the frustrations, school leaders and advocates alike gave nearly universal praise to the first year of the shift for bringing educators closer to their communities and providing insight into what the state’s neediest students require.
“Just like all systems that are brand new, there are challenges—it’s not all sugar,” said Marc Ecker, superintendent of the Fountain Valley School District and the outgoing 2013-14 president of the Association of California School Administrators.
“It’s a slow process; we’re doing a huge, huge change,” Ecker said. “But I’d much rather be where we are now in trying to improve and build upon this plan … than where we were under the old system.”
A Focus On Results
The Local Control Funding Formula adopted in June 2013, was pitched as a way to give schools flexibility in designing programs to improve student performance, especially for three groups identified as high needs—students in poverty, English learners and foster children—that constitute 63 percent of the state’s 6.2 million students.
The Local Control and Accountability Plan summarizes a three-year plan for meeting student needs, including increasing or improving services for foster children, English learners and students in poverty. LCAPs are required of all public school districts, county offices of education and charter schools.
Process: Districts are to consult with local stakeholders, determine needs for improving student performance, identify goals for improving services, name specific actions to do so, identify funding, link funding with district budgets, and approve the LCAP on the same date they approve their annual budget.
Deadlines: LCAPs were due to county offices by July 1. Technically, the counties have until Oct. 8 to approve, but because they must be approved before district budgets are certified, and the deadline for doing that is Aug. 15, the deadline is much earlier.
Transparency/Updates: Each district must post its LCAP on its website; counties must post all approved LCAPs on their sites. LCAPs are to be updated annually on the same schedule.
Oversight: Counties can reject LCAPs on technical grounds. In those cases, they must take specific steps to assist districts to complete the LCAPs properly. The counties can intervene in specific cases when districts fail to improve student outcomes. Rules for determining these actions are expected to be ready by October 2015.
California’s system also ties accountability over spending to student performance, requiring districts to identify how spending is improving student outcomes.
The new formula replaces a two-tiered funding system that gave schools a pot of general dollars for every student and divvied up about a third of education funding into more than 40 program-specific categories. Those categorical funds could only be spent on students targeted by the individual programs.
Under the Local Control Funding Formula, school dollars are divided into three broad tiers:
- Base grant: All of California’s roughly 950 school districts receive the same base allotments per student, depending on grade level.
- Supplemental grant: Districts with high-need student groups receive supplemental grants equal to 20 percent of each student’s base grant. All districts are eligible for these funds.
- Concentration grant: Districts where high-needs students exceed 55 percent of enrollment receive a grant equal to 50 percent of each student’s base grant. In the 2013-14 school year, 565 districts were eligible for these grants.
An essential part of California’s effort is a promise to undo recession-era cuts, including at schools that don’t have high concentrations of the three high-needs groups. Full financing for the Local Control Funding Formula will be phased in over eight years. In 2013-14, California schools received $42 billion—a figured estimated to grow by about $4.75 billion in 2014-15.
California’s system is modeled after what’s known as “weighted student funding,” popularized after its adoption by a Canadian school district in the late 1970s. The idea is to give schools with the largest numbers of needy students more money and also more autonomy over spending, in the hopes of reducing inequities and improving achievement. Similar formulas are used by a smattering of school districts across the U.S., including New York City, and a few states. New Jersey and Rhode Island follow versions of the system; Colorado and Illinois have considered the idea.
But education finance experts say California’s version applies the concept in its purest form. Whether the state will become a model for future reform is uncertain, though.
Lisa Snell, director of education and child welfare at the Reason Foundation, a think tank that promotes free market ideas, tracks the implementation of weighted funding formulas. Many states provide extra funding for students with high needs, but California’s concentration grant takes this idea to another level, Snell said.
“States are definitely looking at California to see how it works out,” Snell said. “I wouldn’t say that every state is jumping on the bandwagon, but in general a lot of states are starting to have a conversation about school funding reform and equalizing funding.”
But economist Eric A. Hanushek, a senior fellow at Stanford University’s Hoover Institution, said most states don’t look outside their borders for school finance models.
