Everyone talks about the dramatic cost difference between California counties, but does nothing about it. Children in the poorest districts in the wealthiest counties pay the price of our inaction. Many do so unnecessarily.
Let’s review what we know.
Does the cost to run a school differ around the state? Yes. Over 80 percent of school funding is related to personnel. No Californian expects to get by on the same income in San Francisco as in Fresno or Bakersfield. The most recent of many studies on California’s regional cost differences documents a “bare bones” budget for a family of four in San Francisco ($123,442) that is over twice as high as one in Fresno ($59,440) or Bakersfield ($57,898) — indeed, twice as high as in 22 of California’s 58 counties.
How does California’s school funding scheme, the Local Control Funding Formula (LCFF), handle San Francisco’s high costs? It doesn’t. The formula is identical throughout the state. This forces school districts like San Francisco to spend a disproportionate share of their time juggling budgets and finding funding. Administrators beat the bushes for money — parcel taxes, funding from the city, grants — while trading off class size, staff experience, competitive pay, clerical support and building maintenance. This sometimes leads to tensions between schools with higher and lower PTA funding.
Is this a best practice? No. Ten other states include regional cost adjustments, including large, socioeconomically diverse states such as Massachusetts, Florida, Texas and New York. EdWeek’s annual statewide rankings adjust for regional costs; academic research routinely factors them in. The original whitepaper outlining the concept for the Local Control Funding Formula (co-authored by Michael Kirst, former president of the State Board of Education) included regional costs right along with student disadvantage in its “more rational, more equitable” school funding system.
Who is this hurting? Eight counties show up at or above the statewide average on every county cost index we can find. San Francisco, San Mateo and Marin lead the pack, followed by Santa Clara, Alameda and Contra Costa. Next come Orange and Santa Cruz, with San Diego and Ventura high on most, but not all indexes.
Some property-wealthy school districts in the 10 counties don’t feel the pinch, because their property taxes bring in more money than they’d get under the state’s funding formula. They get to keep the difference, which amounts to thousands of dollars per student in some cases. But 82 percent of the disadvantaged students who live in those counties — foster youth, children from low-income families and English learners — don’t live in property-wealthy districts. They get what the state’s formula allots — not recognizing higher rents and other costs that ravage their families.
How does this manifest itself in test scores? Students in the highest-cost counties consistently underperform their socioeconomic peers elsewhere in the state. Because many of these areas contain wealthy districts, it is easy to miss the fact that — focusing on only middle-class districts — an additional 8-10 percent of the student body will fail to meet the state’s English language arts standards. Even counties with only a small cost disadvantage like Orange, San Diego, Santa Cruz and Ventura see a measurable increase in children in the lower socioeconomic range failing to meet standards.
Sadly, the state’s inaction is also unnecessary — supplementing school funding for regional costs would be simple and surprisingly affordable. A statewide regional cost supplement would increase school funding requirements by $1.1 billion, less than 2 percent of total statewide LCFF funding. Even better, 40 percent of this would be covered by existing property taxes collected for education in the high-cost counties, but currently redistributed to their local governments since the existing Local Control Funding Formula structure fails to call for it.
Raising the LCFF threshold in the three worst-impacted counties — San Francisco, San Mateo and Marin — wouldn’t require a penny from the General Fund. Including the next three counties — Santa Clara, Alameda and Contra Costa — would add $440 million, while Orange, San Diego, Santa Cruz and Ventura would add just under $250 million more in costs to the state. In short, the net out-of-pocket for the General Fund would be under $700 million.
Why should the rest of the California education community care?
These ten high-cost counties represent 36 percent of the population, 46 percent of all property tax and 54 percent of all personal income tax paid. Ignoring regional costs strengthens many voters’ perceptions that taxes paid “for schools” just don’t get there. Los Angeles Unified failed to pass a direct parcel tax for its own schools, in a county with 26 percent of the state’s population, paying 25 percent of all property tax and 23 percent of the state’s personal income tax. So why should voters who are already paying much more believe that anything will reach the struggling districts in their midst?
Both morally and practically, plucking the goose that lays the Golden State’s eggs is a self-defeating strategy. It benefits a small number of privileged children, by increasing their schools’ ability to compete for good teachers, while reducing the chances for anyone trying to climb the ladder below them. It also misleads ivory tower academics who are researching educational inequity, by creating more of it. It doesn’t help kids and it doesn’t strengthen California.
Jennifer Bestor is the research director for Educate Our State, a statewide, grassroots, parent-led organization educating and uniting Californians to provide all students with a high-quality public education.
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Todd Maddison 4 years ago4 years ago
So, would accomodating regional differences mean reducing funding for areas that are relatively inexpensive?
If we make the case that San Francisco deserves more because of the cost of living there, then conversely does not Victorville deserve less?
