Community-Based School Finance and Accountability

Abstract

Top-down accountability policies have arguably had very limited impact over the past 20 years. Education stakeholders are now contemplating new forms of bottom-up accountability. In 2013, policymakers in California enacted a community-based approach that creates the Local Control Funding Formula (LCFF) process for school finance to increase flexibility. The reform also seeks to involve stakeholders at the local level by creating a Local Control and Accountability Plan (LCAP). We conducted a statutory analysis of the state’s new funding formula in comparison to its predecessor. We also analyze the state’s new system of district implementation, support, and intervention. We then discuss the implications of California’s reforms for future K-12 funding and accountability policy.

Keywords

school finance accountability local control community-based reform educational policy

In the American public education system, long-standing achievement gaps have persisted between Whites and Latina/os, African Americans, and Native Americans in urban schools in the United States (Vasquez Heilig & Darling-Hammond, 2008). Urban students comprise a large sector of students attending poorly performing schools, plagued by failing academics, weak performance on standardized exams, low graduation rates, and high drop-out rates (Vasquez Heilig, Cole, & Springel, 2011). These gaps are not coincidence, as the United States has a long history of legislative, executive, and judicial enactments that have codified unequal provision of resources for urban schools (Vasquez Heilig, Williams, & Jez, 2010). To remedy these long-standing gaps, without necessarily addressing persisting inequalities, systemic reformers argued in the early 1990s that high-stakes testing linked to standards and accountability formulas would improve the success of urban students (Smith & O’Day, 1991).

Texas was one of the first states to implement systemic top-down accountability due in large part to several state Supreme Court challenges resulting in the dismantling of the Texas school funding system. In response to the Court’s decisions, the Texas Legislature crafted new school finance legislation that would later become the policy underpinnings of No Child Left Behind (NCLB) accountability. Former Lt. Governor Bill Ratliff, then a Republican senator, sponsored Texas Senate Bill 7 (1993). The Texas Legislature sought to address two issues in Senate Bill 7. First, create a school finance system that would survive the Texas Supreme Court. Second, pass legislation with a new policy approach to address long-standing achievement gaps exhibited by urban students in Houston, Dallas, San Antonio, and other areas across the state. To address these issues, the Texas Legislature enacted SB 7, a Robin Hood school finance redistribution bill and the incipient statute for the creation of the top-down Texas public school accountability system to rate school districts and evaluate campuses.

As noted, SB 7 introduced the primary components of the top-down accountability system that would be codified into national law through the enactment of NCLB. Lieutenant Governor Ratliff relayed that the accountability provisions were a necessary measure to gain passage of the proposed school finance system,

If you are going to pass a school finance bill, it’s almost inevitable to get the votes to pass one that you have to put considerably more money into the system, because if you don’t you have school districts who are winners and you have school districts who are losers, and the losers, the members who represent losing districts can’t vote for it . . . But many members were skeptical about putting that much new money in unless we required some kind of an accountability for the money. That is . . . are we getting the bang for our buck? (as cited by Vasquez Heilig, Young, & Williams, 2012)

The current form of Texas-inspired, top-down, NCLB high-stakes testing and accountability may have run its course. It has become apparent that after 20 years in Texas and 10 years across the United States, the Texas-style sanctions and rewards-based¹ education evaluation system did not produce an education miracle in Texas nor result in all students across the nation being proficient by NCLB’S target year of 2014. Furthermore, the state of Texas has found itself in and out of court every few years due to lawsuits brought against the school finance system over the past two decades.

So what’s next for accountability and school finance? Considering the historical context that detailed the birth of top-down accountability in school finance, the purpose of this article is to identify and provide a conceptual understanding of new bottom-up reforms that are emerging in the field. Specifically, we conduct an in-depth statutory analysis of California’s new Local Accountability law and consider whether it is a potential national alternative to current top-down Texas-inspired approaches to accountability and school finance. The Local Accountability approach has been hailed as a seismic shift to the local level in the way state funding and accountability operate. Thus, we will address in this article the following central question: Could bottom-up approaches to accountability change the role of communities in the current educational reform context?

To answer this question, we address in this article the conceptual approach for community-based reform. We then turn to the California case and conduct a statutory analysis (Putman & Albright, 2013). The statutory analysis includes a review of the major components of California’s locally based approach and then details the state’s new funding formula in comparison to its predecessor. We also analyze the state’s new system of district implementation, support, and intervention. Further, we address intended and unintended consequences of the recent decisions made by the Legislature and the Governor in crafting new K-12 funding and local accountability systems for California. We conclude by considering implications the legislation may have not only in California but also in other states such as Texas that have a documented history of favoring top-down approaches to accountability.

Community-Based Reform

Vasquez Heilig, Khalifa, and Tillman (2013) wrote that NCLB required high-stakes testing and accountability as a dominant paradigm despite vocal dissatisfaction from communities across the nation. Even with mounting opposition, systemic, top-down reforms are institutionalized in U.S. schools (Labaree, 2005). These reforms have served to ostracize community-based educational models. For communities distressed and disheartened by the state of their local public schools, it is imperative that any reform efforts put forth carry the hope of success after decades-long failure of top-down testing and accountability policy to change the underperformance of urban public schools. As more research is undertaken on community-based involvement in school reform, a greater understanding of what makes such grassroots organizing successful is emerging.

