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California's New Funding Formula Still Faces Hurdles, According to Report

CORRECTION, UPDATE

California's revised K-12 funding formula since 2013 has pumped more than $15 billion toward school districts and shifted key spending decisions to local officials. A new study by the Local Control Funding Formula Research Collaborative—based on a basket of eight varied districts—finds that districts appreciate both the extra funding and flexibility. But researchers also raised concerns about oversight and confusion on the part of some districts about funding and the law's goals in the area of equity.

The researchers looked at districts of varying sizes, demographics, and governance models to determine how administrators, teachers, and community members have responded to the Local Control Funding Formula, or LCFF. The formula has been described as a revolutionary one that recognizes inequities between different types of students and scales back the state's role in telling districts how to spend their state funding.

Local officials in the eight districts appreciated the new money and powers, and there were signs that some struggling students were getting unique supports through the funding formula, the researchers found.

But the group also found that, in at least two instances, administrators used money meant strictly for poor students on Advanced Placement courses for all students and on new school building construction. And some district officials had vastly different concepts of what "equity" meant, a fundamental goal of the funding formula. The districts were not named in the study.  

"There are still some very significant obstacles that are getting in the way of achieving the goals of LCFF," said Julie Marsh, a professor at the University of Southern California, one of the researchers involved in the collaborative.   

But the collaborative warned other states against using California as a cookie-cutter model as many of them look to overhaul their funding formulas.

 "Context matters," said Julia Koppich, a researcher with J. Koppich & Associates. "California had particularly solid political alliances (between local and state officials and political parties), a robust economy, and widespread consensus that there needed to be a new formula. Examine your own context and adapt, don't adopt."  

Michael Kirst, the president of California's state board of education, said many of the concerns raised in the study have been addressed in revised material the state began providing local officials last year that clears up confusing parts of the formula and makes spending decisions more transparent for community members.  

"We're still working on this," Kirst said. "This is a continuous improvement project.  Where we're able to make rapid changes, we will.  But there's nothing like this out there. There's no model to work off of." 

California politicians in 2013 passed the LCFF, which replaced the state's restrictive funding formula that critics said didn't recognize the diverse nature of California. The new formula is intended to give local officials more freedom to spend based on their own communities' needs. The new formula was also meant to fix spending disparities between schools with high concentrations of students with special needs and those without. School districts with foster students, low-income students and English-language learners were given more money than other districts and district officials are now required to show that they engaged community members in making decisions.  

The state will spend $72 billion on K-12 and community colleges this year, compared to $47 billion in 2011.  

But more than three years since the funding formula was put in place, researchers found that, in some instances, community members and even school board members aren't engaged in the budget making process. 

"LCFF didn't result in greater coherence in strategic planning and budgeting," said Daniel Humphrey, an independent consultant that worked on the report.   

And administrators in two of the eight districts studied had different concepts of what equity meant, which led to different spending habits. 

While most of the districts understood equity to mean distributing resources to their students who have greater needs, one district's officials understood equity to mean treating all students with the goal of ensuring key resources were provided equally, regardless of students' economic circumstances. Another district's officials described equity in the meritocratic sense that funds should be distributed to those who might benefit the most. Those administrators targeted their money to the top 10 percent of students they thought were most likely to go to college, the researchers found. 

As California implemented the Common Core State Standards, only three of the districts studied spent their money on materials or comprehensive support systems for their teachers to roll out the new standards.  

California's education department is now rolling out its new "Local Control Accountability Plan" as part of its accountability plan under the Every Student Succeeds Act. The new system is designed to align with LCFF to help districts figure out where they need to spend to improve academic outcomes. That could help districts tremendously, researchers said.  

The researchers are urging that the department provide districts with more guidance, training, and clarity over new rules.  

"The state needs to redouble their efforts to clarify the intent of LCFF," said Koppich.  "The message hasn't always been heard."  

Read the collaborative's previous studies here.

CORRECTION: A previous version of this article incorrectly identified the group that conducted the study. The work was done by the Local Control Funding Formula Research Collaborative and is available online from Policy Analysis for California Education, or PACE. 


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