Potential weaknesses in new school funding law demand attention

Louis Freedberg

Louis Freedberg

There are great expectations that the historic – and necessary – reforms of California’s outdated and opaque school financing system signed into law by Gov. Jerry Brown this summer will translate into improved student performance.

However, there are several potential weaknesses in the law that could threaten its ability to produce the results Gov. Brown has in mind. Whether these are addressed at the outset – as the law is being implemented – could determine whether this reform will succeed over the long term in improving the academic outcomes of our lowest-performing students.

Over the next several weeks, EdSource will look at each of these danger areas in greater depth and suggest ways that the new funding law could be strengthened to ensure that its full potential will be fulfilled. Here are four key issues:

Additional  funds will be spent without getting results 

The most  transformative dimension of the new funding system is that it provides additional funds to districts based on the number of low-income students, English learners and foster children in attendance in a district. However, there is a danger that many school districts will spend funds in a scattershot fashion, rather than targeting the funds on programs and services that are likely to produce the greatest gains in student achievement.

The law gives little guidance as to how funds should be spent. In fact, that is one of its main purposes:  to give school districts unprecedented control over how to spend state education funds. However, a preponderance of research – in California and elsewhere – shows there is no direct relationship between how much money a district spends and students’ academic outcomes.

What could make a difference, though, is if funds were targeted in areas that research shows have a direct impact on student success.  That could include, for example,  ensuring that students have effective teachers, which would mean providing high-quality support programs for new teachers and improving the quality of professional development training for all teachers.

Funds could be spread too thinly to make a difference

Another concern is whether districts will have sufficient funds to achieve the law’s ambitious goals – and whether they will spread funds too thinly if they try to achieve them all.

The law states that districts will be assessed on how they (and their students) perform in eight “priority” areas, the full parameters of which must still be fleshed out by the State Board of Education. These include broad measures of student achievement (test scores, share of students taking Advanced Placement classes, preparedness for college and careers, and so on); student engagement (for example, attendance and absenteeism rates); school climate (as measured by suspension and expulsion rates, for example); parental involvement; and the condition of school facilities.  

The challenge is that the funds districts will receive through the new formula are not based on how much it actually will cost them to do well in all these priority areas. Instead, levels of funding were negotiated in the Legislature, and were based on projections of available funding, not the actual cost of providing the necessary services districts need to get the desired results. This year, school districts will get more money than they received last year, and for districts with large numbers of low-income students, English learners and foster children, that amount will rise steadily for the next eight years. But amounts will vary tremendously among districts, depending on the number of their students who fall into one of those high-need categories.

Local Accountability and Control Plan won’t hold school districts accountable

Under the law, every three years a school district must draw up a Local Control and Accountability Plan, which must be updated each year, with input from a range of education stakeholders, including parents and students. However, the risk is that the accountability plan could end up being as ineffective as the School Accountability Report Card – colloquially known as SARCs – which was mandated by voters as part of Proposition 98, a 1988 initiative that guarantees a minimum level of funding be set aside in the state budget each year for education.

When the initiative was approved, voters were assured that schools and community colleges would be held accountable for how the minimum amount guaranteed under the initiative – at the time  about 40 percent of the state’s general fund – would be spent. A quarter century later, the SARCs have not achieved what Prop. 98 specifically stated they were intended to do to — “guarantee accountability for the dollars spent.” The SARCs are often difficult to find, are lengthy documents that often double as public relations pieces for schools and school districts, and they have been weighted down by information mandated by a slew of new requirements imposed by the Legislature in the years since they were first mandated.

The danger is that the new Local Control and Accountability Plan will also end up as a large, multifaceted and unwieldy document that will not be especially useful in providing evidence that funds are being spent effectively to improve student outcomes. It will be up to the State Board of Education to ensure that turns out not to be the case. 

New law’s complexity will discourage community involvement

The new law is supposed to introduce transparency and simplicity into California’s extraordinarily complex school financing system, which has been beyond the understanding of ordinary Californians, including many directly involved in the schools. However, the new school financing law is also extremely complicated, especially in regard to how the law will be implemented over the next eight years. “LCFF is neither simpler nor more transparent than the system it replaced, especially during the phase-in period,” Rick Pratt, chief consultant to the Assembly Education Committee, who is widely regarded as one of the most knowledgeable school finance experts in the state, told EdSource.