What is community-based reform? Mark Warren (2011), an education scholar, has written extensively on community-based reform. He explained, “Over the past twenty years, community organizing has emerged as a powerful new form of public engagement for education reform across the country” (p. 139). This has been well documented through educational reform efforts in California, Chicago, New York, Denver, and Mississippi (Warren, 2011). A renewed focus on local public engagement in education reform is an important form of democratic action to address the historical inequities that have plagued our urban public schools. For those living in poverty, particularly communities of color, civic alliances can arise that “build the civic capacity that can help districts develop and implement effective reforms” (Warren, 2011, p. 140). These alliances allow groups that rarely have a voice in education policy to actually affect change. They “generate political capacity that helps districts sustain reform efforts, while holding public officials accountable to improved practice” (Warren, 2011, p. 140).

Community-based reform works when urban communities are not just engaged but empowered. Too often, the failure is not in the promise of the reform but in its top-down implementation. Organizing disenfranchised groups, people whose interests are often silenced, even ignored, is the great hope but also the great challenge of community-based reform in urban education. To represent groups whose interests were not necessarily part of education reform discussion requires grappling with the underlying issues of race, class, and power that permeate not just our public urban education system but societies as a whole.

According to Warren (2011), a key component of community-based reform in the urban education sector is building relationships among stakeholders. These relationships in turn, build power—connecting people and their interests with a shared purpose for taking action. Drawing on the social capital within urban communities and their interconnectedness, these relationships can build power to make change. Utilizing a circular flow diagram to show organizing as a cycle (see Warren, 2011, p. 149), Warren argued that power emanates from the initial relationship building through leadership development to action. As these processes take place, concerns are turned into actionable issues, alliances are built, and action is ultimately taken that is evaluated internally and externally.

Anyon (2005) identified conditions that encourage individuals to get involved in urban educational reform efforts. It all begins with opportunities for people to challenge the status quo. Social conditions, such the closing of public housing and urban schools, can create environments for change. Further, people are motivated to join community organizing as they become aware of contradictions between political rhetoric and social reality. Finally, the legitimizing of the people’s voice by media and government solidifies people’s desire to become a party to change. When the ethical and moral power of goals are acknowledged and when those goals become part of official public policy, people can see the value and full impact of their efforts.

Oakes, Rogers, and Lipton (2006) added that the conditions are particularly ripe for community-based involvement in urban educational reform due to the continuing failure of top-down educational policies. They relied on Anyon’s three points: (a) recognition of opportunities to push against the status quo, (b) social contradictions that provide impetus for action, and (c) legitimization of concerns and demands to map out the current state of urban public education. They concluded,

The conditions seem to be in place for social movement organizing around educational justice. Shifts in the political economy giving greater visibility and clout to communities of color, the obvious contradictions between the promises of No Child Left Behind and the huge disparities in educational resources and opportunities, and the legitimacy being given to the outrage of these disparities by the courts and the media all set the stage for activism for more equitable schools. (p. 173)

Mediratta, Shah, and McAlister (2009) drew upon a 6-year mixed methods national study of the ways that community-based reform is being used in urban educational reform, specifically for improving the educational outcomes of poor and minority students. They argued that community organizing is largely about power. They explained,

A crucial component of the organizing process is the power analysis—that is, who has the institutional authority to make decisions concerning organizing demands, and which allies might be mobilized in support of the organizing group’s campaign. (p. 5)

Mediratta et al. (2009) also posited that simply building on social capital is not enough. Effective community-based reform also requires developing the “political capital needed to rectify inequity and ensure educational opportunity for its members” (p. 4). Historically, impoverished communities have not necessarily had control over how economic and cultural resources are distributed. Community-based education reform has the potential to shift some of the political capital and control.

In addition, Mediratta et al. (2009) relayed that community organizing for urban school reform largely begins outside of schools because improvement must be set within the context of greater community improvement in urban areas. Thus, community-based education reform takes place “within a larger frame of strategic political action to assert stronger accountability over existing resources in their communities and gain access to new forms of capital” (p. 4). They point out that such organizing is anything but simple and as is the nature of transformation driven by people and personalities, sometimes the “path is more circuitous” (p. 11). Nevertheless, a community-based reform model can offer insight into the elements necessary to effect change in our urban schools through community involvement in education reform.

According to Mediratta et al. (2009), community-based reform begins with an initial phase during which time organizing groups “recruit and convene community residents, parents and young people impacted by low quality schools to develop relationships with each other and discuss and define problems and solutions” (Mediratta et al., 2009, p. 10). During these organizing campaigns, skills and leadership are developed within, an awareness of power emerges, and a confidence of members to speak for themselves and their communities. These community-centered convenings seek to develop understanding and consensus of how to address issues facing urban schools. Through organized campaigns, community members continue to increase their capacity to influence new policy and resource allocations that mean actual on-the-ground changes in schools.

As community groups experience success and the general public gets involved, capacity increases along with the capacity of an urban school system (Mediratta et al., 2009). These two aspects of the process are “dynamically related” (Mediratta et al., 2009, p. 10). While members of the community improve their knowledge of schools and understanding of the system, they are better able to propose and execute strategies for change that have promise for improving the success of urban schools. Likewise, school leaders and powerful stakeholders become more aware of the community’s ability to mobilize for power and exert political influence on behalf of the community, which in turn makes the State more receptive to community proposals. All of this creates a framework in which urban communities and schools can work together, both with expanded capacities to improve district and school success and educational outcomes for students (Mediratta et al., 2009).