Jennifer Bestor 4 years ago4 years ago
LCFF's original design included indexing for regional costs. We’re told this recommendation broke down when low-cost areas claimed they couldn’t attract teachers to their economically depressed areas at prevailing wage rates. Sadly, we can’t find that anyone stuck to their guns regarding the effect on higher-cost areas. Nor does anyone appear to have offered the alternative of supplementation over indexing (indexing reduces funding proportionally in low-cost areas). Nor, incidentally, was the additional … Read More
LCFF’s original design included indexing for regional costs. We’re told this recommendation broke down when low-cost areas claimed they couldn’t attract teachers to their economically depressed areas at prevailing wage rates.
Sadly, we can’t find that anyone stuck to their guns regarding the effect on higher-cost areas. Nor does anyone appear to have offered the alternative of supplementation over indexing (indexing reduces funding proportionally in low-cost areas). Nor, incidentally, was the additional handicap of using a statewide cut-off for poverty considered — a decision that undercounts low-income children, those whose families struggle with food and housing insecurity, which further exacerbates underfunding in high-cost areas.
Finally, no one appears to have considered the fact that, in some (now all) of the highest cost counties, education-allocated property taxes were being collected, then redirected outside of education. Since 1992, a portion of the property tax paid in every county has gone into a countywide fund that goes to pay for schools, in inverse proportion to their direct property tax allocation. In San Diego County, this Educational Revenue Augmentation Fund receives about 13% of every property-tax dollar. 13-14% is typical across the state, except in areas where the AB 8 Shift (a year after Proposition 13) stripped a large amount of the remaining funding from schools. In such areas (eg. the counties of San Francisco, Los Angeles, Alameda), ERAF is compensatorily larger (about 21-25%). However, this fund only goes to meet the state’s explicit LCFF obligation to schools. Once that obligation is met, any remainder is redistributed to the county, its cities and special districts — i.e., outside of education. Spectacularly, $415 million of ‘excess’ remainder was discovered in San Francisco last November, covering the prior two years, money that could have funded SF Unified, but was instead handed to the county government to spend as it wished.
In areas where there isn’t “excess” county Educational Revenue funding — the state general fund would have to provide the revenue. Before condemning this as a transfer from the truly deserving to the merely demanding, please recognize an underlying truth. The ten high-cost counties pay $20 billion a year in state personal income tax above and beyond everything disbursed by the state for their own residents. Half of this $20B funds all the state’s commitment to higher education, the other half funds 96.5% of the K-12 shortfall in other counties. Directing less than 5% to ensure that children in the less-advantaged, LCFF-funded districts in these counties get an equivalent education to that available statewide.
Finally, please see our website for the scatter charts that illustrate the very real cost to schoolchildren in the low-income districts in these “wealthy” counties. There is a significant, and statistically significant, shortfall in performance between working-class kids in high-cost areas vs. the rest of the state. This has been masked by the performance of their actually well-to-do peers within these counties — dismissed by a communal implicit bias against the “privilege” of living in the Bay Area, Orange, San Diego and Ventura counties.
SD Parent 4 years ago4 years ago
Yes, the state likes to talk about regional cost averages when waving the flag of how low the state ranks in per pupil funding but ignores the disparities in regional cost within the state. So I agree with the premise of regional cost factored into LCFF. However, there should be consideration of the retirement disparities that differences in salaries for employees in higher-cost areas vs. lower-cost areas would create. Would it be … Read More
Yes, the state likes to talk about regional cost averages when waving the flag of how low the state ranks in per pupil funding but ignores the disparities in regional cost within the state. So I agree with the premise of regional cost factored into LCFF.
However, there should be consideration of the retirement disparities that differences in salaries for employees in higher-cost areas vs. lower-cost areas would create. Would it be fair if a teacher who lived in the Bay Area retired with twice the pension than a teacher in Bakersfield? Perhaps the state could set a maximum salary scale toward pension payments and benefits and then any salary above that would not be calculated into the pension, just like the cap for Social Security.
P.S. In San Diego Unified, personnel costs hover between 90%-92%, and this has resulted in numerous cuts to students programs and services.
NSmith 4 years ago4 years ago
Adjusting for regional costs would make a huge difference for my local district. My son attends a school where children on one side of the road go to a district that can average $20,000 per student to spend, but on our side of the road we have just over $9,000 to spend per student. Plus we are facing an increasing deficit over the next three years because our district is one of the poor … Read More
Adjusting for regional costs would make a huge difference for my local district. My son attends a school where children on one side of the road go to a district that can average $20,000 per student to spend, but on our side of the road we have just over $9,000 to spend per student. Plus we are facing an increasing deficit over the next three years because our district is one of the poor districts in one top 3 most expensive counties to live in.
This part of the article really stood out to me, “Raising the LCFF threshold in the three worst-impacted counties — San Francisco, San Mateo and Marin — wouldn’t require a penny from the General Fund.”
Amber S. 4 years ago4 years ago
This is spot on. My children attend school in a struggling district in San Mateo County, and the overhead costs of running the district are literally crushing it. We are surrounded by open space and agricultural land which is taxed at a lower rate and are LCFF funded; 15 mins away school districts are spending $25k per child as compared to our $11k. The disparity is staggering and unnecessary. Sacramento needs to make this right immediately!