Budgeting for Educational Equity

Revisiting the LCFF (Part One): California's Landmark School Funding Reform

• CASBO and WestEd • Season 1 • Episode 6

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The Local Control Funding Formula, or LCFF, ushered in a new era of school funding in California when it was adopted in 2013. It's regarded by many as the most significant resource equity reform the state has ever enacted. But how has the LCFF worked? Has it accomplished what it was intended to? And how are inherent tensions between local and state decision making authority, oversight and accountability being navigated?

In this episode, host Jason Willis and special guests explore key elements of the LCFF.

Xilonin Cruz-Gonzalez provides a review of the law, based on her unique perspective both as a locally elected school board member in Azusa USD and as Deputy Director for Californians Together, a statewide group that advocates on behalf of English Learner students.  Xilonin also serves as immediate past president of the California School Boards Association.

Richard De Nava, Assistant Superintendent, Business Services at San Bernardino County Superintendent of Schools, shares insights about the policy and practical implications of the LCFF. Richard also serves as president of CASBO.

And Mike Kirst, former State Board of Education President, Professor Emeritus at Stanford University, and chief architect of the LCFF under Gov. Jerry Brown, offers a remarkable glimpse into the development of the formula, including some of the difficult choices, innovative thinking and pragmatic considerations that went into creating the new law.


Additional Background

As part of the LCFF, all Local Education Agencies receive a per-student funding allocation known as a base grant, plus targeted additional funding depending on the needs of certain students (known as supplemental and concentration grants). Districts must also engage stakeholders before adopting a Local Control and Accountability Plan. While the new law has shifted more discretion for budgetary decisions to local school districts, it has also brought to the surface inherent tensions between local and state decision making authority. 


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About our series

Budgeting for Educational Equity is presented by the California Association of School Business Official (CASBO) and WestEd. We are grateful to the Sobrato Family Foundation for additional support. Our series is written and produced by Paul Richman and Jason Willis. Original music, mixing and sound by Tommy Dunbar. John Diaz at WestEd  develops the written briefs that go along with each episode.

Follow us on Twitter at @Budget4EdEquity to keep up to date on the series and share your thoughts, ideas, questions and feedback. 

Budgeting for Educational Equity
Revisiting the LCFF

 Jason Willis, host:

When people talk about school funding equity in California, the Local Control Funding Formula – or LCFF – is certain to come up. Indeed, we’ve heard many references to it already in our previous episodes – and new research continues to shed light on its impact in our schools and on the outcomes of students. By many standards, the LCFF is the most significant resource equity reform California has ever enacted. That was eight years ago, in 2013. How has LCFF worked? Has it accomplished what it was intended to? And how do we continue to navigate the inherent tensions between local control and state oversight and accountability?

Thanks for joining us again on Budgeting for Educational Equity, the series presented by CASBO and WestEd. I’m Jason Willis, your host. 

In this two-part episode, we’ll go deeper into the LCFF, including hearing from its chief architect, former State Board of Education President Mike Kirst about the policy and practical implications that went into development. And we’ll hear from a chief school business officer about its impact as well. To get us going, we wanted to consider the unique perspective of an education leader who has seen the impact of LCFF both in her service as a local school board member and her work as a statewide advocate for English learner students. Her name is Xilonin Cruz-Gonzalez. 

Xilonin:

How are you guys doing?

Jason:

Good. How are you?

Xilonin:

Good.

Jason:

Xilonin, first of all, thanks again so much for joining. It's so great to see you again. And, you have been, I think in some ways, like a real inspiration for me, being able to live and be in so many different spaces as an education leader from advocacy to school board to community leader. And I just was hoping you could share a little bit about those unique hats that you've worn so far in your career in public education in California. 

[2:09]

Xilonin:

Sure. And thank you for those kind words, Jason. So, I've been on my school board now for almost 20 years, I was elected in 2001 when I was 26, so I have served about two decades on my school board in Azusa. And, I really didn't come from an educational background; I'd studied engineering in college. But as I got on the school board and got more engaged with education and feeling that it's so important, it sort of has become now, it has become the work that I do. 

So, fast forward now to where we are: I work for an organization called Californians Together. It's a statewide coalition of professionals, civil rights and community organizations that focus on improving outcomes for English learners, mostly working on state policy and the implementation of those policies. But I also really think that it's important for those of us as local board members to stay very much engaged in what's happening at the state level. So I've been very active with the California School Boards Association, CSBA, and I just finished up last year serving as president of CSBA. So, I'm currently the immediate past president for CSBA. 

Jason:

And, that's gotta be some tension, right? Like, you often hear in California that, you know, if you're on a school board or you serve as a member of the leadership team in the district, that advocacy groups can really provide a kind of an active tension to what's happening in the system. And play that out for us, like, how do you hold both of those hats? How do you live in both of those worlds? Or in that way, maybe even like code switch across those different roles that you have?

