In recognition of how unfair California public school funding had become, the Legislature in 2013 enacted the Local Control Funding Formula (LCFF), a groundbreaking reform of the state’s broken finance system. The new law eliminated numerous categorical grants and linked funding to pupil needs through weights for low income students, English learners, or those in foster care, along with larger allocations to districts with high concentrations of such students. It gives districts new flexibility to allocate existing funding to schools and students. The reform is also tied to a commitment by the state to “fully fund” the system by 2020-21, with the additional aid requirement estimated at $21 billion.
The good news is that California lawmakers have taken crucial steps toward a fair funding system. With the 2015-16 budget, the state has closed 70 percent of the gap toward full funding in just three years.
LCFF has begun to improve the availability of essential resources in California districts and schools, especially those serving significant numbers of students with greater needs. However, in only its second year, the new system has a very long way to go to overcome the profound inequities that existed before the law was passed.
The urgency of realizing the promise of the LCFF reforms is underscored in the recently released 5th Edition of “Is School Funding Fair? A National Report Card” by the Education Law Center, where we work. Based on data from the 2013 Census fiscal survey, the most recent year available, the Report Card goes beyond raw school spending numbers to analyze California’s overall level of school funding and the state’s investment in public education. The report also examines how well California targets funding to districts with high enrollments of poor students.
The Report Card shows that in 2012-13, prior to the implementation of the LCFF, California lagged on key indicators of funding fairness. The state earned an “F” for what is called “fiscal effort,” or the proportion of economic productivity invested in public education. This lack of investment yielded one of the lowest funding levels in the nation, with California ranking 40th on per-pupil funding adjusted for regional cost factors. On the distribution of funding relative to district poverty, California was essentially “flat.” This means the state was not allocating greater funding and resources to districts with high levels of student need. Given the lag in federal reporting of state fiscal data, it is too early to know the impact of the more recent increases in school funding.
However, the state’s decision to target significant new dollars to high-need schools will likely improve California’s rankings on funding fairness.
The importance of staying the course on the LCFF reforms to remedy this inequity is further driven home by the multiple California districts in our companion report, “America’s Most Fiscally Disadvantaged School Districts.” In the 2012-13 school year, California had 14 of the 47 districts on the list, more than any other state. These 14 districts, educating nearly 300,000 students, are disadvantaged because, relative to other districts in their regional labor market, they had higher student needs and lower per-pupil revenues. For example, San Francisco had 39 percent higher poverty than the average of other districts in its labor market, but only 83 percent of the average revenue for the region. Anaheim Elementary had 87 percent higher poverty and only 88 percent of the revenue. When districts such as these lack the funding to offer competitive wages and decent working conditions, they face a significant barrier in attracting and maintaining qualified teachers and support staff.
California schools are already at a disadvantage, with average teacher salaries far below the salaries of other professionals of similar age, degree level, hours worked per week and weeks worked per year. The Report Card documented that early career teachers (age 25) in California could expect to make 79 percent of the salary of their counterparts, while mid-career teachers (age 45) earn only 72 percent. The most disadvantaged districts must not only compete with other, better-paying professions, but are further hampered by their inability to compete with surrounding school districts that can better compensate their employees.
It should be no surprise that California, as the Learning Policy Institute has found, is facing a teacher shortage in its low-income and high-minority districts. Improving fairness in the state’s finance system is critical to reducing attrition and limiting the number of teachers without proper certifications in high-need districts.
Eradicating funding disparities among districts – and ensuring that funding permits salary levels to be competitive with other occupations requiring a college degree – is the key to overcoming California’s chronic teacher shortage. While the LCFF reforms should allow high-need districts to improve working conditions, whether the overall level of funding is sufficient to raise salaries to competitive levels remains to be seen.
We expect to see progress on school funding levels and distribution from the initial three years – 2013-14 through 2015-16 – of the LCFF reforms. But lawmakers, educators and advocates know that LCFF’s success hinges on sustaining the commitment to the planned phase-in and substantial increases in overall levels of state funding over the next several years. As has happened in states such as New York and Kansas, school funding reforms are often abandoned or weakened before they can make a difference in the quality and sufficiency of teachers, support staff and other education resources in classrooms and schools.
California is also uniquely dependent on voter support to extend Proposition 30, the ballot measure that provides revenue through personal income tax rate increases on high-income earners. If the measure is allowed to expire at the end of 2018, the state will face a significant gap in state revenues that will jeopardize the continued progress of the LCFF reforms. Fortunately, a recent Public Policy Institute of California poll shows that two-thirds of Californians support extending the tax increase.
If California can deliver on its commitment to funding fairness, the state has an unprecedented opportunity to increase essential resources and improve student outcomes across the state.
Danielle Farrie is research director and David G. Sciarra is executive director of the Education Law Center. They are co-authors of the National Report Card.
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