Michael Sato v. Orange Cty. Dept. of Education

Filing

FILED OPINION (RICHARD C. TALLMAN, N. RANDY SMITH and STEPHEN JOSEPH MURPHY, III) AFFIRMED. Each party shall bear its own costs. Judge: RCT Authoring, FILED AND ENTERED JUDGMENT. [10490452]

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 1 of 30

LAO

January 2014

7 0 Y E A R S O F S E RV I C E

EDBASICS

How Are County Offices of Education (COEs)
Funded Under the Local Control Funding
Formula (LCFF)?
Two-Part Formula
COEs receive funding to (1) provide regional services to their
districts and (2) educate students in COE-run alternative
schools. The amounts associated with each responsibility
are calculated through two separate formulas, then the funds
are combined into one allocation that can be used for either
purpose.

tion
duca time. If a
COEs have target funding rates to be reached over 7
of E
ept.was 2, 201
COE’s total funding level priorty. LCFF
to D
2higher than its new
target level, that COE nge C
will continue toun funded at the higher
J bee
ra
on
level, but it will v. O chived
o not receive additional funding increases.
ar
Sat
ed in 5-56402
cit
1
No.
Regional Services Funding
This COE funding is calculated based on three components: a
base amount, an amount driven by district size, and an amount
driven by average daily attendance (ADA).
Apart from meeting certain district oversight requirements, COEs
have considerable discretion over the use of this funding.
Regional Services Part of Formulaa
• Base funding of $655,920 per county office of education.
• Additional $109,320 per school district in the county.
• Additional $40 to $70 per average daily attendance (ADA) in the county (less
populous counties receive higher per ADA rates).
a Reflects target rates set forth in state law. These target rates are to be adjusted annually moving forward
for cost-of-living adjustments.

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 2 of 30
EDBASICS: FUNDING CALIFORNIA’S EDUCATION SYSTEMS

How Are COEs Funded Under the LCFF?

(Continued)

Alternative School Funding
This COE funding is calculated based on three components: a
base rate; supplemental funding for English learner, low-income,
and foster youth students; and concentration funding if these
student groups make up at least 50 percent of enrollment.
COEs receive this funding for four categories of alternative
education students.
COEs are required to adopt Local Control and Accountability
Plans that describe how they will serve these students.

tion
duca
of E
ept. 2, 2017
D
2
Cty.
g•eStudents n June under the authority of
Eligible student population
who are (1)
an
o
. Or
ved
(2)
ato v 2 archithe juvenile justice system,or probation
referred, (3) on probation,
in S 640
(4) mandatorily expelled.
cited . 15-5
Target baseo
• $11,045 per average daily attendance.a
N rate
Alternative Education Part of Formula

Supplemental funding for
EL/LI and foster youth students
Concentration funding

• Additional 35 percent of base rate.b

• Additional 35 percent of base rate for
EL/LI and foster youth students above
50 percent of enrollment.b

a Reflects target rates set forth in state law. These target rates are to be adjusted annually moving forward
for cost-of-living adjustments.
b Assumes 100 percent of students at court schools are EL/LI.
El/LI = English learner/low-income.

This is one of a series of issue briefs examining important questions about education funding in
California. For more information on this topic, or to request other briefs from this series, contact the
Legislative Analyst’s Office Education section at [phone] or visit our website at www.lao.ca.gov.

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 3 of 30

LAO
7 0 Y E A R S O F S E RV I C E

March 19, 2015

Local Control Funding
Formula Implementation
L E G I S L A T I V E

A N A L Y S T ’ S

Presented to:
Senate Budget and Fiscal Review
Subcommittee No. 1 on Education
tion
duca
of E 017
Hon. Marty Block, Chair
ept.

D
,2
Cty. June 22
e
n
rang
v. O rchived o
o
a
Sat
ed in 5-56402
cit
1
No.

O F F I C E

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 4 of 30
March 19, 2015

LAO

New Funding Formula for
School Districts and Charter Schools

7 0 Y E A R S O F S E RV I C E

Local Control Funding Formula (LCFF) Enacted in June
2013
Previously, more than 40 state categorical programs provided
restricted state dollars that districts could use for only certain
activities.
LCFF removed spending restrictions and established
grade-specific base rate targets, which are adjusted for cost
of living annually.
Districts receive supplemental and concentration funding
for English learner, low-income and foster youth (EL/LI)
students.

tion
duca students in the same
Districts serving the same of E
number of
t.
17
grade spans with the ep
same characteristics receive the same
.D
2, 20
ty
ne 2
amount ofge C
an funding. n Ju
. Or
ed o
ato v 2 archiv
in S
0
cited . 15-564
Per-Student Funding Under LCFF
No
Grade
Spans

Base
Ratesa

K-3
4-6
7-8
9-12

$7,741
7,116
7,328
8,711

Supplemental
Fundingb
$1,548
1,423
1,466
1,742

Concentration
Fundingc
$3,870
3,558
3,664
4,356

a Reflects 2014-15 target rates.
b Equals 20 percent of the associated grade-span base rate. Applies to all English learner, low-income
and foster youth (EL/LI) students.
c Equals 50 percent of the associated grade-span base rate. Applies to districts in which EL/LI enrollment
is above 55 percent of total enrollment. Only generated by students above the threshold.
LCFF = Local Control Funding Formula.

LEGISLATIVE ANALYST’S OFFICE

1

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 5 of 30
March 19, 2015

LAO

LCFF Implementation

7 0 Y E A R S O F S E RV I C E

Target LCFF Rates Higher Than Current Funding Rates
At the time of enactment, funding the LCFF target rates was
estimated to cost $18 billion more than available funding.
The state therefore is phasing in LCFF implementation over
multiple years as additional funding becomes available. The
administration believes full implementation will be reached in
2020-21.
Over the past two years, the Legislature has provided
$6.8 billion in additional K-12 funds for LCFF implementation.
The Governor’s budget for 2015-16 proposes an additional
$4 billion.

tion
duca
of E
ept. 2, 2017
Tracking Funding for ty. D Control Funding Formula
C Local ne 2
ange d on Ju
(In Billions)v. Or
ive
Sato 02 arch
in $70
cited . 15-564Target
Growth
No 60
Base
32% of
Gap to Target

50
30% of
Gap to Target

12% of
Gap to Target

40
30
20
10

2012-13

2013-14

2014-15

2015-16
Proposed

72%

80%

85%

Percent of Target Level Funded

LEGISLATIVE ANALYST’S OFFICE

2

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 6 of 30
March 19, 2015

LAO

LCFF for County Offices of Education
(COEs)

7 0 Y E A R S O F S E RV I C E

Two-Part Formula
The “Operations” component of the formula supports basic
COE operations and services for districts in the county.
The “Alternative Education” component supports COE
alternative schools, including court schools and county
community schools. This grant is structured like the district
formula, but with different funding rates and concentration
thresholds.
COEs can spend funds generated by the two-part formula for
any purpose.

tion
duca
of E
Overview of Local Control Funding Formula for tCOEs
ep . 2, 2017
2
ty. D
2014-15
ge C on June
an
Operations Grant
. Or
ed
ato v 2 archiv
S
in
0 Base funding of $661,495 per COE.
Funding target
cited . 15-564 Additional $110,249 per school district in the county.
No
Additional $40 to $71 per ADA in the county (less populous counties
receive higher per-ADA rates).
Alternative Education
Eligible student population

Target base rate
Supplemental funding for EL, LI, and
foster youth
Concentration funding

Students who are (1) under the authority of the juvenile justice
system, (2) probation-referred, (3) on probation, or (4) mandatorily
expelled.
$11,139 per ADA.
Additional 35 percent of COE base grant.a
Additional 35 percent of COE base grant for EL/LI students above
50 percent of enrollment.a

a For court schools, formula calculates supplemental and concentration funding assuming 100 percent of students are EL/LI.
COE = county office of education; ADA = average daily attendance; EL = English learner; and LI = low-income.

