School & District Management

Crunch Time Ahead on Calif. School Finance Overhaul

By Andrew Ujifusa — June 04, 2013 6 min read
With the help of a chart, Gov. Jerry Brown discusses his proposal to increase local control over education funding, a part of his revised budget plan for 2013-14.

A high-powered effort by California Gov. Jerry Brown to remake the state’s school finance system is entering a crucial stage, as lawmakers consider his plan to favor schools with large proportions of disadvantaged and high-needs students in a new funding formula.

The Democrat last month released the second version this year of his K-12 funding proposal. It would simultaneously direct more money to needy and at-risk student groups while aiming to give districts more control over how to best serve those groups.

In a major change from the January version of the governor’s budget plan, the May proposal also would earmark $1 billion over the next two years to implement the Common Core State Standards in English/language arts and math.

But the proposal has many critics on different fronts. Some say it wouldn’t help enough districts recover from years of staggering budget cuts. Others question if it strikes the right policy and political balance between local control and accountability. State lawmakers are studying those issues and must pass a state budget by June 15.

Michael W. Kirst, the chairman of the California state board of education, who outlined the basics of a similar weighted-funding formula five years ago, said it is a “fortuitous time” for an overhaul.

“I think the governor ends up getting most of what he wants,” he predicted. “The question will be about the details.”

Money Flow

Mr. Brown’s plan was made possible in November, when California voters approved Proposition 30, which included broad income-tax increases and earmarked much of the additional revenue for K-12 over several years, including the current school year.

The base spending amount per student in California under the governor’s proposed budget would increase by $1,046, up to about $6,800 for the 2013-14 budget year. The state’s K-12 budget for 2013-14 would rise by about $1 billion, increasing to about $55 billion.

But in addition to the basic grant’s boost, perhaps the most significant piece would be the implementation of a new “local control funding formula,” or LCFF. Under the formula, districts would receive a “supplemental grant” on a per-pupil basis to provide targeted services for English-language learners, students from low-income families, and children in foster care.

That extra funding would be 35 percent of the base grant, multiplied by the percentage of nonduplicated students in those categories. (In California, roughly three-quarters of ELLs would also qualify as low-income students under the plan.)

Hypothetically, a district with 40 percent of its students across the three key categories, for example, would receive an additional $952 per student on top of the base grant.

In addition, Gov. Brown wants a “concentration grant” for districts in which more than 50 percent of the student population fits into at least one of those categories. Districts with 100 percent of their students fitting the demographic profile would get the biggest boost, roughly a 17.5 increase in per-student funding.

“What Brown is proposing is essentially to fix those historical inequities as the state improves its economy,” said Arun Ramanathan, the executive director of the Education Trust-West, a research and advocacy group in Oakland, Calif., that supports the proposal.

What Brown is proposing is essentially to fix those historical inequities as the state improves its economy.”

Once fully implemented over seven years, the formula would allocate, out of every dollar, 80 cents to the base grant, 16 cents to the supplemental grant, and 4 cents to the concentration grant.

More Money, More Power

Mr. Brown also wants to eliminate several of the more than 40 categorical programs in the K-12 funding system, which funnel money to a range of programs, from English-language acquisition to student transportation.

Over many years, Mr. Ramanathan said, lobbyists for individual programs have protected them from efforts to make the system more transparent and more effective for students in need. But some categorical programs, such as the special education fund, would remain because of legal requirements.

Margaret Weston, a research analyst at the San Francisco-based Public Policy Institute of California, a nonpartisan research group, said roughly half the categorical programs’ revenues would be reallocated under Gov. Brown’s spending plan, even though a majority of the programs would be phased out.

In a public-opinion survey the institute released in April, 71 percent of adults approved generally of Mr. Brown’s plan, as did 60 percent of likely voters. But Ms. Weston said the base-grant figure sticks out as inadequate in the eyes of some district officials, in particular those whose relatively well-off districts contribute significantly to the K-12 funding increase made possible through Proposition 30.

Even before recent budget woes, California’s K-12 community believed its schools were underfunded relative to those of other states, said Jeffrey Frost, a lobbyist for the California Association of Suburban School Districts, which represents about 40 districts.

“The argument for my members is, ‘We all need the money,' " he said.

The legislative versions of Mr. Brown’s education proposal in both the state Senate and the Assembly diverge from the governor’s script in notable ways.

Senate Bill 69, championed by Senate President Pro Tem Darrell Steinberg, a Democrat, would reduce the amount of the grant going to districts with the highest concentration of needy students, but boost all base and supplemental grants, the latter by 5 percent, to provide what he called broader support for needy students across districts, while eliminating the “winners and losers” dynamic to the budget.

The California School Boards Association believes the state should add another $5 billion in education spending growth over the next seven years, in addition to phasing in Gov. Brown’s LCFF formula, to help districts recover completely from the budget woes in recent years. In the four years after the 2007-08 budget year, the state lost 25 percent of its school funding, according to schools Superintendent Tom Torlakson.

“Do both. That way, there’s no loser under the proposal,” said Dennis Meyers, the associate director of governmental relations for the association. He estimated that by 2020, under the governor’s plan, just over a third of districts would still be below prerecession revenue levels.

Hitting the Target?

The way the targeted grants themselves work also isn’t free from criticism.

In the May version of the budget, an English-learner could qualify for the extra grant funding for seven years (up from five in the January proposal), but many older ELLs would suffer once their targeted grant funding expires, said Shelly Spiegel-Coleman, the executive director of the Long Beach-based Californians Together, an ELL research and advocacy group.

She also argued the plan’s requirement for districts to use targeted grants “primarily” on academic services, in proportion to the schools with the highest number of students in need, doesn’t hold districts sufficiently accountable.

The state Legislative Analyst’s Office, which provides nonpartisan policy analysis to state lawmakers, expressed concern last month that county superintendents wouldn’t have the capacity under the LCFF to handle the accountability plan in the budget regarding support and interventions. But Mr. Meyers said the revised May budget proposal in fact “overstretched” by giving too much power to officials above the district level.

A version of this article appeared in the June 05, 2013 edition of Education Week as Crunch Time Ahead on Calif. Finance Plan

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