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Distribution of Needy Students Poses Challenge for New Funding Formula

Some High-Need Schools Are in Districts That Don't Qualify For Extra Support

SAN FRANCISCO, March 12, 2015—The uneven distribution of needy students in many California school districts poses challenges to the successful implementation of the state’s new funding formula, according to a report released today by the Public Policy Institute of California (PPIC).

The Local Control Funding Formula provides extra funds for low-income, English learner, and foster care students. Schools districts receive a base grant for each student in attendance and a “supplemental grant” for each high-need student. Districts in which more than 55 percent of students are high need get additional “concentration grants.” The PPIC report finds that 54,000 high-need students attend schools in districts that don’t receive concentration funding.

These districts have small shares of high-need students overall—but include a few schools in which needy students are concentrated. For example, the Capistrano Unified School District in Southern California receives no concentration funding because just 24 percent of its students are high need. Yet in two of the district’s elementary schools, more than 90 percent of students are high-need.

Statewide, there are 677 high-need schools in 154 districts that are not high need. Many of these districts are in Orange and San Diego Counties, as well as the Bay Area and Sacramento County.

Laura Hill, PPIC senior fellow and co-author of the report, pointed out that county offices of education, which are charged with helping districts develop and achieve accountability plans, may have some extra work to do in these counties.

“The funding in the new formula is based on districtwide enrollment levels, and districts have flexibility in how they spend it,” she said. “It will be important to ensure that the additional support reaches high-need students in districts where they are unevenly distributed.”

The PPIC report, Implementing California’s School Funding Formula: Will High-Needs Students Benefit?, is co-authored by PPIC research associate Iwunze Ugo. It is supported with funding from the Evelyn and Walter Haas, Jr. Fund and the Silver Giving Foundation.

The report notes that while district plans may be sufficient to improve outcomes among high-need students, most do not contain enough detailed information to indicate how they are targeting spending. A companion PPIC report, Implementing Local Accountability: The First Year of Planning, examines the plans from a sample of districts and finds that their effectiveness varies widely. The report concludes that the state can help by making technical assistance to districts and county offices of education available and affordable.

Another related PPIC report examines enrollment and participation in school nutrition programs by students eligible for free or reduced-price meals. Enrollment is the measure of the number of low-income students in a district and is consequently an important factor in determining how much a district receives under the new funding formula. The report, Low-Income Students and School Meal Programs, in California, finds that smaller schools have higher rates of enrollment and participation than larger schools. It also finds that low-income elementary school students have the highest rates of participation—but not enrollment— in these programs.

ABOUT PPIC

PPIC is dedicated to informing and improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett. PPIC does not take or support positions on any ballot measure or on any local, state, or federal legislation, nor does it endorse, support, or oppose any political parties or candidates for public office.

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