LEGISLATIVE ANALYST’S OFFICE

3

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 7 of 30
March 19, 2015

LAO

COE Formula Fully Implemented

7 0 Y E A R S O F S E RV I C E

COEs Received $1 Billion in Total Funding in 2014-15
Over the past two years, the Legislature has provided
$58 million in additional funds for COE LCFF implementation.
This was sufficient to bring any COE formerly below its target
rate to the target.
COEs are funded at the greater of (1) their calculated LCFF
target rate or (2) the amount of funding they received in
2012-13. In 2014-15, 20 COEs are funded at their LCFF target
rates and 38 COEs are funded above their target rates.

tion
duca
of E
ept. 2, 2017
2
ty. D
ge C on June
an
. Or
ed
ato v 2 archiv
S
in
0
cited . 15-564
No

LEGISLATIVE ANALYST’S OFFICE

4

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 8 of 30
March 19, 2015

LAO

Governor’s 2015-16 Budget Proposals

7 0 Y E A R S O F S E RV I C E

No Concerns With the Governor’s Major LCFF District
Proposals, but Two Recommended Modifications to
Formula Implementation
Recommend Recognizing That Many Basic Aid Districts
Already Are Funded at Their LCFF Targets
Count all local property tax revenue toward basic aid
districts’ LCFF allotments (and the Proposition 98 minimum
guarantee) beginning in 2015-16.
Would not affect the amount of total funding basic aid
districts receive.

ion

Would increase transparency Edufree up around
and cat
f 98 General Fund. (Absent
$400 million non-Proposition
pt. o , 2017
. De the Governor underestimates basic
this change, wetbelieveune 22
Cy
angeLCFFon J by $70 million in 2014-15 and
r
aid districts’ ed costs
v. O
iv
ato$110 2 archin 2015-16.)
million
S

in
0
cited . 15-564
No

Recommend Amending Statute to Avoid Creating New
Funding Disparities Among COEs
Revise statutory provision to stop providing additional state
aid to certain COEs on top of their LCFF funding allotments.
Would maintain long standing state practice that COEs are
not allowed to benefit disproportionately from differnences in
their underlying property tax revenues.
Would free up an estimated $40 million in 2014-15 and
$60 million in 2015-16 for other Proposition 98 purposes.
(Absent this change, we believe the Governor underestimates
COE’s LCFF costs by $16 million in 2014-15 and $36 million
in 2015-16.)

LEGISLATIVE ANALYST’S OFFICE

5

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 9 of 30
March 19, 2015

LAO

Review of First Year of LCAPs

7 0 Y E A R S O F S E RV I C E

Summary of Major Findings and Assessment
Findings

Assessment

LCAP Design

• Statute establishes ambitious set of
requirements, including requiring districts
to set goals for 12 student subgroups and
each of their schools.

• LCAP has potential as a strategic plan if
refined to be more focused on districts’
key performance issues.

Goals and
Priority Areas

• Some districts lack overarching goals.
• Statute appears to emphasize eight
state priority areas equally. Districts are
prioritizing among them.

• Districts’ goals not targeted to areas in
greatest need of improvement.
• In some cases, districts do not appear
to be carefully considering which
priority areas to align with their goals.

Actions

• Districts pursuing relatively similar
actions.
• Detail of districts’ actions varies widely.
Some provide step-by-step information,
while others only provide general
information.
• Districts vary in extent to which they link
funding with actions.

• Districts rarely differentiate between
new and ongoing actions, making
understanding new strategies difficult.
• Districts vary in which funding sources
they include, thereby omitting some
actions supported with non-LCFF
funding.

tion
duca
of E
ept. 2, 2017
2
ty. D
ge C on June
an
. Or
ed
ato v 2 archiv
S
in
0
cited . 15-564
Metrics and Targets NoDistricts include some, but not all metrics
• Districts rarely include baseline data
•
and targets in their LCAPs.
• Most districts set single target for all
students.
• Many metrics do not apply to elementary
school districts.

EL/LI Services

• Districts’ information on EL/LI services
varies.

for metrics, making targets less
meaningful.

• Difficult to determine if and how districts
are improving services.
• Districts often fail to justify rationale for
providing districtwide or schoolwide
services.

LCAP = Local Control and Accountability Plan; SBE = State Board of Education; LCFF = Local Control Funding Formula;
COEs = county offices of education; and EL/LI = English learner, low-income and foster youth.

LEGISLATIVE ANALYST’S OFFICE

6

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 10 of 30
March 19, 2015

LAO

Recommendations

7 0 Y E A R S O F S E RV I C E

Overall, LCAPs Show Promise as Strategic Plans but Would
Be More Useful if Districts Were Allowed to Focus on Their
Key Performance Challenges
Recommend Legislature Refine LCAP Requirements to:
Emphasize clear strategic plans over detailed,
comprehensive plans.
Allow districts to focus on key metrics.
Clarify metrics in some areas to help monitor performance.
Require districts to indicate whether actions are new or
ion
ongoing.
ucat

f Ed
pt. o , 2017
. De Direct2
Recommendge Cty
Legislature une 2 the California Department of
nJ
ran
Education to Disseminate Examples of Model LCAPs
v. O rchived o
to
in Sa 6402 a
cited . 15-5
No Recommend Legislature Monitor Quality of Information
Regarding EL/LI Students

LEGISLATIVE ANALYST’S OFFICE

7

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 11 of 30

Updated:

An Overview of the
Local Control Funding Formula
MAC TAYLOR • L E G I S L A T I V E A N A L Y S T • UPDATED DECEMBER 2013

Executive Summary
Legislation enacted in 2013-14 made major changes both to the way the state allocates funding
to school districts and the way the state supports and intervenes in underperforming districts. The
legislation was the culmination of more than a decade of research and policy work on California’s
K-12 funding system. This report describes the major components of the legislation, with the first
tion
duca
half of the report describing the state’s new funding formula and the second half describing the
of E
ept. 2report, 7
state’s new system of district support and intervention. Throughout the , 201 we focus primarily
ty. D
e2
on how the legislation affects school districts, but we also n Jun some of the main effects on
ge C o mention
an
d
. Or
charter schools. (This report does not cover thehivefunding formula for county offices of education
ato v 2 arc new
S
n
0
[COEs], which differs d isignificant ways from the new district formula.) The report answers many
cite in . 15-564
of the questions that have been raised in the aftermath of passage regarding the final decisions made
No
by the Legislature and the Governor in crafting new K-12 funding and accountability systems for
California.

CONTENTS
The Formula .....................................................................................................................2
Components ........................................................................................................................... 2
Spending Restrictions ............................................................................................................ 6
Cost of Formula...................................................................................................................... 8
Distributional Effects of Formula .......................................................................................... 8

Transparency and Accountability Under New System ..................................................10
District Development and Adoption of LCAPs....................................................................10
COE Review of District LCAPs .............................................................................................13
Support and Intervention .....................................................................................................14

Major Decisions Ahead ..................................................................................................18
Conclusion ......................................................................................................................20

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 12 of 30
A N L AO R E P O R T

