Assembly Standing Committee on Education

Good morning. Thank you very much, everyone. Good morning. It's great to have you all here. This is the Assembly Budget Subcommitee number three on Education Finance and the Assembly Education Committee. I'm chair of the Subcommitee, Assembly Member David Alvarez, and I am really pleased to be joined by the Chair of our Education Committee, Assemblymember Muratsuchi.

It's been 12 years since the adoption of the Local Control Funding Formula. California has weighted student funding for all of our schools, and after a decade of implementation, the state is due for oversight for this foundational education finance formula.

Questions that come to mind or is LCFF's fiscal formula serving the key values California education leaders expected and envisioned and worked hard to produce? Is there more the state can do and should do to advance our values further inside the formula that occupies roughly 80% of the state's education funding? The Assembly realizes that LCFF means many things to many constituencies that cannot all be unpacked in just one hearing alone.

But today we will focus on the funding formula itself in isolation of the other pieces that are as important in LCFF, such as the local control accountability plan funds outside of LCFF, which are also critically important for our schools and for our students and our accountability systems of our funding.

We know that our panelists will speak to the interactions, but they have been warned, and we have talked about this at length. We plan to focus deeply on only the formula today. Reopening the LCFF for oversight now is a critical point. We have increased education funding by 65%, adjusted for inflation over the last 10 years alone.

And student enrollment, despite the creation of new grade of transitional kindergarten, continues to decline. More funding, less students in the supermajority of our school districts throughout our state. We know we all, we're nowhere near adequacy, something I know many of you are familiar with, or complete equity.

Make sure we're serving all of our students in the way that they need to be served. However, we must continue to facilitate our fiscal structures toward this goal with the revenues that we do have. In preparing for this hearing, I was struck by the importance of the original LCFF targets alone. And what could new targets look like?

To what purpose? Inside our student weighted formula for the future, we will be having public comment taken at the end of the panels and discussions from Members and the Committee. And now I'd like to turn it over to Co-Chair Assemblymember Muratsuchi, Chair of the Education Committee.

Thank you very much, chair Alvarez, and good morning, everyone. It's hard for me to believe that in my freshman year in the Legislature, we adopted perhaps the most significant education policy, certainly the most significant education finance policy change ever since Proposition 13, and how we've had at least 10 years of reflecting on what progress we've made as well as what improvements are necessary.

And so I really welcome today's hearing. I look forward to hearing from all the speakers. I want to thank Miss Gable and Miss Rees for pulling together such a great lineup of speakers. I just wanted to, you know, focus on what I'll be looking for in terms of today's hearing, reflecting on my 10 years here in the Legislature.

You know, first, while we all celebrated the adoption of the Local Control Funding Formula as perhaps the most progressive education funding policy in the entire country, with more funding and resources going to districts with the greatest needs, at the same time, I know that we've been hearing a lot of districts talking about whether there is adequate funding for all districts to be able to meet the basic costs of running districts throughout the state.

As a representative of not only Los Angeles Unified, the state's largest school district with 85% unduplicated count, as well as suburban school districts, I know we're going to be hearing from Torrance unified in my district today that I was confronted from the get go with how do we strike that balance of achieving equity through the Local Control Funding Formula, while at the same time addressing concerns of adequacy for all school districts to be able to educate all California kids.

And so I'm hoping that we will continue to focus on that question of how do we achieve both equity and adequacy in today's hearing, celebrating the progress that we've made, identify what areas we need improvement on to continue to close achievement gaps that we know we faced. Setbacks, significant setbacks, during the pandemic.

But how do we continue to make progress, not only with the continuation of the Local Control Funding Formula, but how do we improve upon the LCFF moving forward, focusing on what's working and what needs improvement. So with that chair. Thank you. And I look forward to today's hearing.

Thank you. I also just want to reiterate, we're not here just to talk about what LCFF is or what it's done. This is really very intentional hearing to listen from all of you who are practitioners, who are researchers, as to how it's working.

Well, as our co chair just mentioned, what are the things that perhaps we could do a little bit better? It was a massive undertaking the last time to get to where we are, and I think overall, we're in a much better place. However, I think everybody would agree that there's always improvements to be made.

And that's what the conversation, the goal, if you want to, the theme of the day, the theme of the next 3 hours. The goal. We're not just here just to sit and talk. We want to hear specifics in terms of what's working well and what can be improved.

