The Path Towards Reimagining and Rebuilding Schools
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The COVID-19 pandemic has affected all students; however, its impact has been particularly devastating for students of color, students from low-income families, English learners, and other marginalized children and youth. As transmission rates decline and vaccination rates increase in California, many are eager to return to normalcy, but we must all recognize that even the prepandemic normal was not working for all students. The 2021–22 school year, therefore, constitutes a critical opportunity for schools to offer students, families, and educators a restorative restart.

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California’s school system is under tremendous long-run fiscal pressure; allocating resources efficiently is therefore paramount. Efficient allocation means more money spent on the most effective policies and interventions; less waste; and ultimately better outcomes for students. Economic analysis—making sure districts and schools are spending their budgets wisely—is the method used to identify effectiveness and efficiency.

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California is the fifth largest economy in the world and the wealthiest state in the nation. The Golden State is home to countless tech giants, an enormous entertainment industry, major agricultural regions, and many other successful industries. California households earn a median income of $71,000 per year, more than $10,000 above the national average. However, California school funding—even before COVID-19—was insufficient to meet educational goals and address the needs of students, particularly given the state’s high cost of living. How can that be true?

A Summary Brief
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California and the rest of the country are enduring a pandemic-induced economic recession, and school and district leaders are bracing for the fallout. Funding for California schools had improved rapidly between 2013 and 2019, with districts spending roughly $13,100 per pupil in 2018–19 as compared with $9,680 only 6 years earlier. However, that level of funding still fell short of what would have been adequate given California’s goals as a state, the student population it serves, and its cost of living.

Views from the 2020 PACE/USC Rossier Poll
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With important state and national elections looming, where do California voters stand on some of the major education policy issues of the day? This report examines findings from the 2020 PACE/USC Rossier poll of California voters. The poll represents the views of 2,000 registered California voters across a range of topics from early childhood education to higher education. Based on these results, we have identified five key findings:

A Progress Report One Year After Getting Down to Facts II
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The Getting Down to Facts II (GDTFII) project, released in September 2018, assessed the state of preK–12 education in California. As year 2 of Governor Newsom’s term begins, this report provides a progress update on three areas of concern raised by the research findings and highlights what may be coming next.

The Implications of Marin’s Rising Pension Costs and Tax Revolt for Increasing Education Funding
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Voters in Marin County have long been willing to pass parcel taxes to fund their schools. In 2016, taxes faced unprecedented opposition from local activists; taxes in Kentfield and Mill Valley were defeated or passed by previously unheard-of narrow margins, respectively. What changed? This case study uses district financial and demographic data as well as interviews and focus groups with advocates and education leaders to answer this question. It was clear that:
  • The current financial situation is not sustainable.
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Sacramento City Unified School District (SCUSD), California’s thirteenth largest school district, faces a looming deficit and must make significant budget adjustments to avoid state intervention. This case study explores how the district reached this point, how its finances compare with other districts in Sacramento County, and what the implications are for students, particularly those with the greatest needs.
Evidence from California
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Charter schools enroll a growing share of public school students, leading to concerns about the financial implications of charter schools for traditional public schools. Using detailed expenditure data for school districts in California, this paper exploits variation in charter school enrollment across time and between districts to evaluate how district spending and overall financial health change as nearby charter sectors expand.
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Researchers in the Getting Down to Facts II project showed that while the financial picture has improved in recent years for California’s school districts, several important challenges remain. This policy brief explores one of these challenges in greater detail: the costs of health and welfare benefits for district employees.

Evidence to Inform Policy
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Governor Newsom’s first Budget Proposal increases funding for education in California. There are areas of substantive overlap in the Budget Proposal and research findings from the Getting Down to Facts II (GDTFII) research project, released in September 2018, which built an evidence base on the current status of California education and implications for paths forward.

Views from the 2019 PACE/USC Rossier Poll
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With a new Governor, State Superintendent, and Legislators in Sacramento and a diminished federal role in education, there is an opportunity for California’s leaders to take stock of recent educational reforms and make necessary improvements. This report presents findings from a state-representative poll of California registered voters on an array of education policy issues. Based on our analysis, we have identified nine major findings:

California’s Current Policies and Funding Levels
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California policymakers have established the expectation that all public school students should have access to a broad course of study, in classes where instruction is consistent with the state’s content standards. Further, the state holds schools and school districts accountable for their ability to ensure that all students achieve at a specified level of academic proficiency, attend school regularly, and graduate from high school prepared for adult success.