California’s Local Approach for Accountability and School Finance

Local control has been a bedrock principle of public schooling in America since its inception (Howe & Meens, 2012). NCLB sent us in the opposite direction of this traditional notion by requiring a top-down educational policy approach that was determined by the federal government and executed by the states (Vasquez Heilig & Darling-Hammond, 2008). NCLB’s top-down federal approach to educational policy is the antithesis of political conservatives’ focus on local control and progressives’ concern with community empowerment. Thus, it comes as no surprise that NCLB’s educational policy approach has been a disappointment to many regardless of political leanings.

Can accountability be reformed to include local and community-based processes as discussed by Mediratta et al. (2009)? The Texas model has a primary focus on top-down goal-setting and measurement. Could a return to a traditional locally based educational policy be realized via a multiple measures approach to accountability that is democratically decided upon at the community level? Vasquez Heilig (2012) first proposed a new bottom-up form of accountability called Community-Based Accountability (CBA). Vasquez Heilig et al. (2013) posited that local, CBA could involve strategic plans developed at the local level, which would serve as alternatives to NCLB’s intense focus on a top-down, one-size-fits-all policy. A bottom-up approach would enable local communities to focus on a new set of outcomes (i.e., career readiness, college readiness, safety, school climate) in addition to or rather than standardized high-stakes testing. A new form of bottom-up designed accountability would allow for communities to drive a locally based approach that relies on a set of measures of educational quality for short-term and long-term community-based goals. The role of the state and federal government would be to calculate baselines, growth, and yearly ratings (Recognized, Low-Performing, etc.) for a set of goals that communities selected in a democratic process.

There are already examples of policymakers considering local approaches for accountability from Texas to California. The first evidence of a shift was in the Lone Star State, where the High Performance Coalition (HPC) of 20 districts empowered by Texas Senate Bill 1557 sought to adopt a Community-Based Accountability and Assessment plan in 2012. Michael Williams, the Texas Education Agency Commissioner, eventually rejected the HPC plan. While Texas, the birthplace of NCLB-style accountability, was the first to dabble with locally determined accountability, the California Legislature recently codified a locally based accountability approach for school finance. In his 2013 State of State address, California Governor Jerry Brown supported a policy direction that was more focused on local control. He called for new education laws in California to consider the principle of Subsidiarity. Governor Brown defined Subsidiarity as,

The idea that a central authority should only perform those tasks which cannot be performed at a more immediate or local level. In other words, higher or more remote levels of government, like the state, should render assistance to local school districts, but always respect their primary jurisdiction and the dignity and freedom of teachers and students (Brown, 2013).

Governor Brown delivered on his Subsidiarity by supporting Local Accountability, a new community-based approach that creates the Local Control Funding Formula (LCFF) process for school finance to increase flexibility, accountability, and input from the local level so educators can make the decisions about funding for their students. The reform seeks to involve superintendents, school boards, school staff, parents, students, and community stakeholders in school finance at the local level by creating a Local Control and Accountability Plan (LCAP), based on set short-term and long-term goals relative to local priorities.

Following Governor Brown’s State of the State speech, the California Legislature codified the new local accountability approach for school finance. Chapter 47, Statutes of 2013 (AB 97, Committee on Budget) was enacted as part of the 2013-2014 budget package. This statute made major changes both to the way the state of California allocates funding to school districts and the way the state supports and intervenes in underperforming districts.

California School Finance History

To contextualize the radical departure that Brown’s new locally based approach to school finance and accountability represents in California, we must first discuss the Golden State’s school finance history. Dating back to 1970, California public schools received their money primarily from local property taxes, which produced enough money to enable the state to be one of the leading per-pupil spenders in the country. During the early 1970s, political pressure mounted as local demands for property tax relief increased. Property owners all over California were disgruntled that school districts and local governments were deriving increasing revenues from them through escalating home and property values (Timar, 2006). To curb this practice, the California legislature chose to freeze the amount that each school district could take in per pupil for general spending. Commonly known as a district’s “revenue limit,” the resulting legislation became the basis for the state’s general aid formula for the next 30 years (Bersin, Kirst, & Liu, 2008).

Kirst (2006) posited that the 1972 decision to impose revenue limits had additional political motivations. Politicians assumed that enrollments would decline due to lower birth rates across the state. The ramification of declining birth rates meant that if districts froze dollar amounts collected from taxpayers, then they would inevitably have more per-pupil spending over time; however, state revenue limits based on per-pupil dollars forced state and local spending to decline each time a student was “lost” (Kirst, 2006). Consequently, as enrollments dropped across the state during the 1970s, so too did California’s national spending rank. By 2013, California ranked 49th in the national average in adjusted per-pupil spending despite the fact that the state had been spending approximately $60 billion a year to educate students in K-12 (Fensterwald, 2013a).

Over the years, revenue limits became a political tool to complicate the school finance system in California. The 1972 legislation produced a “finance system that has no coherent conceptual basis, is incredibly complex, fails to deliver an equal or effective education to all children, and is a historical accretion” (Kirst, 2006, p. 2). Prior to the 1972 legislation, the state Supreme Court ruled in Serrano v. Priest (1971) that the state had to “sever the close linkage between district assessed property value per pupil and total district spending” (Serrano v. Priest, 1971). Before Serrano, district expenditures across the California had varied significantly because district tax rates and property values were so disparate. As a result, Serrano v. Priest (1971) focused primarily on general purpose operating spending but ignored items such as categorical aid and construction.

