Reforms > Local Control Funding Formula

Study compliments and questions Brown's funding formula


This graph shows the strong relationship between results on California Standards Tests and poverty, with highest scoring API scores in the upper left going to children not in poverty. Source: CA Dept; of Education (click to enlarge).

This graph shows the strong relationship between results on California Standards Tests and poverty, with highest API scores in the upper left going to children not in poverty. Source: CA Dept. of Education. (Click to enlarge)

An analysis by the Public Policy Institute of California, released Wednesday, praises Gov. Jerry Brown’s overall plan for school finance reform, while raising questions about elements of the formula that would steer substantially more money to disadvantaged students.

“The governor’s series of reform proposals are in keeping with many of the principles of good school finance reform,” conclude Margaret Weston, a PPIC research fellow, and Heather Rose, a UC Davis associate professor of education. And his “very explicit and simple” Local Control Funding Formula funnels additional resources to students who most need them. But achieving a consensus on the formula “faces a specific and difficult challenge: agreeing on the appropriate weights for disadvantaged students,” they said.

PPIC published the study on the same day that the Department of Finance released a much anticipated district-by-district breakdown that translates the Local Control Funding Formula into per-student dollars. The 80-page chart discloses how much districts and charter schools would get during the next two years and once the formula is fully funded in seven years, if revenues meet projections. (See our explanation.)

Brown’s formula would simplify the rules for distributing state funding to school districts while channeling more dollars to low-income students and English learners to try to close gaps in their learning. Districts would receive a base level of funding, equal to their general or “revenue limit” funding in 2008, before state budget cuts slashed K-12 funding. Each disadvantaged student would get an extra 35 percent funding. And, on top of that, in schools where disadvantaged students comprise a majority, funding would be bumped up again under a “concentration factor.”

PPIC’s study suggests that the Legislature view finance reform in the context of not just state funding but all sources, since low-income students and English learners already receive significant amounts of federal aid. It also suggests that lawmakers consider raising the base level of funding and take a second look at how supplemental money for disadvantaged students would be ratcheted up under the concentration factor.

Those same students already are targeted under federal and state “categorical” programs. The study found that unified districts composed entirely of low-income students currently receive an average of $2,372 more per student than unified districts with no indigent students: $8,934 compared with $6,567. That difference of 36 percent is a net figure, after subtracting the average advantage that districts with few low-income children have in local revenues, like parcel taxes, and through “basic aid” – districts funded solely by property taxes. Federal funding contributes about 40 percent of extra revenue for low-income students and the state about 60 percent.

The problem under the current system is that state categorical aid is not uniformly distributed. Districts in which high-needs students make up 70 percent of enrollment receive an average of $1,755 per student, but averages are deceiving. Funding  among districts ranges from $991 to $3,324 per student.

If Brown's finance formula (WPF) were implemented fully this year, total school funding, based on percentage of low-income students, would rise from a little more than $6,000 to more than $11,000 in schools where all students were low-income, state and federal funds included. Source: Public Policy Institute of California (click to enlarge).

If Brown’s finance formula (WPF) were implemented fully this year, total school funding, based on percentage of low-income students, would rise from a little more than $6,000 to more than $11,000 in schools where all students were low-income, state and federal funds included. Source: Public Policy Institute of California. (Click to enlarge)

With a few exceptions, what had been categorical money would be distributed uniformly under Brown’s formula. And there would be a lot more of it: 77 percent more per student in combined state and federal funding for a unified district with all low-income students under full funding of Brown’s formula in 2019-20. That’s more than twice the 36 percent in combined federal and state categorical money under the current system.

Under the Local Control Funding Formula, Brown would add bonus dollars through a concentration factor once disadvantaged students comprise a majority of students. A district with 80 percent high-needs students would get 46 percent more funding for each of those students. A district with all high-needs students would get 53 percent more funding per student, the maximum.

Concentration factor deserves scrutiny

The study doesn’t venture whether that’s the right amount, saying it’s the Legislature’s role to determine the balance between the base funding for all students and the extra money for the disadvantaged. “The literature provides some support for directing even more resources to communities with concentrated poverty,” the authors write.

However, they imply that the threshold at which the concentration factor kicks in may not be high enough, since 60 percent of students and 58 percent of districts would benefit from it. “This may argue for a higher level of base funding rather than a concentration factor,” they write.

Another problem is that concentration is measured by district, not by school, for the purpose of funding. As of two years ago, nearly 600 schools with high concentrations of disadvantaged students were located in districts where the overall number of disadvantaged students was under 50 percent; those schools would not benefit from a concentration factor.

State Board of Education President Michael Kirst, who co-wrote a brief five years ago that was the model for the Local Control Funding Formula, defended the concentration factor. He said that the study understated the compound impact in California of large numbers of English learners who are also poor. Over half of English learners attend schools where English learners are the majority. Extra money where there is such a concentration is needed, he said.

Kirst also said he was satisfied that the 35 percent basic supplement for disadvantaged students is in the general range of other research in California.

