The Local Control Funding Formula Research Collaborative (LCFFRC)

The Local Control Funding Formula Research Collaborative (LCFFRC) brings together a diverse set of policy experts who, since 2014, have been documenting implementation of the Local Control Funding Formula (LCFF), California’s pathbreaking finance and governance system. Operating under the auspices of Policy Analysis for California Education (PACE), principal LCFFRC researchers are Julia Koppich (J. Koppich & Associates), Daniel Humphrey (Independent Consultant), Julie Marsh (University of Southern California), Jennifer O’Day (American Institutes of Research), Magaly Lavadenz (Loyal Marymount), and Laura Stokes (Inverness Research).

Publications

This report seeks to help policymakers and others better understand ways in which LCFF implementation is changing fundamental aspects of resource allocation and governance in California’s K-12 education system. The LCFF provides all districts with base funding plus supplemental and concentration grants for low-income students, English learners, and foster youth. The law eliminated most categorical programs, giving local school systems resource allocation authority and requiring Local Control Accountability Plans (LCAPs) developed with input from parents, community members, students, and educators. The goal is more equitable and coherent resource allocation decisions and improved and more equitable student outcomes.

This report, the third by the Local Control Funding Formula Research Collaborative (LCFFRC), focuses on issues that emerged from our previous research in which we found widespread support for the LCFF as well as significant challenges. Many districts had difficulty fostering meaningful stakeholder engagement. Some found the LCFF and Common Core State Standards (CCSS) to be competing policy priorities. Questions remained about how resource allocation decisions were made and if LCFF dollars were reaching targetedpopulations. Drawing on these findings, this study focuses on four main issues: 1) the extent of meaningful stakeholder engagement in LCAP development, 2) ways LCFF implementation is advancing or challenging CCSS implementation, 3) how resources are allocated, especially to targeted groups, and, 4) the extent to which LCFF planning and implementation advance equity and coherence.

This report is based on eight case studies, seven in traditional districts and one in a charter management organization. Study sites reflected California’s geographic and demographic diversity. To collect data, we conducted 151 interviews with administrators, parents, community members, union leaders, and board members in fall 2016 and examined a range of relevant documents, including LCAPs, district budgets, collectively bargained contracts, strategic plans, and school site plans. While we recognize this study has limitations, including the small number of cases and the timing of the data collection (districts had not yet used the revised LCAP template and the new state accountability system was not fully in place), we believe the research provides important insights into the ongoing implementation of the state’s ambitious new system of finance and governance.

California ended 40 years of reliance on categorical funding for schools when Governor Jerry Brown signed the Local Control Funding Formula (LCFF) into law on July 1, 2013. LCFF intends to enhance services for high-needs students through new flexibility, targeted student funding, and local accountability. Two years into LCFF implementation, our research in 18 districts and more than half of the state’s County Offices of Education (COEs) uncovers both reasons for optimism and a few concerns.

District officials around the state remain enthusiastic about local control. Many report that the LCFF has allowed their district to focus more on supports and services for their high-needs students, improve their budget development and strategic planning processes, and increase community engagement. District and COE officials are nearly unanimous that fully implementing the LCFF will take more time and no one we interviewed favors a return to categorical funding. However, implementation of the LCFF is creating an uneasy tension between local control and compliance that threatens to undermine the vision.

LCAPs Continue to Challenge

The Local Control and Accountability Plan (LCAP), a centerpiece of the LCFF, struggles with five challenges. Districts

  1. are unclear about the purpose of the LCAP;
  2. are unsure about what funds to include in it;
  3. are confused about the cycle and annual updates;
  4. view the LCAP as a compliance document; and
  5. produce LCAPs that are neither readable by nor accessible to the public.

Stakeholder Engagement Still a Work-in-Progress

The districts in our study made strong efforts to engage stakeholders in LCAP development by embracing a variety of strategies to solicit input. However, meaningful stakeholder engagement is very much a work-in-progress. The general confusion surrounding LCAP development led many districts to scale back Year 2 engagement efforts. Regardless, many districts experienced an increase in interest group activity in Year 2, often resulting in the “loudest voices” playing a disproportionate role in shaping the LCAP.

Public awareness of the LCFF still lags, which may be complicating engagement efforts. An August 2015 PACE/USC Rossier School of Education poll found that 65% of registered California voters had never heard or read anything about the LCFF.

Implementation and Capacity Challenges

District capacity—having adequate personnel, expertise, fully functioning data systems and services—could make or break the LCFF. Relatedly, COEs play a key mediating role in LCFF implementation, but variation in their capacity contributed to inconsistent guidance and support to districts.

Among the most pressing long-term challenges to successful LCFF implementation may be California’s emerging teacher shortage. Many of our study districts already have experienced teacher shortages or were concerned that shortages will increase over the next few years, hampering their ability to make good on increased program and service commitments for target student populations.

California has taken the first steps down an historic path that fundamentally alters how its public schools are financed, education decisions are made, and traditionally underserved students’ needs are met. The Local Control Funding Formula (LCFF), passed with bipartisan legislative support and signed into law by Governor Jerry Brown on July 1, 2013, represents the most comprehensive transformation of California’s school funding system in 40 years. The LCFF significantly loosens the reins of state control over education. It all but eliminates categorical funding streams, substituting a base of funding for all districts and adding dollars for low-income students, English language learners, and foster youth. The new system empowers school districts to determine how to allocate their dollars to best meet the needs of their students. Finally, by requiring all districts to engage parents and other education stakeholders in decisions about how to spend newly flexible funds, the LCFF represents a remarkable experiment in local democracy. The LCFF is a paradigm shift for California education, and it is still in its infancy. How are school districts using their newfound budget flexibility in this early implementation phase? How are they engaging parents and other stakeholders? What opportunities and challenges do they foresee with the LCFF? What can state policymakers learn from these early experiences?

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