And we appreciate all of you who prepared so diligently, including our staff, who did so much work to prepare for today, and looking really forward to starting with our first panel, who are ready to go. And we want to thank you very much for being prepared. This issue.

This panel is on the Local Control Funding Formula, the fiscal design, and the outcome goals. The issue will be a panel with California school finance leaders regarding the fiscal design principles of LCFF and the intended student and system outcomes for those principles.

I want to thank all of you for sharing your perspective today on where LCFF is taking California. The Committee has specifically asked this panel to address a few questions. Are the LCFF fiscal design core principle still driving state education priorities, such as adequacy, addressing a universal basic need for all leas to invest in student outcomes.

Second, on equity impact outcomes for all unduplicated student groups, are they equitable? And third, impact outcomes in Low performing and historically marginalized student subgroups. Are they equitable? So with that, I want to turn it over to our first panelist, Doctor Johnson from the University of California, Berkeley, who will be our first panelist. Make sure you turn on your microphone, please.

Thank you very much. I'm delighted to be here and honored to have the opportunity to share the. Did you just. Okay, I can't see the slide.

If you just proceed, they'll be up on the screen, and we also have copies in front of us, so.

Okay. Okay.

Do you need a copy of it? You copy?

Yeah, I just. I have to be able to see. Oh, there it is. Okay. Thank you. Appreciate that. Okay, great. So I want to just jump right into trying to. I want to just jump right into the journey. In 2011, obviously, California is the largest and most diverse state public education system.

In 2011, the journey, California ranked last nationwide in average per people spending, adjusted for differences in cost of living, consistently ranked in the bottom 15 among state systems in the 10 years leading up to LCFF in both per pupil spending and capacity to spend on education.

And in the year immediately preceding LCFF passage data from NAEP revealed California had among the largest socioeconomic achievement gaps in the nation.

Now, LCFF resulted in substantial increases in public education investments tk 12 and transformative funding formula overhaul that has been sustained in recent years, as reflected in the fact that the funding k 12 tk public schools received in 2023 state budget is nearly triple the funding received in 2011. Now, I want to just outline the way in which the pieces were rolled out. First, it was targeted district property, wealth and student need defined by percent student disadvantage.

And what I really want to lay out is the three dimensions that LCF funding formula was characterized by the three components the base grant, which varies by the grade span of the students, which is roughly 8000 right the supplemental grant, which is equal to 20% of the adjusted base grant for each high need student and the concentration grant, which is equal to 50% of the adjusted base grant per high need student in districts more than 55% high need and what I want to kind of emphasize here is this rollout of the $18 billion that received fully funded by the 2018 to 19 school year enabled both greater discretion how to use the resources sorry, I'm trying to go back, there's a little bit of a delay. But what I just want you to see is the gradual rollout in the funding.

And you can certainly see that that graduate rollout, when you look at the pre LCFF versus the post LCFF differences in funding, there's a huge increase in each year in the overall funding. But we also see that between the zero to 55%, there is actually a loss of the progressivity in the funding formula, between zero and 55%, and the concentration grant kicks in again.

The pre LCFF economic impact aid, which was replaced by LCFF's supplemental and concentration grant, meant that some of these middle districts, between zero and 55% are losing some of the progressivity in the funding formula, even though they have greater need.

Now, what we do is link the full universe of public school students to all of the kind of students traced before LCFF and throughout their school age years, and link it to the schools and funding levels that they experienced.

And what we're able to demonstrate is not only following the money forward to how the money was spent in terms of class size, teacher salary, teacher turnover, guidance counselors, whether it was spent on health services, but how that was connected to student achievement and over a long time horizon.

And what we generally demonstrate is when we look at the 2018 to 19 cohorts of years versus the 2014-15 that predated LCFF, we see improvements across the board that you see improvements for, say, a fifth grader who was in 2018-19 5th grader versus the 2014 5th grader from the same school.

And we see that improvement for all districts, but particularly among those districts that got access to the concentration grant. And we see improvements, particularly in the early aspects of the supplemental grant. But that fades out as the supplemental grant loses some of its progressivity.

But we're talking about this improvement echoing not just in math achievement, but in reading achievement, and not just in the early grades, but we find it throughout the school age years. In fact, we find that about $1,000 per pupil spending experienced for three consecutive years leads to a full grade level improvement in math achievement relative to cohorts before LCF and a full grade level improvement in reading.

