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Local Control Funding Formula Overview

Information about the funding and accountability provisions of the Local Control Funding Formula.

Funding Provisions

The local control funding formula (LCFF) was enacted in 2013–14, and it replaced the previous kindergarten through grade 12 (K–12) finance system which had been in existence for roughly 40 years. For school districts and charter schools, the LCFF establishes base, supplemental, and concentration grants in place of the myriad of previously existing K–12 funding streams, including revenue limits, general purpose block grants, and most of the 50-plus state categorical programs that existed at the time. For county offices of education (COEs), the LCFF establishes separate funding streams for oversight activities and instructional programs.

Original estimates provided by the Department of Finance (DOF) in 2013–14 indicated there would be an additional state cost of approximately $18 billion, which included $58 million for COEs. DOF estimated it would take eight years to fully phase in the new funding formula for school districts and charter schools, and it would take two years to fully phase in the new formula for COEs.

School District and Charter School LCFF Funding
  • Provides a uniform base grant for each school district and charter school per unit of average daily attendance (ADA), based on the grade span of the pupils, i.e. kindergarten through grade 3 (K–3), grades 4–6, grades 7–8 and grades 9–12.
  • Provides an adjustment of 10.4 percent on the base grant amount for K–3. As a condition of receiving these funds, school districts are required to make progress toward an average class enrollment of no more than 24 pupils in K-3 classes, unless the district has collectively bargained an annual alternative average class enrollment in those grades for each school site. Charter schools do not have to comply with this condition.
  • Provides an adjustment of 2.6 percent on the base grant amount for grades 9–12; there are no compliance requirements associated with this adjustment.
  • Provides a supplemental grant equal to 20 percent of the adjusted base grant multiplied by ADA and the unduplicated percentage of targeted disadvantaged pupils. Targeted pupils are those classified as English learners (EL), meet income requirements to receive a free or reduced-price meal (FRPM), foster youth, or any combination of these factors (unduplicated count).
  • Provides a concentration grant equal to 50 percent of the adjusted base grant multiplied by ADA and the percentage of targeted pupils exceeding 55 percent of a local educational agency’s (LEA) enrollment.
  • Provides for additional “economic recovery target” funding for a small number of school districts and charter schools to ensure that virtually all districts and charters are at least restored to their pre-recession funding levels (adjusted for inflation).
  • Guarantees a minimum amount of state aid to school districts and charter schools based on the amount of state aid they received in 2012–13. The calculation is adjusted for changes in local revenue and ADA.
  • Maintains Home-to-School Transportation and Targeted Instructional Improvement Block Grant funding as add-ons to the adjusted base grants in the LCFF target, based on amounts received in 2012–13, and requires that 2012–13 expenditure levels continue to be maintained for Home-to-School Transportation.

A summary of the current LCFF target amounts, as well as other current funding information, can be seen on the Funding Rates and Information Web page.

Figure 1 provides a summary of the amounts provided to date to support implementation of the LCFF. Until full implementation, LEAs will receive roughly the same amount of funding they received prior to the LCFF phase-in which began in 2012–13, plus an additional amount each year to bridge the gap between prior funding levels and the new LCFF target levels.

Figure 1: Amounts provided in the Annual Budget to fund increased costs for LCFF (dollars in billions)
Fiscal Year Original DOF Estimated Need to Fully Fund LCFF Gap Appropriation Remaining Need to Fully Fund LCFF*
2013–14 $18.0 $2.1 $15.8
2014–15 N/A $4.7 $11.3
2015–16 N/A $6.0 $5.6
2016–17 N/A $2.9 $2.7 (estimated)

*Note: Amount calculated by CDE as of each year's Budget Act. Figures may not sum due to changes between years for growth and cost-of-living adjustments (COLA).

As of the 2016–17 Budget Act, school districts and charter schools are receiving on average 96 percent of their LCFF targets, as indicated in Figure 2. On an individual LEA basis, however, there is a wide variation on how much of their full LCFF target funding individual school districts and charter schools are receiving. This variation is due to the fact that when LCFF implementation began, individual districts and charter schools were all at different distances from their LCFF targets. While some were close to or even already above their LCFF target, others were quite far away. Since all receive the same percentage of their need each year, some get a significant amount of gap funding each year during the phase in period while others get very little, and all should get to their LCFF target at about the same time, with certain exceptions. Figure 3 shows the range in LCFF transition funding as a percentage of LCFF target entitlements received in 2014–15 by individual districts and charter schools.

Figure 2: Statewide Percentage of LCFF Targets Funded by Year

Figure 2 is a bar chart titled Statewide Percentage of LCFF Targets Funded by Year. The Y axis of the chart shows the amount in billions from $0 to $70. The X axis shows the fiscal years: 2013-14, 2014-15, 2015-16, and 2016-17. In fiscal year 2013-14, the graph indicates that funding is at 72% of target, with 12% of the gap funded. In fiscal year 2014-15, the graph indicates that funding is at 80% of target, with 30% of the remaining gap funded. In fiscal year 2015-16, the graph indicates that funding is at 90% of target, with 52% of the remaining gap funded. In fiscal year 2016-17, the graph indicates that funding is at 96% of target, with 54% of the remaining gap funded (Department of Finance estimate).

