Sunday, February 24, 2013


Study compliments and questions Brown’s funding formula

By John Fensterwald| EdSource Today

This graph shows the strong relationship between results on California Standards Tests and poverty, with highest scoring API scores in the upper left going to children not in poverty. Source: CA Dept; of Education (click to enlarge).

This graph shows the strong relationship between results on California Standards Tests and poverty, with highest API scores in the upper left going to children not in poverty. Source: CA Dept. of Education. (Click to enlarge)

February 22nd, 2013 | An analysis by the Public Policy Institute of California, released Wednesday, praises Gov. Jerry Brown’s overall plan for school finance reform, while raising questions about elements of the formula that would steer substantially more money to disadvantaged students.

“The governor’s series of reform proposals are in keeping with many of the principles of good school finance reform,” conclude Margaret Weston, a PPIC research fellow, and Heather Rose, a UC Davis associate professor of education. And his “very explicit and simple” Local Control Funding Formula funnels additional resources to students who most need them. But achieving a consensus on the formula “faces a specific and difficult challenge: agreeing on the appropriate weights for disadvantaged students,” they said.

PPIC published the study on the same day that the Department of Finance released a much anticipated district-by-district breakdown that translates the Local Control Funding Formula into per-student dollars. The 80-page chart discloses how much districts and charter schools would get during the next two years and once the formula is fully funded in seven years, if revenues meet projections. (See our explanation.)

Brown’s formula would simplify the rules for distributing state funding to school districts while channeling more dollars to low-income students and English learners to try to close gaps in their learning. Districts would receive a base level of funding, equal to their general or “revenue limit” funding in 2008, before state budget cuts slashed K-12 funding. Each disadvantaged student would get an extra 35 percent funding. And, on top of that, in schools where disadvantaged students comprise a majority, funding would be bumped up again under a “concentration factor.”

PPIC’s study suggests that the Legislature view finance reform in the context of not just state funding but all sources, since low-income students and English learners already receive significant amounts of federal aid. It also suggests that lawmakers consider raising the base level of funding and take a second look at how supplemental money for disadvantaged students would be ratcheted up under the concentration factor.

Those same students already are targeted under federal and state “categorical” programs. The study found that unified districts composed entirely of low-income students currently receive an average of $2,372 more per student than unified districts with no indigent students: $8,934 compared with $6,567. That difference of 36 percent is a net figure, after subtracting the average advantage that districts with few low-income children have in local revenues, like parcel taxes, and through “basic aid” – districts funded solely by property taxes. Federal funding contributes about 40 percent of extra revenue for low-income students and the state about 60 percent.

The problem under the current system is that state categorical aid is not uniformly distributed. Districts in which high-needs students make up 70 percent of enrollment receive an average of $1,755 per student, but averages are deceiving. Funding  among districts ranges from $991 to $3,324 per student.

If Brown's finance formula (WPF) were implemented fully this year, total school funding, based on percentage of low-income students, would rise from a little more than $6,000 to more than $11,000 in schools where all students were low-income, state and federal funds included. Source: Public Policy Institute of California (click to enlarge).

If Brown’s finance formula (WPF) were implemented fully this year, total school funding, based on percentage of low-income students, would rise from a little more than $6,000 to more than $11,000 in schools where all students were low-income, state and federal funds included. Source: Public Policy Institute of California. (Click to enlarge)

With a few exceptions, what had been categorical money would be distributed uniformly under Brown’s formula. And there would be a lot more of it: 77 percent more per student in combined state and federal funding for a unified district with all low-income students under full funding of Brown’s formula in 2019-20. That’s more than twice the 36 percent in combined federal and state categorical money under the current system.

Under the Local Control Funding Formula, Brown would add bonus dollars through a concentration factor once disadvantaged students comprise a majority of students. A district with 80 percent high-needs students would get 46 percent more funding for each of those students. A district with all high-needs students would get 53 percent more funding per student, the maximum.