Xilonin:

So I think, um, I appreciate you saying code switching, right? Because I think some of that in terms of how you communicate with people -- that does happen. I do think people can successfully live in both worlds. And it really, for me, it's been driven by the fact of what I want to accomplish as a school board member, right? I got elected to my school board because I wanted to see change in my school district. Yes, I wasn't in there to try to tear things down, but I was there to push us and I still am there to try to push us to do better for our students, and that goes hand in hand with my work in advocacy, because that's really focused on, let's push the whole system, right? Let's push the whole system at the state level to do what's better for students. And so, I have not felt that tension. I think maybe where it shows up with me is in terms of how you communicate with people, right? Because if people cannot hear you, if they can't listen to the way you're speaking, they won't hear your message, right? So sometimes, how I talk about issues may be a little toned down when I'm talking to school board members, but the key messages and the key ideas are the same in both spaces, and I would, additionally, I would add, I think that as local leaders, whether they are board members or whether they're district leadership, they shouldn't be afraid of people coming and advocating, especially under LCFF. We should welcome that because that means that those people are interested and want to see better outcomes, right? That's what they're saying is that they want to see better things happen in your school district. 

Jason:

And, that’s a great segue into the LCFF which, of course, included some new requirements for engaging the school community more in budget decision-making. And so, first of all, Xilonin, I want you to kind of rewind about eight years, to the time when the LCFF was being introduced by then-Governor Brown and moving through the legislature. Tell us a bit about how you were feeling: What was your perspective on it back then? Were you optimistic? Did you have concerns? Give us a sense of where your mind was at back when the law initially passed?

Xilonin:

Well, I'll just say I've always been a fan of weighted student formulas; I think they make sense, right? So as the conversation around LCFF became real -- and it became obvious that we were moving in that direction -- I was very excited about it. I mean, I think I was [also] very much concerned about how do we keep transparency and accountability, but I do think at the core, the idea that we are going to give districts money, it's going to be equity-based, it's going to be based on the students with the highest needs, you're getting additional dollars for students with high needs, and that you, as districts are going to be given the flexibility to really design programs and supports for the students in your district. I think that's the right approach. And I do think that moving from categoricals to that -- there are plenty of people before LCFF that would talk about that, [but] I think it fell on deaf ears because that's not how people thought about things -- so LCFF gave us a structure for that approach to budgeting.  

Jason:

Yep. And did you have any big concerns back then?

Xilonin:

I mean, the big concern was really around like are districts going to spend the money the way really it's intended, right? Are they going to have equity-focused approaches that really, that truly increase and improve outcomes for students -- or is, is that really going to happen? 

Jason

So, okay. So let's come forward eight years. Now it's 2021, we're 20 months into a pandemic, eight years after this groundbreaking law was signed. What's your review? Like, what's your Yelp review on the LCFF? 

Xilonin:

I think as I look at it now at eight years, I would say, I'm not sure. I don't think it's been as successful as we, as I think people hoped that it would be. But I think it's due to multiple factors. And I think, one is just around culture and understanding how difficult it is for people to shift their thinking about how we spend money. 

As LCFF came in, school districts had been underfunded for a good eight years – I mean, four years, excuse me, right? And so as money was coming into the system, districts were just thinking about like, how do we recover from all of these major cuts that we made starting in 2008. And so, I don't think that LCFF ever got a fair shake from the outset because districts we're trying to build back a hole at the same time as they're being asked to re-imagine how we're going to deliver. That being said, that's not an excuse. I think that we, it was incumbent on us as districts, to do that re-imagination and to rethink how we do things. And I think as you look around the state, the lack of accountability in terms of ensuring that those dollars are spent on the students that you're generating them for, I'm thinking specifically of English learners, foster youth, and low-income students, you see, there's too many examples across the state where that money has been used across the district for all students, right? Or, not really honed and focused on the students that really it was intended for. And that, I think aside from the funding issue, those are choice issues that I think too few districts have capitalized on. 

Jason:

Hmm. So let's stay there for a minute. Say a little bit more about those issues of choice. Like I think you're right: Districts have a lot of discretion, a lot of autonomy about where they push and direct these resources once it gets to the school district level. But why do you say, you feel like it's been a missed opportunity or we haven't kind of taken full advantage of that opportunity?

Xilonin:

So, I'll give you a couple of examples -- and I'll give you the example of my district when LCFF first came in because we were a district with the high unduplicated count. So we actually got significant supplemental and concentration dollars, and there was another district nearby that had fewer students that were unduplicated, you know, in the 20-30 [percent] range, and the first thing they did was give across-the-board raises to all their teachers using supplemental dollars, right? 

But we, as a school board, we were very clear and we were all united, all five of us along with our superintendent, that if we were going to give additional dollars for like salary increases, it was going to be to increase or improve, right? So we ended up, we did allocate some dollars to that, but it was coupled with additional professional development days. We added days as we added those dollars. Those are decisions that, they’re sometimes difficult to make because there's pressure at a district level to really think about like, how do we spend this money to serve all students? And you really see it in examples, if you ever read LCAPs and you see in the LCAP, you have a choice, like when you have an action or service, you can choose this, or you can choose to specify which student group it affects, or you can click "all students," right? And too often, for most of these action/services, districts are choosing the "all students" selection or the button, right. Because in their minds, what they're doing is supporting all students and it's been very difficult to see districts that are just going to say, no, we know that we have this subset of students, let's say, African-American boys, right? We know that they're struggling with, say, learning how to read by third grade -- I'm just making [this up as] an example, right? Like, let us design and put in supports and spend money on supports to be able to address that identified need. And you don't see a lot of that happening and [instead] you see, I think, what I see is I see a lot of reluctance to have those conversations. It's more comfortable to speak at this more generalized level. 

