Making the Local Control Funding Formula Work

While students, parents, faculty and school staff gear up for the excitement of a new school year, a critically important process is unfolding largely out of public view.

California schools are nearing the conclusion of the second annual cycle of the district planning and budgeting process ushered in by Local Control Funding Formula, (LCFF) the historic reform of the state’s K-12 education finance and governance system.

And what we are seeing so far raises serious concerns.

Under LCFF, school districts receive additional funding based on how many high-need students—English learners, foster youth, and low-income students—they enroll. They also now have significantly more discretion over how to use their state funding.

In exchange for the increased flexibility, districts must engage local stakeholders in developing an annual Local Control Accountability Plan (LCAP). That plan shows how the district will use its funding, including the additional money for high-need students, to improve student outcomes based on specified metrics across eight state priority areas. Districts had to adopt their LCAPs by July 1, and county offices of education must review and approve those plans by October 8.

LCFF has tremendous potential to improve student outcomes and close opportunity gaps for high-need student groups. By linking goals for student outcomes with actions and expenditures across multiple indicators, the LCAP process is intended to make analysis of student need the touchstone for all decisions about services and programs, while helping districts engage the community when making hard choices about how to prioritize limited resources.

When districts adopted their first-ever LCAPs in July 2014, the ACLU of California reviewed those plans from a random sample of 40 districts around the state to identify trends and to inform our ongoing advocacy around LCFF implementation. Among our findings, three significant issues stood out as significant barriers to whether LCFF will ultimately be successful:

1. Districts did not address each statutory metric

School districts have much greater flexibility over how to use their resources, but they are expected to track their progress within the eight state priority areas, using the specified metrics. Ten of the 40 districts, however, failed to address at least half of the required metrics, and only one district’s LCAP addressed each relevant statutory metric. And, as reflected in this chart, certain metrics were particularly likely to be omitted.

When districts do not address all of the statutory metrics, districts, stakeholders, and state policymakers cannot assess whether the local choices about the educational program reflected in the LCAP are, in fact, improving outcomes across the state priorities and make adjustments necessary to support a culture of continuous improvement.

2. Most districts failed to account for a majority of their LCFF funds

The LCAP is supposed to function as the central planning and accountability tool under LCFF. But excluding two districts that reported expenditures exceeding their total LCFF funds, the districts in our sample accounted for only $2.5 billion of the $6.3 billion in total LCFF funds they received in 2014-15, meaning that $3.8 billion in LCFF funding was not accounted for. In fact, 29 of the districts failed to account for 90% or more of their LCFF funds.

Districts cannot reliably assess why they are, or are not, making progress toward their goals across the eight state priority areas if a majority of their education program is not even reflected in the LCAP. Additionally, failing to account for the bulk of LCFF funds in the LCAP makes meaningful stakeholder engagement impossible because the public cannot assess how the few actions identified fit within the district’s broader program.

3. The majority of districts did not identify and explain the rationale for non-targeted uses of the additional funds generated by high-need students

Districts may use the additional funding they receive for high-need pupils for schoolwide and districtwide, i.e., non-targeted, programs, as long as they identify each such use in the LCAP and explain how it advances goals set for the high-need students. Our review found, however, that 10 districts failed to identify schoolwide and districtwide uses of these funds, and 20 districts identified only one or two examples, rather than identifying all such uses. And only 10 districts made a meaningful attempt to explain why the schoolwide or districtwide uses that they did identify advanced outcomes for the high-need students who generate the funds.

This requirement is essential to ensure that the funds the Legislature intended to meet the greater needs of high-need student are not treated as indistinguishable from the base funding districts receive. Providing the required explanation ensures that the decisions are anchored in the particular needs of the students who generate the funds, and that stakeholders have appropriate insight into the rationale so that they can participate meaningfully in the local conversation about priorities.

We shared our findings with key stakeholders throughout the spring. We also flagged these issues in a letter that the ACLU of California and Public Advocates sent to every district and county superintendent in the state in June.

We hoped and expected to see improvement on these areas in the second round of LCAPs, which districts had to approve by July 1. Unfortunately, our preliminary review of a small sample of just-adopted LCAPs reveals that districts are still struggling with these foundational issues.

Implementing the dramatic changes enacted by LCFF is a significant undertaking. It has been and will continue to be a learning process. There have also been many positives over the last few years and some promising practices in LCAP development that I will highlight separately later this month.

But, taken together, these three issues cut to the heart of whether LCFF will succeed. If districts fail to address and monitor progress on numerous statutory metrics, include only a sliver of their LCFF funds, and fail to transparently explain how they are using the additional funds generated by high-need students to serve those students, the LCAP simply cannot be useful as a tool for continuous improvement or to facilitate meaningful local engagement or accountability.

We must all work together to make LCFF work, and getting these foundational components of the LCAP right is essential. County offices have until September 15 to recommend changes to LCAPs, and we believe these three issues should be front-and-center to the ongoing review process.

David Sapp is the former Director of Education Advocacy for the ACLU of California.