THE FORMULA
COMPONENTS

the target grade-span rates reflect the differences
among existing funding levels across the grade
Chapter 47, Statutes of 2013 (AB 97, Committee
spans. Specifically, the new base-rate differentials
on Budget) created the Local Control Funding
are linked to the differentials in 2012-13 statewide
Formula (LCFF). Two subsequently enacted pieces
average revenue limit rates by district type (the
of legislation—Chapter 70, Statutes of 2013 (SB 91,
same rates previously used to set charter school
Committee on Budget) and Chapter 357, Statutes of
grade-span funding rates). These grade-span
2013 (SB 97, Committee on Budget)—made minor
differences are intended to recognize the generally
changes to the formula. As set forth in this package
higher costs of education at higher grade levels.
of legislation, the LCFF has several components,
Adjusts Early Elementary and High School
described below. (Except where otherwise noted,
Base Rates. The LCFF includes certain adjustments
the components that apply to school districts also
to the K-3 and high school base rates. These
apply to charter schools.)
adjustments effectively increase the base rates
Sets Uniform, Grade-Span Base Rates. Under
for these two grade spans. The K-3 adjustment
the new formula, districts receive the bulk of
increases the K-3 base rate by 10.4 percent (or
their funding based on average daily attendance
tion
initially $712 per ADA)—for an adjusted, initial
(ADA) in four grade spans. Figure 1 displays the
duca
o E
K-3 base rate off$7,557. This adjustment is intended
four LCFF grade-span base rates as specified in
ept. 2, 2017
to cover costse 2
ty. D un associated with class size reduction
Chapter 47. Each year, beginning in 2013-14, these e C
g (CSR) inJthe early grades. (The $712 per-pupil
on
Oran
target base rates are to be updated for cost-of-living ived
o v. arch adjustment reflects the average K-3 CSR rate under
Sat
adjustments (COLAs). tThe differences6402
ed in 5-5 among
ci
the previous funding rules.) The high school
.1

No

Figure 1

Overview of Local Control Funding Formulaa
Formula Component

Rates/Rules

Target base rates (per ADA) b

•
•
•
•

Base rate adjustments

• K-3: 10.4 percent of base rate.
• 9-12: 2.6 percent of base rate.

Supplemental funding for certain student subgroups
(per EL/LI student and foster youth)

20 percent of adjusted base rate.

Concentration funding

Each EL/LI student above 55 percent of enrollment
generates an additional 50 percent of adjusted base rate.

Add-ons

Targeted Instructional Improvement Block Grant, Hometo-School Transportation, Economic Recovery Target.

K-3: $6,845
4-6: $6,947
7-8: $7,154
9-12: $8,289

a Applies to school districts and charter schools.
b Reflects target rates as specified in statute. Does not include 1.57 percent cost-of-living adjustment provided in 2013-14.
ADA = average daily attendance; EL = English learner; and LI = low-income (defined as a student receiving a free or reduced-price meal).

www.lao.ca.gov

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 13 of 30
A N L AO R E P O R T

adjustment increases the grades 9-12 base rate by
2.6 percent (or initially $216 per ADA)—for an
adjusted, initial high school base rate of $8,505.
This adjustment is not designated for any particular
activity, but the genesis of the adjustment related
to the costs of providing career technical education
(CTE) in high school. The $216 adjustment
reflects the average total amount spent per pupil
on Regional Occupational Centers and Programs
(ROCPs) under the old system. Moving forward,
the adjustment percentages will remain the same,
though the dollar value of the adjustments will
increase as the base rates rise due to statutorily
authorized COLAs.
Includes Supplemental Funding for English
Learners and Low-Income (EL/LI) Students. The
LCFF provides additional funds for particular
student groups. Under the formula, each EL/LI
student and foster youth in a district generates an
additional 20 percent of the qualifying student’s
adjusted grade-span base rate. For instance, an LIge
n

Figure 2

kindergartener generates an additional $1,511 for
the district, which is 20 percent of the adjusted
K-3 base rate of $7,557. (Because all foster youth
also meet the state’s LI definition, hereafter we do
not refer to them as a separate subgroup.) For the
purposes of generating this supplemental funding
(as well as the concentration funding discussed
below), a district’s EL/LI count is based on a
three-year rolling average of EL/LI enrollment.
Students who are both EL and LI are counted
only once. For more information regarding the
classification of EL/LI student groups, see the box
on page 4.
Provides Concentration Funding for Districts
With Higher EL/LI Populations. Districts
whose EL/LI populations exceed 55 percent of
their enrollment receive concentration funding.
Specifically, as shown in Figure 2, these districts
ation
receive an additional uc
d 50 percent of the adjusted base
of E 017
grantDept. EL/LI student above the 55 percent
for each
,2
ty.
Cthreshold.u(Ae 22 school cannot receive
n charter
nJ

o
Ora
o v. archived
at
in S
02
cited . 15-564
No

Illustration of How LCFF Works
Elementary District

Concentration Threshold
(55 percent of enrollment)

Funding Each Student Generates
Student

Base K-3 Rate

K-3 Adjustment

EL/LI Supplement

EL/LI

$6,845

$712

$1,511

EL/LI

$6,845

$712

$1,511

Non-EL/LI

$6,845

$712

EL/LI Concentration

Total
$9,068

$3,779

$12,847

$7,557

EL/LI = English learner/low-income.

www.lao.ca.gov

3

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 14 of 30
A N L AO R E P O R T

concentration funding for a greater proportion of
EL/LI students than the district in which it resides.
For instance, if a charter school has 80 percent EL/
LI enrollment but the district in which it resides
has only 60 percent EL/LI enrollment, the charter
school’s concentration funding is capped based on
60 percent EL/LI enrollment. If a charter school
has multiple sites located in multiple districts,
its concentration funding is capped based on the
encompassing district with the highest EL/LI
concentration, or its own EL/LI concentration if
lower.)
Effect of Supplemental and Concentration
Funding on a District’s Total Allocation.
In the description above, the supplement

and concentration factors are described in
per-student terms. Alternatively, the supplement
and concentration factors can be viewed in
per-district terms. Thinking of the supplement and
concentration factor in this latter way allows total
district funding allocations to be compared more
easily. As seen in Figure 3, as a district’s proportion
of EL/LI students increases, so does its total
funding allocation. For instance, a district with
50 percent EL/LI students has a total allocation that
is 10 percent higher than the same-sized district
with no EL/LI students. In Figure 3, the first section
of the line (colored blue) shows percent increases in
a district’s funding allocation up to the 55 percent
EL/LI threshold, whereas the second section of

Classification of English Learner/Low-Income (EL/LI) Students

ion
ucat
dFunding Formula (LCFF),
Classification of EL Students. For the purposes of the Local Control
E
t. of
epand the2, 2017 English Language
students are classified as EL based on a home language survey
ty. D ne 2 California
ge Creports Juthe home language survey that a
Development Test (CELDT). If a parent or an
n on
r guardian
v. O initial ed o
o student’s rchivlanguage learned or the primary language used at
language other than English is the
Sat
02 a
ed in 5-564the CELDT. If the student is determined by the school district
home, the student iis required to take
ct
1
No.
not to be English proficient based on CELDT results, then the student is classified as EL. Each year
thereafter, an EL student is reassessed using the CELDT. Once a student is determined to be English
proficient—based on CELDT results, performance on other state assessments, teacher input, and
local criteria—the student is reclassified as Fluent English Proficient (FEP). Each school district can
use its own criteria for reclassifying EL students as FEP. Under the LCFF, no time limit is placed on
how long an EL student can generate supplemental and concentration funding for a district, but a
student reclassified as FEP who is not also LI will no longer generate additional funding.
Classification of LI Students. For the purposes of the LCFF, LI students are those that qualify
for free or reduced-price meals (FRPM). Eligibility for FRPM is determined by school districts
through a variety of means. In many cases, students are determined FRPM-eligible through an
application process sent to students’ households. If a household’s income is below 185 percent of
the federal poverty line ($43,568 for a family of four), the student is eligible for FRPM. In other
cases, students are directly certified as FRPM-eligible due to participation in other social service
programs, such as the California Work Opportunity and Responsibility to Kids program. Foster
youth automatically are eligible for FRPM, therefore the foster family’s income has no bearing on
the foster student’s FRPM eligibility. An LI student will generate supplemental and concentration
funding for a district until the student is no longer FRPM-eligible.

www.lao.ca.gov

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 15 of 30
A N L AO R E P O R T

the line (colored red) shows funding increases
once a district passes the 55 percent concentration
threshold and begins receiving concentration
funding in addition to supplemental funding.
As shown in the figure, a district in which every
student is EL/LI has a total funding allocation
42.5 percent greater than the same-sized district
with no EL/LI students.
Treats Two Existing Categorical Funding
Streams as Add-Ons. Funds from two
existing programs—the Targeted Instructional
Improvement Block Grant and Home-to-School
(HTS) Transportation program—are treated
as add-ons to the LCFF. Districts that received
funding from these programs in 2012-13 will
continue to receive that same amount of funding
in addition to what the LCFF provides each year.