Music interlude.

[11:40]

Jason:

Xilonin provided us with a lot to consider – and we’re going to come back to her – but before that, I want to shift gears and delve in a bit more to the origins of the LCFF -- the formulating of the formula, if you will -- back to the time when we had lots of categorical programs, and we had by nearly all accounts an overly confusing and a complex funding system. I figured there was no one better to reflect on the creation of LCFF than Mike Kirst. To name just a few highlights of his resume: Mike is professor emeritus at the Graduate School of Education, Stanford University. He served as Governor Jerry Brown’s chief education advisor and president of the State Board of Education. In addition, Mike has conducted comprehensive school finance studies in a number of states and, back in 2008, along with Alan Bersin and Goodwin Lieu, he authored a brief on reforming California School Finance that set out the need for what was then referred to as a “weighted student formula.” 

Jason:

So, for a better part of a decade, as you came back into state service, you kind of led the charge, if you will, on the Local Control Funding Formula. And so I was hoping that you could tell us a bit about what were some of the really significant mile markers in getting to that reform and getting it passed? You know, just to raise one of the first ones that often folks will cite is your 2008 paper with Bersin and Lieu that really kind of sets out some of the thought leadership around how the state might go about doing it. So, tell us some of those stories, like what were some of those substantial moments?

Mike:

Well, I think one key thing was that, I guess, proceeding with, you know, my practical experience was -- this was in the middle of all the discussion about educational adequacy and measuring that and coming up with definitions of what an ideal program would look like, and so on. And Jesse Levin and others have worked on that. And I just never thought that we would get there, given the kind of tax system we had.

So it's the old humility game, and after you learned that, I've, you know, we just started with the view of well, let's go to a minimalist approach. And a minimalist approach is, rather than trying to reach for a maximum goal, or some overall definition of equity, we’ll be minimalist. And then we proceeded from this view: This state will always provide lots of money to local school districts. It may not be adequate and it may not grow at the right rate, but we will always give large amounts of money. Let us try and figure out how best to distribute whatever money the state can afford without any normative standard about what it could afford or should afford, and work out a better formula than we now have. And maybe we'll be lucky enough to hold harmless, maybe we won't. But that was the, there was no grand equity view, closing achievement gaps and so on. It was just from a ‘let's do better what we're already doing’, which is really, [a system] not well-developed, hopeless and, you know, all the problems that we had.

So I think that was a crucial start, it was a view, it's very humble. We've got a program that'll work whether the state's, you know, flourishing, or just even. Of course if it was in recession, it would be more of a problem. So I think that was crucial.

And the other thing was, all of us had been impressed by a lot of research that wasn't much a featured, but I remember William Julius Wilson’s book, The Truly Disadvantaged, where he wrote about the Chicago ghettos and that there was a theory of concentrated poverty, and in our case concentrated language issues [as well], where nobody in the household or few in the neighborhood spoke English, so that we needed to carve out a difference where there's high levels of concentration.  Now, I never heard that before in the discussion. They talked about weights, but they didn't have anything behind it in terms of a theory of concentration. That led then to what I think is the major innovation in LCFF, which is a very strong concentration factor we have, when you have over 55% [unduplicated student counts]. When I did the Florida system in 1972-3, we weighted, but we never did anything about concentration. And with all the school districts in California, we have some that are very highly concentrated. 

Jason:

Yeah, so Mike, take us into some of the experiences. And I don't know if it was maybe a conversation that you had with Governor Brown, or you know, as a part of the State Board [of Education] or with the State Board staff, or others in the state. What were some of the substantial things, you know, decisions that you guys were making that really kind of drove the development of the LCFF? You mentioned one, particularly around the innovation of the concentration factors. Were there other things around the design that you felt were really kind of crucial in some of the policy architecture there?

Mike:

Well, in no particular order, there'd be the thing we've talked about a lot, the decision to omit special education, -- [that] was important. I think it was basically, it was complex and second, none of us knew anything about it, and third, it had such a strong categorical history that you could avoid it without taking, or picking up a little flack. So it was easy to avoid it and we had no way to figure it out. And it was the same thing with transportation, boy, you know, that was, we never really addressed that -- that's still under the radar -- but that's another outmoded formula and historical artifact of all of this [that] could have easily been in included. So, I think to, you know, narrow your scope, not try and take everything on, I think was crucial.

