Which school do you want to support?
In the previous lesson we looked at California’s new school funding system, particularly the Local Control Funding Formula (LCFF). LCFF is important. It represents the "foundational" funding for school operations and, well, it is a lot of money. That said, there are billions more in state and federal funds that support public education in California but whose distribution is determined by different rules. We cover a few examples in this lesson.
Federal law requires schools to provide "specially defined instruction, and related services...to meet the unique needs of a child with a disability." Approximately 10% of California students are identified for Special Education services. Most of these students require services that cost only modestly more than a normal program, but a few need intensive interventions that cost far more. The average cost of education for special ed students is more than double the norm.
California’s Legislative Analyst’s Office, in its 2013 Special Ed Primer estimated that Special Education expenditures totaled $8.6 billion in 2010-11 and came from the following sources:
Federal funds cover about a fifth of the cost of Special Education
The state disburses the categorical funds for Special Education using primarily a “census–based” method that allocates money to local consortia of schools and districts based on their total student population. The consortia, called Special Education Local Planning Areas or SELPAs, develop local plans for allocating the funds to their charter schools and districts. The actual per-pupil amounts for each SELPA vary based on historical factors.
Clearly, the earmarked state and federal funding does not cover the full cost of Special Education services. Local school districts use their general purpose funding to make up the difference, effectively reducing the amount they have for their basic programs.
Special Education funding is a lightening rod for complaints. Local districts say it costs them too much. Parents and teachers worry that students don’t get the services they should. And policymakers struggle to even make sense of how the system works. The LCFF reform specifically excluded Special Education funding, leaving improvement of that part of the school funding system for another time.
With over 6 million school children and tens of thousands of buildings, facility costs are a substantial and ongoing expense that school district and state officials must plan for.
The money California uses to build and renovate school buildings is completely separate from the operating funds described in the state’s annual budget. Like homeowners, both state and local officials usually look to long-term financing for these major capital expenditures. Instead of getting a mortgage from a bank, public entities finance these expenditures through bonds that they promise to repay, with interest, from future tax proceeds.
When local school districts want to pass a bond, they have to get the voters in their community to agree to pay more taxes, thus guaranteeing the bond will be repaid. In most cases, such elections require a 55% yes vote. (See Lesson 5.9 for more about the rules surrounding local bond elections.) State bonds require a simple majority approval from voters and do not require the state to raise taxes. Together, state and local bonds generated about $66 billion for school facilities between 1998 and 2010.
Both the state and federal governments from time to time provide financial incentives to encourage K-12 schools to take actions or participate in programs. In general, the number and scope of these exceptions has declined dramatically over time
For example, as part of the fiscal stimulus measures enacted under the Obama administration, the federal government created the Investing in Innovation Fund, better known as the i3 grants. These awards provided temporary funding to local education agencies and community-based organizations to test new ideas and demonstrate the value of new practices.
California officials perhaps took a page from the federal book when they set aside $250 million to encourage innovation in the area of career-technical education by creating the "California Career Pathways Trust." The program awarded grants to schools and community colleges to work in partnership with local business to create new technical programs and curriculum.
Over time, additional program exceptions seem almost certain to be added. This page on the Department of Education website appears to be a good source for information about exceptions to the Local Control Funding Formula.
Of course none of these funds and programs are meaningful unless they ultimately benefit students, right? The next lesson examines how little we know about how funds are actually used.
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