California Spends More on Schools with the Neediest Kids. Here’s How it’s Succeeded, and Failed

A decade after California revolutionized the way it funds schools, nearly everyone agrees the initiative has done what it was meant to do: improved math and reading scores and brought more resources to students who struggle the most.

And nearly everyone also agrees that the Local Control Funding Formula, as it’s known, could use a tune-up. Black and Latino students’ test scores have improved but still lag behind their white and Asian peers, and schools in affluent areas still spend far more per student than schools in poorer neighborhoods.

But overall, researchers and superintendents say, the system introduced under Gov. Jerry Brown has remade California’s schools for the better.

“Gov. Brown had a good idea,” said Adam Clark, superintendent of Mt. Diablo Unified in Concord. “(The funding formula) has given school districts the tools and resources to really address the needs of students. And it gives parents and the community a voice.”

Jaime Green, superintendent of Trinity Alps Unified in Trinity County, put it more succinctly: “Without LCFF our district would not be open.”

Under the Local Control Funding Formula, the state gives school districts a base amount of money calculated by attendance, but funnels extra funds for low-income students, English learners and foster youth. Districts have freedom to spend the money on whatever programs they think will help their students, with guidance and accountability through a public local planning process.

Prior to the funding formula, California schools were financed primarily through local property taxes, a system that had been in place for 40 years. Districts with lower tax revenues got extra money from the state, up to a certain limit, and the state doled out dozens of grants for specific programs.

Districts like Trinity Unified, located in California’s poorest county, barely stayed afloat under that system because the extra money was not enough to cover expenses, especially considering the large number of students living in poverty.

The overall amount of spending was low due in part to Proposition 13, the 1978 ballot initiative that capped property taxes and resulted in deep cuts to state spending. By the mid-2000s, California was near the bottom of states nationally in school spending, student test scores and nearly every other educational measurement. Linda Darling Hammond, president of the State Board of Education, described it as “a broken system.”

“When I came to California from New York in 1998, I could not believe the degree to which the schools had been allowed to deteriorate,” Darling-Hammond said. “It was shocking that places like Compton, Baldwin Park, Oakland, which had a large number of high-needs students, were spending well below the state average. Something like LCFF was sorely needed.”

Simplifying and decentralizing school funding

Brown, who was elected to his second stint as governor in 2010, said he got the inspiration to overhaul school funding from Mike Kirst, who served as president of the State Board of Education during both of Brown’s stints as governor. Kirst and his colleagues had proposed the idea of a weighted formula a few years earlier, but it was shelved when the economy crashed in 2008.

A handful of other states, including Florida and Oregon, had already adopted formulas that give schools more money for high-needs students. Gathering support from legislators, teachers unions, parent groups and school boards, Brown, Kirst and their allies helped get the funding formula enacted in 2013.

“Brown told the Democratic Legislature they’d have the fight of their lives if they resisted this,” Kirst said. “We were elated when it passed, although it didn’t feel like a risk. There wasn’t really a downside.”

The simplicity, along with shifting power away from the state, appealed to Brown.

“I liked the idea of reducing complexity, of giving money where it was most needed,” Brown said in December at a conference on the impact of the funding formula. “You need goals, you need standards, but you have to let local people do their thing.”

It coincided with a trio of other big changes in California education: passage of Proposition 30, a sales tax which raised about $6 billion annually for schools; introduction of the Common Core reading and math curriculum; and the Smarter Balanced standardized testing system.

Within a few years, the improvements were obvious in California classrooms. By 2019, before the pandemic, reading and math scores in all grades had improved, graduation rates rose, suspensions and expulsions fell, and more students met college admission requirements for the state’s public universities. A report by the Learning Policy Institute found that an increase of $1,000 in per-pupil spending over three consecutive years resulted in a full grade level improvement in math and reading.

California now ranks near the national average in school spending, as well as in math and reading scores. Although scores fell in the wake of the pandemic, they didn’t fall as far as they did in other states and are slowly beginning to creep upward.

But challenges persist. One common gripe among superintendents is the annual plan required to chart goals and priorities. The Local Control Accountability Plan is a key part of the funding formula’s accountability and parent involvement components, but it can be a headache, superintendents said. It entails community meetings, surveys, data analysis and detailed explanations of spending for the public, county and state to review. Los Angeles Unified’s most recent plan is nearly 600 pages. For small districts, whose plans can top 100 pages, the responsibility falls largely on the superintendent.

The plans are often so dense with jargon that even though they’re posted online, reviewed at school board meetings and shared with parents, few people wade through them — thereby not providing the accountability they’re intended to. Darling-Hammond acknowledged that the Local Control Accountability Plan needs to be streamlined.

“Everyone understands the LCAP has become quite cumbersome over the years,” she said. “We’ve slimmed it down a bit but there’s still work to do.”

Overall school spending is still unequal

Another problem is the overall amount of school spending generally, some said. Even though low-income schools now have much more money than they did a decade ago, it’s not enough to address the needs of students facing complex challenges. And schools in affluent areas still spend far more per student, thanks to parent donations and local bonds and taxes.

For example, Woodside Elementary, a K-8 district in San Mateo County where just 8% of students are low income, brought in $39,200 per student last year, more than twice the state average, according to Ed-Data. The money, much of it from parent donations, funds things like art, music, physical education, technology and the library. In south Santa Clara County, Gilroy Unified, where 53% of students are low income and 25% are English learners, brought in just $15,800 per student last year.

That inequity is particularly frustrating for Jason Reimann, superintendent of Hayward Unified in the east Bay Area. He feels he’s constantly having to choose which programs to fund and which to postpone due to lack of resources. In a perfect world, he said, he’d like to offer more honors and advanced placement classes in the high schools, more tutoring, more after-school and extra-curricular activities, more support for parents such as English language classes, and more staff in special education classrooms.