Weston and Rose also reviewed those studies, most of which were done for the 2007 Stanford-led Getting Down to Facts reports. One recommended giving districts with all high-needs students 66 percent more than districts without those students. Another, by Jon Sonstelie, a school finance expert at the University of California Santa Barbara, concluded that a 25 percent increase in base funding, plus a 30 percent supplement for high-poverty districts, would be needed to raise achievement to the state’s API target of 800. He based this on budget simulations with California educators. But since 2007, API scores have risen significantly anyway even though district budgets have been cut, casting doubt that raising test scores should be the measure for increasing spending. Kirst said more resources will be needed to meet the ambitious goals of preparing students for college and careers and for schools to succeed in teaching the more rigorous Common Core standards .

Weston and Rose concluded that research studies all pointed to the need for more money to increase student achievement, and disadvantaged students need even more. But the studies had flaws, so using their results to set spending targets is problematic.

“The reality is we don’t know how additional funding will translate into outcomes,” but a lack of certainty over how to link spending and achievement “does not relieve our state government of setting school funding goals and priorities,” they write. “A strong finance system is an essential component of a strong education system.”

Filed under: Local Control Funding Formula, School Finance

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6 Responses to “Study compliments and questions Brown's funding formula”

  1. Vee Ward said

    on March 8, 2013 at 6:06 pm

    So are you all OK with your tax dollars going to “English language learners” instead of American kids? Why is this “elephant in the room” never addressed? Why is funding for American kids cut to accommodate the (very likely) illegal kids who already take too many of our tax dollars as it is? Until parents wake up, the liberal school districts will continue to take from our kids and give to those who should not rightfully even be in the classrooms. When will parents wake up? When funding is cut to $1,000 per student and everything but English is cut?

  2. Paul said

    on February 23, 2013 at 2:36 am

    Corinne, your suggestion is an interesting one. Some thoughts…

    What little categorical funding is left for teacher preparation — chiefly the Teacher Credentialing Block Grant, the state’s contribution to Beginning Teacher Support and Assessment (BTSA) — has been subject to categorical funding flexibility for several years. Already today, districts may spend the money on any educational purpose. The TCBG is among the programs that would be eliminated under the new funding formula.

    While it might seem a terrible thing to eliminate dedicated state funding for BTSA,

    1. BTSA will continue, whether paid for by candidates or by miscellaneous district revenues, because the law says that BTSA is the only way for most teachers to clear (make renewable) their credentials.

    2. The proportion of new teachers in California’s teacher workforce has declined dramatically. Most of the new teachers have been laid off.

    3. Even if BTSA were at risk, there is no empirical evidence of the program’s effectiveness. Retention statistics — phony anyway without CalTIDES — consider only those teachers who stay long enough to complete BTSA. Anyone who is fool enough to do that will have invested so much money and time in teacher preparation, and foregone so much income from unpaid student teaching and a low starting salary, that leaving the profession wouldn’t make sense.

  3. navigio said

    on February 22, 2013 at 11:55 am

    “PPIC’s study suggests that the Legislature view finance reform in the context of not just state funding but all sources, since low-income students and English learners already receive significant amounts of federal aid. ”

    I’ve obviously had too much coffee today since this line made me chuckle. One of the amazing things about education funding discussions is they almost always fail to mention whether they are talking about state-only money, fed-only money, or state and fed money combined (can add local to the mix too). This allows people to say ‘our CA school revenue has been cut’ while the actual revenue increases (or vice versa). In the past, I have even posited that some state policy takes into account expectations about federal funding in its decisions. Anyway, just another level of obscurity in these important discussions.

    That said, I love PPIC, but just for excercise I will depart from with them on this concept. If we focus solely on state funding, then we put ourselves in a much better position to toy with the idea of rejecting NCLB outright. :-) Obviously, the likelihood of that is slim since, as a public education leader recently put it here (paraphrasing), “it would be pointless to forgo a potential source of funding on principle, even under the flawed current system”. But here’s to hoping… and another cup of coffee..

  4. Corinne Muelrath said

    on February 22, 2013 at 11:45 am

    Though we agree that local control is important, how does the proposed funding model impact categorical programs that focus on teacher development and credentialing? We know the need for new teachers often correlates with student demographics within schools and districts, so theoretically the funding would increase within high need schools. However, in reality, will the “melting pot” allow high need districts to continue to offer high quality teacher development and teacher preparation or will the funding be lost? New teachers need strong support systems and high quality teacher preparation. A modified funding model where funding increases when the number of new teachers increases will ensure equity so districts are able to continue to offer intern and induction programs.

    • el replied

      on February 22, 2013 at 3:11 pm

      One of the issues with BITSA funding is that it is funded regionally – so for example in my area, there is a county office of education who gets all the money for that and then covers not just their own county but some neighboring counties.

      The hold harmless funding rule and new formula are problematic, because all the counties in question will be in the hold harmless/stagnant funding class, but be taking on different responsibilities, meaning that there will be pressure to spend what was once regional BITSA money all in that one county to meet that and their other county level responsibilities.

  5. Richard Moore said

    on February 22, 2013 at 11:16 am

    >>> “The reality is we don’t know how additional funding will translate into outcomes,” …

    This is priceless. Right up there with Nancy Pelosi’s “we have to pass the bill so that you can find out what is in it”

    Meanwhile more categoricals disappear, more money will go to salaries, and still we will try to run schools without nurses, counselors or librarians.

    What’s wrong with this picture??

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