Researchers find wide variations in understanding, implementing California’s school funding formula

May 1, 2017

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Researchers who closely examined the impact of the state’s funding formula in eight school districts found a continued commitment to the goals of the new system but an uneven implementation and “consistent misunderstandings and confusion” of fundamental aspects of the law.

The researchers reported that some of the districts, faced with rising costs and declining enrollments, are channeling money intended for students targeted for extra resources under the Local Control Funding Formula to basic expenses.

While acknowledging policy leaders’ impatience to see results three years after the law’s adoption, the eight researchers in the Local Control Funding Formula Research Collaborative urged leaders to “stay the course.”

The researchers include independent researchers Daniel Humphrey and Julia Koppich; Julie Marsh, an associate professor at University of Southern California; and David Plank, executive director of Policy Analysis for California Education, which has produced this and two previous reports on this issue.

Especially administrators from small districts, stretched thin with multiple jobs, need help with the Local Control and Accountability Plan, and other districts need clarity about the law, they said. County offices of education, which oversee the districts’ implementation of the funding law, and a new state agency established to help school districts improve, the California Collaborative for Educational Excellence, should identify districts’ best practices and spread the word, the report said.

Despite outreach by the State Board of Education and the California Department of Education, “not everyone is listening or fully understanding” the formula and how it works, the report said.

“The LCFF remains a grand vision for the improvement of education in California, but tests the patience of policymakers who understandably look for results. Our main message to policymakers is stay the course,” said the Local Control Funding Formula Research Collaborative.

Passed in 2013, the Local Control Funding Formula shifts more decision making over how to spend state dollars from the state to local districts. It partly redistributes funding based on a district’s percentages of “high-needs” students: low-income children, foster and homeless youth, and English learners. And it requires districts to reach out to the public to write the Local Control and Accountability Plan, or LCAP, that lays out spending and program priorities.

But local control “can’t just happen” instantly, Koppich said in a press conference last week. Districts need time and guidance to determine what works best for them, she said.

To encourage frank participation, the study does not name the eight districts, which include a charter school network. Half of the eight have less than 4,000 students. The other half have between 10,000 and 100,000 students. In seven of the eight districts, students targeted for extra money make up more than 55 percent of the district, the cutoff for receiving extra “concentration” dollars for having high proportions of high-needs students.

The researchers focused on how the districts did in four areas: engaging parents and other community members in their districts; advancing the Common Core standards; allocating resources to targeted student groups, and using the formula to advance equitable and coherent priorities.


The study found that districts continued to struggle to increase parents’ participation in creating their LCAPs – even after scheduling evening meetings and often providing food and child care. Nonetheless, interviewees from seven districts cited ideas that emerged from the engagement process that ended up in their LCAPs, such as more classroom aides, intervention specialists, math coaches, parent education in computer skills and English, and a college and career center.

The LCAP template’s complexity has been an obstacle to strategic planning and parent understanding, the researchers agreed. The State Board of Education hopes its revised template will make LCAPs shorter and easier to read, but Koppich doubted it would be a big improvement.

Among other findings:

Common Core

Implementing academic standards is one of multiple priorities that the LCAP must address. Six districts mentioned the Common Core standards in their LCAPs, but only two included well-defined strategies for teacher training. A large urban district added a half-hour to the day and 10 additional professional development days in the lowest-performing elementary schools. Only three districts specified supports for English learners in their LCAPs.

Funding transparency and equity

The funding formula requires that districts increase and improve services and programs for high-needs students in proportion to the “supplemental” and “concentration” funding they receive for those students.

“Districts in our sample appear to be using their resources, for the most part, to support targeted student groups,” the report said. They were able to show they used the money to hire counselors and social workers, and to increase tutoring and advanced placement programs for the formula’s targeted student groups. One district used the formula to shift staffing to high-needs schools.

But Humphrey, in an interview, acknowledged there was “unevenness” in how districts accounted for the spending, and an overall lack of transparency in LCAPs. “By and large, our impression is that they are making good-faith efforts,” he said.

Researchers also found questionable uses. One district used supplemental and concentration funding only to make one-time, new purchases for schools. Another district defined “fair” distribution as funneling extra dollars only to the top 10 percent of students most likely to attend college for SAT preparation and tutoring. Researchers said they couldn’t determine if this approach, clearly at odds with the formula’s intent, is prevalent elsewhere.

All districts complained that rising pensions and other costs, declining or static enrollments, and projected flattening of revenues were squeezing the formula’s base revenues. “Thus, as student counts decrease or level off, we found some districts shifting funding they had once directed to targeted groups to cover ongoing expenses instead,” the report said. These included remodeling bathrooms and school security.

As one unnamed district official said, “Technically, like the next year or two out, we are going to get no new base dollars … so we are finding ways of redefining core and calling that supplemental.”

The spending raised questions about the oversight of the county offices of education, which had reviewed and signed off on all of the districts’ LCAPs. “Again this year, we found wide variation” in how county offices “interpreted the spirit and intention” of the funding formula, the report said.

The report does not recommend ways to make it easier to determine how supplemental and concentration dollars have been spent. However, Koppich said in an interview she opposes Assembly Bill 1321, pushed by dozens of education advocacy groups, that would require districts to track sources of funding and spending at the school level.

Moving forward, the researchers recommend giving districts flexibility to develop alternatives to the state’s LCAP template. By trying to do too much, they concluded, the LCAP has become an impediment to a primary goal of the funding formula: coherent planning.

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