Push underway to increase California school funding by billions

First graders at Redwood Heights Elementary School in Oakland.

Credit: Alison Yin for EdSource (2014)

By the time he leaves office early next year, Gov. Jerry Brown will have achieved his goal of  “full funding” for his signature school financing law, the 2013 Local Control Funding Formula.

But rather than hang a banner and declare victory, legislators and education advocates who support Brown’s funding formula are ready to set the next target: an aspirational goal of committing more than $35 billion in new K-12 dollars to the funding formula — enough to raise California’s current per-student spending of $11,149 by about $6,500. That would potentially place California among the top 10 states in the nation.

Assembly Bill 2808, authored by Assemblyman Al Muratsuchi, D-Torrance, avoids a hard choice: It does not include a funding source to accelerate education spending. Since future governors and Legislatures will ultimately decide the size of their state budgets, the bill cannot dictate how soon the state will reach the $35 billion target. It’s a recommendation: Give K-12 schools significantly more money and direct the bulk of it to the funding formula, which covers more than 80 percent of running a school district, from teacher salaries to roof repairs and pension costs.

The point of AB 2808 is to shift the conversation from the previous definition of a fully funded formula to the aspiration of “fair and full funding for all schools, regardless of where you live,” Muratsuchi said. The bill received unanimous approval in the Assembly Education Committee and is now awaiting action by the Assembly Appropriations Committee. It has the support of groups representing teachers, school boards, parents and school district administrators.

The Legislature passed the funding formula in 2013, when the state was emerging from the Great Recession with about a 15 percent cut in K-12 funding. Brown set an 8-year goal of shifting to the new financing system in which districts would receive the same base funding per student, with additional money, called concentration and supplemental grants, tied to the numbers of low-income students, English learners and foster and migrant children they enroll.

Brown defined full funding as the point at which every district would be restored to the pre-recession funding level of 2007-08, plus inflation. The California Department of Finance predicted it would take eight years, until 2020-21, to reach that point. But, due to surging revenue, particularly in the first years of the formula, Brown is budgeting to reach full funding in 2018-19, two years early. Districts with large proportions of students targeted under the formula already receive more than the full-funding minimum. Some are receiving $2,000 or more per student than districts with low percentages of “high-needs” students.

Support for AB 2808 reflects a consensus that the formula’s base funding, which is supposed to cover basic costs of doing business, isn’t enough. A year after they passed the funding formula, the Legislature passed a 30-year plan to cover a massive unfunded pension liability for public employees, including teachers and hourly school employees. That expense, plus rising costs of special education that legislators didn’t foresee in 2013, have consumed a large portion of school districts’ base costs.

The result has been, for many districts, deficit spending and encroaching on supplemental and concentration money that is supposed to be spent on extra programs and services for high-needs students.

“The base is anemic in terms of adequate school funding. Districts will find a rationale to keep doors open, and that is not good for poor children” who could get short-changed money intended for them, said Kevin Gordon, president of Capitol Advisors Group, an education consulting company based in Sacramento.

The funding law is silent as to what happens once the 2013 full-funding target is reached. Change the formula? Continue to freeze funding at the current level, plus inflation? Return to the old way, before the funding formula, and fund specific “categorical” programs that dictate how districts should use the money, whether for computer coding classes, mental health counselors, technology or whatever legislators decide is important?

Muratsuchi’s bill sends the message to stay the course, let school boards continue to determine their own spending decisions under local control and don’t change the funding formula itself — just increase the amount.

A top-10 funding state, in theory

Drafters of the bill set a target of raising base funding by $35 billion — 60 percent — which they calculated is needed to raise the base to the national average in per-student spending. That comes with caveats, however.

• There are several methods to rank states’ student spending, as an EdSource explainer and an analysis of AB 2808 by Rick Pratt, chief consultant for the Assembly Education Committee, noted. Drafters of the bill chose Education Week’s index, which factors in regional costs of living. By that measure, California’s adjusted total per-student spending of $8,694 was $3,462 below the national average of $12,152; California ranked 45th among states and Washington, D.C.
• State comparisons are several years old. The most recent EdWeek comparison, done in January 2017, was for the 2014-15 school year. Other states will probably increase their spending, too, raising the national average by the time California spends $35 billion more.
• There is no target date for reaching the national average, and this Legislature couldn’t dictate what future governors and lawmakers will do anyway. Minimum K-12 and community college funding is determined by Proposition 98, a formula that factors in the annual growth in state revenue and per-capita income. School funding has increased an average of about 3 percent per year over the past 30 years, according to the Assembly Appropriations Committee analysis of the bill. Without new taxes, such as an initiative to raise taxes on commercial property — headed for the 2020 ballot — or reshuffling of state priorities, it could take more than a decade for the base funding under the funding formula to reach EdWeek’s 2014-15 national average.
• But base spending for the funding formula makes up only 71 percent of total K-12 state funding. The rest includes supplemental and concentration grants under the formula, about 19 percent of the total. Supplemental and concentration grants are calculated as a percentage of base funding. So raising the base by 60 percent would require raising supplemental and concentration funding by the same proportion. Other programs, including the state contribution to special education, make up the final 10 percent.

Next year, under Brown’s budget for full funding, the base grant would average $8,300 per student, according to the Legislative Analyst’s Office.

With a 60 percent increase, as called for in the bill, that amount would rise to $13,300 per student.

Raising the total funding formula, including supplemental and concentration grants, by 60 percent would increase spending to $15,900 per student.

Even if spending for the remaining K-12 programs not included in the funding formula, like the state contribution to special education, were frozen at current levels — a very unlikely scenario — total per-student spending would rise to a minimum $17,600 per student, according to the LAO. California would then be among the top 10 states in per-student spending, according to Pratt’s analysis.

Supporters aren’t citing these daunting numbers. Instead, they’re making the overall point that “full funding” under the current law is still inadequate funding.

“The educators who work with students day in and day out fully support AB 2808, a long-term funding mechanism to bring increased educational funding in California to a level our students need and deserve,” Claudia Briggs, a spokeswoman for the California Teachers Association, wrote in an email. Along with the CTA and the state PTA, associations representing school administrators, business officers and school boards also back the bill,

Based on conversations with the Department of Finance, Muratsuchi said he is “optimistic” that Brown would sign the bill. Doing so would ensure that Brown’s landmark law remains the top funding priority after he retires, he said.