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Now that the state’s budget deficit has been taken care of, Gov. Jerry Brown is on another mission. He wants to radically reform the way California school districts are funded, taking decision-making out of the hands of Sacramento bureaucrats and placing it under the purview of school district administrators.

“We’re investing in our schools, but we’re doing so in the context of encouraging local flexibility, local control,” Brown said last week as he announced his budget. “We want to put the decisions closer to the classroom.”

That rather innocuous statement foreshadows a sea change for the way California school districts get their money.

Brown wants to do away with a longstanding system of channeling cash to schools via inflexible programs known as “categoricals.” Instead of Sacramento defining what districts are allowed to spend those dollars on, Brown wants to send almost all education funding, unencumbered, to districts and let them make their own spending decisions.

Under Brown’s plan, which still needs approval from the legislature, money would be disbursed among school districts according to a completely new formula (more on that in a minute). It’s impossible to gauge the impact of the change for local school districts, but, big picture: Districts will have much greater control over their spending, and districts with the most high-need students will get larger shares of the new money.

Let’s take a look at how this new funding mechanism, called the “Local Control Funding Formula,” would work.

Big Picture

Seemingly everyone thinks the amount the state will have to spend on education in coming years is going to grow.

Brown wants to enact a plan now to ensure that any additional revenue will be spent effectively. Rather than getting more money, then scrambling to figure out what to do with it, he wants the state to establish a mechanism for funneling new dollars in advance. That’s the Local Control Funding Formula.

But the state doesn’t have most of that money yet.

So, Brown wants districts to calculate “targets” for how much money they should receive from the state each year, if the state had enough money to fully fund education the way Brown envisions.

Brown thinks the state can hit those targets in seven years.

So, how does each district figure out its target level of funding?

The Funding Cake

One visual that’s helped me understand California’s per-student education funding under this new system is a three-tiered cake.

The bottom tier is biggest, the next tier is smaller and the top tier is the smallest, just like a wedding cake.

The bottom tier of funding is the base funding for every public school student in California. This represents the bulk of education spending, and every district is entitled to this amount, multiplied by however many students attend its schools.

The middle layer of funding would be calculated according to each district’s “eligibility.”

Each district would calculate the proportion of its students that are either a) English language learners; b) receive free or reduced lunch or c) are in foster care.

For example, if a school district has 100 students, and 60 of them fall into one of these three categories, then the district would be eligible for this extra layer of funding for 60 percent of its students.

The extra layer of funding would be calculated like this: The percentage of students that are eligible, multiplied by 35 percent of the base funding.

So, using the example district above, assuming a base funding level of $10,000 per student, the district would get an additional $3,500 for 60 of its students.

(It’s important to remember that the extra layer of money wouldn’t only go to the 60 students who brought it in. Rather, the district gets the extra money to spend, however it sees fit, on all its students.)

The last tier of funding would be calculated in a similar way.

Brown wants districts that have large proportions of high-need children to get more revenue. So, for the third layer, he wants districts to calculate the percentage of students eligible for extra funding above 50 percent of the total student body.

In the above example, that number would be 10 percent, because 60 percent minus 50 percent is 10 percent.

That 10 percent would then be again multiplied by an additional 35 percent of the base funding amount.

So, our example district would get an extra $3,500, multiplied by 10, for $35,000 for that top tier of the cake.

But we’re not done yet.

Remember that these calculations just allow a district to come up with a target funding amount.

The state doesn’t yet have enough money to hit that target, but it does have some extra cash to divvy up. Here’s how it does that:

Hitting Targets

Once every district in the state has calculated how much money it is eligible for under Brown’s new system, the state will have an overall target amount for funding all California schools.

It will be well short of that target.

Indeed, the state has already done these calculations for the 2013-14 school year, and state officials reckon they are about $15 billion short of fully funding all the districts under the new formula.

But Brown thinks the state can hit the target in seven years. And there is a bit of extra cash next year, thanks to Proposition 30.

Next year, the state has about $1.6 billion extra to send to districts. In order to figure out how much of that money each district is entitled to, the district will have to calculate its target amount, then figure out how far away from that target it currently is.

Let’s say a district calculates that it’s entitled to $12,000 per student, but it only received $10,000 last year. The state will look at each district in turn, establish how far away it is, and then allocate a chunk of the new money it has available to each district.

This will happen every year, theoretically getting closer and closer to the target amount, until all the districts are fully funded.

What’s the Point in All This?

To the outsider, this may all seem rather convoluted.

But the fundamental underpinnings of this new method are pretty clear:

• Brown wants the districts that need the most money, because they have the highest proportions of high-need students, to get the most funding;

• By doing away with the system of categoricals and instead just handing districts more money with no strings attached, Brown wants to bring the spending decisions closer to the classroom;

• The whole system should ultimately simplify district’s budgets, since they won’t have to budget and account for dozens of individual programs. They’ll just get one big lump sum that they can spend on the programs they think are most needed.

Districts across California will spend the next few weeks wrapping their heads around this new system.

Lora Duzyk, assistant superintendent of the San Diego County Office of Education, welcomed the changes.

“Simplification is huge,” she said. “It creates efficiencies and it’s always better to have control of money locally.”

In the meantime, Brown has to persuade his colleagues in the legislature that this fancy new mechanism is the most equitable and effective way to fund local schools.

If he can’t do that, well, then we just figured all this out for nothing.

Will Carless is an investigative reporter at Voice of San Diego currently focused on local education. You can reach him at or 619.550.5670.

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Will Carless

Will Carless was formerly the head of investigations at Voice of San Diego.

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