“I don’t get any sense of a groundswell to follow California,” he said. “Every state has its own bizarre twist on financing schools. I don’t see ever states look to other states, especially if it’s not related to outcomes.”
In California, the new funding structure is intended to leverage education dollars for high-need students, who lag behind on performance measures such as graduation rates, standardized test scores, attendance, preparation for four-year colleges and participation in Advanced Placement classes. (Special education students are funded separately in one of the few remaining categorical accounts.)
Deadlines for California’s new funding system
June 2013: The state adopts the new funding system, returning control to local districts for the first time since the mid-1970s. School district funding is divided into three categories: Basic grants given for all students, with different levels based on grade span; supplemental grants for students in poverty, English learners and foster children, called high-needs students; concentration grants for school districts with more than 55 percent of high-needs students.
January 2014: After extensive public comment, the state releases emergency guidelines for how districts should spend funds under the Local Control Funding Formula. The rules require districts to improve or increase services for high-needs students. The state also provides a template for the Local Control and Accountability Plan, the primary document for recording school district goals, spending and programs.
July 1, 2014: LCAPs are due to county offices of education for approval.
July 10, 2014: State Board of Education hearing gathers perspectives on a set of proposed permanent rules for the LCFF and revisions to the LCAP
July 22, 2014: State Board of Education public hearing on changes to the LCAP
September 2014: State Board of Education expected to consider final changes to the permanent rules for the LCFF.
So now, instead of spending from a multitude of program-specific pots of money, districts can lump their dollars into one big pot to fund programs for all three high-need student groups.
Take, for example, Louis VanderMolen Fundamental Elementary, a Corona-Norco Unified campus in Riverside County with more than 55 percent high-needs students, most of them students in poverty.
On a recent Friday, Leah Byrne’s fourth graders focused intently on individual laptops as they worked through a sophisticated literacy program. The students were taking advantage of one of six laptop carts that allow VanderMolen to shift resources around the campus.
But the carts don’t have the same funding sources. Three were purchased through federal grants for grades four through six, one via a fund for English-learner programs and two through one-time funds that allowed school-wide use.
Under the old system, laptops purchased for English learners were restricted to use by those particular students and couldn’t be shared with other high-needs groups.
“Now this money comes with a broader range of options and meets the needs of a broader range of students,” principal Debora Marks said.
That’s important, because improving student reading levels is the school’s biggest priority, Marks said.
A Slow Start
California changed how school dollars would be spent first, and then directed the state’s Board of Education to devise rules for how spending would be monitored, starting in 2014-15.
State education leaders concluded they wouldn’t finish a permanent set of new rules quickly enough for district planning efforts. After holding hearings on options, the board adopted emergency regulations in January, giving schools six months to create their primary planning tool for the new system, a document called the Local Control and Accountability Plan.
Known as the LCAP, the plan describes how districts assess their needs, engage with community members, identify goals in eight state priority areas (which include student engagement, school climate and achievement), specify programs for achieving the goals, outline spending for each program and coordinate their plan with district budgets.
The plan covers a three-year span and is to be updated annually.
Districts turned in the plans to county offices of education by July 1; counties have until October to approve the documents, but that timeline has been truncated by a conflicting rule requiring the plans to be finalized before an Aug. 15 deadline for certifying district budgets.
And, even with that done, the rules for evaluating a district’s performance on the plans aren’t expected to be completed until October, 2015—months after their first annual updates are due.
“The process felt a bit like the cat chasing around the laser pointer,” said David Haglund, the deputy superintendent of educational services for Santa Ana Unified, where 93.3 percent of students are high-need. “The state was very far delayed in defining the rules and the template, which delayed our engagement with the community.”
The funding system emphasizes that district goals should be driven by community needs, and it mandates meetings to gather perspectives from groups representing high-need students. Given the timeline concerns, advocacy groups and school associations had urged districts to begin meeting before the state finalized its rules.
Long Beach Unified, the state’s third largest district with 70 percent of students classified as high need, followed that advice.
“We started in September, so it was a yearlong process for us,” said Robert Tagorda, director of Long Beach Unified’s Equity, Access/College and Career Readiness Department. “This is new territory. We needed to build the capacity in our stakeholders to understand the state law.”
