Budget Basics

Understanding California’s School Financing System

Historical Funding Inequality

While California ranked high nationally in terms of funding for public education, the amount of funds a student received varied and was determined by the wealth of the neighborhood they lived in.

For example, in fiscal year 1968–69 the Baldwin Park Unified School District spent $4,022 per student; Pasadena Unified School District spent $5,855 on every student; and the Beverly Hills Unified School District spent $8,588 per student (inflation adjusted).

Eventually, courts found California State education financing was unequal and unfair. The State decided to equalize funding regardless of a community’s wealth.

Although spending was equalized, it was far from “fair” because it did not account for varying student needs.

The Impact of Proposition 13 on Public Education

A key ballot initiative–Proposition 13–significantly impacted how schools were funded in California.

Proposition 13 reduced property tax revenues available for school districts and made it harder to upgrade tax laws. This meant that as the student population grew, the ability to increase spending in classrooms became limited. Consequently, California dropped from the top five in student spending to the bottom 10 out of 50 states.

The Road to Recovery

Three more ballot initiatives—Proposition 98 (1988), Proposition 30 (2012), and Proposition 55 (2016)—also played a key role in shaping how schools were funded in California.

• Proposition 98 ensured some basic level of spending for students, with increases linked to the growth of the state budget.
• Proposition 30 closed budget shortfalls by increasing income taxes on wealthy individuals. The policy was extended in 2016 with Proposition 55.

While all three improved the educational experiences of students, none linked funding to student needs.

Resetting Education Financing Through LCFF

After decades of court battles, legislative tinkering, and community-driven initiatives, California reset education funding by implementing the Local Control Funding Formula (LCFF) in 2013.

The formula includes the following major components:

• Equity in District Funding: LCFF provided baseline funding for all students and provided more resources through additional grants to school districts with high concentrations of low-income students, English learners, and foster youth students—referred to as “Targeted Student Population.”
• Transparency: School districts became responsible for how their equity-funds addressed high-need students, school sites, and communities, through the Local Control and Accountability Plan (LCAP).
• Long-term Planning: School districts are mandated to annually update their LCAP’s with a three-year spending plan to account for the equity funds earmarked to address the needs of the Targeted Student Population.
• Parent Engagement: In developing their LCAP priorities, districts are required to engage parents, teachers, administrators, community advocates, and students themselves.

Implementing Equity at LAUSD

Student Equity Needs Index 2.0 (2018)

When California approved LCFF in 2013, Los Angeles parents, students, and advocates expected a good amount of equity funds to go to the highest-need schools. LCFF provided a state-wide framework for districts, but did not specify implementation at the local level. In anticipation, local advocates successfully pushed LAUSD to ensure that the revenue derived by high-need students reached the highest-need schools and students through the Student Equity Needs Index (SENI) 2.0 version in 2018.
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SENI 2.0 takes into consideration community factors such as exposure to gun violence and asthma severity rates. This allows for schools to address historic trauma students experience outside the school environment that substantially produce negative effects on our student’s ability to learn, especially in communities of color.

How it Works – Student Equity Needs Index (SENI) 2.0

The SENI 2.0 utilizes a tiered system based on a variety of student and school-based indicators to determine highest-, high-, moderate-, low- and lowest-need schools. The new index considers the following indicators of need:

• % of Foster Youth
• % of Homeless Youth
• % of Unduplicated Students
• % of Low-income Students
• % of Standard English Learners
• I-Star Reports, a school incident tracking system
• ELA and Math scores for incoming students
• Chronic Absenteeism
• Suspension Rates
• Asthma Severity Rates
• Non-Fatal Gun Shot Injuries
• A-G completion with a C or better

Once the rankings were established, LAUSD allotted $281 million to school sites in the 2019–20 school year, using the SENI 2.0 equity-based funding formula.

