BILL ANALYSIS Ó
AB 88
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Date of Hearing: April 24, 2013
ASSEMBLY COMMITTEE ON EDUCATION
Joan Buchanan, Chair
AB 88 (Buchanan) - As Amended: April 3, 2013
[This bill is being heard for information purposes. No vote
will be taken at this hearing.]
SUBJECT : School finance: new pupil funding formula
SUMMARY : Replaces the current system of K-12 finance with a
Local Control Funding Formula (LCFF) for school districts,
county offices of education (COEs), and charter schools and
makes numerous conforming changes. Specifically, this bill :
1)Establishes a Local Control Funding Formula for school
districts and charter schools comprised of a base grant and a
supplemental grant.
2)Provides that the base grant shall be based on the statewide
average undeficited revenue limit, estimated to be $6,816 per
average daily attendance (ADA).
3)Provides that the base grant per ADA shall be adjusted by
grade level as follows:
a) Grades K-3, $6,342;
b) Grades 4-6, $6,437;
c) Grades 7-8, $6,628; and
d) Grades 9-12, $7,680.
4)Provides that the K-3 base grant be increased by 11.2% for
Class Size Reduction (CSR), and the 9-12 base grant be
increased by 2.8% for career-technical education (CTE).
5)Establishes a phase-in formula, as specified, to gradually
close the gap between actual funding and the target level of
funding.
6)Requires the pupil-to-teacher ratio in grades K-3 to be no
more than 24-1 when the formula is fully implemented, unless a
higher ratio is negotiated through collective bargaining, and
requires a gradual reduction to the 24-1 ratio during the
phase-in period.
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7)Establishes a supplemental grant equal to 35% of the base
grant for every pupil identified as either an English learner
(EL), eligible for a free or reduced price meal (FRPM), or in
foster care (the 35% "weight" that is applied to the K-3 and
9-12 bases is applied before the CSR and CTE add-ons); and
uses an "unduplicated count," meaning that pupils that fall
into more than one category are counted only once
8)Establishes a "concentration factor," which provides an
additional 35% weight for every EL, FRPM, or foster care pupil
in excess of 50% of the district's ADA.
9)Provides that an EL pupil can generate supplemental funding
for a maximum of five years.
10)Caps funding for home-to-school transportation and the
Targeted Instructional Improvement Program (TIIG) at their
current total levels and continues to provide it to districts
currently receiving it in addition to their LCFF allocation.
11)Maintains funding and program requirements for the following
categorical programs:
a) Special education;
b) After School Education and Safety Program;
c) State Preschool;
d) Quality Education Investment Act;
e) Assessments;
f) American Indian Education Centers; and
g) Early Childhood Education Programs.
12)Repeals funding and program requirements for all other
categorical programs and redirects their monies to the
supplemental grant portion of the LCFF.
13)Establishes a hold harmless provision to maintain total
revenue limit and categorical program funding for each
district and charter school at its 2013-14 level, unadjusted
for changes in ADA or COLA.
14)Provides, for basic aid districts, that local property tax
revenues be used to offset the entire LCFF allocation.
15)Repeals the requirement that districts receiving state
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general obligation bond funding for facilities set aside 3% of
the general fund expenditures in a routine maintenance
account.
16)Requires school districts and COEs to adopt an annual Local
Control and Accountability Plan (LCAP) to identify goals and
describe the specific actions and strategies they will use to
achieve all of the following:
a) Implement the Common Core content standards for all
pupils;
b) Increase the Academic Performance Index (API) for each
school and for each numerically significant pupil subgroup
and reduce gaps in the API and other measures of pupil
achievement between numerically significant pupil
subgroups;
c) Improve pupil achievement of the content standards
adopted by the State Board of Education (SBE);
d) Increase high school graduation rates and reduce dropout
rates;
e) Increase the percentage of pupils who have successfully
completed courses that satisfy the UC and CSU entrance
requirements, Advanced Placement courses, and CTE programs;
f) Identify and address the needs of pupils, and schools
predominately serving pupils, who are English learners,
qualify for free and reduced-price meals, in foster care,
or enrolled in a juvenile court school operated by a county
superintendent of schools;
g) Remedy deficiencies in any school in the areas of
textbooks and instructional materials; safe, clean, and
adequate school facilities; and qualified teachers; and
h) Provide meaningful opportunities for parent involvement,
including, at a minimum, supporting effective schoolsite
councils or other structures at each school and advisory
panels to the governing board or, if parents so choose,
creating other structures, such as an ombudsman for
parents, to address complaints and other issues raised by
parents.