After a second Serrano v. Priest (1976) ruling, California responded by mandating district equalization by adjusting districts’ revenue limits. Theoretically, the state proposed to increase the revenue limits for low-spending districts faster than for high-spending districts, thereby eventually closing the gap between them over time. However, before the gaps closed, Proposition 13 passed in 1978 and severely reduced local property rates to a 1% cap (Kirst, 2006). The result was a 60% loss in property tax revenues for local communities. The state had no choice but to provide relief for local school districts using funds from its large surplus. In doing so, the state for the first time assumed primary responsibility for funding schools. However, because California collected less revenue in the early 1980s, the school finance policy during this time attempted to achieve spending equality chiefly by “leveling down” districts with above-average revenue limits (Timar, 2006). To do so, the state employed a “squeeze factor” that set lower inflation adjustments for high-spending districts (Kirst, 2006).

Before California’s 2013 school finance reform, the portion of a person’s property tax that was earmarked for education and paid to the county tax collector went to the capitol and then was distributed back to the school districts across the state (Bersin et al., 2008). Once this distribution occurred, the state intervened and made up the balance up to a given district’s revenue limit. Ultimately, Proposition 13 resulted in even more state control of school policy because legislators believed that they needed to regulate a system that was state funded, albeit traditionally locally controlled in other public policy areas (Timar, 2006).

Notably, the state court in California ruled in 1983 that equalization was complete and that the state had “equalized” spending among enough school districts. After appeals of that ruling were denied, the Serrano v. Priest (1971) mandate to equalize general purpose spending became ineffectual. Moreover, state takeover of nearly 80% of total school funding meant that California schools’ fortunes were linked to the state’s fluid sales and income tax revenue streams. Because of the dependency on these tax sources, not even economic booms ultimately increased the state’s per-student spending to the level of the national average (Kirst, 2006). As a result, some districts resorted to non-profit fundraising community foundations and additional taxation; however, these supplemental initiatives were not widespread and served primarily property-rich and white-collar suburban districts (Goldfinger, 2008).

Responding to the outcries of school districts across the state, voters passed Proposition 98 in 1988, which reserved approximately 40% of the state’s general fund revenues for K-12 schools and community colleges (Manwaring, 2005). Because Proposition 98 was dependent on state revenue streams, subpar years meant that the guarantee for aid declined as well. However, by 2006, Governor Schwarzenegger had restored most of the cuts that were caused chiefly by the “dot com bust” in 2001 and 2002 (Goldfinger, 2008).

In addition to the revenue limits placed on school districts, more than 80 state categorical aid programs were layered on top for designated purposes. A district that received money under a certain “category” was forced to spend it for that particular purpose. The popularity of these categorical grants had begun in the 1960s when legislators responded to concerns that local districts could not adequately educate disadvantaged students (Sonstelie, 2000). Over the years, categorical aid came to represent nearly 33% of the money spent by the state on schools. Kirst (2006) noted that a “hardening of the categories ensued that did not allow localities to shift state funds for local needs, but rather focused upon compliance with earmarked state funds” (p. 6).

Until the landmark locally based school finance legislation passed in 2013, the revenue limits for districts were still based on what they were spending in 1972 when the local property tax drove the system. Categorical programs continued to provide some revenue limit equalization. As recent as the 2012-2013, the state provided approximately 82% of local district operating expenditures, dictating what needed to be learned and how local districts were to go about meeting academic standards (Elmore & McLaughlin, 1982). As a result of “past equalization measures and the historical buildup of revenue streams, state allocations to school districts bore little relation to educational costs or student needs” (Kirst, 2006, p. 3). Indeed, the school finance system for the state of California was ripe for a change.

California’s New Approach: LCFF

The revenue limits created by Proposition 13 and Proposition 98 led current funding for schools in California to be inequitably distributed between urban and suburban schools, mutually exclusive from student demographics, largely state controlled, and lacking appropriate accountability measures. These inequities are primarily the result of how the current general purpose “revenue limit” funding system was created in response to court rulings and Proposition 13, funding decisions made decades ago (Manwaring, 2005). Compounding these factors have been the state-created categorical aid programs, each with complex accounting and reporting requirements. Categorical program funding allocations were also frozen at different points during the past two decades due to recent fiscal constraints (Kirst, 2006).

To address California’s overly complex, administratively costly, and inequitably distributed school finance system, Governor Jerry Brown proposed and legislators passed the LCFF. The LCFF approach seeks to increase flexibility and accountability and input from the local level so educators are empowered make decisions about funding for their students. In addition, the LCFF purports to reduce state bureaucracy and ensure that student needs drive the allocation of resources. The LCFF consists primarily of base, supplemental, and concentration funding that focuses resources based on a school’s student demographics; each school district (or county education agency or charter school) receives a per-pupil base grant that is to be used to support the basic costs of instruction and operations. Base grant amounts vary between the grade spans of K-3, 4-6, 7-8, and 9-12. The variation is intended to reflect the differential costs of educating pupils in different grade ranges (Fiscal & Administrative Services Division, California Department of Education, 2013).

Once the LCFF is fully implemented, the significant reductions made to current general purpose “revenue limit” funding over the last 5 years should be restored, ensuring that the new base grant funding level is equivalent to the statewide average from 2007-2008. A supplemental grant equal to 35% of the base grant is provided for each English learner, economically disadvantaged, or foster youth student. Students who fall into one or more of these categories can only be counted once for supplemental funding purposes. The supplemental grant is intended to provide additional resources to help address the unique needs, challenges, and costs that these special needs students bring to school. For schools with English learner, economically disadvantaged, and foster youth enrollment that exceeds 50% of their total enrollment, a concentration grant equal to 35% of the base grant is provided for each of these students above the 50% threshold exclusive of duplicative counting of students. While the supplemental grant recognizes that these students have more challenges and needs, the concentration grant attempts to provide even greater resources to schools with exceptionally high concentrations of these students (Fiscal & Administrative Services Division, California Department of Education, 2013).

