What Reaching LCFF Full Implementation Means and Why It Matters

The proposed state budget that Governor Brown released in January calls for a significant increase in support ($2.9 billion) to fully implement California’s main system for funding K-12 education, the Local Control Funding Formula (LCFF), in 2018-19. Reaching this milestone would be a notable accomplishment, especially as it would come two years earlier than initially estimated when the Legislature enacted the LCFF in 2013. Achieving this LCFF funding goal was never intended to mean that an adequate level of financial support needed to deliver a quality education for California’s K-12 students had been provided. However, reaching LCFF full implementation does reflect nearly $20 billion of increased funding for the state’s K-12 schools over the past six years.

Moreover, because the LCFF allocates additional funds to school districts based on their number of disadvantaged students — English learners, foster youth, and students from low-income families — increasing funding for the LCFF means more dollars are being provided to improve educational equity. Advancing equity may also be the goal of recent calls — from some state policymakers and others — to boost LCFF funding further, but exactly how such a boost is provided could unintentionally undermine this goal. To understand why, it is necessary to take a closer look at how the LCFF works and what full implementation really means.

Although the LCFF name includes the word “funding,” the statute establishing the LCFF did not actually provide any. Rather, the LCFF defined how the state allocates K-12 dollars by creating funding targets for a base grant per student to be provided to all California school districts, adjusted for the number of students at various grade levels. These base-grant targets are then used to calculate targets for the LCFF supplemental and concentration grants, the additional dollars that go to school districts for the costs of educating disadvantaged students. The LCFF statute also applied a cost-of-living adjustment (COLA) to the base grant targets each year, so that the targets for all three grants — base, supplemental, and concentration — would be adjusted annually. In short, the LCFF statute established three types of grants, along with targets for each, but did not in itself provide the funding to reach these targets. That said, the Legislature has increased actual funding for the LCFF each year, thereby moving districts closer to the established targets.

The Governor’s budget proposal for 2018-19 provides sufficient dollars for school districts to reach the LCFF targets. Achieving this milestone would be worth celebrating as it would demonstrate the state’s success in achieving a key goal set forth when the LCFF was enacted. One benefit of attaining the LCFF targets would be to underscore the importance of the revenue generated by Proposition 30 (2012) and Proposition 55 (2016), tax measures approved by California voters in recent years.

Another potential benefit of reaching full implementation would be to make it easier to determine the extent to which LCFF is fulfilling its goal of improving equity. A question raised often about the LCFF has been whether the dollars allocated for disadvantaged students are being spent to support them. Prior to full implementation of the LCFF, school districts are required to demonstrate how the additional funding generated by disadvantaged students under the LCFF increases or improves services for these students in proportion to the funds allocated to support them. However, the complexity of this proportionality requirement has made it difficult for education stakeholders to determine whether school districts are really fulfilling their obligations to incrementally increase their support for disadvantaged students. After LCFF full implementation it may be easier to determine whether school districts are fulfilling LCFF’s equity principles because it will no longer be necessary to figure out exactly what proportion of increased LCFF dollars should go to support disadvantaged students. Instead, school districts will have to show how the full amount of supplemental and concentration grants are used to support disadvantaged students. While demonstrating this may present challenges for some school districts, the fiscal accountability requirement triggered by reaching the LCFF targets would be more straightforward than that under current rules.

As California approaches full implementation of the LCFF, some policymakers and others stakeholders have called for continuing to boost K-12 funding. This makes sense given that, as noted earlier, the targets originally established by the LCFF were not meant to provide an adequate level of school funding. While there may be strong arguments for increasing K-12 funding above what is needed for full implementation of the LCFF, there is a crucial difference between boosting funding for the LCFF after full implementation and boosting the targets for LCFF grants prior to reaching them.

Here’s why: Boosting the targets for LCFF grants would mean changing the funding goals that the LCFF established, in essence moving the LCFF goalpost further down the field. What’s more, increasing the LCFF grant targets is not the same as providing the funding to reach them. Instead of providing additional resources for K-12 schools, increasing funding targets would mean extending the time taken to reach full implementation. This would, in turn, keep in place the current complex set of rules that require school districts to show how they are providing a proportion of increased LCFF funding to support disadvantaged students. On the other hand, if the Legislature increases LCFF funding after reaching full implementation — instead of raising the targets beforehand — it would mean more than raising the funding goals. It would create an ongoing state obligation to actually provide the new, higher level of funding, and because of how LCFF dollars are provided (through what’s called a “continuous appropriation”), this level of funding would continue to be allocated to K-12 school districts in future years even if the Legislature does not act.

Since the Governor’s January budget proposed funding to fully implement the LCFF, at least one legislative proposal has called for increasing the targets for LCFF grants in 2018-19. However, any proposal that calls for increasing the LCFF grant targets in 2018-19 but does not actually provide the additional funding to reach them would mean postponing full LCFF implementation. Increasing funding for the LCFF is a worthwhile goal, but increasing the targets for LCFF grants prior to full implementation of the formula will not achieve it.  And for those that want to improve the chances of reaching LCFFs equity goals, achieving LCFF full implementation — as would happen with the increased funding proposed in the Governor’s budget — should be their first priority.

— Jonathan Kaplan