Now, what we really want to highlight is these are significant impacts that we see for every grade and subject, but also that translated to significant improvements in high school graduation rates. And what we really want to then highlight is how was the money used? That how money is spent matters, but the funding must be adequate, equitable, and stable from year to year so that districts can be strategic in their spending and not have to cut one school resource to target funds funding for another.

So we break out the school spending effects separately for all 10,000 of the schools and 1000 of the districts. And we're able to demonstrate that this histogram is showing the distribution of school spending effects for a $1000 increase in per pupil spending. And we see that the histogram is centered on that one year full grade level improvement.

And while there's differences, the whole histogram is to the right of zero. Zero would be no effect, right? So we're seeing improvement across the board, even though we're also seeing some districts spending the money in ways that are boosting achievement more. And so what I just want to highlight is when we look at the factors that are driving the biggest increases in student achievement, we see instruction centered spending that reduces class size, increases teacher salaries, reduces teacher turnover.

That those three instructional centered investments led to the most improvements in student achievement, improvements in allocation to our guidance counselor and health services made a difference as well as teacher professional development. And the key pieces of this are that districts were able to use the LCAP's to tailor to their local need.

Now, we're here to both celebrate all of those improvements through the 2018 to 19 school year, right before the pandemic. And what I just want to establish is the foundation of the house that LCFF helped rebuild is solid, but we want to emphasize the remodeling of the house in ways to improve the Local Control Funding Formula going into the next 10 years.

And key aspects that our panel wants to amplify is first incorporating a cost based funding adjustments that would account for the differences in the competitive teacher salaries that are needed in local labor markets. There are four states that have funding formula that account for the regional cost of differences in living. Does include Washington, New York, Florida, Texas.

We also just want to emphasize that the supplemental grant currently lacks progressivity in the formula for districts zero to 55% as they have increased need going from the lower part of disadvantage toward the upper parts toward 50%. And so we want to incorporate some of that progressivity that was taken away with the economic impact aid.

We want to rethink adequacy in light of the universal TK, in light of the learning loss due to the pandemic, and in light of the growth in child poverty and homelessness that we've witnessed. And finally, we want to emphasize that the lcaps are only serviceable insofar as they can be digitized to promote and facilitate interdistrict learning. I'm on my last slide and I know that I need to be out of time, so if we could just go to this last slide.

Well, the last slide was trying to highlight that there's a balance between the inter district autonomy and the accountability that we do have intra district resource allocation where some of the needs of disadvantaged students within the district are being not addressed. And the question is great autonomy without accountability?

Sometimes we have to strike with the proper balance and we want to rethink those things. I have a great set of wisdom surrounding me, so let me stop here and allow the other panelists to inform the rest of the conversation. Thank you for your time.

Thank you Doctor Johnson, that was really well done in the time allotted. You set us up for success already from the get go here, so hope we can continue on that. We have a packed agenda. We want to move on to Doctor Mike Kirst who is on through the Webex system. Doctor Krist, you are up next and please begin. Your presentation will also be posted as soon as you begin.

Thank you. I don't have slides and I appreciate appearing before you today. I wish I could be there in person. My focus today with all the other witnesses you have is to provide the historical context and evolution of LCFF. LCFF I've been working on California school finance reform since 1969 and it took a long time to get where we were. The original basis of the LCFF came out of a 2008 paper, and obviously that needs updating for continuous improvement.

At that time we were writing the paper for Governor Schwarzenegger and I, the Legislature, who were considering school finance reform, and we saw signs of the recession coming in 2009 and 10.

And so we decided not to address adequacy as it has been addressed in lawsuits and other expert concepts, but just to say the state is at all forever being distributing large amounts of money, local school districts, and therefore they can do it much better than what was going on in 2008, where it was a hodgepodge of categorical programs with no equity.

So our approach was then to focus on equity adequacy. We decided to do by setting targets that would increase gradually over time. And you see that we met those targets. And I would urge the community to consider closely the confusing and somewhat contradictory research on what adequacy means.

It is, it is not clear from, in my view, whether it includes inputs of teachers salaries and so on, or outcomes. And there's no consensus to me as to what the word means as it's been battled out in lawsuits. Equity as well, of course, has different interpretations. So we used best estimates at the time for setting something, the concentration grant at 55%, and we looked at research on the impact of concentrated poverty and other issues that dragged down school attainment.

California, as far as I know, was distinctive in using the idea of concentration that at some point the community that the pupil is living in is so overwhelmingly impacted that you need more money. And I think that's an important concept to include. At the time we decided not to include special education.