“In affluent communities, those decisions don’t have to be made,” Reimann said. “Public education is supposed to be the great equalizer, but even with LCFF most schools have fallen short of that.”

Jack O’Connell, who was State Superintendent of Public Instruction prior to the Local Control Funding Formula, agreed. While he considers the funding formula a landmark in California education, he thinks the state needs to increase the base amount of money it gives schools. Currently, that amount ranges from $11,000 to $12,300 per student, which poses a challenge for middle-class districts without large numbers of low-income students or wealthy parents willing to donate thousands.

“There’s no question things are better off now,” O’Connell said. “But increasing the base grant might be the best way to help all students.”

Kirst said he was confident the funding formula would work, but he’s surprised at its political staying power and how entrenched it’s become in the education landscape.

He’d like to see the formula adjusted to take into account regional costs of living, so districts in expensive areas get more money. And he’d like to see the poverty measurement change. Currently it’s based on how many students meet the federal standards for a free or reduced price meals. But with so many districts now offering free lunch to all students, he said, the state should consider using other criteria.

He also thinks that students who meet more than one of the formula categories should be counted twice, not once. Schools should receive extra money for English learners who are also low-income, for example.

“It’s effective but needs some updating. The idea back then was that it would never be the last word,” Kirst said. “But I don’t see it needing major surgery.”

Basing school funding on enrollment, not attendance

In Trinity Alps Unified, in the mountains of Trinity County in Northern California, the funding formula has made a world of difference — not just for students but for the entire community, said superintendent Green. Prior to the funding formula, the district received less than $12,000 per student from all sources; now it’s closer to $20,000.

That money goes a long way in Trinity County, funding everything from art classes to after-school programs to special education.

“We feel very blessed to have this formula,” Green said. “LCFF allows us to stay open and serve our children at a high level.”

An improvement Green and other superintendents would like to see is funding based on enrollment, not attendance. Currently, the state disperses money to districts based on average daily attendance. But chronic absenteeism soared during the pandemic, resulting in lower revenues. While enrollment is also declining in many areas, absenteeism is the bigger challenge, Green said.

Going forward, some advocates are calling on the state to tie extra funding directly to students’ race. The impact of systemic racism, they say, is too profound to ignore. They argue that Black and Latino students often fall through the cracks, especially if they attend affluent schools, or if they attend low-income schools in affluent districts. The state has shied away from such a policy for fear it would violate Proposition 209, the affirmative action ban that prevents the state from linking money to students’ race or ethnicity.

Gov. Gavin Newsom last year introduced a tweak to the funding formula that directs extra funding to specific schools based on high rates of student turnover, low-income students or students whose parents didn’t graduate from high school. The equity multiplier, as it’s known, is intended to reach students who have the highest needs.

‘Deep inequities’ in California

But that’s not enough, said Natalie Wheatfall-Lum, director of TK-12 education policy at Ed Trust-West, an education research and advocacy organization. California should repeal or scale back Proposition 209.

“We still have deep inequities across the board,” Wheatfall-Lum said. “But by fixing LCFF we have a huge opportunity to support racial equity. … The stakes are very high. How we fund schools is the foundation of our education system.”

Ed Trust-West also recommends that the state hold districts accountable for the academic performance of specific student groups, such as Black and Latino students, and pay more attention to the progress of English learners, whose test scores have barely budged since the finding formula was introduced.

But money isn’t always the answer, Brown noted at a conference in December. Bumps in school funding, while helpful, can’t be expected to solve problems as deeply embedded as poverty, racism and inequality, he said. Factors beyond school play a huge role in students’ outcomes.

Brown pointed to the Oakland Military Institute, a charter school he co-founded in 2001. The middle and high school located in north Oakland has garnered millions in donations but has seen steadily decreasing enrollment and test scores below the state average. Last year, only 16% of students met the standard for math, compared to 34% statewide.

“I’ve raised $18 million for that school and we are still challenged. I’ve thrown everything I can at it, but we have families that don’t have resources, and kids who need a lot more than they’re getting. And the teachers need a lot more. There are huge, substantive problems,” Brown said.

He added: “The inequity, the dislocation and stress on people who don’t have adequate income is so powerful that everything we try to do is still going to be modest in relation to the challenges of a profoundly unequal society.”

‘More than money’ to help high-needs students

At Mt. Diablo Unified in Concord, superintendent Clark said the funding formula money has been crucial in helping not just struggling students, but all students. The district has used its extra funds to hire counselors and teachers, reduce class sizes, bring in tutors, pay for SAT preparation and PSAT tests for all students, and open wellness centers.

At College Park High in Pleasant Hill, the district used funding formula money to open a wellness center two years ago. Furnished with couches, comfy chairs, student-created artwork and private enclaves for one-on-one meetings with counselors, the wellness center is a popular place for students to relax and socialize. In addition to mental health services like peer counseling and therapy dogs, the center offers yoga, meditation, games and a quiet place to do homework. A social worker is always present.

Stephanie Perez, a senior at College Park, said the wellness center has been a lifesaver — literally. It’s given her a reason to stay in school and motivation to stay healthy.

“If this place wasn’t here, I’d be out drinking, smoking, ditching school, getting bad habits,” Perez said. “They really care about you, listen to you, give you a shoulder to cry on. I come here to ease my mind.”

But despite the district’s investments, the achievement gap between Black and Latino students and their white and Asian peers persists, as it does in most districts. Clark said the entire school structure — which hasn’t changed much in a century — might be due for an overhaul. Longer school days, different mindsets about student learning and higher expectations overall might help propel students to better outcomes.

“It’s more than money that is going to change the problem,” he said.