Some of the more challenging parts of the law include how the base grant that districts are targeted to receive at “full funding” in 2020-21 is calculated, the changing allocations districts will receive each year until full funding is achieved, and how state funds will be allocated based on the number of students with greater educational needs. Adding to the challenge is that arguably the most complex part of how California’s schools are financed – Proposition 98 – remains untouched by the new law.

The complexity of the new law is especially relevant, as one of its most innovative provisions is that it requires school districts to get input from community-level participants in their schools – school staff, parents, community members and even students – as they decide how best to use state funds. If the law is too complex for ordinary Californians to understand, that could play a major role in discouraging all but education experts to be directly involved in the process.

The State Board of Education has been given the responsibility to flesh out many aspects of the law during the coming two years. Now is the time for Californians to come forward and encourage the board — and if necessary the Legislature — to make the necessary fixes or adjustments, not years from now when it may be too late to make midcourse corrections.

If you have recommendations for how the law could be enforced more effectively,  please let us know – and we will forward your comments to State Board of Education President Michael Kirst.

Louis Freedberg is executive director of EdSource. Follow him @louisfr.

Filed under: Commentary, Policy & Finance, School Finance, State Education Policy



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23 Responses to “Potential weaknesses in new school funding law demand attention”

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  1. Richard Moore on Oct 18, 2013 at 12:56 am10/18/2013 12:56 am

    • 000

    Gosh. What to do? lrs.org have any ideas? How about the years of research by SchoolMatch? But then that would lead to categoricals and that would lead to pleas for an end to categoricals. And there is that sticky bit about actually raising spending.

    Face it. Decisions about education these days are made by Pearson and Bill Gates. Go talk to them in 5 years and ask if it worked.

  2. Karen Swett on Oct 17, 2013 at 10:17 pm10/17/2013 10:17 pm

    • 000

    Gary Ravini – I wish I had control over having the most or least. My concern is not about – in this thread – about amount. I want people to know that it is VERY possible, and VERY important to “follow the money”. AND you can NOT do this unless you are fluent in the “language of SACS”. Look it up on the CDE website. You can see how every penny is spent if you can read SACS.


    • navigio on Oct 17, 2013 at 10:33 pm10/17/2013 10:33 pm

      • 000

      Actually Karen, it’s not. There is no reporting requirement at the SACS level for schools, so the closest you can rely on getting is district level (even then you’ll be lucky to get a per expenditure list–good luck getting that at a school level in the districts I’m familiar with).
      But even then, if there are any SACS epiphanies to be had they are at the district level where SACS codes are used to group some expenditures in an obscuring way (consultants for example). However, even then, those are drops in buckets. You may be right that being able to read such reports is useful. I would argue it is of no help when there are no reports to read.
      That said, I would love to hear some examples of things you’ve found in these reports that have contributed to a better spsa, for example.

    • Gary Ravani on Oct 18, 2013 at 12:01 pm10/18/2013 12:01 pm

      • 000


      Trust me, we do very detailed budget analysis studies at both the district and state level. “Waste,” and so on, can be very subjective terms.

  3. Joanne Leavitt on Oct 17, 2013 at 9:37 pm10/17/2013 9:37 pm

    • 000

    I hope people aren’t expecting miracles overnight. Considering where we rate nationally on students per teacher, librarians, nurses and other support, years of chronic underfunding, we have some catching up to do. This doesn’t even bring us withing reach of adequacy. Add to that 25% of our children are in or on the verge of official poverty, suffer from a lack of adequate food for a part of most months, live in sub-par or over crowded housing, do not have access to dental or vision care–the list goes on, our teachers are doing a d— good job. Not to disparage LCFF, it is a probably positive step, but only a step.