We didn't have a clear idea as to how to solve it. And now it is the last categorical out there separate system. We want to integrate the special education pupils into the regular classroom, but yet we have a categorical funding system that separates them out.

There are three studies by Wested on finance, governance and accountability that I think give us some ways to think about this that we did not have when we formulated our original ideas. So I would urge attention to that as well. Rucker mentioned the regional cost of living adjustments. That was in our original paper in 2008.

And it's the only major concept from that paper that we didn't get in the LCFF legislation. And obviously, the differences in housing costs, for example, between where I live on the border of Santa Clara and San Mateo county are quite different compared to other parts of the state.

I would also recommend, in addition to the other states that have it, a study I sent your staff called from Colorado, which is more recent and has Denver and adjustments in it, and I think they use some technology that is different than the other places and worth your consideration. Now, also, at the time, we used free lunch, which was the major way poverty was defined. It was never a precise way. Since then, free lunch has expanded dramatically and it, I think, deserves reconsideration.

There are other studies which I sent your staff of using federal criteria for some of their special needs grants and even have the amazing thing in Nevada where they use 10 to 12 factors with AI to come up with a measure of student poverty. I think that's a reach too far, but it's interesting.

So that's another area, I think, in free lunch that you want to take a look at. Now, we agonized over how to the area of do you distribute the money to districts versus schools? I was an administrator at the federal level of title one of the elementary and Secondary Education act, and that, of course, allocates to schools.

But our view was, and this was partly in consultation eventually with Governor Brown, is to proceed with humility. We didn't how. We just didn't think we knew how to allocate money from Sacramento to over 10,000 schools.

And so our view was that we would give it to the districts and allow them to distribute the money within their own areas. And I think that still really applies, although there may be ways, and we have some new, the equity multiplier, some new ways to bring schools in.

Doctor, Doctor Kirst, can I ask you to do one final comment? I know I have questions for you and the Members.

Sure. And then my final comment is the accounting system. The accounting system makes it hard to sort out what money is spent in districts and what money is spent in schools, and it's in big buckets like Administration and instruction. And I don't think we can get the information we need in many ways with the current accounting system. I'll stop there. Thank you.

Thank you very much. Appreciate that. We'll now move on to our next panelist representing the California State Board of Education, Brooke Salin.

Good morning and thank you for inviting me to join this important conversation. As I said, my name is Brooks Allen. I serve as Executive Director of the California State Board of Education and Education policy advisor to Governor Newsom.

Notably, my comments this morning regarding the origins of the local funding formula are also informed by my experiences in 2012 and 2013 when I served as a statewide Director of education advocacy for the ACLU of California and worked closely with a coalition of student, family, community and civil rights organizations on efforts that supported, advocated for, and helped shape the enactment of the LCFF.

Subsequently, I had the pleasure of joining the State Board of Education staff immediately thereafter and worked on the initial set of LCFF expenditure regulations and the very first local and accountability plan template. As a Member of that staff. With that background, I would like to offer a few observations to support your deliberations today.

The first building on my fellow panelists comments is to underscore that the LCFF stands as a landmark achievement in California's effort to fulfill the constitutional promise to provide equal educational opportunity. While we don't have the time today, in this short time to review the entire history, I think we are all well served to remember that.

Whether it was the Serrano finance litigation in the 1970s, the California Supreme Court's decision in the 1990s to protect the right of students to basic educational equality, or the Williams settlement in the early two thousands, the focus has been on at that time was really on seeking to make sure that all students with greater needs receive roughly the same as their peers.

It was a question of equality, not equity. LCFF represented a sea change. It was the largest state in the union standing up and declaring that equal educational opportunity could only be achieved by providing more funding to serve students with the greatest needs. An equity based allocation formula that Doctor Kirst and his colleagues proposed and Governor Brown and the Legislature made a reality. Thanks to continued champion investments by the Governor and the Legislature.

Today we see that of the nearly 80 billion in LCFF that is allocated to leas, over 14 billion is now provided on the basis of the number of students who are Low income English learners or foster youth, including an augmentation of nearly 4.6 billion over the past six years that demonstrates the state's continued and growing commitment to meeting the needs of students with the greatest needs.

