Brown's school funding formula lauded, then picked apart at hearing

March 13, 2013

To a person, every Assemblymember at a committee hearing Tuesday and the six superintendents who testified at it praised the principles behind Gov. Jerry Brown’s proposed school finance reforms: simplicity, clarity and equity ­­– more money for the state’s neediest children.

But there were also sharp disagreements over the components of Brown’s Local Control Funding Formula that would determine how much money districts would get were the new finance system phased in over the next seven years, as Brown hopes. At its core, the division was between those favoring the formula as proposed and those arguing that it would give too many extra dollars for English learners and low-income children relative to a base funding amount for all children.

Long Beach Unified Superintendent Chris Steinhauser encouraged approval of Brown’s funding formula as “the right thing to do.”

Christopher Steinhauser, superintendent of Long Beach Unified, an urban district with mostly high-needs students favored by the formula, and John Nickerson, superintendent of Acalanes Union High School District, a 6,000-student district in Contra Costa County with few disadvantaged students, epitomized the different outlooks.

“The governor’s proposal is a great, bold step to bring equity and access to all children. Never in my lifetime did I think I would see this,” Steinhauser said. “It’s the right thing to do. You don’t need to have all of the answers to move forward.”

“In principle, I support the Local Control Funding Formula, but the base level funding is inadequate. It would potentially crush a district like ours,” Nickerson said. “Given the community support of Prop. 30 and the expansion of Prop. 98 funding, I don’t think it’s right that districts should have to look out over the next several years at how they are going to have to gut programs. I don’t think it’s right for districts to having to be looking at, Can we shorten our school year? I don’t think it would be right to have to look at employees who haven’t had a raise in salary for five years and say you will have to wait another five years.”

Bolstered by the passage of Proposition 30 and substantial projected state revenue, Brown is proposing to restore the cuts of 22 percent since 2007-08 to a district’s general funding. On top of this amount, ranging from $6,342 per K-3 student to $7,680 per high school  student, Brown would add 35 percent – an average of about $2,450 – for each English learner, foster youth and low-income student. And in districts where high-needs students made up more than a majority of students, he’d add another 35 percent per student, recognizing that high concentrations of poverty require additional money. A district with all high-needs students would get, in total, 53 percent more funding – an average of about $3,600 – more than a district with no English learners and low-income children.

Christine Frazier, superintendent of the Kern County Office of Education, said that discussions with her 47 districts, 33 of which would get more money under the new system, indicated the money would be used well. Uses would incude restoring tutoring and summer programs that have been cut, extending the school day, creating smaller classes, targeting one-on-one intervention with students with the greatest needs, intensely training teachers, and ending classes mixing students from different grades created because of funding cuts.

What constitutes ‘holding harmless’?

Brown says that districts would be held harmless; no district would receive less than they get now. But that’s not the whole story, because the funding for dozens of special programs, called categoricals, such as teacher training and textbooks, that Acalanes and other districts get now – already 25 percent less than five years ago – will be frozen. Only districts’ base funding and the supplemental money for needy children will get yearly increases. If you’re a district primarily without targeted students like Acalanes (2 percent low-income and 2 percent English learners), all you would get under full funding would be basically the revenue limit.

Acalanes Union High School District Superintendent John Nickerson calls the hold-harmless guarantee misleading.

“It’s misleading to say hold harmless,” Nickerson said. “Hold harmless is to hold at inadequate funding.”

Assemblymember Al Muratsuchi, a Democrat representing Torrance, Manhattan Beach and well-off beach communities in Los Angeles County, said Brown’s proposal “is pitting urban against suburban districts and is not in the interest of California.”

Nickerson didn’t make that argument. He acknowledged that students in poverty do need more funding and what’s needed is adjusting the formula.

“Look at the base rate and bring it up. If you did that, set a true target of what it takes to educate kids in the 21st century,” he said, “then losers would not lose quite as quickly, and the winners would not win as quickly. That would make it tolerable.”

Assemblymember Susan Bonilla, D-Concord, who chairs the Budget Committee’s eduction subcommittee that held the hearing, agreed that setting the “base rate is a critical factor.”

Susan Bonilla, who chairs the education subcommittee, said that fixing base funding in the formula and providing more money for the state’s neediest children are not mutually exclusive goals.

“How do we go about addressing realities raised by districts like Acalanes, suffering severe cuts that it would not make up?” she asked in an interview, calling it “an inherent flaw” in the formula. But at the same time, she said rebalancing the formula and recognizing “the compelling reasons to address the neediest students in the state are not mutually exclusive goals.”

Other superintendents suggested one approach would be to limit, or even eliminate, the bonus dollars for high concentrations of English learners and low-income students and raise the level of base funding. An analysis by Public Policy Institute of California alternatively suggested limiting the bonus funding to far fewer districts.

Don Stabler, deputy superintendent of Torrance Unified, had a different issue with the concentration factor. Since it’s based on the districtwide number of high-needs students, students in a high-poverty school in a suburban district would not get the extra dollars. So, as Assemblymember Muratsuchi put it, similar “students on the east side of Western Avenue,” the dividing line between Torrance Unified and Los Angeles Unified, would get $2,000 less per student than those on the west side of the street.

Steinhauser said that assigning bonus dollars by school instead of by district – an idea the Brown administration has resisted – would be fine, as long as the reporting requirements weren’t onerous.

One aspect of the formula particularly annoyed some Assembly members and superintendents. Two large categorical programs totaling $1.3 billion – home-to-school transportation, important to many rural and some urban districts, and Targeted Instructional Improvement Block Grants or TIIG – would be excluded from the formula; districts would continue to get current funding levels. TIIG is money for desegregation programs, some dating back decades, and disproportionately favors a small number of districts, like Los Angeles Unified, by hundreds of dollars per student. Los Angeles Unified uses the money, a spokesperson testified, to fund magnet schools and transport students to them. In 2008, a court upheld the continued use of the money, she said.

“I’m dumbfounded” that TIIG is not included in the formula, where it could be used to raise funding levels, said Rich Fagan, associate superintendent for Elk Grove Unified. “This is wholly unfair to the other districts.”

Chris Ferguson of the state Department of Finance said that TIIG was left out of the funding formula because districts have indicated they’d sue for violating their desegregation agreements if the money was taken away. Rachel Ehlers, education analyst for the Legislative Analyst’s Office, questioned the basis for a suit, noting that only four districts have active desegregation cases, and all TIIG districts could use the money for whatever purpose they wanted.

Bonilla’s subcommittee will return to aspects of the funding formula – how it treats career and technical education funding, TIIG, foster children in particular, the bonus or concentration dollars – in early April. Adult education funding will get a separate hearing. The next step, Bonilla said, is to do modeling with possible changes to the formula and to ask the Department of Finance for a breakdown comparing how districts would do under the current system versus the Local Control Funding Formula.

“It’s a long way to June 30,” she said, referring to the deadline for passing the state budget. “We’re going to focus on doing things correctly. This is not code language for delay. But we should not let the date drive us.”



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