Concentration factor deserves scrutiny

The study doesn’t venture whether that’s the right amount, saying it’s the Legislature’s role to determine the balance between the base funding for all students and the extra money for the disadvantaged. “The literature provides some support for directing even more resources to communities with concentrated poverty,” the authors write.

However, they imply that the threshold at which the concentration factor kicks in may not be high enough, since 60 percent of students and 58 percent of districts would benefit from it. “This may argue for a higher level of base funding rather than a concentration factor,” they write.

Another problem is that concentration is measured by district, not by school, for the purpose of funding. As of two years ago, nearly 600 schools with high concentrations of disadvantaged students were located in districts where the overall number of disadvantaged students was under 50 percent; those schools would not benefit from a concentration factor.

State Board of Education President Michael Kirst, who co-wrote a brief five years ago that was the model for the Local Control Funding Formula, defended the concentration factor. He said that the study understated the compound impact in California of large numbers of English learners who are also poor. Over half of English learners attend schools where English learners are the majority. Extra money where there is such a concentration is needed, he said.

Kirst also said he was satisfied that the 35 percent basic supplement for disadvantaged students is in the general range of other research in California.

Weston and Rose also reviewed those studies, most of which were done for the 2007 Stanford-led Getting Down to Facts reports. One recommended giving districts with all high-needs students 66 percent more than districts without those students. Another, by Jon Sonstelie, a school finance expert at the University of California Santa Barbara, concluded that a 25 percent increase in base funding, plus a 30 percent supplement for high-poverty districts, would be needed to raise achievement to the state’s API target of 800. He based this on budget simulations with California educators. But since 2007, API scores have risen significantly anyway even though district budgets have been cut, casting doubt that raising test scores should be the measure for increasing spending. Kirst said more resources will be needed to meet the ambitious goals of preparing students for college and careers and for schools to succeed in teaching the more rigorous Common Core standards .

Weston and Rose concluded that research studies all pointed to the need for more money to increase student achievement, and disadvantaged students need even more. But the studies had flaws, so using their results to set spending targets is problematic.

“The reality is we don’t know how additional funding will translate into outcomes,” but a lack of certainty over how to link spending and achievement “does not relieve our state government of setting school funding goals and priorities,” they write. “A strong finance system is an essential component of a strong education system.”

Going deeper

Margaret Weston and Heather Rose, analysis of Gov. Brown’s latest version of his plan for K-12 school funding reform;
PPIC primer on school finance by Margaret Weston, November 2012;

2008 brief co-authored by State Board President Michael Kirst proposing model for funding formula adopted by Gov. Jerry Brown;

Explanation of Local Community Funding Formula;

District-by-district breakdown giving impact on charter schools and districts at full funding.

Two recent opinion pieces in EdSource Today on the funding formula, by John Affeldt and by Bob Blattner.


State releases district breakdowns under school funding formula

By John Fensterwald   | EdSource Today

February 20th, 2013 | Districts and charter schools now know how they’d make out under Gov. Jerry Brown’s proposed Local Control Funding Formula, his plan for sweeping school finance reform. The state Department of Finance posted the long-awaited district-by-district breakdown and a two-page overview Wednesday. The 80-page chart calculates districts’ base per student funding for 2011-12 as a comparison and lists funding for the next two years and full per student funding in seven years – if projected state revenues hold up.

Brown outlines increases in education spending in a news conference last month.

<< Brown outlines increases in education spending in a news conference last month.

Brown’s proposed formula promises to simplify and rationalize the state’s idiosyncratic and irrational funding system, with its complex rules governing dozens of “categorical” programs with funding designated for special purposes. Starting off with what districts now receive in base funding (known as “revenue limit” funding), it would create a new financing system as additional money becomes available from increased revenues generated by an improving state economy, and past debts that the state owes to schools are paid off.

Brown’s plan would provide additional funds to districts having to meet the extra costs of educating economically disadvantaged and other high-needs students. There would be a “phase in” period, with annual funding increases, leading to full funding in 2019-20. The Legislature, which reacted cooly last year to an earlier version, must now consider whether to approve or change it.