I think there was, secondly, the decision to do what we wanted to do and then throw it out there and see what the "flack" was -- so that first version was really important, and then we got a lot of stakeholder feedback. I think the ability to simulate it was very important, the technical nature of it, you know. Jon Sonstelie was really crucial in building a simulation model through PPIC that exceeded the abilities Lieu and me; so that we could actually show what it would do to each district -- and that's hard in California to do that -- and then [Department of] Finance took his model and then adapted it. And so we had an ability to do rapid fire changes. And we knew coming into the initial discussion what it would do to various districts. I had learned through working in Oregon where I could never make Portland look "poor" and we always took money from them. Obviously, if we, you know, had some system that wasn't benefiting L.A. a lot, we were in trouble -- and so,  we were able then to craft a system, then fiddle with a concentration factor so that it made sense to us as to what districts ought to be getting, given what their background characteristics were. 

I think the ability then, the weighting for, or the differential funding, I should say for the different grades was important. We all were convinced that high school costs more than elementary school. So that was built into it, and that came from experience. I don't think in Florida we did anything like that. We just didn't have that kind of grasp of the grade level differences. So those would be some things... 

Jason:

Yeah, thanks, Mike. That’s some great insight into the development of the LCFF, and -- I do want to go back to one of the things in particular that you mentioned -- because I feel like we need to hover over it more, because it’s so central to people’s conception of the LCFF. You said that, at the outset of the work, there really was “no grand view about equity.” And, I don't know if that’s just part of you being characteristically humble -- but could you talk about that more? I mean, LCFF has become the main thing people point to as a step towards school funding equity in California. Did I understand you right to say it really was not as much of a driver when you first started out?

Mike:

It was a driver, but there wasn't any normative template -- that's an academic word, you know.  [But] we did not start off with, ‘we want an adequate education’ or 'certain groups of students should get twice as much as others.' We really tailored the formula to -- we knew that low income children should get more and that it should be significantly more and it should be adjusted for concentration, but it didn't proceed from a basis of, sort of, 'we want to reach this goal like adequacy' or, um…The old equity goals were differences in spending. They would take the top 10% and compare in spending and compare it to the bottom 10%. And I always thought that was phony because you had some unusual situations at the top. 

And of course, another omission -- I should go back to our omissions -- was, [we decided] 'we're not going to play around with basic aid’ because we learned from Governor Gray Davis who really got into basic aid. Gray Davis thought that basic aid was fundamentally inequitable and he went right at it and he never could get it repealed. And it just was, as we saw it, dead politically. So this is pragmatic, uh, historically based, applied knowledge and wisdom, and [we said] we're going to do a whole lot better for pupils than we did before, but we don't have a specific standard that we're trying to meet. 

Jason:

Mmmm.

 Mike:

Now, it, roughly when we simulated it, if you took districts that were overwhelmingly poverty stricken, like Alum Rock in East San Jose, and there's a lot of them down in L.A. County, they have gotten about twice as much per pupil -- I'm sorry, they have gotten 50% more per pupil with a full funding of LCFF. And we knew that was about where it would end up. So, 50% more, I thought that was a move towards equity, but I'm not going to [have] hubris as to proclaim “equity.” You know, it's like beauty and truth. These are hard words to exactly quantify and to exactly use. So, if we were putting in 50% more in these kinds of concentrated districts, I thought it  was a move towards equity, but if we've pretended equity, then people would start the argument about that. And again, I went back to, we're just going to do better than we did before, okay? A lot better. But I'm not going to have some standard of equity, say this is what we're going to do, this is the right thing, this is our philosophy, our goal. No, we'll play it by ear.  And then we, you know, carefully looked at the 680 corridor which Jason lives on, to make sure we weren't hurting the suburban districts that were not basic aid and totally relying on state funds. They were the ones that were going to get clobbered under a lot of equity formulas I could think of, and we always wanted to, um, I had my eye on them. They're in the public system. I've done this a lot, you know, in a lot of states plus California, and so to me, it's crafting -- it's like a craftsman -- a craftsman starts off crafting something and you don't begin with a philosophical statement of equity and then say, we're going to aim this philosophical statement. So it was limited goals and uh, stay away from equity, adequacy, all these phrases, because they're just gonna hang you on that. 

[26:18]

Jason:

Yeah. Mike, I want to build on this, like this iterative nature that you're talking about with the LCFF, right? You set out the draft, you said, Hey, this is our best guess. You took kind of a humble approach to this. And, I'll just say it, to your credit, like there have been studies -- WestEd has produced some of them -- that have basically shown that [under LCFF] there is a more equitable distribution of resources from the state to LEAs. That is like now fact; it’s well accepted across the State of California. So in that way, a substantial policy shift out of what we previously had with revenue limits and the dozens of categoricals that were kind of laid into those former policies. 

So, one of the kind of evolutions of this conversation is about how LEAs think about the distribution of their resources, how they are ensuring that those dollars are reaching those most vulnerable student populations. And I think the place that I want to start at is, when you were developing this policy, how did you negotiate through that? What was the thinking about, you know, providing those resources to the LEAs? Was there any discussion about, well, maybe we should think about going further, right, to “backpack funding” to make sure the dollars follow the student, if you will. Give us some sense -- any kind of moments that stick out to you  on that point?