17) Requires the COE plan to also describe specific actions and
strategies to:
a) Conduct effective fiscal oversight of school districts;
b) Provide support to school districts in the county, as
specified; and
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c) Coordinate instruction for expelled pupils.
18)Requires the annual audit of school district and COE
expenditures to ascertain and verify whether funds have been
spent in accordance with the LCAP.
19)Requires the COE review of school district budgets to verify
that funds will be spent in accordance with the district's
LCAP.
20)Requires charter schools to submit an annual LCAP to their
chartering authorities and COEs.
21)Replaces the existing funding model for COEs and replaces it
with a two part formula based on the cost of providing
regional services and alternative education.
22)Provides that the regional services component of the COE
funding formula consist of the following:
a) A base grant of $655,920;
b) An additional amount of $109,320 per school district in
the county; and
c) An additional $40 to $70 per ADA in the county (based on
a sliding scale, with less populated counties receiving a
higher amount per ADA).
23)Provides that the alternative education component of the COE
funding formula include:
a) A base rate of $11,045 per eligible pupil (pupils who
are incarcerated, on probation, probation-referred, or
mandatorily expelled);
b) A weight of 35% for pupils who are EL, receiving free or
reduced price meals, or in foster care; and
c) A concentration factor of an additional 35% for EL,
FRPM, or foster care pupils above 50% of enrollment.
24)Makes various technical and conforming changes to repeal
categorical program requirements and replace statutory
references to the revenue limit with references to the LCFF.
EXISTING LAW provides a system of K-12 finance based on revenue
limits (general purpose funding) and categorical program funding
(funding for specific purposes).
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FISCAL EFFECT : Unknown
COMMENTS : The LCFF was proposed by Governor Brown in January
as part of his 2013-14 budget proposal. It is similar to the
Weighted Pupil Formula he proposed last year, but was not
adopted. According to the Governor's Budget Summary,
"California's school finance system?has become overly complex,
administratively costly, and inequitably distributed." The
Governor argues that the LCFF "will increase local control,
reduce state bureaucracy, and ensure that pupil needs drive the
allocation of resources." In addition, it "will also greatly
increase transparency in school funding."
Current system vs. LCFF . State and local funding is provided to
school districts in two major forms: revenue limit funding and
categorical program funding. Revenue limit funding comprises
about two-thirds of total state-local funding and may be used by
school districts for general purposes. By contrast, categorical
program funding must be used for the purposes of the categorical
program. Some programs are directed to specific populations,
such as special needs pupils, adults, English learners, or needy
pupils, as measured by eligibility for free or reduced priced
meals. Other programs are directed to specific purposes, such
as class size reduction, instructional materials, or
professional development.
Categorical programs have been established by the Legislature
over the years to ensure that specific funding and policy
priorities are addressed by local districts. In some cases, the
establishment of categorical programs grew out of the
Legislature's concern that local decision-making was not
resulting in sufficiently high priority being placed on specific
state priorities, such as providing programs and services to
better serve English learners. In other cases, categorical
program funding was demanded by local districts to cover the
costs of specific programs or services, such as special
education and home-to-school transportation. Since 2009-10,
funding for most categorical programs (representing less than
half of total categorical program funding) has been provided to
districts as general purpose funding (i.e., the funds have been
"flexed"). Flexibility was provided to help districts better
manage 20% budget cuts and is scheduled to expire in 2014-15.
The LCFF eliminates both the funding and requirements for nearly
all state categorical programs. (Federal funding accounts for
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about 12% of total K-12 funding in California, and both the
funding and requirements attached to the federal programs would
be unchanged by the LCFF.) Categorical programs that would be
retained are:
Special Education
After School Education and Safety
State Preschool
Quality Education Investment Act
Child Nutrition
Assessments
American Indian Education Centers
Early Childhood Education Program
Districts would still need to comply with the requirements of
these programs. In addition, the mandates block grant would
continue to be funded separately. Funding for two other
programs-Targeted Instructional Improvements Grants (TIIG) and
home-to-school transportation would be frozen at their current
levels and provided to districts that currently receive them,
but they could be used for general purposes. Funding for these
two programs would not be adjusted for changes is a district's
ADA.