Under the plan, no district would receive less than they receive this year in state support, and “the vast majority” – 1,700 districts and charter schools – will get “moderate to significant” funding increases over the next five years, according to the overview. During this time, the average per-student funding under Proposition 98 is projected to rise $2,700 per student.*  Receiving little or no increase in money would be 230 charter schools and districts – among them “basic aid” districts that already receive more in funding from property taxes than they would be entitled to in state funding.

The formula would work this way:

  • Every district would receive a base grant for every student – an average of $6,800 when fully funded, with more for high schools and less for elementary schools. The base  grant would include restoring the dollars the state owed to districts from past years’ budget cuts and unpaid cost-of-living increases. It would not include money for special education and a few other categorical programs that would be funded outside of the formula. No district, including basic aid districts, would receive less than they get today. Schools would get an extra $700 per student in grades K-3 for smaller classes, though districts could spend the money otherwise.

Districts with disadvantaged students – low-income students, English learners and foster youth – would get additional dollars:

  • A supplement of $2,385 per student, which is equal to 35 percent of the base grant for every disadvantaged student in the district.
  • An additional grant for those districts in which high-needs students comprise 50 percent or more of students, reflecting the need for additional money to counteract the demands on districts with a high concentration of poor children and English learners. Districts with 60 percent high-needs students would get 38.5 percent more revenue per high-needs student ($2,624); a district in which every child is an English learner or low-income student would get a maximum of 52.5 percent more ($3,578) in per-student funding than a district with no high-needs children.

Looking at  how the formula will play out  in Orange County (pages 39-40):

  • Magnolia Elementary School District in Anaheim has 6,142 students, 73 percent of whom are low-income students and 49 percent of whom are English learners. Its base grant of $6,122 last year would rise to $11,190 per student when fully funded by the state as projected in seven years.
  • Los Alamitos Unified, with 9,343 students, got about the same base grant last year as Magnolia: $6,132. But, with only 12 percent low-income students and 2 percent English learners, its funding would rise to only $8,616 per student at full funding, $2,574 less than in Magnolia.
  • Laguna Beach Unified, with 2,878 students, is a “basic aid” district, with enough income from property taxes from high-priced homes to generate an enviable $13,362 per student without any additional support from the state. It wouldn’t lose any money under Brown’s formula, but it wouldn’t gain any either.

Although the formula for when the plan is fully implemented is pretty straightforward and simple, determining funding during the  phase-in period would be anything but. That’s because each district’s starting point is different, reflecting differences among districts’ current revenue limit funding and funding from categorical programs. The rate of yearly increases, to get to the fully-funded target amount, would be quicker for low-funded districts and slower for those already getting above-average funding.

A comparison of Los Angeles Unified (page 23) and Fresno Unified (page 10) is illustrative. Based on Department of Finance calculations, Fresno, the fourth-largest district in the state, received $6,547 per student in the equivalent of base funding under the formula last year. Los Angeles Unified got $7,509 in base funding, nearly $1,000 more per student than Fresno, because of funding from a categorical program – desegregation money now called TIIG (Targeted Instructional Improvement Block Grant) – that Fresno never got, and Los Angeles will continue to receive, even though they serve roughly the same proportions of high-need students. At full funding, both Los Angeles Unified and Fresno Unified would get close to the same amount: $11,635 for Fresno, $11,993 for Los Angeles. Over the next two years, Fresno would get $968 more per student; Los Angeles would get $830 more per student.

The Department of Finance overview doesn’t detail the formula for determining the amounts that districts will get each year as this plan is phased in: it’s complex. Consult your district’s chief finance officer or, if you’re ambitious, it’s spelled out in the 500-page trailer bill on Brown’s proposed funding formula.

* The Department of Finance doesn’t make projections beyond five years; it uses what is describes as “conservative” Proposition 98 forecasts beyond that.

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