Understanding the Local Control Funding Formula

What to know about CA’s historic school equity reform

By Samantha Tran

September 25, 2020

What is the Local Control Funding Formula? 

Signed into law in 2013, the Local Control Funding Formula (LCFF) is an historic effort to make the distribution of school funding more equitable by basing it on student needAdditionally, the law allows local school districts, in consultation with their communities, to have more flexibility in how best to allocate resources to improve student opportunities and outcomes – within equity guardrails maintained by the state. The law also significantly broadened the priorities that districts should have in spending its funding. In the past too much focus was on test scores. The State now also prioritizes school climate, student and parent engagement, college and career readiness, and numerous measures on the conditions of learning. 


What is it designed to do? 

LCFF promotes student equity by providing more funds for those students who face systemic barriers to academic achievementThe LCFF’s Supplemental and Concentration grants provide funding for this purpose based on the number and concentration of students who are English Learners, students from low-income households, and students in foster careThe law also encourages more innovation, the tailoring of programs to better fit students’ distinct needs, and the ongoing involvement of local stakeholders in setting priorities and tracking progress. The expectation was that this additional investment and the added flexibility would allow districts to close student achievement gaps and address multiple educational priorities. 


What role does the local community play? 

LCFF requires districts to engage local stakeholders so that they can help shape the development of the district’s spending plan (the Local Control and Accountability Plan or LCAP) in ways that respond to local circumstances and needs.  Unfortunately, however, the initial LCAP and budget documents that were developed and shared were largely inaccessible and incomprehensible to all but those with the most nuanced internal understanding of the district’s operations. Over the past several years, therefore, Children Now has worked to ensure parents, students and local organizations are equipped with information that provides better transparency on district funding and better engagement processes to influence their school districts LCFF implementation.  

In particular, thelp address the need for greater transparency and to more effectively support community engagement, we have worked with policymakers to include more accessible spending charts and summary information in the LCAP template and have promoted the development of complementary parent budget overview document intended to provide a quick snap shot of key information. See here for more information.  


Where are we with LCFF today?  

The implementation process for LCFF is ongoing and a great deal of progress has been made. First, the state has increased its investment for the targeted students from around $1.5 billion prior to LCFF to around $10 billion annually. To put the size of this additional investment into perspective, the federal government only provides $17 billion nationwide for Title I, the main program focused on similar students. In addition, the state has made some progress on improving the LCAP template to ensure greater transparency on how districts are spending the LCFF funds, especially around actions and services for targeted students. However, there is much to do in both the short- and long-term.  


What can we do to improve LCFF in the short-term? 

Before the COVID-19 pandemic, schools had made slight progress in the multiple state priority areas, however, California still has one of the largest achievement gaps in the country, and now we have data that confirms that performance gaps exist for all of the state indicators. In light of the pandemic, the likelihood is that the performance gaps have gotten even worse. Far too many students are experiencing dramatic learning loss and barriers to accessing education, including connectivity issues, language barriers, and the inability of parents to provide additional resources. These barriers often disproportionally impact students who have been historically underserved, including those who are low-income, English Learners and/or in the foster care system. Therefore, ensuring that LCFF funding for these students is actually spent to benefit them is critical 

Unfortunatelytwo loopholes in current implementation practices of LCFF allow districts to undermine the intent of the law, redirecting Supplemental and Concentration grant funds away from students who are English Learners, youth in foster care, and students from low-income households to be used for other district expenses: 

  • First, districts have approved LCAPs that would spend less, and in some instances significantly less on actions and services focused on the targeted students than the district receives in Supplemental and Concentration grant funds. 
  • Secondif a district doesn’t end up spending the funding as planned, they are allowed to reallocate those funds away from the targeted students to other district purposes. 

AB 1835 (Weber and Quirk-Silva), a bill that is awaiting Governor Newsom’s signature, will ensure that the funding provided under LCFF for targeted students is actually spent to benefit those students. The purpose of the bill is simple – the Legislature appropriates funds to benefit high need students, then those funds should be spent to actually benefit these students. 

To learn more about AB 1835, and the public campaign urging the Governor to sign it, visit this page. 

Heading into the pandemic, California school spending was well below the national average. When combined with the high cost of living in California, the under-investment results in our schools having fewer teachers, counselors, nurses, administrators, and other educators than almost every other state in the country. So, while LCFF may strike a reasonable balance between base funding and targeted funding, the overall size of the pie is too small. 

California is experiencing a severe economic crisis, in addition to the current public health emergency. Early forecasts suggest the state could face a multiyear recession with budget shortfalls in the tens of billions of dollarsIt is during recessions that a state can really make clear what its priorities are. During the Great Recession, K-12 experienced larger reductions than the rest of the budget, and there is a risk that the same thing could happen this time. While the state’s rainy day fund was used to avoid cuts in other parts of the budget, the State is using significant and unsustainable budget deferrals to balance the budget and avoid cuts this year. Specifically, the State is borrowing $11.5 billion from school districts’ future funding to cover the costs for this year.

During economic downturns, students disproportionately experience the negative effects when districts cut supplemental programs and lay off staff. Therefore, it will be critical that the state ensures that the equity-based funding in LCFF is always used to support these students to lessen that impact.  

In the coming year, Children Now will continue to educate state policymakers on the importance of fiscal transparency, effective tracking of LCFF funding, investing in schools and centering equity in education policy    

To learn more about LCFF and education funding, please take a look at pages 34 and 35 of the 2020 California Children’s Report Card.