Mike:

Yeah. It's very clear. And this bookends our discussion. The first bookend, and what we were thinking about to answer your question directly, was we were coming out of the worst recession since the great depression...[Governor] Brown was elected in 2010, and I went to a meeting of his top officials and they said, We're not sure we can pay the bills this month. And we're in such bad shape, we have so little money coming in that we're probably going to have to just not pay a lot of bills. This is December 2010, when we met in UCLA; it was a meeting of administration insiders. So that means that the school districts are in a lot of trouble. Now, this goes back to humility: You've got to know an awful lot to say, I'm going to tell local school districts how to spend this money, when they're coming out of -- and when they're not even coming out of yet -- a big recession. And when the proposal was introduced in 2012, we were still in a semi-recession mode. So, it was very much influenced by the fact that what should they restore? I don't know? Who, which, how should they distribute money to schools within the school district? I don't know. At this point, it's really, uh, we gotta give them flexibility. Remember, we just had flexed the categoricals before that, so we were coming out of that move. 

And the other bookend is, for our critics, now we're going to come out of COVID. Do they know what districts really need to spend and how they ought to spend it coming out of COVID? Sure as hell I don’t; I don't even know where these pupils are. I don't know what the ability of the districts to mount programs and accelerate programs is. We know they’ll have a lot of money, unlike facing what we had. So, it's interesting that the beginning and the end were periods when you were hesitant to get too much into their [school districts'] business because they were, it was not a normal time.

Jason:

Yeah, and I want to stay on that point, Mike, because I think there's a lot of parallels as you're pointing out between coming out of the great recession -- there's differences, right? -- but comparisons of the great recession and now coming out of the pandemic, and I think in the way that you were creating the architecture of LCFF, you were trying to find the balance of like, who would be responsible, who could best make those kinds of decisions? I think what's part of the landscape that we're seeing now is that there's a bit more press on this issue. They're saying, Hey, we really want to make sure that these resources get to the schools in which these more vulnerable populations are in; therefore, we're going to take a couple of steps basically to make sure that that happens. They've shown up in a couple of places, including some of the federal laws around the American rescue plan, but there's also, as you know, in the state’s context, been a lot of kind of aggressive pushes from some of the education equity groups to basically say, We need more teeth around how schools districts are making decisions around the allocation of resources. What do you think about that? Do you think that that policy route is the way to go? What are some of the solution sets that you think should be considered or viable for advancing that conversation down the field? 

Mike:

Yeah, well, I certainly agree with this idea that they shouldn't be, at the local district, shouldn't be able to not spend the money in a year and then, you know, take it back into the general fund. So I think that was clearly not intended in our thinking and my thinking, and so, to back up on your broader question: Of course, it's a question of balance. California has developed and was developing when LCFF was passed, a view that there's a strong district role. And that's the reverse, of course, of ESSA and NCLB that goes to schools. And so our theory of change was always that the district is a major leader and the school site can't lead on its own -- that we had seen over years attempts to, have school site budgeting (my colleague Alan Odden wrote a whole book on it), and it seemed very hard to get the budgeting skills we need down to the site level, and principals, who are already overloaded and not well-trained, having them be chief budget officer of their school…So I had initially thought a lot about allocating money to schools -- and we did do that in Florida because there's only county units down there, and seven districts had 85% of the enrollment...

But I had cooled off on school site allocations as a way to do it and, and school site budgeting through the principal. So once you proceeded through the district, and that was a way to go, then how much do you constrain them? Ands I think it's really an issue of balance. I was hoping and still think that [groups] like Public Advocates had a lot of impact. I had learned from Title I that the threat of lawsuits is very strict. And when they wrote every district we're going to sue you, I loved it, and I thought, Let them do it, because that's a lot of what happened in Title I. It was lawsuits that did it. So you know, I never, um…So I think it's a matter of balance. I was always searching for the right balance. It's interesting that the legislature left on its own came up with something that even [Governor] Newsom couldn’t swallow. So, you know, we just could never meet a compromise between the legislative people that really regarded this as sort of a mini Title I, and a more flexible area that we had. I think the advocacy groups were basically on the right track. They were never trying to tell districts how to spend the money. That's really good. I think we should applaud that; there was not a lot of, Well, you should spend it on, you know, every counselor should cover 300 students or something. So, they were always just trying to get the money to the right places. 


Jason:

Yeah.
 

Mike:

But I never thought of it, we never thought of, "backpack [funding]" for pupils, because we never -- there was a consistent view, a bias you could call it, that the districts need to be able to control their financial affairs in a way, and that just running around them was not the way to go. So we were searching for some in-between. 

Jason:

Yeah, I really appreciate you kind of pulling that out around the advocacy groups, Mike, and you know, we, we tend to bemoan them at times, but the role that they were playing, I think that they were pretty guarded and I would agree.

 

Mike:

Yes, they were very guarded.

Jason:

They really did push on saying, Hey, we just want the funds to go to these kids because we know it works. We're not going to tell the experts how to do it and what to do with it. Yeah, I can absolutely appreciate that.

