With more money to spend, Brown launches K-12 funding reform

January 11, 2013

Gov. Jerry Brown has proposed an unfamiliar budget for public education in the state – one with actual increases. His 2013-14 spending plan for K-12 schools includes a revision of his plan to reform the state’s convoluted, inequitable school finance system that  lawmakers and a coalition of education groups rejected last year. Passing it would be a priority, Brown said.

Brown wants to increase overall spending for K-12 and community colleges in the 2013-14 fiscal year by 5 percent: $2.7 billion, which translates to $337 per student. Total spending would rise to $56.2 billion next year.

Brown said at a news conference Thursday that passing education finance reform would be a priority.

That growth in revenue, guaranteed by Proposition 98, together with extra money from the passage of Proposition 30 in November, would be split between continuing to pay off late payments to schools – part of the state’s “wall of debt” that Brown is determined to shrink rapidly – and phasing in a new funding system that would steer more money to low-income students, English learners and a new group: ­foster-care children.

Brown also wants to shift the responsibility for adult education from K-12 districts to community colleges, with an extra $300 million given to community colleges for that purpose, and to dedicate $450 million in new revenue to school districts and community colleges for energy efficiency projects.

Phase in finance reform

Brown’s finance reforms would direct additional funds to school districts based on their enrollments of English learners and low-income students. The new K-12 finance system, now christened the “local control funding” formula, is similar in major respects to the “weighted student funding” formula that lawmakers shunted aside last year. But since then voters passed Proposition 30, providing more than $2 billion annually to Proposition 98, with forecasts of an economic bounce-back.

Brown administration officials also say they are incorporating some of the criticisms from meetings with district officials and student advocacy groups in November. “Gubernatorial leadership, a better proposal, a better fiscal situation and a communication campaign” where none existed last year convinced State Board of Education President Michael Kirst that this may truly be the year of reform. “A policy window has opened,” said Kirst, who co-wrote the original plan for a weighted formula five years ago.

The goal is a simpler, clearer and more uniform way to fund schools. By eliminating nearly all of the remaining state programs with spending restrictions, called “categoricals,” the new plan would continue the process of transferring power from Sacramento – aka passing the buck – that started four years ago when lawmakers slashed district budgets. Now, Brown wants to make permanent what he calls the “principle of subsidiarity” – giving more authority to those closer to the classroom.

Total K-12 spending per student from all sources would be $11,742 next year. Proposition 98 spending would be $8,304 per student, an increase of $337 from this year and $1,315 from two years ago. Source: proposed 2013-14 state budget, page 25 (click to enlarge).

The ultimate authority for spending decisions would be the district office, not the schools, and supplementary dollars  would be allocated on the numbers of students in need per district. In a press conference, Brown acknowledged that a new finance system might not please districts that have fared relatively well under quirky, inequitable funding formulas or that educate fewer of the targeted groups of children.

But, quoting Aristotle, he said, “Treating unequals equally is not justice.” The resource needs of students in Compton are not the same as those in Santa Monica, he said, and it is not right, fair and just to fund them similarly. “Suburbanites who can see over the horizon” have an interest in seeing that inequalities are eliminated, he said.

Brown and administration officials reiterated that all districts would be fully repaid money that the state has cut and borrowed from them.

As for the Local Community Funding Formula, details and district-by-district allocations, enabling districts to compare how they’d fare under the new system versus the status quo, won’t be available for weeks. However, the budget summary offered highlights and Brown officials added some details in interviews and in a press conference.

Districts currently receive a combination of an unrestricted grant, called the revenue limit, plus categorical grants. Both vary from district to district. Some outdated formulas go back 30 years; others have been frozen and have failed to keep up with student growth and declines.

Under the new formula, districts will receive a base grant plus supplemental dollars based on the number of students who are English learners, in foster care or whose families are low-income. The following figures are preliminary – and will change, as the formula is revised. (It may have already been revised by the time you read this.)

Base grant: It will be equal to the fully repaid revenue limit. Currently, with cuts it’s about $5,500; the target is an average of $6,800 in seven years, according to Nicolas Schweizer of the state Department of Finance. Grades K-3 will continue getting additional money for reducing class sizes but, for now, districts can spend the money as they choose. The same flexibility will apply to career technical education categorical grants, which will be folded into the basic per-student grant for high school grades.

While superintendents have been clamoring for more flexibility, defenders of technical education and Partnership Academies, which prepare students for college and careers, worry that districts might cut funding for the programs. Until the state accountability system is changed, districts will overvalue subjects, like English language arts and math, that are tested, said Fred Jones, who represents a coalition of employers, labor groups and others concerned about  career technical education. “The only real assurance we have under the current confines that CTE dollars will be spent on career prep is for those dollars to be limited only to bona fide career prep programs and expenses.”

Supplement dollars: Every low-income and foster care student and students not proficient in English will get an extra 35 percent of the base grant: $2,380, once fully phased in. So, for example, for a district where 25 percent of students are targeted for extra funding, the average per-student funding in seven years would be $7,395 ($6,800 base plus $595 supplement). A district with 50 percent students in need would get $7,990 ($6,800 plus $1,190).

Last year, in the May revision of the budget, Brown was recommending only an extra 20 percent of the base grant.

Concentration factor: Districts where low-income and other students in need comprise over half of the student body will get even more bonus money on top of the supplement, based on the assumption that concentrations of low-income students and English learners pose extra challenges. (Some superintendents and policy advocates dispute this assertion.) This will also be 35 percent. So a district with 75 percent students in need would receive $9,180 per student ($6,800 plus $1,785 supplement plus $595 concentration bonus).

Categorical programs: Districts will continue to receive more than $1 billion in categorical dollars for bus transportation and Target Instruction Improvement Grants, but the amounts will be frozen. Continuing TIIG – once allocated for desegregation programs but now general dollars – is a particular nod to Los Angeles Unified, the biggest beneficiary by far, which has built this money into its current budget for decades.

The new funding system retains separate funding for special education and nutrition programs and after-school programs funded under Proposition 49, which together total about $4 billion.

Accountability: Last year some advocates for low-income students and English learners had criticized Brown’s plan to allocate money to districts rather than to individual schools out of concern that extra dollars might not be spent on those students.

Money will continue to be distributed to a school district’s central office, but Brown would require a District Plan for Student Achievement, in which districts must annually account for how money would be spent on low-income students and English-language learners and document that all students have qualified teachers and sufficient materials. For the first time, districts would also have to demonstrate how they implement Common Core standards and progress made toward career- and college-readiness goals.

Sue Burr, Brown’s chief education adviser, said that the state would not withhold money from districts that are out of compliance. The assumption is that parents and advocacy groups would hold administrators and school board members accountable for how funds are spent. Among the children’s advocates who praised the concept of weighted funding Thursday while cautioning that they need more information was John Affeldt, managing partner at Public Advocates, a nonprofit law firm. “We remain enthusiastic supporters of the concept of spending more on kids who need more resources to get to the same level of achievement,” he said. The requirement for a district accountability plan is “a concept that we and other advocates had pushed for and is a step in the right direction, but we await details.”

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