Funding assistance will also be provided by California to schools to reduce class sizes in K-3 and to assist high schools with the ability to provide career technical education courses. Once fully implemented, the K-3 funding assistance would require schools to maintain a per-school-site classroom average of 24 students, unless an alternative average is collectively bargained at the local level. Schools would be transitioned to LCFF using Proposition 98 growth funding. No schools will receive less funding than their 2012-2013 funding level as a result of LCFF. Over the first 5 years of formula implementation, per-student funding on a statewide basis is projected to increase by more than $2,700 (Fiscal & Administrative Services Division, California Department of Education, 2013). Basic aid districts, whose local property tax revenues are more than sufficient to meet their LCFF funding entitlement, would continue to retain all of their local property taxes, including all future growth in their local property tax revenues. They also would continue to receive categorical funding that they already received in 2012-2013 as part of LCFF’s “hold harmless” mechanism (Fiscal & Administrative Services Division, California Department of Education, 2013).

LCFF Statutory Analysis

An examination of the statutory language creating the LCFF provides a deeper understanding of how the new finance law will operate. Although the law provides a number of changes to the old-school finance model as well as a number of safe guards against districts losing revenue during the transition to the LCFF, the largest and most substantive portions of the law can be thought of as consisting of two separate parts. The first part of the law establishes the simplified funding requirements under the LCFF. This section scraps the state’s old bifurcated revenue limit and categorical funding approach to school finance and replaces it with a new model that will be more responsive to the unique needs of districts and the student body they serve. The second part of the law establishes requirements that keep districts accountable for responsible use of LCFF funding given the greater spending flexibility granted to districts by the new law. This portion of the law seeks to ensure that districts use their increased funding and flexibility in a manner that is consistent with the intent of the law and responsive to the needs and desires of the community the district serves.

The portion of the LCFF law that affects funding is established by §42238.02 of the California Education Code as amended by Assembly Bill 97 with revisions in Senate Bill 91 and Senate Bill 97. The law first sets out to define the student groups the new law seeks to benefit. The law specifically refers to students who are English learners, eligible for free or reduced-price meals, or are foster youths (§42238.02 (b)(1)). In targeting these students, the law is conscious of the fact that these student groups may overlap in some instances. To account for this overlap and thereby avoid overcounting students in the new funding calculations, the law specifies that for funding purposes, these special student groups must be granted funds based on figures reflecting “unduplicated pupils” (§42238.02 (b)(1)). Referring to students as “unduplicated” means that the student may be counted only once for supplemental or concentration LCFF grants even if that student qualifies as more than one of the three student groups the law targets (§42238.02 (b)(1)(A to D)). Pursuant to the new law, districts are required to report their unduplicated students to the state. These figures are reviewed for accuracy by the county office of education and then used by the State Superintendent to make funding calculations under the LCFF (§42238.02 (b)(2 to 5)). For the 2013-2014 school year, the state will use only figures from that year to make its calculations. For the 2014-2015 year, the state will use data from 2013-2014 and 2014-2015. In 2015-2016 and all subsequent years, the state will use 3 years of data on unduplicated students to calculate supplemental and concentration funds (§42238.02 (b)(5)(A to C)).

The eventual use of 3 years of data rather than just 1 will allow the state to more accurately reflect the student make-up of each district and school by avoiding undercounts of students whose eligibility varies, accounting for students who enter or leave the district, and providing a more comprehensive view of school and district demographics. This broad view should allow the state to apportion resources more responsively and efficiently. Furthermore, the explicit definition of which students are to receive special consideration combined with an explicit instruction on how to count a student who falls into more than one of the special categories ensures that no student is counted more than once for funding purposes. By addressing this potential source of confusion with more precision, the state can identify which students it is seeking to offer additional services— and ensure that the additional resources reach the district where that student resides. Alternatively, while the desire to avoid overcounting students for funding purposes makes sense intuitively, this section of the legislation may leave it open to the criticism that the new funding formula ignores the additional difficulty and resulting added costs associated with educating a student who qualifies in more than one of the categories of English learner, free-and-reduced-meal, or foster youth.

After defining the student groups the legislation seeks to target (§42238.02 (b)(1)), the law proceeds to establish the base funding levels each district will receive (§42238.02 (d)(1)(A to D)). The base grants are awarded to districts on a per-pupil basis and vary depending on the grade level of the student (§42238.02 (d)(1)(A to D)). For example, in the 2013-2014 school year, districts will receive $6,845 per student in kindergarten or Grades 1 to 3 but $8,289 for each student in Grades 9 to 12 (§42238.02 (d)(1)(A to D)). The number of students in each district will be based on average daily attendance (§42238.02 (d)(1)(A to D)). In addition to these funds, the State Superintendent will adjust this base funding based on inflation as represented by the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States published by the U.S. Department of Commerce. The base funding will also be augmented by a 10.4% increase to kindergarten and Grades 1 through 3 funds so long as the district “make[s] progress towards maintaining an average class enrollment of not more than 24 pupils” in each classroom unless the district has collectively bargained for a different number of pupils (§42238.02 (d)(3)(B)). Once the law is fully implemented, the 24-student-per-class requirement in these grades becomes permanent with an exception granted for different class sizes reached through collective bargaining (§42238.02 (d)(3)(D)). Finally, the base grant for Grades 9 through 12 is to be increased by 2.6% (§42238.02 (d)(4)). The base grant is the LCFF’s equivalent of the old revenue limit. It provides the baseline funding that a district may use to educate its students. These base grants will increase annually as the state’s revenue increases. Greater state revenue results in fuller education coffers due to Proposition 98. The law is expected to be fully funded within 8 years.

