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  • How to improve California’s school funding formula

    How to improve California’s school funding formula


    Credit: Alison Yin / EdSource

    Top Takeaways
    • The Local Control Funding Formula must be more responsive to enrollment trends to ensure funds serve the high-needs students for whom they are targeted, rather than filling gaps in the district budget.
    • Policymakers must create incentives for districts to improve coordination and merging of services for students with multiple needs.
    • In making adjustments to the formula, policymakers must avoid introducing too many new, disparate factors that can further burden school systems.

    California has an opportunity to ensure that its school funding formula fully delivers on its goals to improve student outcomes, especially for those who need the most support. The key to success will be accounting for shifts in enrollment and creating incentives for districts to blend student programs.

    The 2013 Local Control Funding Formula, or LCFF, represented a dramatic shift from a complicated morass of centralized funding requirements that often resulted in large variations in per-pupil funds delivered in and across districts.

    Under LCFF, higher overall student outcomes have resulted, thanks to localized decision-making and additional funding to ensure that high-needs students also have the opportunity to succeed in schools. However, progress to close achievement gaps — a central intention of the funding formula — remains slow.

    Last year, the California State Assembly held a series of LCFF panels with researchers and educators from across the state. Though divergent views were expressed, multiple experts recommended improving the distribution of supplemental grant funds to the highest-needs students and factoring in geographic cost differences — points underscored by WestEd’s evidence-based review of the funding system.    

    However, two significant dynamics, which we have frequently seen, received little airtime during the hearing. They may hold clues for further optimizing the use of taxpayer dollars.

    First, funding formula updates must meaningfully account for future enrollment declines that could cause changes in the proportions of high-needs students to be served as well as the mix of funding available to school systems.

    California’s public schools have lost a substantial number of students, and forecasts project further declines ranging from half a million to nearly 1 million students by 2032-33.

    Because many students leaving California public schools — often due to the high cost of living — are English learners, economically disadvantaged and white students, the total and mix of available revenues for school systems is changing, and changing differently by region.

    The math is clear: As each student leaves, so does a fraction of the base revenue available to the school system to cover foundational expenses, including teachers, secretaries, utilities and the like. Meanwhile, concentrations of high-needs students, like English learners and students requiring special education services, continue to rise where they are left in greater proportions than their peers, requiring more resources per student to provide equitable opportunities and access.      

    Reducing expenses for school systems proportional to revenue loss is difficult. School systems often make small, marginal changes that don’t lower expenditures to meet available revenues. This may undercut more meaningful, necessary steps — whole system re-evaluation of resource investments that match student need to the skills and expertise of educators. As a result, resources that should be dedicated to additional supports for students may instead get redirected to support basic school costs. This could leave high-needs students out in the cold instead of achieving the state’s intention to equitably allocate funds.

    To avoid this, policymakers must ensure that any future LCFF adjustments include triggers that reconcile the base, supplemental and concentration grants to ensure proper alignment with enrollment and shifts in student need. School systems will also need guidance and support to analyze, design and manage these larger shifts. The formula for special education should be re-evaluated, given that funds are tied to overall student enrollment and not students with individualized education plans (IEPs).

    Second, following any further LCFF adjustments, school systems will need policy, regulatory and funding incentives to seamlessly blend student programs like special education and English learner programs where such services are needed for the same multidimensional students.    

    Eighty-five percent of English learners are economically disadvantaged, as are 67.5% of students with disabilities. California’s high population of students with multiple needs requires additional support to successfully navigate school.

    When supports are smartly combined — such as when English learner development support is integrated into a general education classroom — the result is the simultaneous delivery of good instruction and scaffolding for English learners in all general education classrooms. Directing funding to support one identified student need or a specific program sends a message to local school systems about where to direct resources. However, it can go too far. Unchecked, the system begins to look more like what we set out to get away from in the first place: layers of “categorical” programs funded with money that could only be spent in very restricted ways.

    Policymakers must write policy that incentivizes and supports local educators to build programs that work together to address the multiple needs of students simultaneously. This includes reevaluating existing education funding to reduce its complexity, which would then allow local school systems to achieve coherent programs that seamlessly support the needs of the array of students being served on school campuses — from learning and instruction to collaborating with other agencies to provide supports such as food, health care and more.

    Panelists at the Assembly hearing also noted the need to account for missing factors like geographic cost and economies of scale. While these factors are meaningful adjustments to account for school systems’ costs, introducing too many new, disparate factors can further burden school systems when they are required to track how each of those funding streams is being used. In fact, the governor just signed a bill to conduct a comprehensive review of the overwhelming amount of district reporting already required. Accountability and transparency are important, but too much will limit school systems’ ability to wisely blend and braid funding sources to construct coherent programs that support a wide range of student needs.

    The Local Control Funding Formula has already helped California make significant headway to improve public education. By paying attention to changes in the student population and meaningfully accounting for them in funding and policy, the state will be better poised to deliver on its promise to close achievement gaps.

    •••

    Jason Willis is with the strategic resource allocation and systems planning team at WestEd, a nonprofit, nonpartisan research, development, and service agency that works to promote excellence, achieve equity, and improve learning for children, youth, and adults.

    The opinions expressed in this commentary represent those of the author. EdSource welcomes commentaries representing diverse points of view. If you would like to submit a commentary, please review our guidelines and contact us.





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  • Districts should target funds to foster youth to improve progress, report says

    Districts should target funds to foster youth to improve progress, report says


    As California expands services needed to grow the number of foster youth enrolling in college, more work is needed to help those students graduate.

