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Blog Post · January 31, 2022

Who Stands to Gain from Changes in School Enrollment Funding?

photo - Elementary Student Writing with Pencil at Desk with Teacher in Background

Correction 2/14/2022: An earlier version of this post relied on incorrect calculations of attendance rates. Some charter schools’ enrollments were included in district enrollment but not Average Daily Attendance (ADA), resulting in lower attendance rates in districts with charter schools, including an incorrect calculation for Los Angeles Unified School District. Attendance rates are now calculated excluding all charter schools from both district enrollment and attendance.

Amid concerns over growing absenteeism since schools reopened this fall, the state legislature is considering a change in how schools are funded. Currently, California is one of seven states that fund schools using average daily attendance (ADA), meaning that districts do not receive funding for students on days they are absent. Critics contend that attendance-based funding penalizes schools serving students more prone to the socioeconomic factors that drive absenteeism, while proponents counter that it provides incentives for schools to address poor attendance. Past research has found that states with high-incentive student-count methods—such as the ADA method currently in use—have lower absenteeism and higher graduation rates.

Proposed legislation would provide supplemental funding for enrollment in addition to ADA-based funding, so long as districts demonstrate effort to address absenteeism. To understand the impacts of this potential shift, it is crucial to look at how attendance varies across districts, and how that relates to student demographics.

Such a shift would be a financial boon to districts currently struggling with poor attendance. For example, in a district of average size (roughly 6,000 students) with a low attendance rate of 93%—lower than 86% of districts—the additional funding could amount to more than $750 per student, or around $4.5 million per year. The exact amount would depend on how much the district receives under the funding formula given its student demographics. Districts with high attendance levels would see less of an increase—and may stand to lose some funding if the dollars devoted to enrollment-based funding are not supplemental but instead crowd out existing state K–12 education spending.

Statewide, attendance levels—defined here as the ratio of ADA to enrollment—vary considerably across districts. Using data from 2014–15 through 2018–19 (to avoid confounding attendance and enrollment challenges during COVID-19 shutdowns), we calculated the five-year average ADA-to-enrollment ratio separately by district, excluding charter schools.

The vast majority of districts have attendance levels of 93% or higher, with half at or above 95%. Similarly, the majority of California students are in districts with attendance levels above 95%. Notably, districts with either low or high attendance tend to be smaller, while most large districts are close to the statewide average. While 13% of the state’s districts have low attendance (below 93%), these districts served only about 3% of the state’s non-charter students, roughly 190,000 students per year. Similarly, 9% of the state’s districts have high attendance (above 97%), but cover only 6% of the state’s students.

Districts with lower attendance tend to have higher shares of high-need students—low-income students, English Learners, or foster youth, as defined by the Local Control Funding Formula—while also having higher spending due to the additional funding provided for these students.

In addition, districts with high attendance tend to have low shares of Black and Latino students—and high shares of Asian American students. In general, districts with more high-need, Black, or Latino students would stand to gain more under a shift to enrollment-based funding. Importantly, these are only averages across districts; there are many districts with high or low attendance that do not align with these general trends.

Debates over K–12 funding in California have long centered on how much funding is allocated per student—and to which students, schools, and districts. Often overlooked is how “per student” is calculated. Changing from attendance- to enrollment-based funding would be a big switch that could potentially mean more funding for underserved student groups, though the financial implications would vary significantly across districts. The impact would also depend on the extent to which COVID-era enrollment declines persist, and whether enrollment-based funding means expanding or simply reallocating current state K–12 funding.

For those districts with low attendance, extra funding could be used to help address absenteeism—or could go toward other services and instructional activities. However, if policymakers decide to change the funding model, they should also monitor whether removing financial incentives for higher attendance results in more absenteeism.


coronavirus COVID-19 enrollment K–12 Education Population school finance