  4. Jerry Heverly on Oct 17, 2013 at 7:51 pm10/17/2013 7:51 pm

    • 000

    A local perspective from a suburban district:
    Everyone in my district refers to LCFF as a “giant categorical”. The district administrators want to hold on to every dime, fearful that the county or state will later say we spent the money improperly.
    In our town there’s no one consensus on whether added spending improves the schools, anymore than is evidenced in this discussion. These new advisory groups of parents, students, et. al. would probably be the kinds of folks who have kids in the system, and thus would be relatively liberal in spending the money on salaries, for instance. (Could a district hire aides for special ed students and claim that was part of the plan to use LCFF money?)
    We’ve been focused on raising CST scores. Now there are no such tests, and no API, so how will we justify any of this spending?
    Our teachers got a 3% raise the same week that LCFF passed. Now they are back at the bargaining table asking for more. And, predictably, the classified workers, who haven’t had a raise in a dog’s age, are demanding the same 3%. Our (extremely conservative) finance chief is warning of looming deficits despite LCFF (which we can’t spend on salaries?). People smell money in the water. How does that fit with your concern for results?
    The superintendent says we don’t have enough computers to administer CCSS tests.
    Our lower middle class community has consistently produced two-third’s margins for an arts center, ninth grade building, up to date sports facilities, and more. These are the people who, I think, Gov Brown wants deciding how this money is spent.
    But I bet our new charismatic superintendent will ultimately be the one who decides, rubber stamped by the rest of us.


    • navigio on Oct 17, 2013 at 8:33 pm10/17/2013 8:33 pm

      • 000

      People smell money in the water.

      That’s genius jerry.

      No rubber stamps! Point out that EIA has gone away completely and people will realize they have to resist rubber stamps.

  5. Karen Swett on Oct 17, 2013 at 4:17 pm10/17/2013 4:17 pm

    • 000

    Connecting Spending To Student Outcomes is totally possible. But ONLY IF one is able to read and understand SACS expenditure reports. And this MUST be done at the school site level. Rolling up expenditures into required “aggregated” spending accounts will not tell you anything. Learn to read and understand SACS budget/expenditure school site reports and you will eliminate wasteful spending, be able to write better SPSAs, and embark on more MINDFUL spending. If you don’t know what I’m referring to – SACS – don’t count on any fiscal or achievement accountability. It won’t happen.


    • Gary Ravani on Oct 17, 2013 at 5:59 pm10/17/2013 5:59 pm

      • 000

      Kind of curious. How do you include “mindful” in a discussion about funding that is near last in the nation? CA spends more on direct classroom services as a % of education spending than almost all other states. Eliminate “wasteful” spending from what?

  6. Gary Ravani on Oct 17, 2013 at 4:08 pm10/17/2013 4:08 pm

    • 11100

    I find this more than a little disappointing. To provide a link to ” a preponderance of research” on the relationship between school funding and student achievement and then up pops the name of Hanushek of the Hoover Institution. I mean really, the source could have been a little more “fair and balanced.” There is a huge body of research (begin with Bruce Baker) that demonstrates just the opposite.

    From the article above; “”LCFF is neither simpler nor more transparent than the system it replaced, especially during the phase-in period,” Rick Pratt, chief consultant to the Assembly Education Committee, who is widely regarded as one of the most knowledgeable school finance experts in the state, told EdSource.” Really? Where have I heard that before?

    The reality of CA’s school funding is one pundits and politicians will do the limbo combined with yoga to dodge: CA is around 47th to 49th of the 50 states in K-12 funding per child in dollars adjusted for cost-of-living. You cannot dodge the negative consequences of that: some of the largest class sizes in the nation; fewest counselors in the nation; fewest librarians; fewest nurses; etc.; etc.; etc.

    Due to the Serrano v Priest decision, CA became one of the “fairest” states in the way it funded schools compared to states that relied primarily on local taxes that could (and do in many cases) have wild discrepancies. However, after 1985 when school spending first dropped below the national average, CA underfunded its schools very fairly. LCFF needed to happen. It is a more just (if not actually simpler) way to fund schools. That being said, CA will now underfund its schools , and the students, in a more fair and just method.

    Back to Mr. Freedberg’s link (above) which goes to a synopsis of “conclusions” drawn from the getting Down to facts series of studies. Hanushek was able “frame” the rollout of the study, in part by using his amorphous scattergrams and by quickly diverting public attention from the issues of funding to issues of governance. Some of the studies however did point to “adequacy” of funding, that is, the discrepancies between actual funding and what it would take to meet the demands of CA’s “world class” standards. One study suggested $1.3 trillion. Yes, with a “T.” Another proposed around $30 billion, which can be assumed to be more “reasonable.” Since that time CA has cut $20 billion. So, cumulatively, we need an injection of around $50 billion, in a neat ballpark figure, to be “adequate.” (Recall, Prop 30 just stopped the bleeding.) Limbo, stretch, and contort as you like the wretched state of school funding in CA cannot be ignored.