    Julie Leopo/ EdSource

    California’s foster care students have improved their high school graduation rates since 2013, but have barely improved, or even lost ground, in rates of suspension, attendance and prompt college enrollment, according to a new report.

    And, in the 10 districts with the most foster students, only a fraction of 1% of the targeted money was directly spent on that group. The report, by WestEd, a nonpartisan education research agency, attributed the discrepancy to a disconnect between the administrators who drew up the spending plans and the staff who work directly with students, the report found.

    Published this week and titled “Revisiting Californiaʼs Invisible Achievement Gap: Trends in Education Outcomes of Students in Foster Care in the Context of the Local Control Funding Formula,” the report details how state policies have affected outcomes for foster youth over the past decade, at times positively, but often in ways that limit their ability to succeed.

    The authors conclude that while those changes facilitate school stabilization and other educational supports, challenges remain, including ensuring that planned school expenditures dedicate some funds to foster students’ unique needs.

    “The report suggests that the implementation of foster care supports remains difficult and that funding for tailored interventions to the unique situations and challenges of students in foster care is not yet a common rule even for districts with large numbers of students in foster care,” said Vanessa Ximenes Barrat, WestEd senior research associate and co-author of the report.

    Tailoring support to specific student populations

    The report’s authors noted that tailoring support to each student group is critical given their varying needs.

    For instance, in the school year immediately preceding the pandemic, which erupted in March 2020, foster students’ chronic absenteeism rate was 28% versus 12% for the overall student population across California. The rates sharply rose during the pandemic and have since steadily decreased. But data from 2022-23, the most recent school year included in the report, shows that discrepancies remain: 25% of all students were chronically absent versus 39% of foster students.

    The wide gaps indicate to school staff that foster youth might need stronger interventions than other student groups in addressing why they are missing so much instructional time.

    Similarly, suspension data shows continuing disparities, despite policy changes in recent years. Whereas suspension rates for all students have largely lingered between 3% and 4% since 2014-15 and through the pandemic, the rate for foster youth was between 13% and 15%.

    “All the things that make students in foster care have all the worst outcomes across the board — their instability, their trauma, etc. — means that they need more of the interventions than everyone else, and they need different interventions based on their unique needs,” said a child welfare and education professional who was interviewed for the report.

    Improved graduation rates, but concerns remain

    One area where foster students have slowly made strides is with graduation rates. Rates have steadily increased for high-needs students, including foster youth, since the 2016-17 school year. That year, 51% of foster students graduated from high school in four years. By 2022-23, 61% were graduating.

    A possible reason for the improvement, according to the report’s authors, is the passage in 2013 of Assembly Bill 216 which allowed some foster students to graduate after completing the state’s minimum requirements.

    School staff who were interviewed for the report said that the law prevented some students from dropping out as they were moved from one placement to another, and encouraged them to complete high school even if they had fallen behind in some courses.

    Other staff noted that the extension of foster care services to age 21 occurred during the same period in which graduation rates improved. The extension, they said, probably prevented students from leaving school because they were receiving added support to avert homelessness and other instabilities common among youth leaving foster care.

    But even with that improvement, school staff interviewed for this report saw areas of concern. Of those foster students who graduated, for example, less than one-fifth had completed the A-G coursework required to qualify for admission to one of the state’s public four-year universities.

    Other takeaways from the report include:

    • While dropout rates among foster youth remain higher than their peers’, they have lowered by 5 percentage points since 2016-17.
    • More foster youth are attending only one school each year, rather than moving between schools, which advocates say causes personal and academic instability — 66% in 2022-23, up from 62% in 2017-18.
    • More foster students are attending high-poverty schools — up from 56% in 2014-15 to 59% in 2022-23.

    As California’s general student population has dwindled, so has the state’s foster student population. State data shows that nearly 45,000 foster students were enrolled in the K-12 grades during the 2014-15 school year on census day, the first Wednesday in October. Eight years later, the state enrolled about 31,700 foster students.

    About a quarter of the state’s foster care students attend school across just 10 districts: Los Angeles Unified, Fresno Unified, Lancaster Elementary, Long Beach Unified, Antelope Valley Union High, Palmdale Elementary, San Bernardino City Unified, Moreno Valley Unified, Kern High, and Hesperia Unified.

    Local-control dollars rarely targeted solely to foster students

    The dip in enrollment of foster students in K-12 coincided with the state’s overhaul of the school finance system and the implementation of the Local Control Funding Formula, commonly referred to as LCFF. One of the changes under LCFF was that districts receive supplemental grants based on the number of high-needs students, which includes foster youth, English learners and low-income students.

    Each district must also complete a Local Control Accountability Plan, known as an LCAP, and provide details on how it intends to help students succeed, including actions and expenditures related to the three groups of high-needs students.

    Equity across the state’s student population was part of the intent of implementing LCFF.

    But the report showed that of WestEd’s review of the 10 LCAPs, only 10 of 482 anticipated actions to support overall student populations were specific to foster students. Over half of the actions referenced foster students in some way, but mostly lumped all high-needs students together.

    Foster youth, for example, have alarmingly high rates of chronic absences and increased school mobility. If a service offered by a school requires students to be present in class, foster students may not always benefit; they might instead need greater access to transportation to help them travel to school regularly.

    The question of whether to target more funds specifically to each student group, rather than combining them, persists, given changes at the federal Department of Education and how they may impact foster students.

    Ximenes Barrat said, “As a relatively small and highly vulnerable population with distinct needs, there is a real risk that their concerns could be overlooked amid broader policy shifts.”

    WestEd CEO Jannelle Kubinec is president of the EdSource Board of Directors. EdSource’s editorial team maintains sole editorial control over the content of its coverage.





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