How Some Local Funding Quirks Are Blocking School Choice
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How Some Local Funding Quirks Are Blocking School Choice

Sweeping changes to the school finance system are receiving high marks. But there's still work to be done.

As California continues to search for ways to boost student achievement across the board, the state’s sweeping changes to the school finance system are receiving high marks. But more is needed.

In 2013, California enacted the Local Control Funding Formula (LCFF), which has streamlined funding allotments and given educators more say over how education dollars are spent at schools. In a survey of school district superintendents, 82 percent agreed that LCFF has led to greater alignment between the allocation of resources and educational goals. Additionally, Georgetown University’s Edunomics Lab found “evidence of districts customizing spending to better meet their local needs.”

But there’s still work to do. Edunomics also found that some funding allotments aren’t always reaching the disadvantaged students they’re intended for because local budgeting practices in certain districts are outdated and unfair. Fortunately, a provision in the federal Every Student Succeeds Acts will help address this issue. School districts will soon be required to report per-pupil expenditures at the school level, providing much-needed transparency that will show whether education money is making it to specific schools and classrooms.

It’s also become clear that LCFF left a loophole that favors district politics over parents. Roughly 10 percent of California’s school districts are classified as “Basic Aid,” meaning they have sufficient property wealth to raise their funding through local property tax revenues. In past years, this funding scenario might have been chalked up to “local control,” but the arrangement has real ramifications for families seeking better opportunities for their kids and looking to use available school choice options.

An analysis of California’s District of Choice Program by the state’s Legislative Analyst’s Office (LAO) found that families cross school district boundaries for a variety of reasons, including to seek out specialized programs and to give bullied kids fresh starts at new schools. LAO concluded that the competitive effects of losing students incentivized districts to better engage with their communities and to adopt new and innovative educational programs.  Some districts, such as Riverside Unified, have adopted open enrollment programs that promote access to any of their schools with available seats. But many districts still refuse to enroll transfer students even when spots are available.

There are two primary reasons for this.  The first is a political wall. Superintendents are reluctant to be seen as “poaching” students from other districts and can face pressure from within their communities to keep certain kids out. Research shows that school districts are more likely to reject transfers if the district’s student achievement or socio-economic characteristics are greater than a neighboring district’s characteristics.

The second barrier is a financial wall. The monetary incentive to enroll transfer students is weak and varying. California’s Basic Aid districts are a textbook example of a barrier to school choice. While money generally follows the student under LCFF, property tax-wealthy Basic Aid districts don’t receive their funding based on the number of students in schools. Thus, the districts have little incentive to increase enrollment or accept students from other areas. In fact, open enrollment programs are often rolled back once districts hit this Basic Aid status. For example, once the Santa Barbara Unified School District hit Basic Aid its board voted unanimously to discontinue its open enrollment program, effectively evicting its 212 transfer students in the process.

“We would be educating students who don’t have funding attached to them,” one Santa Barbara official explained of families who might live in other areas and not pay property taxes into the district.

Clearly, politics and finances can get in the way of doing what’s best for kids. While California’s LCFF helps improve fairness and school choice, the state’s Basic Aid districts are an unfortunate exception. Since Basic Aid districts receive some additional dollars from state coffers that are “outside-the-formula,” re-examining how those parts of state funding are distributed can help get California closer to the end goals of parental control, school choice and funding equity.

This column first appeared in the Orange County Register.