Districts that did not receive funds from these
programs in 2012-13 do not receive these add-ons
moving forward.
Also Provides New Economic Recovery
Target (ERT) Add-On to Some Districts. Had
the revenue limit deficit factor been retired and
categorical program funding been restored, the
previous funding system would have generated
greater levels of funding than the LCFF for
approximately 230 districts (about 20 percent of
districts). To address this issue, the new funding
system provides an ERT add-on to a subset of these
districts. As shown in Figure 4 (see next page), the
ERT add-on amount equals the difference between
the amount a district would have received under
the old system and the amount a district would
receive based on the LCFF in 2020-21. To derive

tion
duca
Figure 3
of E
ept. 2, 2017
How a District’s EL/LI Concentration AffectsD LCFF Allocation
2
ty. its
ge C on June
an
Percent Increase in District Funding Allocation
. Or
ed
ato v 2 archiv
S
in
0
cited . 15-564
42%
No
38
Due to Supplemental Funding

34

Due to Supplemental and Concentration Funding

30
26
22
18
14
10
6
2
10

20

30

40

50

55

60

70

80

90

100%

Percent of EL/LI Students in District

EL/LI = English learner/low-income.

www.lao.ca.gov

5

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 16 of 30
A N L AO R E P O R T

the amount a district
Figure 4
would have received
Calculating Economic Recovery Target (ERT)
under the old system in
2020-21, assumptions are
Total District Funding Allotment
made that the revenue
limit deficit factor would
ERT
have been retired, a
Categorical
Funding
1.94 percent COLA would
have been applied to
revenue limits every year
LCFF
from 2013-14 through
Revenue
Limit
2020-21, and categorical
Funding
funding would be
increased to the district’s
2007-08 level (reflecting
an increase of 24 percent
Old System
New System
over the 2012-13 level).
Approximately 130
ion
the majority of categoricaltspending restrictions
districts are eligible
duca
of E
that districts faced under17 old system were
to receive the ERT add-on. The 100 remaining
ept. 2, 20 the
ty. D u Under
eliminated.ne 2 the new system, 14 categorical
districts are not eligible for the add-on because ofge C
nJ
ran
programs remain. Figure 5 lists those categorical
v. O rchived o
their exceptionally high per-pupil funding rates.
to
programs that were eliminated and those that are
in Sa district 2 a
0
Specifically, a provisioned
a
cit disallows5-564 from
1
retained under the new system.
receiving an ERT add-on No. funding exceeds the
if its
Districts Eventually Must Ensure
90th percentile of per-pupil funding rates under the
“Proportionality” When Spending EL/LI
old system (estimated to be approximately $14,500
Funds. Under the LCFF, districts will have to use
per pupil in 2020-21).
supplemental and concentration funds to “increase
or improve services for EL/LI pupils in proportion
SPENDING RESTRICTIONS
to the increase in supplemental and concentration
The LCFF eliminates the vast majority of
funds.” The exact meaning and regulatory effect of
categorical spending restrictions. In their place, the
this proportionality clause is currently unknown.
LCFF establishes a more limited set of spending
On or before January 31, 2014, the State Board of
restrictions, some of which apply over the long
Education (SBE) is required to adopt regulations
term and some of which are applicable only during
regarding how this clause will be operationalized.
the initial transition period.
These regulations also may include the conditions
under which districts can use supplemental and
Long-Term Spending Requirements
concentration funds on a school-wide basis.
Many Existing Categorical Spending
Districts Encouraged to Have K-3 Class
Requirements Removed. Approximately threequarters of categorical programs were eliminated in Sizes No More Than 24 Students. Under full
implementation of the LCFF, as a condition of
tandem with the creation of the LCFF. As a result,
www.lao.ca.gov

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 17 of 30
A N L AO R E P O R T

receiving the K-3 base-rate adjustment, districts
must maintain a K-3 school-site average class size of
24 or fewer students, unless collectively bargained
otherwise. If a district negotiates a different class
size for those grades, the district is not subject
to this provision and will continue to receive the
adjustment. Absent a related collective bargaining
provision, were a particular school site in a district to
exceed an average class size of 24, the district would
lose the K-3 adjustment for all its K-3 school sites.
Restrictions on HTS Transportation Funding
Maintained. Starting in 2013-14, districts receiving
the HTS Transportation add-on must spend the
same amount of state HTS Transportation funds as
they spent in 2012-13. Districts that did not receive
HTS Transportation funds in 2012-13 and therefore
are not eligible for the add-on moving forward,

do not have similar transportation spending
requirements.
Short-Term Requirements
Specific Maintenance-of-Effort (MOE)
Requirements Imposed During First Two Years
of Implementation. Of the state categorical funds
they received, school districts are required to
spend no less in 2013-14 and 2014-15 than they
did in 2012-13 on ROCPs and Adult Education. If
districts received funding for ROCPs and/or HTS
Transportation through a joint powers authority
(JPA), they must continue to pass through those
funds to the JPA in 2013-14 and 2014-15. Funds
used to satisfy these MOE requirements count
towards a district’s LCFF allocation. Consequently,
districts subject to these MOE requirements will

tion
duca
Figure 5
of E
ept. 2, 2017
y. D
Treatment of Categorical Programs Under tLCFF ne 2
ge C on Ju
Retained Programs
Oran
o v. archived
t
Foster Youth Services
Adults in Correctional Facilities S
n a
ed iSafety5-56402
cit
Mandates Block Grant
After School Education and
1
No.
Partnership Academies
Agricultural Vocational Education
American Indian Education Centers and
Early Childhood Education Program
Assessments
Child Nutrition

Quality Education Improvement Act
Special Education
Specialized Secondary Programs
State Preschool

Eliminated Programs
Advanced Placement Fee Waiver
Alternative Credentialing
California High School Exit Exam Tutoring
California School Age Families
Categorical Programs for New Schools
Certificated Staff Mentoring
Charter School Block Grant
Civic Education
Community-Based English Tutoring
Community Day School (extra hours)
Deferred Maintenance
Economic Impact Aid
Educational Technology
Gifted and Talented Education
Grade 7-12 Counseling
High School Class Size Reduction

Instructional Materials Block Grant
International Baccalaureate Diploma Program
National Board Certification Incentives
Oral Health Assessments
Physical Education Block Grant
Principal Training
Professional Development Block Grant
Professional Development for Math and English
School and Library Improvement Block Grant
School Safety
School Safety Competitive Grant
Staff Development
Student Councils
Summer School Programs
Teacher Credentialing Block Grant
Teacher Dismissal

www.lao.ca.gov

7

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 18 of 30
A N L AO R E P O R T

