Less than a week after the state Legislature approved a sweeping school finance reform plan that will funnel additional funds to low-income students and English learners, the state’s finance chief says school districts will have to spend the extra funds in a way “that shows improved outcomes” among their students.

Ana Matosantos, the director of the Department of Finance, was speaking during a telephone briefing convened by EdSource and New America Media with nearly 450 participants from around the state, including journalists, school officials, finance experts and parent advocates.

The turnout for the briefing reflected the intense interest generated by the passage of the most far-reaching reform of California’s school financing system in decades. Its central feature is a local control funding formula which provides a base level of funding for all districts, with additional funds for high-needs students to take into account the higher costs of educating them.

“The law is very clear that the dollars that are being provided through supplemental and concentration grants have to be spent on supplemental services for the students for which they are being provided,” Matosantos said.

But details of the plan and its implementation must still be worked out for the nearly 1000 districts enrolling 6.2 million students, and it is evident that the transformation of a convoluted school finance system will be complex, raising multiple questions for local officials and communities.

Michael Kirst, president of the State Board of Education, noted in the briefing that the plan delegates a great deal of control to local districts to spend funds as they see fit, marking a decisive shift from the rigid top-down requirements imposed by Sacramento and Washington over the past decade.

“A lot of accountability (for how funds will be spent) will not be stage managed from Sacramento,” he said. “People will have to get active at the local level to make this (funding plan) meet their needs.”

At the same time, he said, the law approved by the Legislature last week gives considerable powers to the State Board of Education to establish procedures for how to hold school districts accountable for the money  they will receive.

Members of the board are appointed by Gov. Brown. In fact, Kirst also served as president of the board during Brown’s first term as governor in the 1970s.

By early next year, Kirst said, the board will draw up a “template” for the “local education plans” that school districts are required to draw up under the new school funding laws, based on public hearings and parental and community input.

Later in the year the board will develop a “rubric” for a range of accountability measures – such as attendance rates and how well students are prepared for college – that local districts will be expected to meet.

In his briefing presentation, Jonathan Kaplan, senior policy analyst at the California Budget Project, which for decades has advocated on behalf of policies that benefit low-income Californians, described the reform plan as a “major step forward.”

But he emphasized the need for parents and other “education stakeholders” to hold school districts accountable for ensuring that funds are equitably spent.

He also pointed to “a decade of disinvestment” in California’s schools, and said that the school finance plan still falls short of what many regard as an “adequate” level of funding to ensure that children succeed at their optimal levels.

“The Local Control Funding Formula is about dividing the school funding pie,” he said. “Now the question facing California is how we can make the pie larger.”

With the abolition of multiple separate streams of “categorical” funding that districts had to spend on specific programs, officials emphasized that districts will have far greater flexibility in how they spend state funds – beginning in the coming school year.

Said the Department of Finance’s chief deputy director Michael Cohen, “We are moving to a unified stream of money that is the most flexible that California has ever seen in allowing districts to choose what highest and best use of the dollars are.”

Have questions about implementation of the new school funding plan? Send them to edsource@edsource.org and we will seek answers from the Department of Finance and other experts.  


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