In addition to these base grants, districts are eligible for supplemental grants under the LCFF. The law provides that each district is entitled to a supplemental add-on grant equal to 20% of its per-pupil base grant for unduplicated students who are English learners, free or reduced-price meal eligible, or foster children (§42238.02 (e)). These grants are determined by multiplying the district’s base grants, percentage of unduplicated pupils as reported to the state and confirmed by the county office of education, and 20% (§42238.02 (e)). The product of that calculation determines the district’s supplemental grant (§42238.02 (e)). These grants will allow districts greater resources to address the needs of these unique student populations. Furthermore, because these additional resources are not provided through categorical grants as they were under the old system, the district is free to use them as it sees fit to better educate the child. This freedom may raise suspicion during the implementation of the LCFF given the possibility that districts may abuse that discretion, but the LCAP of each district, discussed in the pages to come, should provide a check on the district’s freedom to spend.

The last source of funding under the LCFF is known as a concentration grant. The statutes calls on the State Superintendent to provide an add-on grant of 50% of the district’s base grants for districts with a high concentration of unduplicated students who are English learners, free or reduced-price meal eligible, or foster children (§42238.02 (f)). Specifically, the grant will be calculated by multiplying the district’s base grants by 50% and the percentage of unduplicated students in the district that exceeds 55% of the district’s total enrollment (§42238.02 (f)). The product of these three figures is the district’s concentration grant (§42238.02 (f)). Put another way, if the district has unduplicated students in excess of 55% of its student enrollment, it will receive 50% of its base grants for each percentage point above 55%. This funding is also awarded to the districts with substantial freedom. The statute provides that the state board must establish a regulation requiring a district to increase its services for unduplicated students in proportion to the increase in funding the district receives through supplemental and concentration grants (§42238.07 (a)(1)); however, the same portion of the law allows for districts to use unduplicated funds in a school or district-wide manner (§42238.07 (a)(2)). As noted earlier, this freedom may lead to criticism and concern at the implementation stage.

Local Accountability Plans

To ensure that state dollars are being well spent under the LCFF, legislators were careful to craft an accountability aspect to the law. All districts and charters receiving funding under the LCFF will be required to develop a LCAP (§52060 (a)). All recipients of LCFF funding must adopt an LCAP on or before July 2014 (§52060 (a)). The LCAP will be effective for a period of 3 years and must be updated by July 1 of each year (§52060 (b)). The LCAP must include an explanation of goals for district pupils and pupil subgroups as well as a list of actions and expenditures the district will take to achieve those goals, including specific goals and expenditures for unduplicated pupils (§52060 (c)(1 to 4)). The goals of the district must address a set of state priorities identified by statute in addition to any local priorities (§52060 (c)(2)).

The statute identifies 10 state priorities that must figure into district goals developed under the LCAP. First, the district must make assurances and strides to ensure that all teachers are well qualified for their instructional area; that all students have access to appropriate, standard-aligned instructional material; and that the school facilities are in good repair (§52060 (d)(1)). A district’s goals must also address how the district will ensure implementation of the Common Core State Standards and provide standard-aligned services to English learners for those students to acquire proficiency (§52060 (d)(2)). The statute further requires districts to consider how they will promote parental involvement (§52060 (d)(3)). Specifically, the district must address how they will promote parent involvement in district and school site decisions and encourage parental participation in programs for unduplicated students (§52060 (d)(3)). The state priorities also include student achievement, and the statute provides a variety of measures that the district must consider in promoting student achievement, including measures targeted directly at unduplicated students (§52060 (d)(4)).

The next state priority to be addressed in the LCAP goals involves student engagement as measured by attendance and drop-out rates (§52060 (d)(5)). The district must take specific actions to reduce absenteeism and drop-out rates (§52060 (d)(5)). The LCAP must also address school climate, which may be measured using disciplinary records as well as through student, parent, and teacher surveys (§52060 (d)(6)). The seventh state priority that figures into LCAP goals requires a showing by the district that students are offered a broad course of study including programs that address the needs of unduplicated students (§52060 (d)(7)). These programs must correspond to funding provided for unduplicated students under the LCFF (§52060 (d)(7)). The eighth state priority states that an LCAP may consider student outcomes in specific subject areas as applicable (§52060 (d)(8)). The state has also prioritized professional development and induction programs for school employees, and all LCAPs must address how and what types of programs are being provided in the district (§52060 (h)). Finally, section 52066 introduces the additional priority of providing and coordinating services for foster youths (§52066 (d)(10)).

In developing a district LCAP, the district must consider quantitative measures and may consider qualitative measures in delineating the district’s path and progress toward its LCAP goals (§52060 (e to f)). In addition, a district’s local school board (or a charter’s governing board) is required to solicit input from all interested parties when developing its LCAP (§52060 (g)). The statute specifically calls on districts to seek the opinions and guidance of teachers, principals, administrators, education service professionals, local bargaining units, parents, and students (§52060 (g)). Of import, as noted earlier, the district is free to create its own district-specific goals and priorities and may seek to measure those goals and priorities as the district sees fit.