The LCFF replaces revenue limit and most categorical program
funding with a single allocation comprised of a base grant and a
supplemental grant. The base grant is based on the current
undeficited statewide average revenue limit, which is estimated
by the Department of Finance (DOF) to be $6,816 per average
daily attendance (ADA). The base grant would be adjusted for
the ADA in four grade spans as follows:
Kindergarten-Grade 3, $6,342/ADA
Grades 4-6, $6,437/ADA
Grades 7-8, $6,628/ADA
Grades 9-12, $7,680/ADA
The K-3 grade level amount would be increased by 11.2% of the
K-3 base grant (estimated to be $710 per ADA in 2013-14) for
class size reduction (CSR), and the 9-12 grade level amount
would be increased by 2.8% (estimated to be $215 per ADA in
2013-14) for career-technical education (CTE). To qualify for
the K-3 class size reduction supplement, a district must either
maintain a 24-to-1 pupil-teacher ratio in those grades or
negotiate a higher ratio in the local collective bargaining
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contract once the formula is fully implemented. The grade 9-12
CTE supplement could be used for any locally-determined purpose.
The supplemental grant would be based on the number of English
learners (EL pupils), pupils eligible for free or reduced price
meals, or pupils in foster care attending the district. As a
practical matter, all foster youth are also eligible for free or
reduced price meals. The formula uses an unduplicated count,
meaning a pupil who falls into more than one of those three
categories would be counted only once. Each such pupil would
generate a weight of 35% of the base grant. In other words, an
EL pupil would generate 135% of the base grant amount of revenue
for the district. The weights for grades K-3 and 9-12 would be
applied to the base grant exclusive of the CSR and CTE add-ons.
A "concentration factor" is applied if more than half of a
district's ADA falls into one of the three targeted categories.
In that case, each identified pupil above 50% would generate an
additional 35% weight, for a total weight of 70%.
The formula treats charter schools essentially the same way as a
district, except a charter school cannot have a concentration
factor that is higher than the concentration factor of the
district in which is resides.
The total amount of funding generated for a district under the
formula for the base grant, the supplemental grant, and the
concentration factor is a target, and does not reflect actual
funding levels. The DOF estimates the cost of funding the
target level is $15.5 billion and that the target will be
reached in seven years, or in 2019-20, based on current revenue
projections. During the projected seven year phase-in period,
the amount each district and charter school receives will be
based on the level of funding provided in the budget and the
amount needed to reach its target. For example, if the budget
appropriates enough to close the statewide gap between the
target and the actual level of funding by 10%, then each
district and charter school will receive an amount equal to 10%
of its own gap between its target level and actual level of
funding. In this way, a district that is further from its
target will receive a larger increase, both as a percentage of
its budget and per ADA, than a district that is closer to its
target.
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POLICY IMPLICATIONS OF THE LCFF
Eliminates continuous appropriation for revenue limit . Under
existing law, funding for the revenue limit is continuously
appropriated. That means it is not appropriated in the annual
Budget Act. This protects school funding whenever the budget is
enacted late, because the continuous appropriation allows
revenue limit apportionments to be made, even in the absence of
a budget. It also protects revenue limit funding from the line
item veto. Eliminating revenue limits and the continuous
appropriation shifts significant control over the largest
segment of school funding from the Legislature to the Governor.
Reduces transparency . Although the LCFF is promoted as a way
to make school funding more transparent, in important ways it
results in less transparency. Currently, the total amount of
funding that districts receive is the sum of distinct,
identifiable parts. As a result districts and the public have
historically known how much they are getting for, for example,
Economic Impact Aid, professional development, or instructional
materials. Under LCFF, nearly all funding will be blended
together in a lump sum allocation to districts. The simplicity
of the LCFF concept belies the fact that the complex
calculations used to determine a district's apportionment will
be made in a black box. Unless one knows and understands the
underlying formula, it will not be evident how much money is for
the base grant, the different grade level ADA, the supplemental
grant, grade 9-12 CTE, growth, COLA, etc. If the public cannot
identify the amount of a district's total funding that is for
the supplemental grant, then the public cannot determine whether
those supplemental funds are being spent on programs and
services for the pupils who generate them.
