Revisiting Transparency in California’s School Funding Formula

Last week an Assembly budget subcommittee revived dormant hopes — held by many parents, education advocates, and others — of making the state’s K-12 school funding formula, the Local Control Funding Formula (LCFF), more transparent for local stakeholders as well as for state policymakers. However, the subcommittee needed to go further to help ensure that dollars intended for disadvantaged students are used to support them.

The LCFF provides additional dollars to school districts based on their number of disadvantaged students – English learners, foster youth, and students from low-income families. As we blogged about before the State Board of Education (SBE) initially took action on LCFF’s spending rules, we believe they should abide by two important principles: establishing a baseline level of spending and ensuring transparency. The regulations ultimately adopted by the SBE last November are reflected in the Local Control and Accountability Plans (LCAPs) that school districts must use to report their goals for improving services for disadvantaged students. However, the LCAP format does not require school districts to report a baseline spending level for disadvantaged students, nor does it require an accounting of the amount school districts receive or spend to support these students.

Last week’s action by the Assembly Budget Subcommittee #2 on Education Finance, which was approved by the Assembly Budget Committee earlier this week, is intended to improve LCFF transparency. The subcommittee’s proposal would require school districts, county offices of education, and charter schools to annually report the amount of funds they receive for disadvantaged students, the percentage by which services for these students must be increased or improved, and an estimate of the amount of additional LCFF dollars they spent to support these students as compared to the amount spent to support all students.

Although it requires school districts to report the amount they receive for grants targeted to disadvantaged students — an improvement over the existing requirements — the subcommittee’s proposal falls short in some important ways. It would not require school districts to report the amount they spend to improve services for disadvantaged students, nor would it require school districts to report the baseline funding used to support these students in 2013-14, the year LCFF funding began. Without these requirements, education stakeholders and policymakers will lack information they need to determine how LCFF dollars are being spent each year and whether that level of spending represents an increase or improvement of services for disadvantaged students.

While the proposal is limited in scope, it still remains unclear whether this legislative effort to improve LCFF transparency will survive the budget process. Yet even if it does, more actions will be required to ensure that school districts are using the dollars intended for disadvantaged students to support them.

— Jonathan Kaplan