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CEO’s note

by Vernon M. Billy
A system built to last

Securing LCFF for the next 10 years


he 10th anniversary of the Local Control Funding Formula (LCFF) is upon us, and its resilience and flexibility are in the spotlight now, more than ever. The long run of robust state budgets seems to be over and for the first time in more than a decade, lean years may lie ahead. Twelve years after the negotiations that led to LCFF, few legislators remain who took part in its development and understand the reasons for its creation.

a colorful pie chart consisted of the colors green, red, blue, yellow, and orange; a hand each holds the larger yellow and blue wedges of the chart that sits on a background made of ascending and descending line graphs
The first decade of LCFF was a honeymoon period. Buoyed by high-flying capital gains revenues and record state budget totals, LCFF allocations — which account for about 70 percent of state education funding — climbed steadily. That was a welcome sight after more than 30 years of underinvestment in education sent California’s per-pupil funding plummeting from top 10 in the nation during the 1970s to 35th nationally in 2013. Factor in cost of living, and state funding to K-12 schools ranked 49th among 50 states and the District of Columbia when LCFF was adopted.

Clearly it was time for a change, but LCFF contained a broader philosophical goal than simply increasing school funding. The larger idea behind LCFF was to streamline the complex school funding allocation methodology and boost education funding, while at the same time providing greater resources for the state’s high-need students and provide more local flexibility in determining how best to support those students — Gov. Jerry Brown’s philosophy of “subsidiarity.”

Proposed by Gov. Brown in 2012 and passed by the Legislature in 2013, LCFF represented a paradigm shift in public school funding. Prior to LCFF, state funding for schools was a maze of more than 50 categorical programs determining where local educational agencies could spend money — regardless of whether those categories actually made sense for a particular LEA. But developing a new mechanism that made sense for all education stakeholders was extremely challenging.

I remember being asked to meet with Gov. Brown’s staff so they could share their proposal with CSBA. I was very interested to hear their idea for changing our outdated revenue limit and categorical funding scheme. As it turned out, Gov. Brown’s first iteration was a weighted student formula (WSF), rooted in concepts I was familiar with from my time working with San Francisco USD. SFUSD was one of the first — if not the first — school district in the state to implement a WSF. While the first attempt at passing this legislation was unsuccessful, it set the stage for broader conversations with the education community to restructure the state’s school funding allocation approach. CSBA staff was engaged almost nonstop with the Governor’s Office, the Legislature, and our education partners advocating for a more evolved system for funding California schools.

While we supported the proposal in principle from the beginning, the devil, as always with school finance, was in the details. Before signing off on LCFF, CSBA urged the Governor to restore funding levels, pay back the funds owed to schools through excessive deferrals, increase per-pupil funding levels to at least the national average (at a time when California was near the very bottom of national rankings for per-pupil funding) and account for the costs associated with educational reforms. We also emphasized the need to factor regional cost differences into the formula, ensure accountability for results in student achievement, shift adult education from K-12 to community colleges, offer increased local governing board authority, provide equity for different kinds of school districts and facilitate community input and transparency.

Working from these principles, CSBA advocated for a new and improved school funding mechanism featuring five core elements:

  1. Adequacy: Provide enough resources to allow students to meet state standards
  2. Cost differentiation: Recognize that costs vary depending on student need and other specific district factors
  3. Transparency: Funding formulas should be straightforward and transparent. Formulas should adjust for key cost differences without trying to adjust for every difference between districts
  4. Equity: Allocate the same per-pupil revenue to all districts with the same cost factors
  5. Local discretion: Provide local governing boards discretion in how to allocate resources to allow communities to address local priorities

Those elements were largely reflected in LCFF, which moved state education funding away from categorical programs toward funding allocated based on student needs, while allowing for both accountability and flexibility at the local level. LCFF combined most categorical and general funds into a single formula based on student attendance along with additional resources for low-income students, English learners and foster youth. In exchange for the promise of greater autonomy, school districts were required to increase community engagement and public reporting as part of a three-year spending and academic achievement program called the Local Control and Accountability Plan (LCAP).

Transforming the state’s method for funding public schools was not an easy task given the various stakeholders who had assorted policy interests in the Governor’s proposed change. Throughout the legislative and implementation process, CSBA consistently argued for more funding and greater local control of education funding. Our members had long urged the state to let them use resources in a way that reflected their local knowledge and allows them to direct revenue in a way that makes sense for their unique communities and specific student needs. But as we’ve gotten further from the inception of LCFF and our memory of its founding principles has grown dimmer, we’ve seen repeated efforts to chisel away the authority of local school districts and county offices of education.

That’s not to say LCFF is perfect. LCFF still falls short in providing sufficient funding for LEAs with large numbers of high-need students, but not enough to qualify for concentration grants. Just as when LCFF was signed into law, greater effort is needed to raise overall funding levels and to make sure that all high-need students, regardless of location, are receiving the necessary support. For LCFF to reach its potential, we should prioritize base, unrestricted funding and continue to evaluate the LCAP development process and requirements, particularly for small school districts. Going forward, it will be critical that legislators and policymakers respect the original intent of LCFF and avoid additional growth in categorical programs and other restrictive requirements that may compromise the integrity of the formula.

The 10th anniversary of LCFF is a significant landmark, but no reason to rest on our laurels. We must continue to defend the core elements of LCFF while addressing its shortcomings to demonstrate the same commitment to continuous improvement we expect from our local schools.

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