History Behind Local Control Funding Formula

The Local Control Funding Formula (LCFF) represents a significant shift from California's past approaches to school funding. It is born from decades of different funding methods, legal challenges, and evolving student populations. This evolution reflects a continuous effort to better align funding with the actual needs of California's diverse student body. Let's look at the journey from California's previous funding system to the introduction of LCFF in 2013 and see how past challenges shaped today's focus on equity and local decision-making.

Funding Schools Before LCFF

Before the 1970s, California schools relied heavily on local property taxes. This meant districts in wealthier areas could raise much more money per student than districts in poorer areas, creating large disparities in school funding. The California Supreme Court addressed this in 1971 with the Serrano v. Priest decision, ruling that funding differences based on local wealth were unconstitutional.

The state responded with laws aiming to equalize per-pupil spending using a "revenue limit" system, which capped the total revenue districts could receive per student, blending state aid and local funds. However, voter approval of Proposition 13 in 1978 drastically changed things. Prop 13 cut local property tax rates and largely shifted control over school funding to the state.

State funding became the main source for schools, yet the old revenue limits, often based on historical funding levels, persisted. This meant significant funding variations between similar school districts continued, often without a clear reason related to student needs. Some districts with high property values, known as "basic aid" districts, could spend much more using their excess local taxes, further challenging the goal of equal funding.

By the 1990s, California had a highly centralized school finance system that struggled to adequately fund schools, leading to lower per-pupil spending than other states.

The Maze of Categorical Programs

Even as the state took greater financial control in the 1970s, a system of categorical aid programs, which first appeared in the 1960s, grew dramatically. These programs aimed to ensure money supported specific priorities, like low-income students, English learners, or special education. By the early 2000s, California had hundreds of separate state and federal categorical funding streams covering everything from textbooks and transportation to afterschool programs.

While intended to help high-needs students, this system became incredibly complex. School districts faced a confusing web of restricted funds, each with its own application rules and reporting needs. Prior to LCFF, state school funding involved navigating over 50 different categorical programs. This fragmented approach often failed to align resources systematically with actual student needs. Similar districts could receive vastly different amounts of categorical funding.

Furthermore, the rigid rules meant districts lacked flexibility. They could not shift funds from one category, like textbooks, to another pressing need, like hiring counselors, even if it better served their students. The system fostered a focus on compliance rather than strategic planning, leading to administrative burdens and inefficiencies.

During the budget crisis of the late 2000s, the state temporarily allowed districts to use many categorical funds flexibly. This experience showed that local leaders could manage resources effectively when given more freedom, setting the stage for reform.

Why California Needed Funding Reform

By the early 2010s, many agreed California's school finance system was deeply flawed. It was overly complex, making budget planning and transparency difficult, even for experts. Funding distribution was often arbitrary, tied to historical patterns rather than current student needs. Equity was undermined because the piecemeal categorical system failed to consistently direct resources to disadvantaged students, and achievement gaps persisted.

The highly centralized, top-down control stifled local innovation and flexibility. Accountability focused more on following rules than improving student outcomes. Adding to these structural issues, California's student population was changing. Rising child poverty, affecting nearly one in four children by 2012, and a large, consistent population of English learners, making up about 21% of students, placed greater demands on schools. The old system was not designed to meet these growing and diverse needs effectively, particularly for high-needs students, including foster youth.

These factors, combined with strong advocacy and political will under Governor Jerry Brown, created the momentum for a fundamental change, leading to the LCFF in 2013\.

Understanding LCFF's Purpose Today

The Local Control Funding Formula, enacted in 2013, was designed specifically to remedy the historical problems in California's school finance. It dramatically simplified funding by eliminating most categorical programs, giving school districts one main source of state aid and much greater flexibility in how they use it.

Equity became central through a weighted student formula, providing a base grant for all students plus significant additional funding via supplemental and concentration grants for low-income students, English learners, and foster youth. This approach ensures state aid is distributed based on student needs, replacing arbitrary historical allocations.

To balance local control with responsibility, LCFF introduced the Local Control and Accountability Plan (LCAP). This plan requires districts to outline how they will use funds to improve student outcomes, particularly for high-needs groups, involving community input.

For administrators today, this history clarifies the "why" behind LCFF, emphasizing local decision-making, equity, and holistic planning to improve student achievement for all. Understanding this background can help districts effectively use their increased funding and flexibility, ensuring resources are directed where they can make the biggest difference for students.