A bill to move California schools toward enrollment-based funding — one of this legislative session’s most significant education measures — has been shelved for 2023. Coined as a bill to transition the state’s Local Control Funding Formula methodology from an attendance-based formula to an enrollment-based one, Senate Bill 98 (Portantino, D-Burbank) would create an add-on to the LCFF formula to provide supplemental attendance-based funding and impose a number of new requirements on districts. The proposal became a two-year bill on July 11 and will remain on hold in the Assembly Education Committee until next year. The pause offers a chance to look more deeply at the proposal and for CSBA to explain what it looks for in a funding proposal.

As written, SB 98 would authorize local educational agencies to annually receive supplemental funding based on the additional funding the LEA would receive if the LCFF student count methodology were based on enrollment instead of attendance. This difference, referred to as “average daily membership,” is defined as the sum of the aggregate enrollment days for all pupils in an LEA divided by the total number of instructional days for the LEA in an academic year. Put more simply, it is the difference between a school district or county office of education’s current average daily attendance (ADA) and their enrollment for the purposes of funding. The author and sponsors of the bill have stated that it is their intent that SB 98 would be accompanied by a rebenching of Proposition 98; however, this is not currently reflected in the language of the bill, nor was there any funding identified in the 2023–24 budget to achieve that intent.

The additional funding would come with strings: the bill would also require LEAs to spend 30 percent of this supplemental funding on addressing chronic absenteeism and habitual truancy to improve attendance; to maintain the same per-pupil spending level on staff who address absenteeism and truancy as was spent in the school year 2019–20; and to provide evidence of compliance with this maintenance of effort (MOE) requirement to the California Department of Education (CDE).

While CSBA has long supported efforts to transition to an enrollment-based funding methodology for public education, the association’s Legislative Committee voted to take an Oppose unless Amended position on SB 98. As currently written, the bill does not meet CSBA’s standard that any effort to transition to an enrollment-based funding methodology for LCFF be a “clean” one that:

• Includes an equivalent increase in funding through a rebenching of Proposition 98
• Is free of any mandate requirements
• Is not done at the expense of existing funding, programs or grants within Proposition 98

CSBA appreciates Sen. Portantino’s leadership on this issue as well as the stated intent to accompany the bill with a rebenching of Proposition 98. Without additional funding, SB 98 would create an unfunded categorical mandate that would result in a reduction in LCFF funding for many districts.

That risk would increase if the Legislature chose to fund this measure on an annual basis instead of rebenching Proposition 98. At a time when the state is approaching an ongoing budget deficit, this would likely result in reductions to LCFF apportionments for LEAs with little to no chronic absenteeism, and compete with other important Prop 98-funded educational programs and even the annual cost-of-living adjustments for LCFF. It is also unclear whether the funding methodology laid out in SB 98 would ensure that all school districts would benefit from the change.

SB 98, as proposed, would impose several new mandates. The requirements for this supplemental funding essentially impose a new categorical program subject to additional reporting, an MOE and a requirement to spend at least 30 percent of the funds to provide services and supports to improve school attendance. This 30 percent requirement — in addition to setting a floor for per-pupil spending levels on staff who address chronic absenteeism at 2019–20 rates regardless of the LEA’s actual rate of absenteeism in the current year — sidesteps districts’ ability to address the specific local needs of their communities. Furthermore, requiring LEAs to provide evidence of compliance with MOE is redundant given that enrollment data is reported to CDE twice yearly. The MOE also would require LEAs with declining enrollment to maintain staff positions based on 2019–20 expenditures.

Regardless of where the chips fall on questions of funding, the specific requirements of SB 98 as currently written would not allow for a clean transition to enrollment-based funding.

Now a two-year bill, SB 98 will remain in the Assembly Education Committee for the time being. The measure is expected to return in the second year of the two-year legislative session, and CSBA will continue to work with Sen. Portantino and other education partners to advocate for a clean transition to enrollment-based funding that benefits all schools without impacting LCFF or imposing on local control.