have relatively less general purpose funding over
demographics, and growth in property tax revenue.
this two-year period. (A district that already shifted
Additional LCFF Funding to Be Allocated
all funds away from these programs as part of its
Based on Funding “Gap.” Over the course of
response to categorical flexibility is not subject to
implementation, districts will receive new funding
these MOE requirements.)
based on the difference (or gap) between their
Districts Must Make Progress Toward Meeting
prior-year funding level and their target LCFF
CSR Goal During Transition Period. As mentioned funding level. Every district will see the same
earlier, to receive the K-3 base-rate adjustment,
proportion of their gap closed, but the dollar
districts by full LCFF implementation must reduce
amount they receive will vary depending on the
K-3 class size to no more than 24 students, unless
size of their gap. For example, in 2013-14, districts
collectively bargained otherwise. Over the phase-in
(in most cases) will have 12 percent of their gap
period (discussed later in more detail), districts
filled. For a district whose gap is $100 million, this
must make progress toward this goal in proportion
corresponds to $12 million in additional funding.
to the growth in their funding. For example, if a
For a district whose gap is $10 million, this
district started with an average K-3 class size of
corresponds to $1.2 million in additional funding.
28 students, and it received new funding equivalent
Figure 6 depicts transition funding for years one,
to 10 percent of its LCFF funding gap, that district
four, and eight for a non-ERT district as well as an
would have to reduce average K-3 class size to
ERT district (discussed below).
ation
27.6 students (10 percent of the difference between
Funding for ERTuc
d Add-On to Be Allocated
of E
28 and 24). Similar to the CSR requirement under
in Equal pt.
Over Eight-Year Period.
e Increments 2017
ty. D une to ,
CDistricts eligible22 receive the ERT add-on
full implementation, this interim requirement doese
nJ
rang
v. O K-3chived o
not apply to districts that collectively bargain
will receive incremental ERT funding over the
to
in Sa 6402 ar
class sizes.
course of implementation in addition to their gap
cited . 15-5
funding discussed above. As depicted in Figure 6,
No
COST OF FORMULA
an ERT district will receive the same proportion
As explained below, the LCFF costs
of gap funding towards its LCFF target as other
significantly more than the previous funding
non-ERT districts, as well as a portion of its ERT
system. As a result, it will take several years to fully
add-on. In 2013-14, an ERT district will receive
transition to the new funding formula.
one-eighth of its add-on, in year two two-eighths,
Fully Implementing LCFF and ERT Add-On
in year three three-eighths, etcetera. In year eight
Estimated to Cost an Additional $18 Billion. Were
(the estimated year of full implementation), ERT
the state to fully implement the LCFF in 2013-14,
districts will receive their full ERT add-on (as
the costs would be $18 billion more than the state
calculated in 2013-14) and will continue to receive
spent on K-12 education in 2012-13. (This assumes
this add-on amount in perpetuity. Changes in the
current levels of ADA, EL/LI enrollment, and
implementation timeline for LCFF will not affect
property tax revenue.) Given the cost, coupled with
the ERT funding schedule.
projected growth in Proposition 98 funding, fully
DISTRIBUTIONAL EFFECTS OF FORMULA
implementing the new system is anticipated to take
Vast Majority of Districts to Receive More
eight years. Each year the total General Fund cost
State Aid, No District to Get Less State Aid.
of the new system will change somewhat due to
providing COLAs, fluctuations in ADA and student The vast majority of districts will see significant
www.lao.ca.gov

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 19 of 30
A N L AO R E P O R T

increases in funding under the LCFF. That
notwithstanding, statute further includes a “hold
harmless” provision that specifies no district is to
receive less state aid than it received in 2012-13.
Specifically, no district is to receive less moving
forward than it received last year for revenue limits
(calculated on a per-ADA basis) and categorical
programs (calculated based on the district’s total
entitlement).
A Few Districts Will Not Receive Additional
Funds. Though most districts will see funding
increases under the new formula, approximately
15 percent of districts will not receive additional
funding. (These districts, which have particularly
high existing per-pupil funding rates, are the ones
that benefit from the hold harmless provision

described above.) Three types of districts are
unlikely to receive additional funding.
•

Basic Aid Districts. Most basic aid
districts currently have more per-pupil
funding than needed to meet their LCFF
targets and their ERT. As a result, they will
continue to receive the same amount of
state aid they received in 2012-13 (though,
as discussed below, a few districts will fall
out of basic-aid status and begin receiving
state aid as a result of the LCFF).

•

Non-Isolated, Single-School Districts.
Prior to 2012-13, these types of districts
were eligible to receive additional funding
if the school met the necessary small

tion
duca a
Illustration of How Transition Works for Two Types of E
of Districts
ept. 2, 2017
2
ty. D
ge C on June
an Year 4d
Year 1
Year 8
. Or
e
(2013-14)
(2016-17)
(2020-21)
ato v 2 archiv
in S
0
cited . 15-564
No
Figure 6

b

Non-ERT
District

ERT
District

Non-ERT
District

b,c

ERT
District

Non-ERT
District

ERT
District

ERT
a

This illustration assumes that the two districts have the same average daily attendance and
student demographics. As a result, both districts have the same LCFF target. The only
difference between the districts is that one is eligible for an ERT add-on due to historical
funding levels.
b Each year, target base rates will be provided a cost-of-living adjustment. As a result, over
the course of the phase in, districts’ LCFF targets will be increasing.
c Based on current projections, LCFF will take eight years to fully implement.

ERT Add-On
LCFF Target
Growth to LCFF Target
2012-13 Allocation

ERT = Economic Recovery Target.

www.lao.ca.gov

9

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 20 of 30
A N L AO R E P O R T

school (NSS) ADA requirements. Starting
in 2013-14, schools that are not geographically isolated are no longer eligible for NSS
funding. As a result, these districts’ 2012-13
funding levels exceed their LCFF targets
and they will continue receiving their
2012-13 amounts until those amounts drop
below their LCFF targets.
•

Anomalous Districts. Some districts had
funding levels under the old system that
were abnormally high either because of
peculiar categorical rules (such as receiving
an extremely high meals-for-needy-pupils
add-on) or peculiar charter-school conversion
rules (used by a few districts to receive
significant fiscal benefit from conversions).
These districts also will continue to receive
their 2012-13 funding amounts until those
amounts drop below their LCFF targets.

A Few Districts Likely to Fall Out of Basic
Aid Status and Begin Receiving State Aid.
Under the previous funding system, property tax
revenue counted only against a district’s revenue
limits. Consequently, basic aid districts were
those districts whose revenue limit entitlements
were equal to or less than their local property
tax revenue. Under the LCFF, local property tax
revenue counts against a district’s entire LCFF
allocation (which has base rates higher than old
revenue limit rates and greater funding for EL/
LI students). As a result, the threshold for basic
aid status is significantly higher under the LCFF.
Moreover, some districts recently entered basic aid
status as a result of state cuts in revenue limit rates.
These districts are most likely to fall out of basic aid
status under the new system, but a few other basic
aid districts also might fall out of basic aid status
tion
due to increased funding levels under the LCFF.
duca
E

of
ept. 2, 2017
2
ty. D
ge C on June
an
Or
d
TRANSPARENCYaAND ACCOUNTABILITY
to v. archive
S
in
6402
citedSYSTEM
15-5
UNDER NEWNo.
In addition to creating a new funding formula,
the 2013-14 package of legislation establishes a set
of new rules relating to school district transparency
and accountability. Specifically, under the new
rules, districts are required to adopt Local Control
and Accountability Plans (LCAPs). Districts that
do not meet the goals specified in their LCAPs and
fail to improve educational outcomes are to receive
assistance through a new system of support and
intervention. We describe this new system in more
detail below.