As we consider this groundbreaking equity formula 11 years later, as you both referenced at the top, I would like to offer two historical observations pertinent to the framing of the discussion. The first is that the Local Control Funding Formula is just that, a formula and not a statewide revenue target. It was enacted, as many of us will recall, against the backdrop of a deep fiscal crisis, one that had large school districts across the state contemplating cutting entire weeks off of the school year before the voters passed Proposition 30 in 2012.

But while Proposition 30 provided an essential effusion of funds for schools, LCFF itself was designed to provide a simplified, transparent and equity driven allocation of funds as school funding recovered and grew, a period that notably has seen Prop 98 funding increase by 185% since the enactment of LCFF.

It did not promise to generate additional revenue, and thus, I posit that the formula should not be judged by whether it has increased overall funding to, quote unquote, adequate levels, however, that may be defined in today's deliberations.

Rather, in terms of changing the foundational approach for how California distributes all available funding to schools, even beyond LCFF funding, including how we've approached the distribution of federal relief funding and large, transformative, equity driven investments in community schools and expanded learning time. There's no question that against that bar, it has been extraordinarily successful.

It now represents fundamentally how we in California do business, and maintaining an equity and fused baseline for allocating funds in pursuit of equal educational opportunity is more important than ever, given the high proportion of high needs students in our schools.

Two, the LCFF allocation methodology is inextricably interwoven with the planning and accountability provisions, most specifically the local control and accountability plan, and they should be evaluated together. Warning fully understood. But I just I need to underscore this point. It's evident when we look back about how the formula was developed in 2012.

We were talking about the weighted student formula. That was the formula conversation. It really wasn't until the Legislature advocates, others pressed as some Member to see the accountability provisions and other pieces get into it. And we even had the name the Low control funding formula in 2013 evolve that we finally saw it enacted.

And at that point we saw that the very expenditure regulations themselves governing the allocation and use of supplemental concentration grant funds got embedded in the LCAP itself. The expense regulations, literally about how we allocate the formula, are embedded in that LCAP.

And therefore any evaluation of how well the LCFF goal of improving educational services for the highest need students as compared to services provided to all students is being achieved, must look at the use and approval of LCAP.

Can I ask you for a final comment? I also have questions for you, so we'll be back. Certainly.

Yeah, absolutely. The formula and the associated planning accountability provisions have been involving ever since enactment, and recent innovations bear careful study. Fundamentally, to borrow from one of my favorite charges that President Kirst gave us, and he referred to it just now, we all must practice patience, persistence and humility in the interest of time.

I'm not going to run through the details of each, but I hope that the forthcoming conversations about how we continue to build on the LCFF foundation will touch on how experience and studies led to the concentration grant add on that provides over $1.0 billion to student and staff to improve to decrease apologies, student and staff ratios at individual schools with concentration of high need students.

The allocation of learning acceleration funds in 2021 that included additional funds for unhoused students on top of the LCFF driven allocation and there provides an early indicator of what it would look like to study duplication and then finally providing the additional 300 million in ongoing equity multiplier funds and recent changes to the LCAP template to help leas better resource better focus resources on student group and school level disparities in student opportunities outcomes.

We're all together in this continuous improvement journey in pursuit of ensuring that all students receive high quality educational opportunities to help them succeed and thrive. And I look forward to the continuing conversation. Thank you.

Appreciate that. Move on to our next speaker with Children Now, Mister Ted Lempert.

Thank you very much, Mister chair. Mister chairs and Members. And first, I just want to thank you and your staff for doing this oversight hearing. As a former Member and someone who's worked with the Legislature a long time, I've always felt Legislature doesn't do enough oversight. So thank you for doing this, especially on this critical measure.

And just to borrow from Rutgers metaphor, LCFF is a 10 year old house. We shouldn't move. Let's not tear it down. But some remodeling would be in order. So I have a couple of specific suggestions about that remodeling, but first, just big picture.

Brooks mentioned the coalition of groups, ACLU, Children Now, others, that are all now represented through the equity coalition. Why did we so strongly fight for this law? One, because it rationalized the funding system and rationalized what was an over regulated categorical system.

Two, because it was equity based distribution of funds and on paper it is the strongest equity ed finance law in the country. And importantly, it was predicated on a strong accountability system. What LCFF never was was about getting more money for schools.

In fact, one of the arguments we used with the education Committee across the state was let's rationalize the finance system. Let's make sense of that. That will help us advocate to the Governor and Legislature and or the voters for a lot more money for education that hasn't come to pass in the first decade, maybe the second decade.

