A Guide to the Local Control Funding Formula


(repost from EdSource)

The Local Control Funding Formula replaces California’s nearly half-century-old, state-controlled school finance system with one that promises more local control as well as greater transparency and fairness.

Under the old system, school districts received approximately two-thirds of their revenues as general-purpose funding based on complex historical formulas (known as “revenue limit” funds), and about one-third through nearly four dozen highly regulated “categorical programs,” such as for summer school, textbooks, staff development, gifted and talented students, and counselors for middle and high schools.

Under the new system, districts will receive a uniform base grant for every district, adjusted by grade level, plus additional funds for students with greater educational needs, defined as low-income, English learner and foster youth students. Districts will get an additional 20 percent of the base grant based on the numbers of these students enrolled in a district, and even more when they make up more than 55 percent of a district’s enrollment.

Welcome to EdSource’s guide to the Local Control Funding Formula (LCFF), along with news and information about California’s new K-12 finance system.

The EdSource section includes:

Districts will have broad discretion over how to use the base grants. The funding law says that districts must expand or improve services for high-needs students in proportion to the additional funding that these students bring to the district. Temporary regulations that the State Board of Education passed in January 2014 tell districts how much money they must spend each year on high-needs students and when that money can be used to fund schoolwide and districtwide programs.

The transition to the new formula began in the 2013-14 school year. Full implementation of the new funding formula is projected to take eight years. The vast majority of school districts will receive more funding under the new formula after it is fully implemented. Most districts that would get less than under the old system will receive additional payments restoring their funding to 2007-08 levels, before the Great Recession led to substantial budget cuts. In 2013-14, no district will get less than it received from the state on a per pupil basis in the 2012-13 school year.

School districts will have more authority than before to decide how to spend their money. But they will also face new obligations to show that their spending improved student performance. Districts must adopt a Local Control and Accountability Plan (LCAP), after soliciting suggestions from teachers, parents and the community, and update it annually.

The plan must spell out the district’s goals for improving student outcomes according to eight priorities set by the state, and align spending to meet the goals. Districts that fail to meet their goals and improve student outcomes will receive assistance from county offices of education and through a new agency, the California Collaborative for Educational Excellence. Districts that are persistently failing could be subject to state intervention or even a state takeover.

More information on the EdSource website on LCFF here.


Small Steps May Lead to School Finance Reform

PPIC released a new report this week indicating California’s schools inequitable finance system is  inadequately funded but can significantly improve the way it funds public schools by making small investments over time. Every year the state attempts to distribute more than 50 billion dollars worth of funding.

The report outlines a strategy to reform California’s school finance system—widely considered to be inadequately funded, inequitable, and overly complex. There is unlikely to be additional money available soon to address the first of these concerns—the level of funding. But the system can be made more equitable and transparent, and doing so would prepare the state to make the most of any additional resources in the future.

Instead of spending money focused on student needs, they are forced to adhere to a flawed funding system that includes a 1973 tax base, as well as hundreds of pieces of legislation doling out money based on the political whims of decades past.

“Given California’s budget problems, school finance reform isn’t likely to happen overnight,” says Margaret Weston, PPIC research associate and author of the report. “But small investments over time can add up to a big change. This approach wouldn’t require a major investment in a single year and would ensure that no district would see a decrease in funding per pupil.”

The report offers concrete ideas addressing systemic inequities and illogical policies that too often reward inefficiency, such as  districts that are adept at helping English learners become fluent in the language lose funding, while those who fail to do so continue to get extra resources to support those students’ needs.

Additional recommendations include:

  • State legislators don’t need to wait for a legal mandate to start fixing the system. The PPIC report offers policymakers some road maps for equalizing funding over the next several years, while still addressing the diverse needs of districts.
  • Increasing funding based more on the number of low-income students in a district rather than on English learners or the number of students who post low standardized test scores
  • A funding system that recognizes the expensive transportation needs of rural districts or those where high regional wages drive up the price of teachers

You can read the full report HERE or check out the press release HERE.

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