Distorts funding for growth and COLA during the phase-in period .
Annual increases for enrollment growth and COLA get added to
each district's target grant. Then, the funding each district
receives is based on the gap between its actual level of funding
and its growth and COLA adjusted target and the amount
appropriated in the Budget Act to close that gap. For example,
if a district's target is $10,000 and its actual level of
funding is $8,000, then its funding gap is $2,000. If enough
money is appropriated to close the gap by 10%, then the
district's increase will be $200. Because enrollment growth is
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not funded directly, the closer a district's actual level of
funding is to its target, the less funding per ADA it will
receive. The following table illustrates this:
----------------------------------------------------------------
| | District 1 | District 2 |
----------------------------------------------------------------
|--------------------+------+------+------+------+---------------|
| |Year |Year |Year |Year | Year 2 (No |
| |1 |2 |1 |2 | Growth) |
|--------------------+------+------+------+------+---------------|
|ADA | 100 | 110 | 100 | 110 | 100 |
|--------------------+------+------+------+------+---------------|
|Target @$100/ADA |$10,00|$11,00|$10,00|$11,00| $10,000 |
| | 0 | 0 | 0 | 0 | |
|--------------------+------+------+------+------+---------------|
|Actual Prior Year |$6,000|$6,400|$8,000|$8,200| $8,200 |
|Funding | | | | | |
|--------------------+------+------+------+------+---------------|
|Gap |$4,000|$4,600|$2,000|$2,800| $1,800 |
| | | | | | |
|--------------------+------+------+------+------+---------------|
|Funding for 10% of | $400 | $460 | $200 | $280 | $180 |
|Gap | | | | | |
|--------------------+------+------+------+------+---------------|
|Current Year |$6,400|$6,860|$8,200|$8,480| $8,380 |
|Funding | | | | | |
|--------------------+------+------+------+------+---------------|
|CY Funding per ADA | $64 | $62 | $82 | $77 |$83.80 |
----------------------------------------------------------------
As the table shows, districts 1 and 2 are identical in every
respect except for the size of the gap between their actual
funding and their targets. Both have 100 ADA in year one and
110 ADA in year two. The ADA growth increases their targets in
year 2. However, in year 2, funding drops by $5 per ADA (a 6%
drop) for district 2, which is closer to its target than
district 1. Funding per ADA drops by $2 (or 3%) in district 1.
In general, if a district's actual funding is more than 50% of
its target, its funding per ADA will be reduced. At full
implementation, this reduced level of funding will be locked in.
If a district's actual level of funding is less than 50% of its
target, its total funding per ADA will increase.
The table also shows that, if District 2 has no growth in year
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2, its funding per ADA would increase. The committee may wish
to consider whether the state should adopt a policy of reducing
funding per ADA for growing districts during the phase-in
period.
Under existing law, funding per ADA drops only when overall
funding is reduced. Under the LCFF, funding per ADA in
individual districts can drop even when there is an overall
increase in funding. The LCFF distorts the application of the
COLA in a similar way. These phenomena will occur only during
the phase-in period and are intentional. This is the mechanism
that brings all districts to the same base level of funding per
ADA when full implementation occurs. It is a combination of
leveling up for some districts and leveling down for other
districts. In the past, the Legislature has chosen to use only
a leveling-up approach, as with revenue limit equalization.
Hampers multi-year projections . The distortion of growth and
COLA funding makes it more difficult for districts to project
revenue in future years. Existing law requires districts to
prepare budgets showing that they are able to meet their
financial obligations not only for the current year but also for
the next two fiscal years. County superintendents of schools
are required to consider a district's multiyear budget
projections as part of their oversight responsibility. A
primary determinate of a district's revenue is ADA, so the less
predictable funding per ADA is, the more difficult it will be to
make multi-year revenue projections. This difficulty will be
felt both by districts and by the county superintendents who
review district budgets.
Fails to restore all districts to their 2007-08 purchasing
power . The LCFF uses the current level of funding as the
starting point for the allocation of funds. The current level
of funding is more than 20% below the level provided in 2007-08.
