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California Funding Formula May Miss Many High-Needs Students, Report Finds

For the 2013-14 and 2014-15 school years, California has funded public schools using the Local Control Funding Formula, a major departure from the historical method for K-12 finance in the Golden State. The formula combines an increase in state aid over seven years, a bigger emphasis on "high needs" students (such as those coming from low-income families), and greater financial autonomy for districts and county offices of education.

But is the formula truly helping as many high-needs students as it could be? A new report from the Public Policy Institute of California (PPIC) raises concerns that many such students, including children in foster homes and English-language learners, may not be receiving the additional resources that the formula generally promises for them. Why? PPIC says the formula may be missing particular schools within districts that need the most attention and resources.

There's a little background knowledge required here. While all districts and county education offices receive extra aid for every high-needs student they educate (through "supplemental" grants), those districts in which at least 55 percent of students are classified as high needs get an additional 50 percent of its state per-student aid for every student that takes them over that 55-percent threshold. These 50-percent boosts in aid for districts with large numbers of needy students are called "concentration" grants.

The authors of the study, Laura Hill and Iwunze Ugo, put together a chart below to show how two California districts of similar size can get significantly different amounts of state aid based on the share of their enrollment that's high need:

PPICFundingComparisonLCFF.PNGSo what's the concern PPIC raises? The think tank says that district-wide numbers regarding high-needs kids don't necessarily do justice to schools where virtually all the students are considered needy under the state funding formula. PPIC highlights several schools whose enrollment of needy students differs radically from their district-wide averages:


"The biggest cause for concern lies with districts that have relatively low overall shares of high-need students that are unevenly distributed across schools. These districts are most likely to be found in Orange and San Diego Counties, as well as in the Bay Area (Sonoma, Napa, San Francisco, Solano, Contra Costa, Santa Clara, and Santa Cruz Counties) and in Sacramento County," Hill and Ugo write. "An additional potential problem is that these students are in high-need schools but not in high-need districts, and therefore do not generate concentration funding."

The requirements for how state aid is spent don't ignore individual schools entirely—the California School Boards Association notes, for example, that districts' plans for spending the money must show how they plan to seek parental input and involvement at individual schools as well as in the entire districts. And Hill and Ugo note that some districts, like Los Angeles Unified, plan to distribute funds to schools on a proportional basis based on how many high-needs students they have. 

But many districts' plans for spending state funds "mention the distribution of supplemental and concentration funding but do not provide much detailed information," the two authors note. 

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