California’s new locally based accountability model did not stop with creating a state priority requiring community engagement and specifically requiring the district to seek outside input on its LCAP. The legislature went further in establishing community control by requiring that the LCAP be reviewed by advisory committees, subject to public comment, and heard in at least two public hearings. Section 52063 of the California Education Code requires establishment of a parent advisory committee and an English learner parent advisory committee (§52063). Under the new law, both committees must review the LCAP, and the superintendent must respond in writing to comments made by the committees before the LCAP can be approved (§52062 (1 to 2)). The superintendent is also required to provide public notice of the opportunity for written comment on the LCAP (§52062 (3)). Unfortunately, the law explicitly does not require written notices or mailers to notify community members of the opportunity to comment, which may undercut the effectiveness of this provision (§52062 (3)). Before adopting the LCAP, the superintendent must hold one public hearing for comment from the community and must adopt the plan at another separate hearing (§52062 (4)(b)(1 to 2)).

Once adopted at the local level, a district’s LCAP is subject to review at two levels. First the plan must be reviewed and approved by the county education office, which may seek clarification on the district’s LCAP (§52070). Once approved at the county level, the State Superintendent will have a similar opportunity to review and seek clarification on a district’s LCAP (§52070.5). The State Superintendent has the final say on the approval of district or charter LCAPs.

To help schools reach the goals put forth in their LCAPs, the LCFF legislation also establishes a body called the California Collaborative for Educational Excellence (§52074). The Collaborative is to be governed by a five-member board and may, at their direction, contract with individuals, Local Education Authorities (LEA), or education organizations (§52074 (e)). The purpose of those contracts may include improving teacher quality, improving school leadership, addressing the needs of special student populations, or addressing any of the state priorities that must be included in a district’s LCAP (§52074 (e)(1 to 4)). The Collaborative could prove invaluable in helping districts reach their goals, but the Collaborative’s broad grant of discretion to contract has the potential to be problematic once implemented if not carefully monitored.

Implementation and Local Accountability

Given the complexity of the language of the legislation and the sweeping nature of the reform, the implementation of LCFF is not without its challenges. First, LCFF is based on a transition methodology, which means that it will be gradually implemented as Proposition 98 funding grows over time. All districts, country education agencies, and charter schools have both different starting points based on 2012-2013 funding levels and different funding targets based on their unique student demographics. Each year districts will receive the allocation they received in the prior year, plus the additional funding allocated toward bringing districts to their targets (Fiscal & Administrative Services Division, California Department of Education, 2013). The $2.1 billion appropriated in 2013-2014 closes the target gap statewide by approximately 12%; under this scenario, if a district’s total funding gap is $100 million then the district would receive $12 million toward reaching its target. Conversely, a district with a $10 million gap will receive $1.2 million (WestEd, 2013). The transition period theoretically allows districts to begin restoring core programs and develop long-term planning to address state and local priorities.

At the local level, each district, county office, or charter school undoubtedly has its own particular context. Due to the transition methodology however, local entities will have varying levels of investment. Local budgets face a number of impending pressures, including addressing existing obligations, rebuilding and restoring after past years of cuts, and determining allowable uses of supplemental and concentration funding (Taylor, 2013). Moreover, districts face the challenge of engaging parents and the local community to communicate effectively (California School Boards Association, 2013). Key areas of communication could have the potential to reap large benefits such as the understanding of short-term and long-term financial commitments, the potential for more predictable planning, the delineation of clear priorities as established in the LCAPs, and the opportunity to develop and message priorities for improving student outcomes (California School Boards Association, 2013).

Under LCFF, local accountability has the challenge of meeting fiscally based responsibilities and student outcome measures. Fiscally based responsibilities have the potential to include the promotion of district level for students that generate supplemental funding, holding districts accountable for providing targeted and specifically designed support systems for English learners and other unique populations, ensuring preschool programs can benefit from supplemental spending, and defining a school-wide threshold for applying supplemental and/or concentration funding to all students, particularly those who are low performing. At the student outcome level, multiple measures could include but not be limited to the California Academic Performance Index (API), graduation and drop-out rates, school safety, course offerings, college and career readiness indicators, and demonstration of student engagement (Fiscal & Administrative Services Division, California Department of Education, 2013).

LCAPs have the potential to use existing outcome measures and reports to the greatest extent while streamlining reporting systems. Districts could establish “baseline” metric growth targets for each indicator while the state could establish general parameters without basing academic accountability or interventions on a single metric (California School Boards Association, 2013). At the state level, California is committed to the implementation of Common Core and to the development of corresponding national assessments; thus, the state could incorporate new secondary indicators in the API and condense mandated reporting requirements. Because current state outcome measures are in flux and future assessments nebulous, the reliance on a single state indicator (such as the API) seems particularly problematic. Finally, new outcome measures could be considered, such as the addition of language proficiency progress, re-designation rates, outcome metrics for alternative education programs, and student engagement indicators (California School Boards Association, 2013).