And just a word on the quote adequacy before we get to the formula. We work with over 5600 groups through our children's movement groups across the state, parents, students, community, faith based, others. I think anyone in schools today would say we're close to adequate.

As our 2024 report card shows, we rank 49th in teacher staffing ratios, 46 in total staffing, and what we need to do is compare ourselves to other states. Of course, we've significantly increased education funding over the last decade. So have other states.

And if you look at how we invest based on our personal income, we are $23 billion a year below the national average, 50 billion below New York and 80 billion below New Jersey. So just a yemenite national context when folks talk about adequate funding.

So then specifically on the remodeling, we truly need to ensure what was always the promise of LCFF and why the equity groups pushed so hard for it. And that is to ensure students generating LCFF s and c dollars receive the higher level of service.

What we've seen too often is that the dollars are progressively distributed across districts, but often regressively distributed across schools within the district. And Mike mentioned the debate. I remember many debates in children. I was conference room with Mike and others about how we turned his research paper into law.

There was a lot of debate about do you give the money to districts or directly to students? And as Mike mentioned, maybe it's time to reconsider that a little bit, given the flaws in the district based model. But why overall performance has increased, there really has been little to no progress on closing achievement gaps.

As the report card shows, California still has the highest achievement gaps by income in the nation in 8th grade math and 48th in fourth grade reading. So we need to really, things for a future hearing are overhauling and streamlining the LCAP process and having much more transparency and really strengthening that accountability system.

But specifically for today, it really is time to consider increasing the weights for the supplemental and concentration grants and what I would term a real chance to reinvest the declining enrollment dividend. Driven largely by changing birth rates, our schools are expected to lose over 660,000 students over the next decade.

Districts face unique challenges in addressing this declining enrollment. What me and my colleagues at Children Now would propose is a declining enrollment dividend for the Governor and Legislature to adopt.

Given that Proposition 98 will continue to grow with the state's economy that was estimated 11.5 billion from declining enrollment could be reallocated to new school spending, we would propose that the state, by formula calculate the LCFF savings from declining enrollment and reinvest those funds, dividing the funding between one, increasing the s and c rates and two, strengthening strengthening the base to move us towards a more equitable and adequate funding system.

And finally, one thing I would consider a tearing down, not a remodel, is adding a lot more categoricals. We have seen over the last decade, as we've had fewer students freeing up more dollars, much is what has been invested as a new categorical programs. I think it's very important we stay with the original intent of LCFF.

One, I won't call it an exception. TK is not a categorical, it's an extra grade. And as part of this discussion, I think we all know, and we know internationally, that in addition to the reforms we've been talking about, a strongly funded early childhood system will also lead to greater student achievement.

Thank you very much. Right on time. Thank you. Appreciate that. We are now moving on to Mister Edgar Zazueta, Association of California School Administrators. Thank you for being here.

Good morning, Chairman. Good morning to both Chairman. My name is Edgar Zazueta. I'm the executive director of the Association for California School Administrators, representing more than 17,000 school leaders throughout California. Like my colleagues, really appreciate the opportunity to provide some perspective and some reflection on the 10 years, the 10 plus years of LCFF. Before I say anything else, I think it's worth noting, especially being a statewide association, and I think something that everybody recognize. We have 1000 leas in this district with diverse needs, diverse perspectives.

Anytime we're giving some perspective of trying to, that reflects the whole state, that those are varied. And I want to put that out there, that the experience has been different. With that being said, I think it should be said unequivocally, and this is something that's backed up, I think, by the research by other folks outside, folks coming in and getting the perspectives of our members.

That LCFF, and this is the belief of the field, that the LCFF has been a catalyst, an important catalyst for meaningful changes to our public education system. Its funding system, the funding design has put a bigger emphasis on equity. And I would point out, beyond even just our finance system. I love what Mr. Allen here said about that.

It fundamentally has changed the way we do business. And I think this conversation about finances goes beyond just the distribution of dollars, of just how are we putting equity at the forefront. And I do think that is a byproduct of this conversation with the LCFF. Like Dr. Johnson and many other studies have pointed out that there's clear evidence that money has mattered, that it has translated into achievement gap.

In closing, beginning to close the achievement gap between high need students and their peers. That targeted funding has allowed districts to provide additional academic support and tutoring and other resources that specifically address the needs of low income students, English learners, and foster youth.