Pinning each district's target level of funding to the
statewide average undeficited revenue limit means that districts
with above average revenue limits will have a target that is
below their 2007-08 funding level. In other words, even if they
hit their targets in seven years, as projected by the
Administration, their purchasing power will lag below what it
was 12 years earlier. This conflicts with a principle of school
finance reform suggested by Alan Bersin, Michael Kirst, and
Goodwin Liu in their 2008 paper, "Reforming California School
Finance," upon which the LCFF proposal is based. Specifically,
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they argue that "Reforms should apply to new money going
forward, without reducing any district's current allocation."
Consistent with that principle, and since all districts shared
equally in the cuts that have occurred since 2007-08, the
committee may wish to consider whether all districts should be
restored to that level of funding, either before a new formula
is enacted or concurrently with the phase-in of a new formula.
Eliminates categorical programs that serve the general pupil
population . Districts currently receive about $2.5 billion
(about $400 per ADA) for categorical programs that serve the
general pupil population. Instructional materials, deferred
maintenance, and professional development are examples of such
programs. The LCFF eliminates these programs and their funding
by excluding them from the base grant and using the funding for
the supplemental grant. Districts with relatively few targeted
pupils will lose much of this funding altogether. Districts
with relatively large numbers of targeted pupils will receive
the funds formerly associated with these programs in their
supplemental grants. However, they will be required spend the
supplemental grant moneys to "substantially" benefit the pupils
that generate them. These districts will be restricted in their
ability to use these funds for their former purposes. Thus,
resources targeted to programs that support all pupils, like
instructional materials and professional development, will be
eliminated in all districts. Put another way, all districts
will have only their base grant funds to use for purposes for
which they have historically received categorical funds. This
is an important point for the committee to consider in light of
the increased demand for these programs to successfully
implement the Common Core content standards for all pupils.
Retains large inequities . The proposal fails to resolve the two
most inequitably-funded programs-TIIG and HTS transportation.
Both are continued at their current levels of funding and
current distribution. TIIG was established by AB 825
(Firebaugh, Chapter 871, Statutes of 2004), by consolidating
funding for two programs-court-ordered and voluntary
desegregation and supplemental grants. About half of the
state's school districts receive TIIG funding, ranging from less
than $1,000 for a few very small districts to more than $400
million for Los Angeles Unified. The five districts that
receive the largest amount of TIIG funding in 2012-13 funding
are:
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-----------------------------------------------------------------
|District |Total TIIG |TIIG Funding per |
| |Funding |Pupil |
|---------------------------+----------------+--------------------|
|Los Angeles Unified | $406.5 million | $620 |
|---------------------------+----------------+--------------------|
|San Jose Unified | $27.1 million | $816 |
|---------------------------+----------------+--------------------|
|San Bernardino City | $14.9 million | $277 |
|Unified | | |
|---------------------------+----------------+--------------------|
|Oakland Unified | $8.9 million | $191 |
|---------------------------+----------------+--------------------|
|Long Beach Unified | $8.5 million |$103 |
| | | |
-----------------------------------------------------------------
Disparities in funding per pupil are even greater than indicated
in the table above. For example, Santa Ana enrolls a larger
percentage of English learners than Los Angeles (55% vs. 41%),
yet Santa Ana receives $7 per pupil in TIIG funding compared to
LA's $620 per pupil. The LCFF proposal perpetuates these
inequities.
The current home-to-school transportation funding formula was
enacted in 1983. The formula provides that the amount of
transportation aid a district receives is equal to the lesser of
its prior year approved expenses or its prior year state aid,
adjusted for whatever COLA may be provided in the budget.
Accordingly, state aid does not keep pace with increased costs
if a district's costs are growing at a faster rate than
inflation. In addition, if a district did not provide
transportation in the year prior to the enactment of the
formula, then that district is not entitled to any state
funding, because its prior year aid will always be zero. There
are 18 districts with approved transportation costs that do not
receive any state aid because of this.
By capping aid at the level of prior year aid, the formula has
failed to keep pace with actual workload increases, especially
for growing districts, and the amount of aid a district receives
no longer bears any relationship to its costs or workload. As
a result, the percentage of approved costs that are reimbursed
by state aid ranges from 0% to 97%, and averages 43%.