Tagorda’s team shared reams of student performance data with community members, briefed them on the state law and gathered their views on district priorities. The district solicited hundreds of ideas through an electronic survey. Community leaders helped narrow those ideas to 110, then 33 and then to 15 recommendations sent to the district board.
But many districts—including Corona-Norco and Santa Ana Unified—waited to start efforts until they had a sense of what the state’s emergency guidelines would entail.
Corona-Norco—the state’s seventh largest district with 45.8 percent of students marked as high need—formed a steering committee of more than three dozen stakeholder representatives in December.
The group was briefed on the new law and district performance data, and reviewed input from community meetings and more than 3,500 surveys. The district used existing events to attract more community members to Local Control and Accountability Plan meetings held at each of its 49 schools, according to Linda K. White, assistant to the superintendent.
“Some of our principals piggybacked them with student award assemblies, where they knew they’d have a lot of parents coming already,” White said.
In addition to ideas for strengthening student college and career readiness, Corona-Norco learned that its community wanted a stronger parent outreach programs—a need echoed in the findings of other districts.
$42 billion: California K-12 education spending in 2013-14
$4.75 billion: Education funding increase planned for 2014-15
6,236,506: California K-12 enrollment
63.1 percent: High-needs students, defined as students in poverty, English learners, foster children
59.2 percent: Students in poverty
22.7 percent: English learners
0.5 percent: Foster children
Santa Ana Unified launched efforts after the rules were approved in January, and catered virtually every one of the almost daily community meetings it held from late February through March, because officials realized the meetings cut into valuable family time.
“We held in the community over 52 different meetings, at various times of the days, evenings and weekends,” Haglund said. “It was pretty intense. That process just sort of consumed the calendar for six weeks. But it was important work. So you give up what you have to give up to get it done.”
Unlike Long Beach or Corona-Norco, Santa Ana didn’t present community members with extensive data on student performance. Haglund said the district used the community meetings as the key component of its needs assessment.
“The purpose of the conversations with the stakeholders was more to ask what parents wanted for their students. What do they need to be successful and how are we doing? Not ‘Here’s how we did on algebra,’ ” Haglund said. “They tell us what it is they think their students need, and we tell them how we’re going to provide that.”
One lesson from Santa Ana’s meetings: Student tutoring services should be offered at times more convenient to the community—such as on Saturdays—rather than after school, when they had been offered in the past.
Because districts interpreted their charges differently, the nature of community input and the resulting Local Control and Accountability Plans can look very different. David Sapp, director of education advocacy and legal counsel for the ACLU of Southern California, said the ACLU’s three state offices have reviewed 30 LCAP documents.
“One issue came through quite clearly—the idea of starting with the needs assessment, what is our actual student need, didn’t happen in the vast majority of districts,” Sapp said. “I think in most places the process worked backward—we know what programs we have, let’s cram it into the LCAP structure.”
Sapp said he understood how the compressed timeline for the massive change could lead to such an outcome.
“I appreciate and understand the district frustration,” he said. “My sense is that much of the bad and disappointing stuff that we’ve seen has a lot to do with a lack of capacity in districts and a lack of resources.”
And not every district has been praised for its outreach efforts. During a public comments section at the state Board of Education’s July 10 meeting on the Local Control Funding Formula, community members complained that some districts gave short notice of meetings, lacked translators and ignored community perspectives.
Districts and advocacy groups alike took issue with the template the state issued for filling out the Local Control and Accountability Plan.
The format was a challenge to work with, school leaders said, because it was built as a series of tables spanning multiple pages of a Word document that districts were told they could not alter.
But even with those restrictions, intended to keep formatting similar, the final documents differ depending on student needs and a district’s approach to describing goals, measures and means of achieving them.
“You can’t see what the district is doing,” Sapp said. “It’s very idiosyncratic.”
Los Angeles Unified—the state’s largest district, where 84.6 percent of students are classified as high-need—lists dozens of programs it will fund with $837 million for high-needs students. The district’s needs range from helping English learners hit graduation goals and state testing benchmarks to reducing chronic absenteeism.
