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Blog Post · December 1, 2023

Commentary: On California Funding Formula’s 10th Anniversary, Celebrate Progress but Double Down on Fairness

photo - Student phot - Writing on Board with Teacher in Elementary School Math Class

This commentary was published by EdSource on November 29, 2023.

Former governor Jerry Brown headlines a party next week toasting the Local Control Funding Formula (LCFF), California’s ten-year-old reshaping of school finance, the nation’s most ambitious effort to target public investment toward narrowing disparities in student achievement.

In 2013, Brown and the legislature recast state funding to shift dollars toward districts that serve greater shares of low-income and non-English-speaking children. The logic remains compelling: educators labor to bring all children over proficiency hurdles in reading and math, so greater resources must go to students who have the farthest to climb.

Party goers in Sacramento do have cause to celebrate. The extra funding has worked to lift performance among students living in areas of concentrated poverty. Test scores, graduation rates, and college readiness have all seen increases stemming from the extra funding, according to research from the Learning Policy Institute and the Public Policy Institute of California.

Education funding also soared under both Brown and Governor Gavin Newsom, fueled by a robust economy, the voter-approved Proposition 98 set-aside for schools, and pandemic-era aid from Washington. State funding for K–12 education has grown more than 40% since 2017.

But California’s schools still produce grossly unequal results among racial and economic groups. While reading proficiency among fourth graders climbed from 40% to 49% between 2014 and 2019,  with slightly greater gains for low-income students, racial disparities failed to budge. White children in California have continued to achieve at three grade levels above Latino peers over the past quarter century, according to the National Assessment of Educational Progress—gaps were even larger for Black children. The picture is similar for math.

The good news: Brown’s funding formula helped sustain progress made by educators and kids since 2002, continuing to boost average test scores, especially in districts with concentrated poverty. The sobering news: inequalities among students remained unmoved despite gains for all demographic groups in reading and math.

So, what have we learned over the past decade that could inform more potent school finance policies?

First, only a small slice of local control funding—just 7%—is dedicated specifically to districts serving the largest concentrations of low-income families. For some, the impact was eye-popping: districts in which nearly all students are from impoverished families enjoyed a 13% gain in the share meeting grade-level standards. But most low-income students do not attend schools in these districts and so receive much less targeted funding. And schools with concentrated poverty in economically mixed districts lose out on this additional funding.

Policy makers and researchers remain in the dark over whether local boards mirror the spirit of the formula when allocating dollars between schools, and this holds consequences for kids. If districts spend dollars equally across all students, then low-income kids only partially benefit, even as the formula targets districts with more high-need students.

Newsom did target fresh funding to low-performing schools this year, dubbed the equity multiplier. The dollar augmentation is modest, but the new mechanism recognizes “that we have not sufficiently structured the reform to get dollars to highest-needs schools in a consistent way,” Jessenia Reyes, a policy analyst at Catalyst California in Los Angeles, told us.

Second, how districts choose to deploy their funding matters. Local control funding operates like a dump truck, unloading extra dollars to the district—it’s not a backpack, where targeted dollars follow the child. Districts do not always target extra funds to the students who generate them: for each dollar a school generates due to its socioeconomic “need,” spending goes up only by 63 cents in the average district; the rest is spread more equally across all other schools in the district. Data suggest this targeting, or lack thereof, varies considerably across districts.

Los Angeles Unified—pressed by equity advocates—has pioneered a Student Needs Equity Index that pinpoints the most challenged schools, then distributes $700 million in flexible dollars to their principals and teacher leaders. Despite equaling less than 5% of the district’s yearly budget, this progressivity among schools has helped to boost reading scores for English learners.

When local boards award extra funding to their most hard-pressed schools, contentious politics may come to light. Spreading new dollars across all schools holds broad appeal to labor leaders and parents. But “if we are really trying to implement equity, some kids may not need the [additional] resources,” said Ana Teresa Dahan, managing director of GPSN, the nonprofit formerly known as Great Public Schools Now.

Third, as we learn more about how spending varies among schools, we arrive at the effects of something quite sacred: teacher seniority. More experienced and highly qualified teachers tend to migrate to more affluent schools. So, serious efforts to equalize school budgets require incenting the best teachers to remain committed to poor communities.

Even when districts focus extra resources on their most challenged schools, principals often assign more senior teachers to high-achieving kids, as we found in Los Angeles. More robust targeting of funds among schools may fail to narrow gaps within schools until principals are better coached to weigh strategic options.

Yes, policy leaders deserve to pause and party on, celebrating a decade of high hopes and discernible progress in elevating disadvantaged students. But avoid the hangover. Fresh policy options and sober attention to school-level spending and staffing are urgently needed.


California State Legislature Gavin Newsom Jerry Brown K–12 Education Local Control Funding Formula Political Landscape Poverty & Inequality racial disparities school districts school finance school funding teachers test scores