  7. William Huyett on Oct 17, 2013 at 3:10 pm10/17/2013 3:10 pm

    • 000

    The key to the success of LCFF is accountability, and implementing a system and school culture of continuous improvement. Accoumtability is not only an expectation that schools meet the eight State Priorities but that through the assessment and analysis of results we change curriculum content, instructional practices, intervention strategies and resource allocations. Local stakeholders in professional learning communities are the best people and most effective process to assess results, plan reforms, implement changes, and re-assess results to determine the effectiveness of the reforms. Our current accreditation process for secondary schools has all the protocols and effectiveness rubrics needed for this purpose. In addition, they have been developed, used extensively, and refined over the past twenty five years. This process, called Focus on Learning, would fit nicely with the framework of what the LCAP could be at its best.

  8. Mike Smith on Oct 17, 2013 at 11:43 am10/17/2013 11:43 am

    • 000

    Louis — one of your sub-heads is “Additional Funds will be spent without getting result” — how do you know this? — then you suggest that Sacramento should specify and require uses of the money in order to ensure that the districts do the right things. Interesting, but why not just merge the LCFF money with funds from Title I of ESEA (NCLB) since that it the strategy that it uses. But wait, most of the evidence suggests that Title I has almost no effect on student achievement. I think the assumption in the legislation is that the districts can be more responsive to local needs than can edicts from Sacramento. These funds are addressed to meet inequalities in funding that have increased over the past thirty years — they are not intended to be a categorical program — rather than add to the CA Department of Education’s job of ensuring compliance with often badly conceived legislation let move it to become an organization that makes available good evidence about strategies that districts can use with all of their funds, if they think the strategies meet their needs. M


    • Louis Freedberg on Oct 17, 2013 at 12:10 pm10/17/2013 12:10 pm

      • 000

      All good points, Mike. I just wanted to clarify that the sub-hed “Additional funds will be spent without getting results” wasn’t intended to be a prediction, but rather to point out the concern — a considerable one –that the additional funds will be spent without resulting in improved student outcomes. Probably would have been clearer to say “Additional funds might be spent without getting results.”

      • el on Oct 17, 2013 at 12:39 pm10/17/2013 12:39 pm

        • 000

        It’s worth noting that we’re already running schools at an unsustainably low level. That we are maintaining the “results” (quotes because how one chooses to measure that is of course a huge, unsettled question) that we are is largely because of float from past years and the goodwill of a lot of people (teachers, parents, staff, administrators, community) going far above and beyond what their actual obligations are. People have gone without raises for years, they’ve been taking on extra work for years, they’ve been relying on volunteers — and this is not sustainable. People did it with the anticipation that the shortfall would end.

        So before you expect “extra money” to produce “better results” we really need to get back to adequacy, paying for all the services our districts actually provide and use.

        In my experience, more money does provide results. But a lot of the question is what exact result you expect. Expecting money to directly impact test scores, especially in a short term, is not so much realistic. If for example you measure the value of a car based on whether it makes a trip from Los Angeles to Sacramento one time, then there is no difference between buying a $1,000 beater, a Ford Fiesta, a Ford Excursion, a Honda Accord, or a Mercedes.

        Yet, I think we might all understand that if you had to stick with that car for 20 years and routinely make that trip with 4 adults, that the $1,000 beater might not be the optimal choice.

        If our district spends that money on field trips and as a result, 10% more apply to a four year college, I would consider that money well spent, even if our test scores were flat. But we have no way to measure that or to directly relate that expense to that result.

        • Gary Ravani on Oct 17, 2013 at 1:55 pm10/17/2013 1:55 pm

          • 000

          Well stated, el.

        • KSC on Oct 19, 2013 at 7:43 am10/19/2013 7:43 am

          • 000

          We need that little man from the Chronicle film reviews here. El, my little man would be falling out of his chair applauding.

  9. brian bridges on Oct 17, 2013 at 11:13 am10/17/2013 11:13 am

    • 000

    What’s left unsaid is how LCFF destroys the very entities that support school districts. At least 30 county offices of education, whose programs support district efforts, won’t receive new funds until 2020. As a result, state, regional and local support programs are being cut.

  10. el on Oct 17, 2013 at 10:50 am10/17/2013 10:50 am

    • 000

    Let me ask you:

    How would you “guarantee accountability for the dollars spent”?