Small but affluent Hillsborough City School District, where 1.8 percent of students are high-need, outlines significantly fewer programs. As a result, Hillsborough created a much shorter plan to account for roughly $19,000 it estimated receiving in supplemental dollars if the highly affluent community’s local property taxes didn’t already push funding above state levels.
Hillsborough’s plan includes a digital device initiative, a push for expanding world language instruction and supplemental math and language arts materials for its 20 English learners. Goals do not include improving test scores or reducing absenteeism—elements that are not issues for the district.
Districts also used a variety of measurements for their goals—with differences appearing even within a single district’s accountability plan.
Pasadena Unified, where 71.1 percent of students are high-need, pledged to improve the percent of students taking classes required for University of California and Cal State admissions—called the A-G completion rate—by 10 percent in 2014-15. It had set its baseline as 40 percent in 2013-14.
San Ramon Valley Unified, where 8.9 percent of students are high-need, also gave a baseline for the A-G completion rate: 64 percent. But it is less specific than Pasadena in describing its goal: “Increase percentage of students meeting A-G requirements, demonstrating college readiness, and participating in CTE (career technical education) programs.”
Even when districts set specific standards for growth, such as 5 or 10 percent, the reasoning behind the targets isn’t always clear.
“That is one area we struggled with a bit—what is the right outcome,” said Edgar Zazueta, chief of staff for external affairs for Los Angeles Unified. “We were very conservative in the first year and looked at historical trends … and we’re going to revisit it at the year marker.”
In some areas, districts simply couldn’t set baselines.
For example, because the state is adopting a new standardized testing system, it didn’t report English and math scores for 2013-14, and may not have figures from its first round of testing until after the 2015-16 LCAPs are due.
Santa Ana Unified, in cases like this, indicated that some measures would be added later in the plan’s three-year cycle.
“We didn’t want to be arbitrary or pretend,” Haglund said. “So when there’s no metric or baseline, we say there’s a need for a new metric and how we will set a baseline. But to suggest numbers just so you can have them in a plan? That seemed a little disingenuous.”
Some districts were highly specific on how much they will spend, their funding sources, how many employees they will hire or the programs they will launch. But few were specific on the same elements, or gave the data in the same format.
Berkeley Unified, for example, describes how it will hire an unspecified number of intervention staff in several areas, including literacy. But it is specific in breaking down the cost by LCFF base grant, supplement grant and other funding sources.
San Bernardino City Unified outlined how it will spend $1.2 million to reinstate nine counselors and $13.5 million to reduce class sizes to targeted levels. On the other hand, the district didn’t break down funding sources.
San Bernardino City also lists some efforts in general terms, stating it will spend $750,000 for site-level academic programs and $488,020 for African-American student achievement services, without spelling out the program details.
Hillsborough lists the phrase “minimal cost” or “cost unknown” for several programs.
Samantha Tran, senior director for education policy at the Oakland-based advocacy group Children Now, said more specifics are needed throughout the accountability plans so community members can clearly see what districts plan to do.
Children Now and other advocacy groups are lobbying for permanent Local Control Funding Formula rules that would require districts to “principally” direct supplemental and concentration grants to help high-needs students, and delineate how much from each funding source is going to each program and student group.
“Transparency is a basic, bare minimum thing,” Tran said. “There’s been a challenge there every step of the way, with people being nervous as being showing too much.”
But Dennis Meyers, assistant executive director for governmental relations for the California School Boards Association, and other school leaders are urging the state to make minimal changes in the rules—to put their trust in districts during the transition.
“This has to settle in and become the new culture for K-12 schools,” he said. “This has to become the new norm. I think you’re going to see people become more excited as fears go away, as years go by and people feel more comfortable about this new authority.”
A draft of the permanent rules was released by the state Board of Education for a 15-day comment period after a July 10 meeting where advocacy groups and school leaders squared off over the language changes.
A hearing just on proposed changes to the LCAP itself was held July 22, and the state board is expected to consider the LCFF final regulations in September.
Vol. 34, Issue 01, Page 8
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