DISTRICT DEVELOPMENT AND
ADOPTION OF LCAPS
Districts Must Set Annual Goals in Eight
Specified Areas. Each LCAP must include a school

10

www.lao.ca.gov

district’s annual goals in each of the eight areas
shown in Figure 7. These eight areas of specified
state priorities are intended to encompass the
key ingredients of high-quality educational
programs. Figure 8 (see page 12) identifies how
districts are to measure success in each of the
eight areas, with districts required to include
associated data in their LCAPs. The plans must
include both district-wide goals and goals for each
numerically significant student subgroup in the
district. (To be numerically significant, a district
must have at least 30 students in a subgroup, with
the exception of foster youth, for which districts
must have at least 15 students.) The student
subgroups that must be addressed in the LCAPs
are listed in Figure 9 (see page 12). (In addition

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 21 of 30
A N L AO R E P O R T

to specified state priorities, districts’ LCAPs can
include annual goals in self-selected areas of local
priority.)
Districts Must Specify Actions They Will Take
to Achieve Goals. A district’s LCAP must specify
the actions the district plans to take to achieve
its annual goals. The specified actions must be
aligned with the school district’s adopted budget.
For example, a school district could specify that it
intends to provide tutors to all EL students reading
below grade level to improve its EL reclassification
rate. To ensure the LCAP and adopted budget
were aligned, the school district would be required
to include sufficient funding for EL tutors in its
adopted budget plan.
Districts Must Use SBE-Adopted LCAP
Template. In preparing their LCAP, districts
are required to use a template developed by SBE.
The template is intended to create consistency in

LCAPs across the state and assist school districts in
developing their plans. The SBE is required to adopt
the LCAP template by March 31, 2014.
Districts Must Solicit Input From Various
Stakeholders in Developing Plan. Figure 10
(see page 13) outlines the process a district must
follow in adopting its LCAP. One of the main
procedural requirements is that a district consults
with its school employees, local bargaining units,
parents, and students. As part of this consultation
process, districts must present their proposed
plans to a parent advisory committee and, in some
cases, a separate EL parent advisory committee.
(EL parent advisory committees are required only
if ELs comprise at least 15 percent of the district’s
enrollment and the district has at least 50 EL
students.) The advisory committees can review
and comment on the proposed plan. Districts
tion
must respond in writing to the comments of the
duca
E

of
ept. 2, 2017
2
ty. D
ge C on June
an
Figure 7
. Or
ed
ato v 2 archiv
S
i Priority Must Be Addressed in LCAPs
0
Eight Areas of iStaten
c ted . 15-564
No

Student Achievement

School Climate

Basic Services

Student Engagement

Areas of State Priority

Implementation of Common
Core State Standards

Other Student Outcomes

Parental Involvement

Course Access

LCAP = Local Control and Accountability Plan.

www.lao.ca.gov

11

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 22 of 30
A N L AO R E P O R T

Figure 8

Required Data for Each of Eight State Priority Areas
Student Achievement

Parental Involvement

•
•
•
•
•
•

• Efforts to seek parent input.
• Promotion of parental participation.

Performance on standardized tests.
Score on Academic Performance Index.
Share of students that are college and career ready.
Share of ELs that become English proficient.
EL reclassification rate.
Share of students that pass Advanced Placement
exams with 3 or higher.
• Share of students determined prepared for college
by the Early Assessment Program.

Basic Services
• Rate of teacher misassignment.
• Student access to standards-aligned
instructional materials.
• Facilities in good repair.

Student Engagement
• School attendance rates.
• Chronic absenteeism rates.
• Middle school dropout rates.
• High school dropout rates.
• High school graduation rates.

Implementation of Common Core
State Standards (CCSS)
• Implementation of CCSS for all students, including
EL.

Other Student Outcomes
• Other indicators of student performance in
required areas of study. May include performance
on other exams.

tion
duca
of E
ept. 2, 2017
School Climate
2
ty. D
ge C on June
• Student suspension rates.
an
• Student expulsion rates.
. Or
ed
• Other local measures.
ato v 2 archiv
S
in
0
cited . 15-564
EL = English learner.
No
Course Access

• Student access and enrollment in all required
areas of study.

Figure 9

Student Subgroups to Be Included in
Local Control and Accountability Plans
Racial/Ethnic Subgroups:
Black or African American
American Indian or Alaska Native
Asian
Filipino
Hispanic or Latino
Native Hawaiian or Pacific Islander
White
Two or more races
Other Subgroups:
Socioeconomically disadvantaged students
English learners
Students with disabilities
Foster youth

12

www.lao.ca.gov

advisory committees. Districts also are required to
notify members of the public that they may submit
written comments regarding the specific actions
and expenditures proposed in the LCAP.
LCAP to Be Adopted Every Three Years And
Updated Annually. Districts are required to adopt
an LCAP by July 1, 2014 and every three years
thereafter. In the interim years between adoptions,
districts are required annually to update their
LCAPs using the SBE template. Each year, districts
must adopt (or update) their LCAPs prior to the
adoption of their budget plans. Annual updates
must review a school district’s progress towards
meeting the goals set forth in its LCAP, assess the
effectiveness of the specific actions taken toward
achieving these goals, and describe any changes
the district will make as a result of this review and

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 23 of 30
A N L AO R E P O R T

assessment. The school district also must specify
the expenditures for the next fiscal year that will be
used to support EL/LI and foster youth students,
as well as former ELs redesignated as English
proficient. Districts also are required to hold at
least two public hearings to discuss and adopt (or
update) their LCAPs. The district must first hold at
least one hearing to solicit recommendations and
comments from the public regarding expenditures
proposed in the plan. It then must adopt (or
officially update) the LCAP at a subsequent hearing.

COE REVIEW OF DISTRICT LCAPS
COE Can Ask for Clarification, Make
Recommendations Regarding District LCAPs.
Within five days of adopting (or updating) its
LCAP, a district must submit its plan to its COE
for review. Figure 11 (see next page) displays the
process of COE review. Before August 15 of each
year, the COE can seek clarification in writing

from the district about the contents of its LCAP.
The district must respond to these requests
within 15 days. Then, within 15 days of receiving
the district’s response, the COE can submit
recommendations for amendments to the LCAP
back to the district. The district must consider the
COE recommendations at a public hearing within
15 days, but the district is not required to make
changes to its plan.
COE Must Approve LCAP if Three Conditions
Are Met. The COE must approve a district’s
LCAP by October 8 if it determines that (1) the
plan adheres to the SBE template, (2) the district’s
budgeted expenditures are sufficient to implement
the strategies outlined in its LCAP, and (3) the
LCAP adheres to the expenditure requirements for
supplemental and concentration funding. As we
discuss in the next section, districts whose LCAPs
ation
are not approved EducCOE are required to receive
by the
of
7
additional support. , 201
ept.
D

22
ty.
ge C on June
Oran
Figure 10
o v. archived
Sat
ed in 5-56402
School DistrictitLCAP Adoption Process
c
1
No.
Solicit written comments
on proposed plan from public.

Develop proposed plan.

Respond in writing
to comments of parent
advisory committees.

Present proposed plan to parent
advisory committees for review
and comment.

Adopt plan in public hearing.

Solicit recommendations and
comments from the public in hearing.

Consult with school employees,
local bargaining units, parents,
and students.

LCAP = Local Control and Accountability Plan.

www.lao.ca.gov

13

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 24 of 30
A N L AO R E P O R T

Figure 11

COE Review of Local Control and Accountability Plans

District Actions:

COE Actions:

Submits locally approved plan
to COE five days after adoption.

Seeks clarification about contents
of plan from district by August 15.

Responds to COE request for
clarification within 15 days.

Submits recommended amendments
to plan back to district within 15 days.

Considers COE recommendations
in a public hearing within 15 days.

Reviews plan to determine if it meets
requirements (adheres to SBE
template and aligns with district
budget).

If plan does not meet
requirements,
ation provides does not approve
support.
duc plan,
. of E 2017
ept
COE = County Office of Education and SBE = State Board of Education.
ty. D une 22,
ge C
J
Oran ived on
v.
SUPPORT AND INTERVENTION Sato 02 arch well as set expectations for improvement for each
in
cited . 15-564 support numerically significant subgroup in each of the
Chapter 47 also establishes a system of
No
eight state priority areas.
If plan meets requirements,
approves plan by October 8.

and intervention for school districts that do not
meet performance expectations for the eight state
priority areas identified in the LCAP. Below, we
discuss this new system in greater detail. (This
system works somewhat differently for charter
schools. We discuss the major differences in the
box on page 16.)

Support for Struggling School Districts
Three Reasons Districts Can Be Flagged for
Additional Support. School districts are required
to receive additional support in the following three
instances.
•

LCAP Not Approved by COE. A district
is required to receive support if its LCAP
is not approved by the COE because it
does not follow the SBE template or is not
aligned with the district’s budget plan.

•

District Requests Assistance. A district
may specifically request additional support.

