It’s a deal: Brown, top lawmakers raise base funding in finance formula

June 11, 2013

In a nod to suburban districts that argued they would be shortchanged, Gov. Jerry Brown and legislative leaders negotiated a new version of Brown’s plan for school finance reform that will increase the base funding level for all students and lower the extra dollars for some high-needs students.

Late Monday, the Joint Legislative Budget Conference Committee, made up of lawmakers from the Senate and the Assembly, approved a compromise version of Brown’s Local Control Funding Formula (LCFF) with little discussion. The full Legislature is expected to take it up as part of the state budget later this week. Legislative leaders circulated only a one-page summary of the new version, along with a district-by-district breakdown that the state Department of Finance had prepared, but no other information on Monday.

The expected approval of the LCFF would hand Brown a huge victory for his top legislative initiative and lead to sweeping changes in how education money is distributed. Although the ratios in the final funding formula differ notably from what Brown had proposed, the essential framework, steering substantial dollars to low-income students and English learners and giving more authority over spending decisions to local districts, remains intact.

“The big picture is that this represents a huge win for kids who need it,” said Ted Lempert, executive director of Children Now, which has led the campaign to pass the school funding reform plan.

Brown had proposed a formula with three components: base-level funding for all of the state’s 6.2 million K-12 students, a supplement for every high-needs child – English learner, low-income student and foster child – and bonus dollars above the supplement for districts with the largest concentrations of high-needs students. Under the compromise, an extra $3 billion in base funding will assure that nearly every district, especially those with few disadvantaged students, will get back state funding that had been cut as a result of the state’s budget crisis since 2007-08 plus cost-of-living increases moving forward. In addition, about 40 districts that would not get all their funds restored under the new formula – including the Berkeley, Pleasanton, Santa Barbara and Dublin Unified Districts – will receive an “economic recovery payment” to ensure they do not lose funds under the plan.

To make room for this, the supplement for every high-needs child will be cut. However, the concentration grants in districts with especially large numbers of high-needs students, which Brown had staunchly defended as critical to his plan, will increase. How much each district will get as a result of the changes will depend on the percentage of high-needs students it has.

Brown had proposed to phase in the formula over seven years. The new plan calls for an 8-year implementation, ending in 2020-21.

Details of the compromise

Based on summaries circulated among legislators, here’s how it would work:

Base funding: Each student will get an average of $537 more, rising from the statewide average base grant of $7,103, including average grade-level add-ons for class size reduction and career technical education, to $7,640. The specific amounts will vary, depending on the grade of the student, with high school students receiving the most (about $8,410 per student). The higher base will cover most of the categorical programs that districts had in 2007-08, such as teacher training, textbooks and materials, and building maintenance. Districts with fewer high-needs students had protested that Brown’s previous proposal wouldn’t have given them enough supplemental money to make up for what they would lose in categorical dollars.

Supplemental money: Brown had proposed an additional 35 percent of base funding for every high-needs student – an average of $2,385. To accommodate the bigger base grant, the compromise plan will lower the supplemental amount  to $1,470 per student, the equivalent of an additional 20 percent. That’s a drop of $915 per child.

Concentration factor: The loss of supplemental money will be offset in those districts with the most high-needs students, because the compromise plan raises the concentration grant from a bonus 35 percent of base funding per student to 50 percent  – $3,676 per student or nearly $1,300 more than under Brown’s plan. Only districts in which 55 percent of students are high-needs will be eligible for any of this money, however; Brown had proposed a threshold of 50 percent high-needs students.

Districts with the most high-needs students will get the largest proportion of concentration money. A district with 57 percent high-needs students – barely over the qualifying threshold of 55 percent – will get only 2 percent of the concentration factor or $74 per student districtwide, while a district, like Fresno, with 92 percent high-needs students, will get a concentration grant of $1,360 per student districtwide. This is on top of the 20 percent per student supplemental grant.

The chart on this page comparing three districts’ allocations shows the different impact of the new distribution formula.

As another graphic on this page shows, base funding will now consume 84 percent of the total dollars under the formula, compared with 80 percent under Brown’s plan; the supplemental portion will drop from 16 percent to 10 percent of dollars; the concentration grant will rise from 4 percent to 6 percent of total dollars.

A short explanation distributed to legislators on Monday said that there is very little difference between a lower base grant with a higher supplement and a higher base grant and lower supplement. That will be true for Clovis Unified, 40 percent of whose students are English learners and low-income students. Steve Ward, Clovis’s associate superintendent for administrative services, said that the district will get about the same amount under the compromise plan. But the big difference is that the rise in the base and drop in the supplemental grant will provide Clovis with more unrestricted dollars, which will be critical to restore funding for services and programs for all students, he said. “The base went up; that’s still not high enough but it’s a good start,” Ward said.

For  those districts, however, that have a sizable proportion of high-needs students but not quite enough to qualify for a concentration grant, the loss of supplemental dollars will be greater than the gain in base funding. They’ll still come out ahead, but not as much as under Brown’s original proposal.

The compromise plan did not address one of the Senate’s principal objections. As with Brown’s earlier funding formula, concentration grants will be based on the percentage of high-needs students per district. Districts like Clovis, Mount Diablo Unified and Elk Grove Unified, with high concentrations of poor students at individual school sites, but with an overall district average of high-needs students near or below 55 percent, will get no concentration dollars. In Clovis, five schools have 75 percent or more high-needs students, including an elementary school with 93 percent English learners and low-income students, Ward said. “The biggest issue we have is these invisible kids – 1 million in districts that won’t get enough money,” he said.

Brown has refused to consider funding by school, insisting that decisions on spending should be made at the district level. What wasn’t clear on Monday was final language on accountability for spending: to what extent supplemental and concentration dollars must now follow high-needs students to their schools or the degree to which trustees and superintendents will have latitude on allocating the extra money.

Infographic by John C. Osborn, EdSource.

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