Unreimbursed costs result in inequitable educational
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opportunities, because districts must redirect general purpose
funds to cover them-funds that would otherwise be available for
the classroom.
Repeals provisions related to the Valenzuela CAHSEE settlement .
AB 347 (Nava, Chapter 526, Statutes of 2007) enacted statutory
changes to implement the settlement agreement in Valenzuela v.
O'Connell. The plaintiffs challenged the California High School
Exit Examination (CAHSEE) as a graduation requirement on
constitutional grounds, arguing that pupils who failed the exam,
but were otherwise eligible to graduate, were victims of an
unequal education system that did not adequately prepare them to
pass the test. The Court of Appeals upheld implementation of
the CAHSEE, but also recommended that the parties "find the
pathways necessary to provide equal and adequate access to
meaningful remedial assistance to students." AB 347 implements
the court directive by requiring school districts to take
specified steps to inform pupils who failed the CAHSEE of their
right to receive intensive instruction and to provide a method
for pupils to seek redress through the uniform complaint
process. The bill also requires county superintendents of
schools to determine the extent to which districts have provided
intensive instruction to pupils who failed the CAHSEE and the
extent to which pupils elected to receive the instruction. The
LCFF proposal repeals these requirements.
Base grant . The target level of funding for the proposed base
grant is based on the statewide average undeficited revenue
limit. Monies for all of the categorical programs-other than
the ones excluded from the LCFF-would be shifted to the weighted
portion of the formula. This raises three inter-related
questions: How large should the base be? How large should the
weight be? And what is the relationship between the base and the
weight.
Providing that the base should be comprised only of the
undeficited revenue limit assumes that this level of funding is
sufficient to adequately serve the needs of the general pupil
population. Historically, however, revenue limit funds have
been supplemented by certain categorical program funds to help
meet the needs of the general pupil population. This includes
funding for instructional materials, professional development,
deferred maintenance, and the Arts and Music Block Grant, among
others. As discussed, the formula eliminates funding for these
programs. To ensure that the base grant is sufficient to meet
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existing general purpose programs, the committee may wish to
consider whether it should be based only on the revenue limit or
whether it should be increased to include funds for categorical
programs that serve the general pupil population.
Using the undeficited revenue limit as the target level of
funding for the base grant implies that this level of funding is
adequate to meet the needs of the general pupil population.
According to the National Education Association's annual
"Rankings & Estimates" report, California was $2,489 per ADA
below the national average in school spending in 2010-11. Only
four states-Arizona, Nevada, Mississippi, and Idaho-ranked below
California in expenditures per ADA. It would cost an additional
$15 billion per year to get to the national average. This is
roughly the same amount the Governor projects will accrue to
schools at full implementation of the LCFF, in seven years.
The most recent "Quality Counts" report, prepared annually by
Education Week, ranks California 49th in the nation in school
expenditures per pupil. "Quality Counts," which adjusts each
state's spending to account for regional cost differences,
reports that California's spending of $8,482 is $3,342 (28%)
below the national average. According to these estimates, it
would cost California $20 million to get to the national
average.
In 2007, California engaged in a number of "Getting Down to
Facts" studies, which studied various aspects of K-12 education
in this state. One of those studies, "Aligning School Finance
with Academic Standards," concluded that school funding in
California would need to increase by 40%, or about $20 billion
to provide schools with the resources to achieve expected
outcomes. That was before school funding was reduced by more
than 20%. The report concludes that most of the 40% increase
should be targeted to low-income and EL pupil to meet their
needs. By contrast, the proposed LCFF would redirect funds from
the existing revenue stream to high-need pupils, rather than
adding new funds. The committee may wish to consider whether
the target level of funding for the base grant should reflect an
aspirational level of funding-such as the national average or a
specified adequate level of funding-rather than an existing
level of funding that is among the lowest in the nation and has
been determined to be inadequate.