Principals were provided with an evidence-based “menu of options” that have been demonstrated to improve student outcomes, which has allowed flexibility for spending SENI 2.0 dollars on meeting the needs of their school and students.
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For more information about SENI 2.0 visit the Equity Alliance for LA’s Kids website.

Next Steps: Stronger Implementation of LCFF through authentic community, school-site, and student engagement.

Across communities, there is a growing belief that the most important stakeholders for school funding are those closest to classrooms—parents, teachers, administrators, community advocates, and students themselves.

Beyond the figure of $7.3 billion, LAUSD’s budget is hard to understand for stakeholders. To date, there is no public data source that details spending or how investments translate into real-world experiences for students and families.

LAUSD Budget Decision-Makers

Each one of these entities plays a role in the budget development process.

• Los Angeles Unified Schools Board of Education: There are seven publicly elected board members who adopt the budget and make policy decisions for LAUSD. Each board member is elected to four-year terms on a staggered basis. They also hire the District Superintendent. To learn who the school board members are, click here.
• Superintendent: There is one Superintendent for LAUSD. They serve as the chief executive who oversees the day-to-day operations, carries out the school board members policies, and ushers the budget development process. To learn who the Superintendent is, click here.
• Principals: Each school is run by an individual principal. This individual ensures that a school’s day-to-day operations run smoothly. They are tasked with developing their local school’s budget.

Budget Calendar

LAUSD’s fiscal year begins on July 1 and ends June 30.

• February
  Schools learn how much funding they will receive and begin making budget decisions.
  
• March
  LAUSD’s budget begins to be drafted.
  
• May
  ‍LAUSD holds an LCAP Community Hearing to publicly share new information.
  
• June
  Budget and LCAP are adopted by LAUSD School Board.
  
• August
  ‍Instructional year begins.

Opportunities for Community Input in the Budget Development Process at LAUSD

Attend School Board meetings where the budget is often discussed from April through June and public comments are taken.

The Local Control Accountability Plan (LCAP) provides parents and community residents with the best opportunity to submit feedback on a portion of the District’s budget through the following committees:

• Parent Advisory Committee (PAC)
• District English Learner Advisory Committee (DELAC)

While these two opportunities hold opportunities for input, LAUSD could do more to better engage the community and listen to their needs and ideas.

Budget Development Process at Your Local School

A school’s budget begins every year on July 1st and ends June 30th.

• February
  Principals learn how much money they are receiving from LAUSD’s central office.
  
• March
  Principals must submit their budget by the deadline.
  
• June
  June is the deadline for Principals to purchase items, and make adjustments to staffing levels and program availability.
  
• September
  ‍Principals are required to submit updated student enrollment numbers to inform an accurate school resource allocation.

Principals are encouraged to engage students and parents in between February and March.

Common Questions about School Site Budgets

• How does LAUSD decide how much funding each school receives? At the beginning of the year, principals use a tool to determine how many students will be enrolled at their school site using demographic trends. LAUSD will then use that data to determine staffing levels at each school.
• Can the Principals spend the money on anything they want? Short answer, no. Most of the schools’ spending is decided by the LAUSD’s central office. Generally, principals only have a small share of funds to their discretion, principally, due to the Student Equity Needs Index (SENI) 2.0 Fund.

Opportunities for Community Engagement in the Budget Development Process at Local Schools

Below are a few formal ways by which schools obtain feedback on school priorities:

• Parent and student surveys
• School Site Councils (SSC)
• English Learner Advisory Committee (ELAC)

Budget terminology

• General Fund: The main operating fund where LAUSD holds most of its revenues.
• Fiscal Year: The year when the district’s budget begins and ends. Traditionally, it’s from July 1st until June 30th of every year.
• FY20: Abbreviated for Fiscal Year 2019–20
• Revenue: Funds or money received.
• Expenditures: How funds or money is spent.
• LCFF: Local Control Funding Formula (LCFF), the state’s main K–12 education financing law. LCFF provides funds to districts by providing them with a Base grant per student and extra Supplemental and Concentration funds depending on their percentage of Targeted Student Populations.
• Equity-Funds: We use this term to identify the Supplemental and Concentration funds leveraged by Targeted Student Populations.
• Targeted Student Populations: LCFF designated three student groups as being a priority often referred to as “Targeted Student Populations.” They are low-income, English learners, and foster youth students.
• Title I, II, III: Federally funded education grants targeting low-income students, English learners, immigrants, and teachers.

