California School Funding: ‘Throwing Good Money After Bad’?

When Jerry Brown returned to the governorship of California in 2011, after a 28-year absence, he proposed a major overhaul in financing public schools.

For many decades, school finance was quite simple. Local school boards would decide how much money they needed each year and adjust property tax rates to generate the revenue.

The state was at most a peripheral player, allocating money to somewhat equalize per-pupil spending in response to a series of state Supreme Court decisions in the 1970s.

Everything changed in 1978, a year in which Brown was seeking his second term as governor, when voters passed the iconic Proposition 13 property tax limit.

School districts and other units of local government, such as cities and counties, could no longer adjust property tax rates and overall property tax revenue took a nosedive.

The state responded by assuming the basic responsibility for financing schools, largely on a per-pupil basis. In 1988, at the behest of the California Teachers Association and other education groups, voters passed another measure, Proposition 98, to give schools a guaranteed share of state revenues.

That’s the system that Brown inherited when he became governor for a second time and he advocated a long-discussed reform dubbed “weighted funding formula.” Rather than providing funds on a per-pupil basis, the system would allocate extra money for students, mostly poor and non-white, who were struggling to reach academic achievement standards.

Declaring that “equal treatment for children in unequal situations is not justice,” Brown persuaded the Legislature in 2013 to pass the “Local Control Funding Formula” or LCFF, a complex system for school systems with large numbers of “at-risk” students to qualify for extra funds.

LCFF had – and still has – some basic flaws.

It assumed that local school officials would spend the money effectively on the targeted students with just cursory state oversight. Brown, a one-time seminary student, called it “subsidiarity,” drawing the phrase from a tenet of Catholic social doctrine.

That flaw is compounded by another – providing extra funds to districts, rather than to individual schools with large numbers of at-risk kids, diluted their potential impact.

Outcomes Mediocre at Best

In practice, subsidiarity has been just a political dodge, allowing Brown and other political figures to wash their hands of any accountability for outcomes that have been mediocre at best. Lawsuits by civil rights groups have been the only real oversight of how schools have spent billions of LCFF dollars.

That’s the system that Gavin Newsom inherited when he succeeded Brown in 2019. In his proposed 2023-24 budget, Newsom wants to tweak it in hopes of making it more effective.

Newsom would allocate an additional $300 million to schools with the highest levels of poverty, dubbed an “equity multiplier,” while sidestepping a demand from Black legislators for extra funds specifically for Black students, who as a group have the lowest educational outcomes.

The Legislature’s Black Caucus is unhappy with Newsom’s approach, which also includes more assistance to school districts that are failing to meet achievement standards. The Legislature’s budget analyst, Gabe Patek, is also highly skeptical, albeit for different reasons.

Patek’s office, in a recent report, points to LCFF’s structural flaws and its lack of tangible improvements for at-risk students and declares that providing another $300 million is less important than “increasing transparency to ensure existing funding actually targets the highest‑need schools and student subgroups.”

There’s an old saying about throwing good money after bad that is applicable to the LCFF quandary. It will never succeed in closing the achievement gap until there is more direct accountability for using its money for the intended purposes and actually improving outcomes.

About the Author

Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He began his professional career in 1960, at age 16, at the Humboldt Times. For more columns by Walters, go to calmatters.org/commentary.

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