Supplemental grant . The DOF has indicated that the weight of
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35% applied to targeted pupils represents a midpoint of weights
applied in other states. However, only one other state-Hawaii,
which is a single school district state-uses a pure weighted
pupil formula (WPF). Other states use a hybrid formula that
uses weights to allocate a portion of overall funds to districts
based on pupil needs, but they do not use a weighted formula to
allocate nearly all school funds. The paper by Bersin, et al.
estimates that the additional cost of serving EL and FRPM pupils
ranges from $1,500 to $3,000 per pupil. This is 22% to 44% of
base target. The proposed 35% weight is near the midpoint of
this range. The Bersin et al. finding raises the question of
whether the additional cost of serving EL and FRPM pupils is
best estimated as a dollar amount (as they do) or as a
percentage of the base amount (as the Governor proposes). And
if it is best expressed as a percentage, then what is the
relationship between the base and the supplement? Intuitively,
one could argue that, as the base amount get higher, the
percentage weight should get lower, but there is little research
to inform this issue.
Similar questions arise around the concentration factor.
Bersin, et al., recommend that the concentration factor take
effect when at-risk pupils exceed 50% of a district's
enrollment. This is based on 1992 and 1997 studies published by
the U. S. Department of Education. Some have argued for a
higher threshold (such as 75%) coupled with a higher base grant,
but there is little recent research on this issue. In addition,
some have argued that the concentration factor should be applied
at the school site level, as well as the district level, because
some districts that wouldn't qualify for the concentration as a
district have school sites with high concentrations of at-risk
pupils.
Allocation of LCFF vs. current formula . The DOF has produced a
computer analysis showing that, under their revenue assumptions,
the target level of funding would be reached in 2019-20 and that
funding per ADA for all districts grows. However, this
conclusion conceals that fact that, as discussed, a feature of
the LCFF is that the target level of funding for some districts
is below their actual 2007-08 level of funding in terms of
inflation-adjusted purchasing power. The DOF analysis also
fails to compare what districts would get under the LCFF with
what they would get under current law. The CDE has done such an
analysis and found that more than 500 districts and charter
schools would lose more than $1,000 per ADA and about 400 other
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districts and charter schools would lose between $500 and $1,000
per ADA under the LCFF. Although many of these are small
district and schools, some are relatively large and also serve
high numbers of needy pupils. A few districts with more than
50% EL/FRPM pupils that would lose funding under LCFF are:
Oakland Unified 60% EL/FRPM-$226/ADA
San Miguel Jt. Union 64% EL/FRPM-$253/ADA
Sweetwater Union High 59% EL/FRPM-$555/ADA
Elk Grove Unified 56% EL/FRPM-$180/ADA
ABC Unified 55% EL/FRPM-$625/ADA
A possible explanation for this is that the current system may
do a better (if imperfect) job than it is given credit for of
allocating dollars to districts with high needs pupils. A
recent study by the Public Policy Institute of California
(PPIC), "California School District Revenue and Pupil Poverty:
Moving toward a Weighted Pupil Funding Formula," looked at the
relationship between total revenue for unified school districts
and the percentage of pupils in those districts eligible for
free or reduced price meals. The PPIC found that total funding
increases as the percentage of FRPM pupil increases, and
computed an average "implicit" weight of 36%. However, the PPIC
found that there is much variation around this average,
indicating a need to better target resources among districts
with high percentages of high-need pupils. An alternative and
more transparent means for achieving this goal may be to
increase funding for the Economic Impact Aid (EIA) program and
modifying the EIA distribution formula.
About three-quarters of high school districts would receive less
funding under the LCFF than under current law. This may result,
in part, from the way needy pupils are counted. Specifically,
the formula defines needy pupils as pupils eligible for free or
reduced-price meals. Students and families must self-identify
themselves as eligible, and many low income high school pupils
do not fill out the form to establish their eligibility.
Accordingly, the true number of low-income pupils in high
schools that should receive supplemental services may be under
counted by the formula.
About 300 districts and charter schools would see their funding
increase by more than $1,000 per ADA, with implementation of the
LCFF, and about 200 would see their funding increase by from
$500 to $1,000 per ADA.
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Local Control and Accountability Plans . Funds received through
the LCFF would be unrestricted and available for any
locally-determined use. However, governing boards would be
required to adopt an annual Local Control and Accountability
Plan (LCAP) to describe the specific actions and strategies the
district will use to achieve specified objectives. One of the
eight requirements of the plan is to identify and address the
needs of pupils, and schools predominately serving pupils, who
are English learners, qualify for free and reduced-price meals,
in foster care, or enrolled in a juvenile court school operated
by a county superintendent of schools. In addition, the
proposal requires that the supplemental grant funds be used to
substantially benefit the targeted pupils as provided for in the
local control and accountability plan. Monitoring this will be
difficult, however, because it will be hard to ascertain how
much of a district's total apportionment is due to the
supplemental grant.
