Gov. Newsom’s Misguided Proposal for California’s Education Funding Formula
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Gov. Newsom’s Misguided Proposal for California’s Education Funding Formula

The key to promoting both flexibility and fairness is better transparency and California can do this with better data, not more bureaucracy.

In a recent K-12 education budget bill, California Gov. Gavin Newsom proposed a plan to ensure education funds make it to the high-need students they’re intended for. While it’s laudable this plan aims to address a well-documented flaw in California’s funding system, it’s unlikely to fix the problem and will instead add more bureaucracy. Instead of tightening the financial leash on school districts, California’s leaders should consider increasing data transparency so it’s easier for parents and the public to see how education funds are spent.

The issue at hand is that school districts are carrying over supplemental and concentration funding—dollars allocated for disadvantaged students—to the following year and spending it on general purposes, which equity advocates are calling foul on. They understandably argue these funds should support the students they’re intended for, not plug budget holes. For their part, school districts believe that spending autonomy is well within their rights under California’s school finance law.

Both sides have a point—supplemental funding should follow students to their schools yet district spending decisions shouldn’t be micromanaged by distant state lawmakers.

In 2013, policymakers replaced California’s convoluted education funding system with the Local Control Funding Formula, which streamlined dollars into a simplified formula. The revamped formula provides a base amount of funding for each student, plus supplemental dollars for students classified as low- income, English learners, or foster youth.

Unlike the prior system, which forced school districts to spend money on programs that ranged from professional development to oral health assessments, the Local Control Funding Formula affords school districts greater flexibility and research shows this approach is working. For example, a study by Policy Analysis for California Education found strong support for this local control from parents, school board members, district officials, and more. Likewise, an analysis by Education Trust-West gave the reform high marks for improving equity.

However, the reform had a big shortcoming: there was no guarantee that school districts would actually allocate supplemental funds to the students they’re intended for. A recent report by Edunomics Lab found that 12 of the 14 California districts evaluated failed to pass along supplemental dollars to the right schools.

Policymakers actually anticipated this problem, but their Band-Aid only made things worse. School districts are required to create three-year Local Control Accountability Plans (LCAP), which are supposed to show how dollars are spent and how this spending aligns with goals. But, as Los Angeles Unified School District’s 282-page plan illustrates, most are terribly confusing and provide little context or value.

Now Gov. Newsom wants to double-down on this flawed approach. Under his proposal, school districts would be required to detail how they plan to use carryover funds, either by accounting for 100% of supplemental and concentration dollars in their spending plans or by demonstrating so-called “qualitative improvements.” But equity advocates aren’t pleased since the plan would still give school districts plenty of wiggle room to avoid actually sending the money to the intended schools and students.

Instead, California should leverage the school-level expenditure data that federal law now, as of 2020, requires states to report. These figures show exactly how districts allocate funding among schools, making it easy to compare what resources different student groups receive. By making this data publicly available and easily accessible, state lawmakers could allow for bottom-up accountability without sacrificing flexibility—which was the original intent of the Local Control Funding Formula.

Advocates can use this information to inform parents where the money is going and pressure local school boards to adopt better funding formulas in cases where unfair allocation patterns emerge. And if that doesn’t work, then state lawmakers should find a way to send these dollars directly to schools, giving each principal a per-pupil allotment directly.

The key to promoting both flexibility and fairness is better transparency and California can do this with better data, not more bureaucracy.

A version of this column previously appeared in the Los Angeles Daily News.