California Can Improve the Effectiveness of its Education Spending


California Can Improve the Effectiveness of its Education Spending

California Gov. Gavin Newsom’s budget plan now calls for $101.8 billion in education spending.

California Gov. Gavin Newsom’s budget plan, revised in May, now calls for $101.8 billion in education spending. A press release from the governor’s office trumpeted the budget’s high spending levels, “The budget invests in K-12 schools by providing approximately $5,000 more per pupil than eight years ago, including additional investments to assist students with the greatest needs. It also increases the ongoing funding for Special Education by almost $200 million compared to the January budget proposal.

While California’s education dollars are now being allocated more effectively thanks to the state’s Local Control Funding Formula, adopted in 2013, these dollars still aren’t being used as productively as they could be.

School finance formulas are notoriously complex. While some federal and state education dollars have strings attached, school districts generally have the final say over how resources are divvied up among their individual schools, which is especially true in California. Most school districts in Southern California, including Los Angeles Unified, Long Beach Unified, Santa Ana Unified, San Bernardino Unified, and Riverside Unified, do this by employing full-time equivalent budgeting. This system distributes funding to individual schools based on the number of staffing positions they are allocated. For instance, under full-time equivalent (FTE) budgeting, schools may be assigned one teacher for every 25 students.

Ample research shows FTE budgeting tends to shortchange the schools and students in low-income communities. A comprehensive study by the U.S. Department of Education found school districts consistently spend less money per pupil at the schools with the most low-income students. A study by Marguerite Roza and Paul T. Hill found similar-sized schools in the same school district can have wild funding discrepancies of up to $1 million, largely because the schools in low-income areas often end up with less experienced, lower paid teachers and FTE budgeting doesn’t account for these salary differentials.

But that’s not all, FTE budgeting not only affects how much is doled out to each school but also how the funds are spent. School district officials dictate how the bulk of the money is spent. A typical principal has less control over his or her budget than you’d expect —typically having autonomy over less than five percent of their school’s budget. As a result, principals often lack the ability to spend money on the priorities they believe would most help their students and improve their schools.

To address these problems, school districts across the country, including in Boston, Denver, Indianapolis, and New York City, are adopting weighted-student funding systems that allocate education dollars directly to schools based on student needs. With weighted-student formula, each student receives a level of funding that follows them to their school, and principals have more autonomy on how to spend the money to best serve those students. Houston Independent School District was the first to do so in 1999 and research by Rice University found the policy has been successful in promoting equity and giving principals more say in spending decisions.

California’s Local Control Funding Formula overhauled how the state’s K-12 school finance system sends dollars to districts, but it doesn’t do enough to ensure that money follows students to their schools. Adopting weighted-student funding would help districts allocate dollars more fairly to schools and put principals in the driver’s seat over spending decisions. This would be especially beneficial for fiscally unstable districts, like LAUSD, since funding would be tied to enrollment and better match fluctuations in revenue.

California’s state officials also have a role to play. Under the federal Every Student Succeeds Act, signed by then-President Obama in 2015, states must now publicly report per-pupil expenditures at the school level. Since California has to get in compliance with this mandate, it should take the opportunity to simultaneously modernize the state’s reporting system to help give districts, principals, parents, and community stakeholders the information they need to make sound decisions. For example, a report could be created showing how funding levels compare across schools. Another report could highlight each districts’ most productive schools by comparing expenditures with outcomes.

California is investing significant funding in education and needs to ensure the money is used fairly and productively.

This column first appeared in the Orange County Register