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California’s Local Control Funding Formula (LCFF), which highlights accountability for student success, has identified the progress of special education students as an area of particular concern. Statewide, the LCFF outcome data show that students with disabilities perform at particularly low levels.

A 10-Year Perspective
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California’s 6-million-student public school system includes a vast inventory of publicly owned buildings and property. All of these facilities need to be maintained and some need major renovations to ensure health, safety, and educational suitability. Some communities also need new school buildings to house a growing student population.

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California’s Local Control Funding Formula (LCFF), signed into law in 2013, represents a substantial investment in school districts serving disadvantaged students and a modest relaxation of restrictions on district expenditures.

What Do We Know?
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The Local Control Funding Formula (LCFF), signed into law by Gov. Jerry Brown on July 1, 2013, represents the first comprehensive change in the state’s education funding system in 40 years. The LCFF eliminates nearly all categorical funding streams, shifts control of most education dollars from the state to local school districts, and empowers districts, through a process of stakeholder engagement, to shape resource allocation goals and priorities to meet local needs.

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In 2014, the California Legislature passed Assembly Bill 1469, a law that requires teachers and school districts, along with the state government, to substantially increase their respective contributions to the California State Teachers’ Retirement System (CalSTRS). The need for higher pension contributions is not a short-term aberration. Recent CalSTRS projections indicate that the higher rates will be required through 2046, assuming that the system continues to operate as it has and actuarial assumptions are met.

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The implementation of the Local Control Funding Formula presents local education leaders with the power and flexibility to use resources in new and different ways. Taking full advantage of this opportunity requires leaders to adopt budgeting practices that highlight the tradeoffs among system goals and facilitate the reallocation of scarce resources to support their top priorities. In this brief Mark Murphy reviews the experiences of three California school districts with budget tools that increase their ability to meet their students’ needs.

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The Problem Funding, resources, and effective teachers have been inequitably distributed across American schools for decades — contributing to vast opportunity and achievement gaps between high-need students and their more privileged peers. The Promise The passage of California’s LCFF in 2013, is one of the most promising education funding reforms in recent history, with the potential to effectively address opportunity and achievement gaps for high-need students, including low-income students, English Learners, and foster youth.
Time to Reaffirm the Grand Vision
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California ended 40 years of reliance on categorical funding for schools when Governor Jerry Brown signed the Local Control Funding Formula (LCFF) into law on July 1, 2013. LCFF intends to enhance services for high-needs students through new flexibility, targeted student funding, and local accountability. Two years into LCFF implementation, our research in 18 districts and more than half of the state’s County Offices of Education (COEs) uncovers both reasons for optimism and a few concerns.

Early Implementation of California's Local Control Funding Formula
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California has taken the first steps down an historic path that fundamentally alters how its public schools are financed, education decisions are made, and traditionally underserved students’ needs are met. The Local Control Funding Formula (LCFF), passed with bipartisan legislative support and signed into law by Governor Jerry Brown on July 1, 2013, represents the most comprehensive transformation of California’s school funding system in 40 years. The LCFF significantly loosens the reins of state control over education.
Rethinking Budget Priorities Under the LCFF
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After years of painful budget cuts, new revenues will begin to flow to California school districts in 2014. Thanks to the voters’ approval of Proposition 30 and the adoption of the Local Control Funding Formula (LCFF), nearly all districts can expect budget increases over the next several years. Districts that educate the most challenging students will see the largest gains. When the LCFF is fully implemented many schools and districts will receive 50 to 75 percent more revenue per pupil than they do now.
Can It Support California’s College and Career-ready Goal?
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For decades, when California’s state leaders have wanted to see local school districts respond to shifts in policy and expectations they relied on the state-controlled school finance system to leverage local change. Through the use of categorical programs and earmarked funding, they created incentives for districts that complied and penalties for those that did not. The result: a school finance system that has been roundly criticized as irrational, inequitable, excessively complicated, overly centralized, and inefficient at allocating resources.
Strong Returns from a $19.5 Billion Investment
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Aiming to relieve overcrowded schools operating on multiple tracks, the Los Angeles Unified School District (LAUSD) has invested more than $19 billion to build 130 new facilities over the past decade. In a new PACE policy brief, William Welsh, Erin Coghlan, Bruce Fuller, and Luke Dauter from the University of California – Berkeley analyze the effects on student achievement of this massive initiative. Tracking thousands of students who moved from overcrowded to new facilities over the 2002-2008 period, the authors discovered robust achievement gains for many students.