•

District Not Improving Student
Outcomes. A district must receive support

New Rubrics to Determine if Districts
Need Support or Intervention
COE Must Assess School District Performance
Based on SBE-Adopted Rubrics. As shown in
Figure 12, SBE must develop three new rubrics for
assessing a school district’s performance. The SBE
is to adopt all three rubrics by October 1, 2015.
The rubrics are to be holistic and consider multiple
measures of district and school performance as

14

www.lao.ca.gov

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 25 of 30
A N L AO R E P O R T

Figure 12

State Board of Education (SBE) Required to Adopt Three New Rubrics
Chapter 47, Statutes of 2013 (AB 97, Committee on Budget) requires SBE to develop and adopt the following three evaluation rubrics by
October 1, 2015.
Self-Assessment Rubric. This rubric is to assist districts in evaluating their strengths and weaknesses.
Support Rubric. This rubric is to be used by COEs to determine if a school district does not improve outcomes in more than
one state priority for at least one subgroup, and thus is required to receive some form of support.
Intervention Rubric. This rubric is to be used by the SPI to determine if a district does not improve outcomes in three out of
four consecutive school years for three or more subgroups in more than one state or local priority, and thus is considered to be
persistently failing.
COE = County Office of Education and SPI = Superintendent of Public Instruction.

if, based on the support rubric, it does not
improve outcomes in more than one state
priority area for at least one subgroup.
Three Forms of Support. Under the new
system, COEs are responsible for providing school

districts with certain types of support. As Figure 13
shows, COEs can provide three types of support.
•

COE Review of Strengths and
tion
Weaknesses.ucaCOE can deliver
d The
of E
assistance by providing
ept. 2, 2017 a written review
D
2
of the district’s strengths and weaknesses
une

ty.
ge C on J
Oran
o v. archived
Sat
Figure 13
ed in 5-56402
cit
1
New System of School District Support and Intervention
No.
COE Options for Providing District Support

COE review of strengths
and weaknesses.

Assignment of academic expert.

Assistance from CCEE.a

SPI Options for District Intervention

Change district LCAP.

a

Impose budget revision aligned to LCAP changes.

Stay or rescind any action
by district governing board
that would prevent student
improvement.

In addition to a COE assigning CCEE, the SPI at any time may assign CCEE to help any district.

COE = County Office of Education; CCEE = California Collaborative for Educational Excellence; SPI = Superintendent of Public Instruction;
and LCAP = Local Control and Accountability Plan.

www.lao.ca.gov

15

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 26 of 30
A N L AO R E P O R T

in the eight state priority areas. The COE
review also must identify evidence-based
programs that could be used by the school
district to meet its annual goals.
•

•

Assign an Academic Expert. The
COE can assign an academic expert or
team of experts to assist the district in
implementing effective programs that are
likely to improve outcomes in the eight
areas of state priority. The COE also can
assign another school district within the
county to serve as a partner for the school
district in need of assistance.
Request Assistance From Newly
Established Agency. The COE can
request that the SPI assign the California

Collaborative for Educational Excellence
(CCEE), a newly established agency, to
provide assistance to the school district.
(We discuss the role of the CCEE in more
detail in the box on page 18.)
Intervention in Persistently
Failing School Districts
SPI Can Intervene in Select Cases. For a
persistently underperforming school district,
the SPI can intervene to assist the district in
improving its education outcomes. The SPI can
intervene, however, only if all three of the following
conditions are met.
•

Persistent Failure for Several Years.
The SPI can intervene if, based on the

tion
duca
New System Works Somewhat Differently for Charter Schoolsf E
17
pt. o
. De requires,charter schools to adopt
2 20
Cty
Chapter 47, Statutes of 2013 (AB 97, Committee on Budget) ne 2
n
ange have theirJu
Or
Local Control and Accountability Plans (LCAPs),ved o performance assessed using rubrics
o v. archi
Sat
adopted by the State Board of Education (SBE), and receive support from its authorizer or the
ed in 5-56402
cit
California Collaborativeo. 1
N for Education Excellence (CCEE). The charter school process, however,

works somewhat differently from the school district process. We describe the major differences
below.
Charter School LCAP Adoption Process Different in Two Ways. Chapter 47 requires the
petition for a charter school to include an LCAP that establishes goals for each of the eight state
priorities (and any identified local priorities) and specifies the actions the charter school will take to
meet these goals. The LCAP must be updated annually by the charter school’s governing board. Like
school districts, charter schools are required to consult with school employees, parents, and students
when developing their annual updates. The LCAP adoption process is different, however, in that
charter schools are exempt from the specific requirements to solicit public comment and hold public
hearings that apply to school districts. Charter schools also are not required to have their plans
approved by the County Office of Education (COE).
Support Required for Persistently Failing Charter Schools. Like school districts, charter
schools must have their performance assessed based on the new SBE rubrics. For charter schools,
however, this assessment is to be conducted by the charter authorizer rather than the COE. A
charter school is required to receive support from its authorizer if, based on the intervention
rubric, it does not improve outcomes in three out of four consecutive school years for three or more

16

www.lao.ca.gov

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 27 of 30
A N L AO R E P O R T

intervention rubric, the district does not
improve outcomes in three out of four
consecutive school years for three or more
subgroups in more than one state or local
priority area.
•

•

CCEE Determines Intervention Is
Necessary. The SPI can intervene if the
CCEE has provided assistance and determines both that (1) the district has not been
able or will not be able to implement CCEE
recommendations and (2) the district’s
performance is so persistently or severely
poor that SPI intervention is necessary.
SBE Approves Intervention. The SPI can
intervene only with approval of SBE.

Provides Three New Powers to SPI. If the above
conditions are met, the SPI can intervene directly
or assign an academic trustee to work on his or her
behalf. The SPI can intervene in the following three
ways.
•

Change District LCAP. The SPI can change
the district’s LCAP to modify the district’s
annual goals or the specific actions the
district will take to achieve its goals.

•

Impose Budget Revision in Conjunction
With LCAP Changes. The SPI can impose
a revision to the district’s budget to align
the district’s spending plan with the
changes made to the LCAP. These changes
only can be made if the SPI determines
they will allow the district to improve

tion
duca
subgroups in more than one state or local priority area—the sameof E
t. standard applied for determining
17
Dep
.intervention22, 20 in a school district.
whether the Superintendent of Public Instruction (SPI)
Cty
n is necessary
g determined to be e
anis e d on Ju struggling based on the support
(Unlike school districts, a charter school that
Or
o v. a chive
atsupport.) In raddition to the support from the charter authorizer, the
rubric is not required to ireceive
S
0
ed n provide the2
citCCEE . 15-564 charter school with support if the authorizer requests and
SPI may assign the
to
No

SBE approves the assistance. (If a charter school requests support but is not underperforming based
on the intervention rubric, the charter authorizer and CCEE are not required to provide support.)
Instead of SPI Intervention, Charter Can Be Revoked by Authorizer. The charter authorizer
can consider revoking a charter if the CCEE provides a charter school with support and determines
that (1) the charter school has not been able or will not be able to implement CCEE recommendations and (2) the charter school’s performance is so persistently or severely poor that revocation is
necessary. If the authorizer revokes a charter for one of these reasons, the decision is not subject to
appeal. Consistent with current law, the authorizer must consider student academic achievement as
the most important factor in determining whether to revoke the charter.
The SBE Also Can Revoke Charter or Take Other Actions Based on Poor Academic
Performance. The SBE—based upon a recommendation from the SPI—also can revoke a charter or
take other appropriate actions if the charter school fails to improve student outcomes across multiple
state and local priority areas. (Prior to the adoption of Chapter 47, SBE could take similar action for
charter schools only if the schools were (1) engaging in gross financial mismanagement, (2) illegally
or improperly using funds, or (3) implementing instructional practices that substantially departed
from measurably successful practices and jeopardized the educational development of students.)

www.lao.ca.gov

17

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 28 of 30
A N L AO R E P O R T

outcomes for all student subgroups in one
or more of the eight state priorities.
•

would make improving student outcomes
in the eight state priority areas, or in any
of the district’s local priority areas, more
difficult. The SPI, however, cannot stay or
rescind an action that is required by a local
collective bargaining agreement.