Conclusion and Implications

California’s move to LCFF and LCAPs represents an attempt to privilege systemic reform over an incremental approach. To effect and realize this reform, California must also privilege what Timar (2006) labeled “a healthy partnership between the state and local education agencies,” one that is an “essential condition of a robust, effective system of education” (p. 24). This partnership is predicated on the notion that a framework for school finance can be developed. California should be applauded for achieving a community-based school finance framework that has both the local coherence and principles that its predecessors lacked. State and local roles and responsibilities for revenues, program control, and accountability have finally involved community-based input in school finance and accountability policy. Now that California has spent the political capital to engage in comprehensive school finance reform, it remains to be seen whether its state and local entities have the will and/or capacity to engage communities in truly equitable locally based school finance and accountability.

In November 2013, LCFF came under fire as improper implementation threatens to become disjointed from legislative intent (Taylor, 2013). Leaders of the state Senate and Assembly have criticized the State Board of Education’s (SBOE) proposed regulations on state funding for the state’s neediest students as “inconsistent with the intent of the new school finance law” (Fensterwald, 2013b, p. 1). This criticism mirrors other similar ones from organizations representing low-income students, foster youth, and English learners. Legislators and other advocates have argued that LCFF regulations give districts too much flexibility to decide how to spend money targeted for high-needs students (Fensterwald, 2013b). The SBOE and California foundations have convened several public forums to consider changes to the regulations. Future regulations would be an attempt to strike a balance between LCFF’s goals of giving school districts flexibility over spending decisions and ensuring that extra money allocated to high-needs students are spent on them. The historical battle between state and local control continues even as LCFF remains in its infancy.

Another important concern to be taken up in future research on the LCFF and LCAPs is the co-opting of local stakeholders. Lopez and Valenzuela (2013) assessed community-derived accountability measures in a policy brief on the proposed language for local accountability in Texas House Bill 5 (2013).

With regards to campus and district accountability indicators, HB 5 builds upon the original intent of House Bill 3, passed during the 81st legislative session, and continues us on a path for rating schools and districts based on multiple criteria. House Bill 5 takes this process out of the hands of the Commissioner, and rather, proposes to place it in the hands of local districts and communities. While this idea may sounds appealing in theory, legislators should be mindful of a significant lack of capacity for our all of our communities in Texas to engage in meaningful, expert conversations. Even in well-resourced contexts replete with experts, we further risk creating a system of advantage where those in power superficially engage marginalized communities.

Will community-based education reform process be co-opted? Do communities lack capacity to have expert conversations? These are important questions that must be taken up in future research of community-based school reforms in California and elsewhere. The SBOE has been tasked with addressing issues of implementation throughout the transition period and beyond in California. Key implementation steps have or will include the convening of regional sessions to seek key input from stakeholders, the adoption of fiscal requirements for concentration and supplemental funding, and LCAP templates for districts, county offices, and charter schools (WestEd, 2013).

Warren (2011) noted a key component of community-based reform is building relationships among stakeholders. Regional sessions, held in August 2013, brought together stakeholders to consider implementation challenges that the LCFF faces. A total of 320 comments and concerns came from various parents, organizations, advocacy groups, and district and county office personnel that attended the sessions, wrote their input on comment cards, or sent in email correspondence. The majority of input came from school, district, and county office personnel (38%), followed by representatives of organizations or advocacy groups (37%). The majority of comments (77%) did not take a position for or against LCFF, but made regulatory recommendations, expressed concern around funding flexibility, and stated that parents and community members would likely not be engaged or informed throughout the LCAP process (WestEd, 2013). Of the comments that expressed support one way or another, those in favor (13%) slightly outnumbered those opposed (10%) to LCFF (WestEd, 2013). So while the early results are concerning, the community forums involving stakeholders in conversation about school finance and local accountability should, according to Mediratta et al. (2009), begin to foster awareness of power in the emergence of input and spark confidence in stakeholders to speak for themselves and their communities in the LCFF policy process.

In conclusion, whether California LCFF and LCAPs represent a new efficacious community-based approach to school finance and accountability remains to be seen as of the writing of this article. However, this approach is an alternative to the top-down Texas-inspired approach that has been the dominant paradigm for the past decade of federal educational policy. NCLB has no stipulations or processes under which local communities have input. The LCFF and LCAP present for the first time a policy approach for school finance and accountability that has community-based components. Will it work? The proof may lie in the pudding so to speak as Californians appear to be taking a wait and see approach with regard to the potential successes and failures of the new locally based approach to school finance and accountability.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

Author Biographies

Julian Vasquez Heilig is an award-winning researcher and teacher. He is currently a Professor of Educational Leadership and Policy Studies and the Director of the Doctorate in Educational Leadership at California State University Sacramento. He blogs at Cloaking Inequity.

Derrick R. Ward works on law and policy issues affecting youth rights and public education. He is a former Teach For America Corps Member, Education Pioneers Graduate Fellow and is currently a Law Fellow with the National Education Association in Washington, D.C. The views expressed are his own.

Eric Weisman is a fourth year doctoral student in the Educational Policy and Planning program at the University of Texas at Austin. His research focuses on large-scale assessment policy, with a particular emphasis on the design and implementation of purpose-driven assessment and curricular and pedagogical responses to testing. An experienced practitioner in the field of national and state large-scale assessment, Weisman holds an M.Ed in Curriculum and Instruction from Harvard University and a B.A. in Literatures in English from Brown University.

Heather Cole is a doctoral candidate in the Department of Special Education, cross-listed in the Department of Educational Administration-Policy & Planning at The University of Texas at Austin. She holds graduate degrees in Law, Public Administration and Education. She has worked in the public sector for the last two decades as a policy advisor and as a public interest and education attorney. Her research interests include educational policy and law, leadership, social justice and the marginalization of students, particularly those with disabilities.

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