LAUSD’s Funds

LAUSD manages several types of funds.

• General Fund: The General Fund is where a large portion of LAUSD’s revenues are located. For example, the main state law that funds K–12 education, Local Control Funding Formula (LCFF), is deposited into this fund. Most of the resources deposited into this fund provide LAUSD with the flexibility to spend the money as they see fit.
• Special Funds: LAUSD manages many special funds which hold revenue for restricted purposes. For example, the Cafeteria Special Revenue Funds receives most of its resources from the federal government for the preparation and delivery of school lunches.

For the purposes of our analysis, we will focus on the General Fund since it is the most flexible.

LAUSD’s Revenues At-A-Glance

Main Takeaway: Seventy-six percent of LAUSD’s revenues comes from the State’s Local Control Funding Formula (LCFF). Federal government revenues make up a much smaller share of LAUSD’s budget.

Fun Fact: Only 1% of the LAUSD’s revenues come from the California State Lottery system.

$7.3 Billion Wow! That’s a lot of money. Yes, it is! LAUSD’s budget is almost the same as how much all four Avengers movies grossed ($7.8 Billion).

LAUSD’s Revenues: LCFF-Specific

Main Takeaway: Twenty percent of LAUSD’s LCFF revenues were derived because of the concentration of High-Need Students attending LAUSD. These funds are supposed to be accounted for in the District’s Local Control and Accountability Plan (LCAP).

LAUSD’s Revenues: Federal Revenues

Main Takeaway: Sixty-three percent of LAUSD’s federal revenues comes from Title I, II, III grants which are primarily directed to low-income, immigrant, and English learner students and for teacher professional development.

LAUSD’s Revenues: Special Education

In Fiscal Year 2019–20, LAUSD only received $500 million for special education, 71% of which came from the state and 29% from the federal government.

LAUSD is expecting to spend $1 billion on special education – the district is supplementing these additional costs by using LCFF funds to resource programs.

LAUSD’s Revenues: Early Childhood Education Centers

LAUSD offers 86 Early Education Centers (ECE), a pre-school program, to children ages 2 through 4 from low-income families or those who have a qualifying need.
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These centers are primarily funded by the Child Development Fund, a state revenue source. In 2019–20, LAUSD is projecting to spend $30 million from the Fund to operate these centers.

LAUSD’s Expenditures At-A-Glance

Main Takeaway: As with all school districts expenditures for teachers, administrators, maintenance staff—and their benefits—amounts to 79% of all spending by LAUSD. The remaining 21% pays for books and supplies, services and contracts, and capital projects.

• Employees and Employee Benefits: Salaries, health Insurance, and retirement contributions.
• Books and Supplies: Reading materials, workbooks, online subscriptions, lab equipment, etc.
• Capital Projects: Building and facility renovation and/or repairs.
• Services and Other Operating Expenditures: Contracts, travel and conferences, dues and memberships, utilities, rentals, leases, repairs, and professional or consulting services.

For more LAUSD budget information visit our District Profile.

Fiscal Year 2019–20 LCAP Analysis

The purpose of the Local Control and Accountability Plan (LCAP) is to provide the community with an annual update on how LCFF resources—especially equity funds—are being spent.

