CA School News Report

Local Control Funding Formula: How It Works

What is the Local Control Funding Formula?

It’s California’s newest school finance system, established in July 2013. The state allocates all districts the same base grant per student, with variances based on grade level. Districts receive a second, supplemental grant equal to 20 percent of each student’s base grant for English language learners, students in poverty and foster children. A third grant, equal to 50 percent of the base grant, goes to schools where concentrations of high-needs students exceed 55 percent of enrollment. As part of the changeover, districts were promised increased funding, even those that lacked large concentrations of high-needs students.

Why is it called the Local Control Funding Formula?

Technically, the funding system is a weighted student formula, but when it was first proposed in 2012 under that name, it was rejected. The new name emphasizes Gov. Jerry Brown’s push for elements of the system that give school districts greater control over spending the money.

Where did the idea come from?

It first found success in a Canadian school district in the late 1970s. Similar funding formulas are used by school systems in other areas, including New York City, New Jersey and Rhode Island.

In California, the idea was floated in the mid-2000s by a group of academics that included Michael Kirst, a former (and current) president of the State Board of Education.

The idea has been debated in Colorado and Illinois.

How did California previously fund schools?

Initially, schools were funded via local taxes, a system that went through several permutations since the state’s establishment.

In the 1960s, local districts levied property taxes to fund their needs. But because some districts were in wealthy communities, and others were not, this led to disparities in school quality. Lawsuits challenging the system led the state to adjust school funding in an effort to equalize districts.

Additionally, legislators would add new special programs from time to time to fund a single category of need or help a specific type of student. Over time, the number of these categorical funds grew to number more than 60. They required extensive accounting by the districts that qualified or applied for funds, and by the state to ensure the money was spent in the narrow arena intended. The byzantine system was long acknowledged to be unfair in how it allocated funds without regard to a district’s actual need. Repeated proposals were made to change it, but nothing stuck until Brown’s plan.

Why is the new system better?

The new system simplifies school finances, requiring far less regulatory oversight. Funds are essentially divided into two pots: One for all students and one shared by the three high-needs student groups.

Moreover, the new system came with a pledge by the state that school districts would be held accountable for improving or increasing student services designed to elevate student performance – outcomes, instead of monitoring how the money flowed in.

Even so, not all districts are fans. Some argue the concentration grants are inherently unfair, since they award some districts twice for having high-needs students.

Why English learners, students in poverty and foster children?

Education research shows these three student groups lag behind their peers. In fact, the groups contain significant crossover. Foster children qualify as low-income; many English learners come from families in poverty. Barriers to success include language, limited family resources and unstable residency, which can force students to frequently miss or switch schools.

So, how does the Local Control Funding Formula work?

Funding for the new system is being phased in over eight years. As it is, districts must identify their greatest student needs, set targets for improving performance in regard to those needs, identify programs for hitting those targets, and describe how new supplemental and concentration grant funds are being used for high-needs students. Schools base these efforts on the proportion of funding they receive.

Districts outline their efforts in a report called the Local Control and Accountability Plan. The plan covers a three-year period and is updated annually. In creating the plan, school districts are required to meet with stakeholders, including the parents of high-needs students. The plan must be discussed during school board meetings and adopted with the school’s budget.

County offices of education review each district’s plan to ensure it aligns with the state’s rules.

What areas are required for the plan?

School districts need to address eight state priorities for school quality, of which state standardized tests are just one. County offices of education must address 10 state priorities.

  • Priority 1: Provide fully credentialed teachers in the subject areas where they are credentialed; student access to standards-aligned instructional materials; keep school facilities in good repair.
  • Priority 2: Adopt and implement state standards, including for English learners.
  • Priority 3: Involve parents in decision making, including those representing high-needs student groups.
  • Priority 4: Performance on standardized tests, including the Academic Performance Index; share of pupils that are college and career ready; English learners becoming English proficient, and the speed of their reclassification as English fluent; AP exam passage rate; pupils prepared for college by the Early Assessment Program.
  • Priority 5: Attendance, absenteeism, middle school and high school dropout rates, high school graduation rates.
  • Priority 6: Suspension rates, expulsion rates, other local measures including surveys of pupils, parents and teachers on the sense of safety and school connectedness.
  • Priority 7: Enrollment in a broad course of study that includes all of the basic subject areas, such as English, math, social studies, science, P.E., health and the arts, as determined by grade level.
  • Priority 8: Student performance in core classes, such as English, math, social studies, science, P.E., health and the arts.
  • Priority 9: Coordination of instruction for expelled pupils.
  • Priority 10: Coordination of services for students in the juvenile court system.

Are there any other requirements for the LCAPs?

Yes. Districts must post them to their websites and update them annually, consulting each time with the community.

 What are the rules for approving them?

Actually, those rules aren’t yet written. First, the state Board of Education must finalize the rules for creating the LCAPs. The state has held a series of hearings on its rules, and is expected to adopt the permanent set in November.

Counties can reject LCAPs on technical grounds. In those cases, they must take specific steps to assist districts to complete the LCAPs properly. The counties can also intervene in specific cases when districts fail to improve student outcomes. Rules for determining these actions are expected to be ready by October 2015, based on recommendations from a new agency called the California Collaborative for Educational Excellence.

 What is the California Collaborative for Educational Excellence?

The group was formed to advise and assist public school districts, county school superintendents and charter schools on achieving goals laid out in the Local Control and Accountability Plan and report to the state board by Oct. 15, 2015 with recommendations for evaluating the plans and ways to share best practices.

The group can be assigned to help a school district directly.