Stay or Rescind an Action of the Local
Governing Board. The SPI also can stay or
rescind an action of the district governing
board if he or she determines the action

MAJOR DECISIONS AHEAD
Many important state and district decisions
relating to the new formula and the new system
of support and intervention will be made over the
next several years. Figure 14 identifies the major
milestones ahead. Below, we discuss some of these
major decisions in more detail.
Many Major Regulations to Be Adopted by
SBE. Over the next several years, SBE must adopt
numerous regulations relating to the LCFF and
the new system of support and intervention. As
the timeline shows, by January 31, 2014, SBE must e
ng

adopt regulations to implement the proportionality
clause relating to LCFF supplemental and
concentration funds. Two months later, by
March 31, 2014, it must adopt LCAP templates for
districts to use in developing their 2014-15 LCAPs.
By October 1, 2015, SBE must adopt the three
rubrics that will be used to assess school districts’
performance. The details of these regulations will
tion
significantly affect the manner in which these new
duca
of E 0 7
provisions t. ultimately1
epare
D
, 2 implemented.

Cty. June 22
on
Ora
o v. archived
Sat
Figure 14
ed in 5-56402
cit
1
Major Milestones for.Implementation of LCFF and LCAPs
No
July 1:
Districts must adopt LCAP for 2014-15.
Jan. 31:
SBE must adopt regulations
for use of supplemental and
concentration funds.

2013-14

Mar. 31:
SBE must adopt LCAP template.

Oct 1:
SBE must adopt evaluation rubrics.

July 1:
Districts must adopt
LCAP annual update.

2014-15

July 1:
Districts adopt LCAP annual update.

2015-16

July 1:
Restrictions on spending for Adult Education, ROCPs, and JPAs expire.

Oct. 8: .
COEs must approve or reject district LCAPs.

LCAP = Local Control and Accountability Plan; SBE = State Board of Education; COE = County Office of Education;
ROCP = Regional Occupational Centers/Programs; and JPA = Joint Powers Authority.

18

2016-17

www.lao.ca.gov

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 29 of 30
A N L AO R E P O R T

CCEE’s Larger Role in New System Remains
Unclear. Although Chapter
the
governance structure of the CCEE, its larger role
within the state’s accountability system remains
unclear. As we discuss in the nearby box, the CCEE
fiscal agent has the authority to contract with
individuals and organizations with expertise and

a record of success in the CCEE’s assigned areas
of responsibility. The legislation, however, does
not specify the process the CCEE should take to
identify agencies with expertise or how the role
of these agencies would differ from the role of
other agencies, including District Assistance and
Intervention Teams and the Statewide System of

New Agency to Support Struggling Districts
Legislation Establishes California Collaborative for Educational Excellence. Chapter 47,
Statutes of 2013 (AB 97, Committee on Budget), creates a new agency, the California Collaborative
for Educational Excellence (CCEE), to advise and assist school districts in improving performance.
Chapter 357, Statutes of 2013 (SB 97, Committee on Budget), establishes a CCEE governing board
consisting of five members: (1) the Superintendent of Public Instruction (SPI), (2) the president of
the State Board of Education (SBE), (3) a county superintendent of schools appointed by the Senate
Committee on Rules, (4) a teacher appointed by the Speaker of the Assembly, and (5) a school
district superintendent appointed by the Governor. The SPI, with approval from the SBE, is required
t as the
to contract with a local education agency (LEA) or consortium of LEAs to serveion fiscal agent
d toca
f Eis u subcontract with
for the CCEE. The fiscal agent, under the direction of the CCEE .board,
17
pt o
. Desupport to ,districts.
2 20
individuals, LEAs, and other organizations to providey
Ct direct ne 2
nge Performance.
aImprove d on Ju Statute requires the CCEE to
r
CCEE Charged With Helping Districts
v. O rchive
atodistricts: (1) improve their achievement in the eight state priority
serve as a statewide expert to help
in S
02 a
te quality of teaching,
cithed . 15-564 (3) improve district/school-site leadership, and (4) address
areas, (2) enhance
No
the needs of special student populations (such as English learner, low-income, foster youth, and
special education students). In particular, the CCEE is intended to help districts achieve the goals set
forth in their Local Control and Accountability Plan (LCAPs).
CCEE Can Intervene in Specific Cases. The CCEE is involved in turnaround efforts in three
ways:
•

A county office of education (COE) can assign the CCEE to provide assistance to
school districts that have an LCAP rejected, request assistance, or are determined in
need of assistance based on the COE’s assessment using the support rubric.

•

The SPI can assign the CCEE to provide assistance to any school district that the SPI
determines needs help to accomplish the goals set forth in its LCAP.

•

The CCEE also is required to play a critical role in determining when the state will
intervene in a persistently failing school district. If the SPI, with approval of the
SBE, would like to intervene in a persistently failing school district, he or she cannot
do so unless the CCEE has provided assistance to the district and determined that
intervention is necessary to improve the district’s performance.

www.lao.ca.gov

19

Case: 15-56402, 06/28/2017, ID: 10490452, DktEntry: 42-2, Page 30 of 30
AN LAO BRIEF

School Support, that currently provide assistance to
low-performing schools and districts.
New Agency’s Prominence and Workload
Uncertain. Given the many elements of the new
system of support and intervention that are yet
to be developed and implemented, the CCEE’s
workload also remains unclear. The CCEE’s
workload will be driven partly by the number
of districts determined in need of support or
assistance. The number of districts that will need
such support, however, will not be known until the
SBE rubrics are adopted and districts are evaluated
based on these rubrics. Because under state law
most of the CCEE’s activities will be driven by
specific requests from school districts, COEs, and
the SPI, the CCEE’s role in the new system also
will be determined by the agency’s reputation

as a statewide expert in improving educational
programs. To the extent that districts, COEs, and
the SPI consider the CCEE a key agency for helping
to improve school performance, the agency will
have a more prominent role advising districts.
Cost of CCEE Also Unclear. Because of
the significant uncertainty regarding the level of
workload of the CCEE, its associated costs are
unknown at this time. The 2013-14 budget provides
$10 million for the CCEE but includes little detail
on how and when the funds are to be spent. The
annual cost of the CCEE ultimately will depend
on the composition of the CCEE; the number of
school districts determined to need support or
intervention; and the frequency with which school
districts, COEs, and the SPI request assistance from
the CCEE.

tion
duca
of E
CONCLUSION
ept. 2, 2017
2
ty. D
ge C on June
an
The creation of the LCFF addresses many of
d
. Or
eacademic plans designed to improve performance
ato v system,chiv in their local context. As evident throughout this
r
the flaws of the state’s prior in Sfunding 02 a
K-12
6
cited be overly 4
which was widely believed to . 15-5 complex,
report, both the LCFF and the new system of
No
inefficient, and outdated. The LCFF, for instance,
is much simpler when compared with the dozens
of categorical funding formulas that were part
of the state’s previous funding system. The new
system of funding and accountability, including the
provisions dealing with the LCAPs, also is intended
to reduce some spending requirements while giving
districts more guidance in developing fiscal and

support and intervention represent major state
policy changes. Moreover, in the coming months
and years, the Legislature, SBE, and school districts
will face many decisions that ultimately will shape
how the formula and new accountability system are
implemented, which, in turn, will determine the
effectiveness of the legislation.

LAO Publications
This brief was prepared by Edgar Cabral and Carolyn Chu, and reviewed by Jennifer Kuhn. The Legislative Analyst’s
Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature.
To request publications call [phone]. This brief and others, as well as an e-mail subscription service,
are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000,
Sacramento, CA 95814.

20

www.lao.ca.gov