The following is an analysis of LAUSD’s 2019–20 LCAP:

• A school districts’ annual LCAP provides a single point of reference to review how resources—especially those linked to low-income, foster youth, and English learners—are being spent to improve their educational experiences.
• LCAPs are separate documents from the annual budget—but follow the same timeline in terms of community engagement, release, public hearings, and school board approval.
• Specifically, an LCAP must provide a clear understanding of how equity-dollars—that are designated for low-income students, foster youth, and English learners—are spent.
• Community engagement is legally required during the development of the LCAP. School districts must provide opportunities for community stakeholders to convey their thoughts on LCAP priorities.
• Districts submit completed LCAPs to their County Office of Education for review. These offices may request changes and modifications and hold final approval authority.
• LAUSD reported $5.2 billion in their LCAP—$4 billion in base grant funding and $1.1 billion in equity funding.

Despite its size, LAUSD’s LCAP is vague and makes assumptions that readers will understand technical nuances. Our key takeaways include:

• The LCAP does not indicate which actions and services are being paid with equity-dollars, making it difficult to assess if those dollars are reaching targeted students.
• Billions in spending is reported under large expenditures categorized as School Autonomy and Instruction, but it is unclear how those dollars reach specific school sites.
• Equity spending is not explicit—every expenditure is tagged as LCFF which makes it harder to understand whether resources meant for targeted students are reaching them.

Fiscal Year 2019–20 LCAP Analysis: Major Expenditures

Major LCAP Expenditures:

• A–G Requirements: $12.5 million for the Graduation and Diploma Program.
• Early Childhood Education: $100 million for the Transitional Kindergarten Expansion Plan.
• Foster Youth:‍ $16.4 million for Foster Youth/Family Source Centers.
• Support Services: $7.4 million for Health and Human Services and $2.4 million for the Homeless Youth Program.
• Parent Engagement: $4.4 million for Targeted Parent Involvement.
• School Climate: $2.1 million for Restorative Justice and $70 million for police.
• Largest Expenditures: $1.7 billion for Instruction,  $1 billion for Special Education, $770.4 million for School Autonomy and $238.4 million for the Central Office and Local Districts.

Main Takeaway: The $1.1 billion designated for targeted students is collapsed under the $5.2 billion total spending figure. LAUSD bundles spending under large categories and does not clearly explain how it uses equity-dollars on services to benefit targeted students.

• “All LCFF Students” includes all students under the Targeted Student Populations.
• “All students” includes every student regardless of income, language, or any other status.
• “LCFF subgroups” includes either one or two subsets from the Targeted Student Populations of English learners, low-income, and foster youth students.
• “Students with Disabilities” includes any student who has special education or disability needs.

Main Takeaway: LAUSD does not clearly explain how it uses equity-dollars on services to benefit schools with high concentrations of targeted students. Consequently, it is unclear how the LCAP and the annual budget process at school sites link with each other.

Decision-makers at Local Schools

Principal: Each school is run by a principal who ensures that a school’s day-to-day operations run smoothly. They are tasked with developing their school-site budget to pay for the needs of students and teachers at the school site.

Assistant Principal: The assistant principal is in charge of the implementation of school priorities in support of the school-wide vision. They play an active role in investing and mobilizing teachers to achieve the collective goals of the school. Some schools have more than one assistant principal.
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Parent Liaison/Coordinator: This individual may be tasked with outreach to parents and students and share important information about a school’s activities and programs.
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Teachers: They have firsthand knowledge about students academic needs and their development.
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Front Office Staff: They keep the office running and manage the meeting schedule for the principal and assistant principal. They often know the calendar of events at a school, many of the teachers and staff, and can be a good resource for navigating the school.

Guide for Becoming a Budget Advocate

Starting off, know your ask:

• Decide what change you want to see in your school.
  ‍Tip: Use our School Site Finder and look up the academic, community, and demographic data to identify areas that need improvement.‍
• Talk to other parents and/or students.
  Tip: Attend a School Site Council, English Learner Advisory Committee meetings, or any school-wide meetings hosted by the principal to learn if other parents and/or students are seeing the same issue.‍
• Identify a solution.
  Tip: If it’s a budget request, determine how much it could cost and how the school could pay for it. Use our School Site Finder to identify how much discretionary funding revenue your school received.

