Requiring Clear Baseline and Transparency Is Key in Crafting Rules for New School Funding Formula

Update: The State Board of Education initially planned to post the agenda materials for its January 2014 meeting on December 20, but has delayed that release until January 3, 2014. This blog post has been updated to reflect that change.

Last summer, when the Governor and Legislature approved California’s new education funding formula, the Local Control Funding Formula (LCFF), they deferred to the State Board of Education (SBE) key decisions regarding accountability — specifically, how to ensure that school districts spend LCFF dollars to provide additional services for disadvantaged students. The Legislature set a January 31, 2014 deadline for the SBE to adopt regulations for how schools can spend LCFF dollars. At the core of the debate regarding these regulations is how to strike a critical balance: ensuring that LCFF dollars are spent to support the disadvantaged students for whom they are intended while providing school districts more authority over how to spend those dollars.

On Friday, January 3, the SBE will post the agenda for its next meeting, scheduled for January 15 and 16, 2014, at which the SBE will need to approve regulations in order to meet the legislative deadline. As we blogged about before, the preliminary draft spending regulations released earlier this year provided far too much discretion to school districts — so much so that these regulations likely would have undermined the LCFF’s goal of addressing the inequities in the former school finance system. Other stakeholders also shared this concern. When the SBE reviewed the draft regulations at its meeting in early November, it inspired nearly five hours of public testimony by more than 180 people. Among them was Senator Holly Mitchell, who echoed the sentiments of many others when she expressed alarm that the draft regulations did not live up to the spirit of the LCFF law.

It appears that the public outcry over the preliminary draft spending regulations made a difference. Last week, the consultant advising the SBE — WestEd — released a paper (PDF) outlining key issues they had identified based on public comments made at last month’s SBE meeting. They also released a draft of the Local Control and Accountability Plan (LCAP) template (PDF) that districts will use to demonstrate compliance with SBE spending regulations. As part of this release, WestEd indicated that the revised regulations and the LCAP “will reflect significant changes based on the provided input” from the November SBE meeting.

In light of the shortcomings of the preliminary regulations, this is encouraging. However, stakeholders who want to ensure that LCFF dollars allocated for disadvantaged students are actually used to support these students should focus on whether the regulations adopted by the SBE abide by two important principles: establishing a baseline and ensuring transparency.

  • Establishing a baseline: The first key issue reported in the WestEd paper states that school districts need to spend more money in order to demonstrate they are increasing or improving services for disadvantaged students. A related concern reported by WestEd highlights the need to define “a methodology for calculating” a proportional increase in funding for these students. However, their paper does not indicate that the SBE will establish a baseline to gauge whether school districts have increased spending to support disadvantaged students. If schools are not required to adhere to such a baseline, it will be difficult to determine whether additional LCFF dollars provided for disadvantaged students are actually used to support them. The proposed LCAP template would require school districts to list and describe the spending needed to meet goals identified in their LCAPs. But the SBE should go further and explicitly require school districts to annually show how schools spent base, supplemental, and concentration grants generated by disadvantaged students in a way that can be easily compared to the baseline amount spent to support these students.
  • Ensuring transparency: A key objective of the LCFF is to increase accountability so that local education stakeholders can ensure that student needs drive the allocation of resources. For stakeholders to have the information needed to make this assessment, school district spending and revenue data must be reported in a timely manner and in a format that is easily understood and that can be readily obtained by stakeholders in multiple languages. Moreover, to allow for comparisons among districts, the SBE should require a standard methodology for school district reporting of spending and revenue data. Fortunately, school districts already report expenditures and revenues based on an accounting manual that allows for transparency and comparability. But currently, these data are only reported to the state and in a format that is difficult for the public to access or understand. The SBE should adopt spending regulations that require school districts to post this accounting data online in a timely manner and in a format the public can easily obtain and comprehend.

The January SBE meeting, with the expected adoption of the spending regulations, is a critical moment for implementation of California’s new school funding formula. While the delayed release of the agenda materials leaves little time for public comment, education stakeholders should heed the upcoming meeting — and the period preceding it — as an opportunity to provide input on the proposed regulations. Ultimately, what’s at stake is to what degree LCFF dollars are spent to support the disadvantaged students who need them the most.

— Jonathan Kaplan