Mike:

The other thing which I kept preaching and you will understand is that the accounting system is so bad. I was always open to accounting [reform].  I remember Children Now proposed some kind of add-on accounting thing for LCFF. To me, it never worked well with the existing accounting system we had. So when your underlying accounting is as screwed up as it currently is -- the accounting, you know, the inputs around instruction and all of that, you had nothing to work with. And I kept, uh, businesspeople to me have such better accounting. So I would have gone for some accounting [changes], but I always thought it required overhauling the entire accounting scheme. You just couldn’t add a gimmick on for LCFF, which is what some people wanted to do. And then they gave up because I don't think they thought it made any sense.

Jason:

Yeah, that's an interesting point, Mike, I, we, when we think about the existing structure, you're basically referring to the standardized accounting codes structure?

Mike:

Yes, I am. It's the same as when I started in 1964, when I began at the [federal] Bureau of the Budget. It's still the same.

Jason:

Yep. The first eight digits are still the same -- because it's a report to the feds. Yeah, totally. 

Mike:

Uh, I don't know a business that's operating with a 1964 accounting system they had..

Jason:

Yeah. Maybe, maybe we need to take that up with the feds on that one. 

But I want to get back to this point about the accounting side of it. I find that really interesting because I wonder, because you know, our audience here includes chief business officers, these are the folks that will direct staff to think about how they build up and code out these different programs that are happening on the ground. And I think it's really intriguing to hear this from a former state leader that, you know, there was some openness to thinking about this and there are some updates that are coming certainly in the efficiency of the system. Some of the shifts are coming around the accounting and the structure. And as you know, Mike, through some of our investigations on the special education finance side, we were really starting to point towards getting away from breaking down silos between programs for students, right? -- that though you may get a dollar for an English learner or for a low-income or special education student, it's often the case that that student is presenting with multiple needs, right? So how do you think about the system and providing that comprehensiveness, if you will… 

 

Mike:

Yeah! Yeah.

 

Music interlude.

[37:55]

 
Jason:

So, let’s return to Xilonin Cruz-Gonzalez, school board member and also deputy director with the statewide advocacy group, Californians Together. And Xilonin, when we talked with Mike Kirst, the chief policy architect of the LCFF, one of the things he told us was that, while equity was certainly a driver in developing LCFF, there was not a quote, “grand equity vision.” He described how in many ways they took a very pragmatic, craftsman-like approach to creating the new formula by setting out to do, as he says, “a whole lot better for pupils than we did before” -- but they didn’t have a specific standard for equity they we're trying to meet – in part because deciding on such a standard is so complicated. I’m just curious, what’s your reaction to all of that?

Xilonin:

I think maybe, I think most of us thought that the whole purpose was to be equity focused. …So when I look at what actually was put in place, I would disagree. I mean, when you look at a weighted student formula, when you look at LCFF, at its base it's about equity. That's really the premise and basis on which most of the people that I know who were advocating for LCFF, that's why they were supporting it. I think the place where they fell short and I'll agree with him [Mike Kirst] that maybe it wasn't focused on equity was on the accountability side. And that's where the tension is around and there's real pushback around, well, as soon as you start putting in accountability, then people are going to stop being innovative and stop, you know -- we can't put any structures on school districts. And I don't think that's true, right? I think that there's a space for us to say, We want to make sure that you are allocating these dollars to the students that you receive it for. We want to make sure that you are choosing approaches that are proven to be able to be successful, and that you have a rationale for why you're choosing those approaches -- research-based approaches -- whatever you want to call them. And there right now there's none of that accountability. When you look at what county offices have to do when they review LCAPs, they're just looking for resource allocation; they're not looking about whether or not these reflect the action, that the services will lead to the outcomes that the district is saying. So there really is no external accountability. And I know Jerry Brown would always say, Well, that's the job of the local community, right? Well, most districts are not an L.A. Unified or Oakland Unified where they have multiple organizations advocating. Most of them are like Azusa, where we're lucky that we're pulling in parents to give us input. So we do need to have that statewide accountability. And that's someplace where I think I differ from a lot of board members. I think it's not going to hurt us to have accountability. It's not going to hurt us to demonstrate why we chose to spend money this way.

[40:28]

Jason:

So, two of the like primary espoused principals under LCFF, as I know you're aware of Xilonin were, on the one hand, this notion of equity -- that we're not only distributing resources from the state to school districts and LEAs more equitably -- but that there is also the other tension of like, we're going to give you the autonomy to make the best decisions on behalf of the communities in which you're working with. And there were features of that system, including the community engagement component, the LCAP documenting the plan, that were really important, but I think it's really fair to say that that's an active tension between how do you promote a set of principles or values around the equitable distribution of those resources all the way down to the student versus create an ability for local systems to have local control – and I'm wondering if you could just kind of take us into that space: How have you seen that play out in your own school district as a school board member or working with Californians Together and [talk about] how some school communities have really tried to balance and ultimately be successful with that tension?