Figure 3: 2015–16 Percent of Target that was Funded for Individual School Districts and Charter Schools
Percent of Target Funded Number of Districts and Charters
Funded at the Target 71
Funded between 90 and 100 percent of Target 1,362
Funded between 82 and 90 percent of Target 716

Note: No district or charter was funded below 82 percent of its Target in 2015–16.

County Office of Education LCFF Funding

COEs were provided $32 million in gap funding for 2013–14 and $25.9 million for 2014–15, and as of 2014–15, COE LCFF targets are fully funded. COEs receive LCFF funding through a two-part formula for oversight responsibilities and instructional programs. Like school districts and charter schools, LCFF also guarantees for COEs a minimum amount of state aid based on what they each received in 2012–13, to hold those COEs harmless if the new formula yields less than what they were receiving prior to LCFF.

The oversight responsibilities are funded through a COE operations grant, with amounts based on (1) a minimum grant per county, (2) the number of school districts in the county, and (3) the ADA in the county attributable to school districts, charter schools, and schools operated by the county superintendent.

The COE instructional programs are funded through an alternative education grant as follows:

  • Provides a uniform base grant per ADA for certain pupils served by county offices (on probation, probation referred, and expelled pursuant to EC Section 48915 (a) or (c)). In addition to the base grant, COEs receive a supplemental grant equal to 35 percent of the base grant multiplied by ADA and the unduplicated percentage of targeted disadvantaged pupils. Targeted pupils are those classified as English learners (EL), meet income requirements to receive a free or reduced-price meal (FRPM), foster youth, or any combination of these factors (unduplicated count). COEs also receive a concentration grant equal to 35 percent of the base grant multiplied by ADA and the unduplicated percentage of targeted students exceeding 50 percent of enrollment.
  • Provides a uniform base grant per ADA for juvenile court school pupils. Additionally, all juvenile court school pupils are deemed to be eligible for the supplemental and concentration grants provided for unduplicated pupils. The supplemental grant is equal to 35 percent of the base grant multiplied by ADA, and the concentration grant is equal to 35 percent of the base grant multiplied by ADA and 50 percent of the juvenile court school enrollment.
  • Other pupils served by COEs are funded based on the LCFF funding of their home school district.

A summary of the current COE operations grant and alternative education grant amounts, as well as other current funding information, can be seen at the Funding Rates and Information Web page.

LCFF Accountability

As part of the LCFF, school districts, COEs, and charter schools are required to develop, adopt, and annually update a three-year Local Control and Accountability Plan (LCAP) using a template adopted by the California State Board of Education (SBE). In addition, the SBE is required to adopt evaluation rubrics to assist LEAs and oversight entities in evaluating strengths, weaknesses, areas that require improvement, technical assistance needs, and where interventions are warranted on or before October 1, 2016. Subsequent revisions to the template or evaluation rubrics are required to be approved by the SBE by January 31 before the fiscal year in which the template or rubric would be used. The LCAP is required to identify goals and measure progress for student subgroups across multiple performance indicators.

Other LCFF accountability components include:

  • The SBE must adopt regulations that govern the expenditure of the supplemental and concentration grant funding. These regulations will require school districts, COEs, and charter schools “to increase and improve” services for targeted students and will provide authority for school districts to spend funds “school-wide” when significant populations of those students attend a school.
  • LEAs must obtain parent and public input in developing, revising, and updating LCAPs.
  • County superintendents must review school district LCAPs and ensure alignment of projected spending, services, and goals. Charter school LCAPs will be reviewed by the chartering authority. COEs are required to provide technical assistance when they disapprove an LCAP.
  • The State Superintendent of Public Instruction must review LCAPs of COEs, as well as intervene if a school district or charter school fails to show improvement across multiple subgroups in three out of four consecutive years.
  • Implementing legislation for LCFF provided $10 million to establish a new regional support network, called the California Collaborative for Educational Excellence, to advise and assist LEAs in achieving their LCAP goals.
  • Implementing legislation for LCFF reduced subgroup size from 50 to 30 students and established foster youth and homeless youth as new subgroups, with a subgroup size of 15, for purposes of Academic Performance Index accountability.

Contact Information

For all LCFF fiscal questions, contact the Office of Principal Apportionment and Special Education at PASE@cde.ca.gov. For all LCFF program questions, contact the Local Agency Systems Support Office at LCFF@cde.ca.gov.

Questions:   Local Agency Systems Support Office | LCFF@cde.ca.gov
Last Reviewed: Monday, August 29, 2016
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