Next, know what to say:

• Tell a personal story about what will help students succeed.
  ‍Tip: Identify a story that exemplifies the issue and is easy to tell and understand. ‍
• Identify a shared value behind your ask.
  ‍Tip: Equality, equity, respect are all examples of values that you want to ensure is at the heart of your story and what you are asking.‍
• Explain why you are concerned—what is the school doing that is and isn’t working?
  ‍Tip: You can bring in data from our School Site Finder and stories from students about what is working and not working.‍
• Tell the principal what you want them to do.
  ‍Tip: Gather all the information you have collected thus far and make the ask!

And, where to say it:

• At school site council meetings
• At English Learner Advisory Committee meetings
• At school-wide meetings
• In one-on-one meetings with the principal and their staff
• During a meeting with your Board member
• To other parents and students

You may get resistance—that’s OK.

• “We’re not hearing that from most parents/students.”
  ‍Tip: This means organize and get louder!
• “LAUSD has told us we’ve got other priorities.”
  ‍Tip: This means get your Board member on your side! ‍
• “There isn’t enough money.”
  ‍Tip: If you’ve found a potential funding stream, this means they don’t see it as a priority. There’s always some money for top priorities, even in bad budget years.

Overview

On March 16, 2020, LAUSD closed its schools to limit the spread of COVID-19 and moved instruction online (distance learning). While this action helped protect the district’s students and staff, it created enormous disruptions. Teachers and students needed to quickly adapt to new methods of instruction and learning. This swift pivot also placed new strains on the district’s budget just as the economy headed into a recession.

Equity Issues for Learning

Equity issues for distance learning are numerous. The technology required for distance learning is not equally available to all students, and free devices and internet access may come with privacy trade-offs and future costs.

Distance learning also means that students who require additional support from teachers and staff will not receive services in the same way. Students without permanent housing, students with disabilities, and English language learners face additional access barriers.   Underlying health disparities, like asthma, also mean some members of the LAUSD community are at higher risk from the disease.

It remains unclear whether some forms of distance learning will continue once LAUSD re-opens in the Fall, meaning that these equity issues may become long-term challenges.

Explore data on highly-impacted student populations using WeBudget’s School Profiles.

Read more about equity issues in distance learning in our policy brief “Overcoming the Distance: Promising Practices to Center Equity in Implementing Distance Learning.”

Equity Issues for Budgeting

Responding to the shift to distance learning, the district allocated $100 million to provide devices and internet access to students through a partnership with Verizon. Serving as a makeshift safety net, LAUSD also launched a mental health hotline and provides meals to Los Angeles residents regardless of age or socioeconomic status.  All told, through the end of the 2019-20 school year, the district will spend over half a billion dollars responding to COVID-19, and will need to spend even more to re-open schools in the Fall.

Beyond these additional costs, the Governor has proposed cuts in state funding that could reduce the district’s revenues by 7%. The district must decide how to continue critical services amid a budget deficit. In June, the Board will pass an preliminary budget with estimates and projections based on current and available information. The full impact may not be known until August or later, so budget revisions both district-wide and at specific schools are expected through the Fall.

Read more about equity issues in local budgeting, including school districts, in our policy brief “Meeting Crisis With Courage: A COVID-19 Playbook for Advocates and Policymakers.”

Equity Issues for Engagement

Parent and student voices will be harder to hear and gauge amid school closures. While alternate methods such as phone or virtual meetings are available, sufficient translation and interpretation services may not be available—which will leave out many families.

In the meantime, advocates, parents, and students can contact Board offices directly—click here to contact your Board member– and some schools are holding community meetings online. Local districts are also bringing multiple schools together for more effective communication and engagement—click here to contact your Local District.

Community organizations are keeping lines of communication open between LAUSD and its community. These are important resources for parents, students, and LAUSD staff:

• Community Coalition
• InnerCity Struggle
• ACLU of Southern California
• MALDEF
• Partnership for Los Angeles Schools