A school district's LCAP is subject to review and approval by
the county superintendent of schools as part of the AB 1200
financial oversight process. County superintendents would be
required to disapprove a district's budget if he or she
determines that the plan is not consistent with the LCAP
template adopted by the SBE or that it does not reflect the
costs necessary to implement the LCAP. This goes beyond the
current responsibilities that county superintendents have with
respect to school district oversight. In addition, the annual
external audit must include a determination of whether funds
were expended in accordance with the LCAP. The committee may
wish to consider whether this goes beyond the scope of normal
audits and whether auditors have the training and expertise to
make this determination.
At what point does the "Principle of Subsidiarity" outweigh
statewide policy objectives and priorities ? Categorical program
have been adopted in part to ensure that state policy objectives
and priorities are addressed at the local level. For example,
the EIA program was established to ensure districts address the
needs of low income pupils and English learners. The Mentally
Gifted Minor program was changed to Gifted and Talented
Education (GATE) to ensure that districts went beyond culturally
biased IQ tests to identify more pupils of color for the
program. By eliminating categorical programs, the LCFF
eliminates the lever by which the Legislature ensures state
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priorities are addressed. The Principle of Subsidiarity assumes
that school districts are the best entities for establishing
policies and setting priorities, but that may not always be the
case. For example, if the benefit of a program accrues more to
the state at large than to an individual school district, such
as citizenship courses for adults or regionalized programs for
career-technical education (such as programs offered through
Regional Occupational Programs and Centers), then districts
would have little incentive to offer that program, even if it is
a high priority for the state.
Related legislation:
AB 200 (Hagman), which is pending in the Assembly Education
Committee, eliminates the sunset date on the Tier 3 categorical
programs and provides that, beginning in 2014-15, funds for
those programs shall be allocated based on the amount per ADA
each recipient received in 2013-14.
AB 470 (Mullin), which is pending in the Assembly Education
Committee, removes the Teacher Credentialing block Grant from
Tier 3 flexibility and requires the SPI and the California
Commission on Teacher Credentialing to perform onsite reviews
for all California Beginning Teacher support and Assessment
programs (BTSA), implement high-quality teacher induction
programs, and enforce existing BTSA program standards.
AB 558 (Cooley), which is currently pending in the Assembly
Education Committee, extends the phase out of the reduced
penalties for exceeding K-3 class size reduction
pupil-to-teacher ratios.
AB 1152 (Ammiano), which is pending in the Assembly Education
Committee, removes the California School Age Families Education
Program (Cal-SAFE) from Tier 3.
AB 1186 (Bonilla), which is pending in the Assembly Education
Committee, extends the flexibility for Tier 3 categorical
program funds, provided, beginning with the 2013-14 fiscal year,
a school district that receives them agrees to use at least 9%
of the total funds for professional development for certificated
and administrative employees related to implementation of the
common core content standards; purchasing technology to
implement assessments aligned with the common core content
standards; or implementation of programs to integrate science,
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technology, engineering, and mathematics (STEM) in grades 7 to
12, inclusive.
AB 1215 (Muratsuchi), which is pending in the Assembly Education
Committee, requires that an annual appropriation from the
General Fund be made directly to the Southern California
Regional Occupational Center for the purposes of providing
career and technical education services.
SB 223 (Liu), which passed the Senate Education Committee on a
9-0 vote and is pending in the Senate Appropriations Committee,
extends categorical flexibility in exchange for the recipient
LEA agreeing to specified accountability preconditions.
REGISTERED SUPPORT / OPPOSITION :
Support
California Collaborative on District Reform
Delano Joint Union High School District
Education Trust-West
EdVoice
Jon R. Gundry, Superintendent, Pasadena Unified School District
Kern County Office of Education
Los Angeles County Office of Education
Los Angeles Unified School District
Opposition
None received
Analysis Prepared by : Rick Pratt / ED. / (916) 319-2087