In California, the Local Control Funding Formula (LCFF) has increased funding for high-need TK–­12 students by distributing additional funds to districts with higher shares of students who are low-income, English Learner, or foster youth. In a recent presentation, PPIC researcher Julien Lafortune outlined key insights from a report on how LCFF funding may look in different districts as well as how districts may be spending their additional dollars.

An average district receives about $10,000 per student under the LCFF base grant. As the number of high-need students rises, districts get supplemental dollars; districts with a high-need population above 55% receive concentration dollars. “The difference between a district that’s marginally at the concentration threshold [of 55%] versus one that is 100% high-need is almost $4,000 per student,” Lafortune said.

All districts in California saw large funding increases over the past decade of LCFF, with relatively larger increases in districts that got concentration funds at 55% high-need, and even higher increases in 80% and above high-need districts. “The formula has a kink at the [55%] concentration threshold, which enables us…to look at the impact of concentration funding,” Lafortune said.

After LCFF, concentration districts saw large gains in test scores, and those gains have persisted after COVID into 2021­–22, the year of most recent data. “Take districts that are 95% high-need…proficiency rates in math and English on average increased 13 percentage points due to the concentration grant funding,” Lafortune said. “Over the first nine years of LCFF, that’s an investment of about $16,000 per student in those districts”

But the way that districts target LCFF funding can attenuate its effect on achievement gaps statewide. To understand targeting and its impact, Lafortune and coauthors examined spending plans from about 700 districts as well as school-level spending data. The purpose was to determine if spending on high-need students and schools is proportional to how additional funding is generated under the formula.

Most districts report less spending on high-need students than the supplemental and concentration dollars they receive. Statewide, about 28% of spending goes toward any high-need student group, while 64% of spending is listed as spending on all students.

“For $1 more funding generated at a site, statewide, the average school site spends 63 cents per dollar more on high-need schools, which indicates partial targeting,” Lafortune said. “The other 37 cents is spent a little more equally across schools—but there’s a lot of variation by district.”

“There’s not a lot of transparency about where supplemental and concentration dollars are going—how much is spent, where is it spent, which students is it spent on,” Lafortune said. “There isn’t consistency in financial reporting.”

To improve transparency, and help improve targeting of LCFF funds, Lafortune pointed to a need to streamline district spending plans, which are long and complex documents, as well as link plans and expenditures to other statewide fiscal reporting systems. Such efforts, however, should consider district needs to avoid creating more reporting burdens.