    I’ve worked on the Single Plan for many years, and am pretty familiar with the SARC. I have tried to influence it to make it a meaningful document. (Also got my hand slapped for deviating too far from the template. :-) ) I think it is relatively meaningful, in that it is a place for the school to say something about its priorities, needs and goals.

    What this report cannot do is guarantee an outcome. I don’t see how any report or document can.

    Some of these reports literally want you to say, “We’re going to purchase 20 computers and we expect this purchase to raise our ELA scores by 20 points.”

    1. It’s ridiculous to make such a claim. And there’s literally no expenditure that you could make that would guarantee this result.

    2. It’s ridiculous to pretend that you “know” that the 20 computers are what caused the scores to rise even if they do. Maybe it’s because the new kindergarten teacher has finally taught all the kids in the school. Maybe it’s because your lowest performing families moved out. Maybe it’s because testing is two weeks later this year, and not the day after spring break. Maybe it’s because attendance was better. Maybe it’s that great field trip the kids went on two years ago that got them excited about reading more.

    3. If the scores don’t go up, what are we supposed to do? Should we destroy the computers, return them, sell them, what? How do we follow through in an “accountable” fashion?

    So, what does it mean to you to “guarantee accountability”?


    • navigio on Oct 17, 2013 at 2:38 pm10/17/2013 2:38 pm

      • 000

      As someone who is also very familiar with both SPSA and SARCs (and has tried to influence the format of both, some with targeted feedback, some with ‘civil disobedience’) I will say that I think the only problem with the things you mention is the expected correlation between the strategy and the outcome. I think it is extremely important for a school and a district to be able to say what it is doing, programmatically, educationally, strategically. Deciding to buy 20 computers can be justified independent of whether the justification is specifically increased test scores (I agree with you that that should never be a realistic assumption). However, these decisions need to be justified, and in public, if for no other reason that they are made based on some kind of priority, and part of understanding a school and district environment is understanding what its priorities are. For me, that level of ‘accountability’ is in essence nothing more than transparency (and I believe what prop 98 was actually trying to get at). Personally, I dont think we can have accountability as used here in the traditional sense until we have this kind of transparency. And, I dont think we have that kind of transparency now. I think this is an important distinction and one that gets lost in such discussions..

      • el on Oct 17, 2013 at 10:08 pm10/17/2013 10:08 pm

        • 000

        I agree with you completely. What I want to see in these documents is

        – a list of school/district perceived weaknesses
        – a list of school/district perceived strengths
        – a set of priorities where attention will be applied
        – how money will be spent addressing those priorities

        So we wrote things like (heavily paraphrased), “Our kids are doing okay on the writing exams, but our local assessment is that writing in the lower grades is weak. We intend to bring in a writing program and spend more time developing this skill, which we think is essential. As a consequence, we will spend less time on area X which is tested on the ELA exam. We will spend $XXXX on training and materials to present this program in grades X and Y.”

        As a parent, that’s just what I want to read about a school. I want to know that they’re thinking. I want to be outraged that area X will not be adequately covered so I can complain. I want to be excited about the writing program.

        This is what I see as transparency.
        “We elect to spend $XXX on activity Y for this educational reason.”

        As a parent, I can say now, “that’s too much money” or “that’s a dumb priority” or “Y could never result in Z” or “Why don’t you have any priorities related to science?”

        And include the charts of test scores, graduation rates, and other outcomes; those are good too.

        But if we could stop the kabuki about “and this plan will assuredly cause the 5 point gain we need in API to stay out of Program Improvement” the document would be clearer and more honest. Teachers are too honest to write the documents as required by the templates, promising test score gains for the $500 projector they need.

        • navigio on Oct 17, 2013 at 10:57 pm10/17/2013 10:57 pm

          • 000

          El, we could literally be the same person. Could not agree more.

          And I’m glad you used the word ‘honest’.

  11. Walter Wallace on Oct 17, 2013 at 7:48 am10/17/2013 7:48 am

    • 000

    The State Board is required to develop and approve regulations addressing the format of the Local Control Accountability Plan by March. I understand they are targeting their November meeting for a draft release.

    The law requires that the LCAP address eight areas of learning, but it is silent on format.

  12. Paul Muench on Oct 17, 2013 at 5:35 am10/17/2013 5:35 am

    • 000

    What does the law require of the State Board?

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