Xilonin:

Yeah, this tension is real, about how much of the work in a district is going to be driven at the district level versus at a site. And that goes to, that's key, that's hand-in-hand with where the money and decision-making is going to be. I will just say, as a board member, I think that the decision to have it be at the district level was the right decision. I think there could be strengthening and reporting out about how is the money being allocated to schools and being spent on students -- and I'm thinking particularly about the students that you're generating the dollars for, right? -- maybe less about how much is going to this school, but really around how are we supporting the students that it was meant to intended to go to? But I think most districts in the state are not behemoths like L.A. Unified and San Diego [Unified]. Most of us are like my district. I neglected to mention we have about 7,500 students and we've been in declining enrollment for 20 years now. And I think about when you look at that size of a system, it is possible to make significant changes in culture and approaches and outcomes in that level of system when you have things that are consistent across the system. And so you think about systems change, and you think if you had a system where the money was being driven to a school site, you could potentially end up in a place where each school site goes in their own direction, and it's very hard to build, um, to put everyone in the same pathway. For example, I'm thinking about a lot of the focus on continuous improvement and how we build in these cycles, right? How do we do this work to continuously improve? I think it's easier at a systems level to sort of build in all those supports, build in how we're going to do the training, build in how are we going to evaluate the outcomes at a district level, as opposed to saying, okay, we're going to be driving this, thinking about it at a site by site level.
 
[43:27]

Music interlude.

Jason:

We’re going to bring another important voice into our story here, the voice of school business leader Rich DeNava. Rich serves as deputy superintendent and chief business official at the San Bernardino County Office of Education – and he also currently serves as statewide president for CASBO, the California Association of School Business Officials. I originally spoke to Rich in late spring, when I asked him about the shifts and calibrations he observed between state and local control, especially in the LCFF era.  

Rich:

You know, as a county office, our job is providing oversight to the districts, you know, providing oversight over their LCAPs and their budgets as well. When we look at it in the local context, there definitely has been positive strides made as far as how the community feels that it's going to be most effective providing for their students, as well as being able to engage with administration and management in how to best provide for the students that they serve. I think really bringing that into that context allows for multiple channels of feedback.

There are instances certainly where there's not, it's not as collaborative of an environment because there's controversy, there's conflict, there's, uh, some individuals or some groups may feel that this is what's necessary, whereas others are on the polar opposite side of that argument. But I do think that the model is working. It’s just, again, I think there are many individuals out there in the world that feel like, Okay, the model has changed, we need immediate, immediate success to be shown, and there's no book answer. You know, I wish there was. I wish there was something scientific because I'm a numbers guy. I'm an analytical kind of a guy… 

Jason:
Amen to that.

Rich:

To be able to say, Yes, this is the right answer. This is the sweet spot. But, I mean, this is a huge paradigm shift. It's been a huge paradigm shift as far as how resources are put into effect and how we're moving the needle for student success. 

Jason:

Mmmm.

Rich:

I do think that we're headed in a positive direction. When you talk about a particular reach on the part of the State, I I do think the state is very involved. The State Board of Education has the pulse of what is going on in schools. But again, we're talking about educating 6 million students across a thousand plus districts and 1500 charter schools. Each one of those school districts, LEAs, charter schools, private schools as well, has a little bit of a different "catch." a little bit of a different philosophy. And I think that's beneficial. 

Jason:

So one of the things -- and I Rich, I know you're probably well aware of this -- around the LCFF, has been both its success in more equitably distributing resources from the state to the school district level, but maybe not so much success in terms of its, the state's ability to be able to claim that dollars are allocated equitably from the school district to the school level. And we've seen this kind of come up in a number of policy conversations. Advocacy groups have published reports on this. And just to start on this one, just curious to get your thoughts on that. Like, what's your sense of that conversation and whether those reports and those conversations kind of reflect what's happening in the broader environment in school business in California?

[48:47]

Rich:

Well, most definitely when we go back and look at the Local Control Funding Formula, by comparison, if we were to look at the trajectory of the revenue limits, which is the old funding model that we used to have pre 2013-14, if you were to look at that and just apply the normal cost of living adjustments as it related to the economy's growth and what have you, [it would be a] similar trajectory or some would say that maybe the revenue limit model might have truly brought more resources to schools on the natural. So, the funding trajectory at it a state level, if you look at it in the broadest of concepts is probably, uh, would be similar. It's the provision of how that funding model went into effect and doled resources out towards, again, the most needy students, when you broke that out with supplemental and concentration grant funding. So in the broader context, it's definitely something that is going to have a little bit of good and bad for everybody out there in the world. It's really about vantage point. So when we talk about that local context, the local context really is going to dictate the needs of a school district and schools within that school district. I think in a large scale, I think it's been effective. There's always going to be losers and winners in the equation when we kind of take a step away from it. 

But in the broad context, I do think that there have been challenges with respect to implementation of resources in the most efficient and effective manner, but I think still CBOs and business leaders, as well as communities, have done a very good job of allocating resources to help impact student achievement in the most positive ways. There's still a lot of room to a room to grow. There's still a lot of improvements to make, especially with the pandemic that has just hit us the last 15-16 months. That's been super impactful. But again, as far as categorizing this whole notion of the funding model, I think it's been effective and I'm very biased when I talk about San Bernardino's local context because many of our districts were winners. When the Local Control Funding Formula came through, our county office was equalized as far as the funding is concerned. We were the lowest funded county office in the state -- San Bernardino County superintendent of schools was. So when that funding model changed, it definitely provided us with resources that we're very needed here in our county and they’ve allowed us to do great things and continue to do great things for our community. 

Jason:

Yeah. One of the things that I appreciated about that response, Rich, was talking about the kind of vantage point and thinking about the kind of local needs and how they are directed. And that, I mean, as you represented, and I think this is fair, like it's complicated, right? There isn't a simple answer to this. So as you step back and think about where could the field benefit, [and] let's take for the moment the amount of resources off the table, what do you feel like...what is it that you think would be helpful to California's CBOs and district leaders that would allow them to take another really big stride forward towards this vision we have about achieving resource equity within our schools and systems?

Rich: 

I think some of the strides that have been taken, probably not [at] the same pace, if you will, as others, are that [we now] involve the business leadership in those conversations. That certainly is something that in my experience did not go on when we were in a categorical or a restricted versus unrestricted world many years ago. With respect to resources in the general fund, there wasn't the collaborative spirit, as well as the collaborative conversations that were necessary to really understand the needs of the student population, as well as the community. And so now, whether school business officials like it or not, they are a part of that conversation on the natural. And again, the sooner they can become more comfortable being uncomfortable in conversations that aren't necessarily in their skillset or in their subject matter expertise, the better for them. 

Jason:

Are there any other particular challenges with LCFF that maybe you’ve heard or experienced that stand out for you?

[52:45]

Rich: 

I think stakeholder engagement in the very beginning seemed to be a huge challenge for a lot of school districts and a lot of administration and leadership because, um, it's not that they didn't want to have input and feedback from the community, but I think, you know, getting your head wrapped around this notion of, Well, we're the subject matter experts, we know what's best for students...I think really opening up that circle, if you will, to make it a little bit more concentric to allow for other areas of input has been equally effective, or it's been even more effective because when the students, the community, the stakeholders, the employees of a district -- we always say it takes, you know, it takes a village to educate a student -- well, that input process I think is equally effective for helping student success along. So I think having those conversations at a more horizontal, if you will, instead of vertical [level] as has been the case in the past has been a structure that has been effective. And it really does sometimes -- there's not always consensus achieved as far as the stakeholder input process -- but I think naturally when you have conversations like that -- uncomfortable conversations that require people to really dive in and invest their time into understanding the needs of others, as well as bringing forward their own positions, I think you end up with a better outcome when all is said and done. 

Jason:

Yeah, that’s good stuff, Rich. And so, stepping back once more, back to “big picture”: Since the LCFF came into being in 2013-14, it sounds like what you’re saying is that it has taken some time for local districts and counties and school communities to really get their arms around this new model and to start being able to move it forward. Is that a fair characterization?

Rich:

Yeah, I don't necessarily want to, you know, I definitely feel that a change of the funding model has been, um, it's a new model. And so when you just look at it from a dollars and cents perspective, you have to remember, the previous model was a 40-year old model. We had some institutional and traditional ways of budgeting, whether they [were] site-based budgeting, doing what you've done in years past, or zero-based budgeting, starting from scratch. And so when you take away categorical funding, which is outlined and defined for specific purposes, and then you say, okay, districts, okay, schools, you know, you're going to be a recipient of “unrestricted” or discretionary types of funding -- but we expect you to provision and allocate that out to the most needy students -- that becomes somewhat challenging because you're changing the paradigm for schools and school leaders, as well as instructional leaders on how they're going to equip each one of their schools to do what they do best, which is educating students and providing programs that'll be geared to their success. We have become more geared towards not just understanding that, but being a little bit more methodical as far as process is concerned. 

So there's definitely a growth pattern for sure, as far as how much better we've done since 2013-14. Is there still room to grow? Absolutely. The conversation about equity was probably not as fruitful back in 2013-14 as it is now. That being said, I do think districts are really, at least the leadership teams that I've been working with as well as our own, are taking very positive strides at, number one, educating and helping people understand that there is a difference in the needs of every one of the students that we support, as well as being able to effectively provision resources to them. How that gets done, again, that's defined within the local context. Every district does it a little bit differently, but I do think there have been positive strides made.  

[57:13]

Music.

Jason:

For a law that has been in place only eight years, there is so much to discuss and so much ground to cover when exploring the LCFF. We hope this episode has helped give you a better understanding of the LCFF -- including its conception and the complicated dynamics around local and state authority. 

Coming up, in part two of “Revisiting the LCFF”, we’re going to look at several more key elements, such as Local Control and Accountability Plans. We’ll hear more insight and perspectives from our guests Mike Kirst and Xilonin Cruz-Gonzalez -- as well as from additional guests. That’s coming up soon, in our next episode.

Budgeting for Education Equity is presented by CASBO and WestEd. Our series is written and produced by Paul Richman and by me, Jason Willis. Tommy Dunbar handles all of our music, sound and editing. John Diaz from WestEd produces the companion briefs that go along with each episode that you can find online. 

As always, thanks so much for joining us! We’ll see you back soon for part two of Revisiting the LCFF. Take care.