The other tenet, as Dr. Kirst pointed out, and one that I think when we get the perspective of our folks in the field, is this emphasis on local control and what that has actually meant for just how we do business, if you will. In a state that is diverse as ours, the recognition that one size doesn't fit all, I think was a very critical one.

The flexibility that LCFF has given the field, has empowered school leaders, teachers, classified employees, parents, and community to work collaboratively to identify and address the highest needs for their specific community. I think at the end of the day, one of the biggest takeaways from LCFF is that the move to put more decision making authority on the hands of those closest to the students, again, has been a very critical one and an important one.

When we do, now turning the page. When we ask for perspectives from our diverse set of leaders about the reflection of what LCFF has meant for their respective schools and communities, I think one theme always comes to the top of the list, and it's looking at the adequacy of the base grant that the formula was founded upon.

While LCFF has provided meaningful change, school leaders will tell you that there is real need to consider the adequacy of the base grant in the formula. Again, many studies, the LAO has reported on addressing the base grant is necessary to make sure that districts are being able to maintain their essential services.

School services of California, amongst other educational experts, have repeatedly highlighted how the base grants are not keeping up with the rising costs that are necessary to serve our students in this state. Fiscal forecasts that they've done have shown that the projected increases in the COLA that we're going to see here in the next couple years are not going to keep up with the pace of just basic needs for your school district.

One example, then this was done in one of those projections, that if you look at your average district and just the cost to fund just regular step and column increases coupled with inflation, the growth that we're going to see in LCFF in the base grant over the next couple years is not going to keep track with that.

And that's not even counting any, that's before you take into account any compensation increases or any other costs for our employees. Again, addressing the adequacy of the base grant will not only deal with some of those basic costs, I think it should be pointed out it also advances equity.

Because while you address the adequacy of the base grant, you also are leveling up supplemental and concentration grants as a result of that. Moving on, I think another theme that is connected to the adequacy of the base grant is the fixed costs that districts are facing.

While I think acknowledging the points that have been well made that this is a distributional formula, it is the main distributional formula in the way that we get money now to schools. So for that reason, I know, with all due respect, the state every year puts out what your composite per ADA number is per student.

I think our folks will be quick to point out that that doesn't always tell the whole story, and the diversity of our districts and the money that they're getting, that that, especially in an environment with declining enrollment and numerous other costs, that is a challenge.

For example, school employer pension contribution costs have more than doubled since the implementation of LCFF. Schools have seen double digit increases in healthcare costs. Insurance rates had been astronomical over the last five to 10 years.

Fire, floods, cybersecurity, old child abuse cases that have come to the forefront have all put our schools finances at risk and have consistently driven up annual cost. Again, multiple studies, including comprehensive analysis by the Public Policy Institute of California that the LCFF based grant has not sufficiently covered all these issues.

Kind of moving into conclusion here is that one of the themes, and Dr. Kirst again pointed this out, that in the effort to fundamentally think about our school finance system, the one outlier was the interaction with our special education funding. A consistent theme has been brought up, both from our members, from perspectives, from policymakers, about thinking about what is that interaction. I love the analogy about the remodeling, and I think we always would caution about wide scale changes.

But I think it is important to acknowledge that this interaction of how we best fund our students with disabilities and what are the interactions with the formula are one that do warrant continued consideration while also acknowledging, and I think it's always important to acknowledge, that the federal government hasn't kept up their end of the bargain, not coming close to funding the 40% of special ed costs that is in the law.

Can I ask you for a final comment, please?

So, with that said, and I'll put this in the category for a topic for another day, but we would be remiss that you can't talk about LCFF without talking about the LCAP. And this is one of the perspectives that comes up in every conversation from our members. And I'll just leave you with one story.

I was part, like many of us, in those conversations with our leaders when we were thinking about LCFF. And there was numerous officials in the administration who envisioned, when we talked about the LCAP, that it was going to be a three to four page document that would be easy to summarize and think about the community.

I think goes without saying, we all know that that hasn't been the case. So we will look forward to those conversations on how to streamline those reporting requirements, especially for our smaller districts who don't have the capacity to deal with all those requirements. So, in closing, I just want to thank the committee for this opportunity, and we look forward to being part of the conversations moving forward.

Thank you for your contributions here today. We are now going to move on to Katie Hardeman, who is the California Teachers Association representative. Welcome.

Good morning. Thanks for having us in this important conversation this morning. Katie Hardeman with the California Teachers Association. CTA is a strong supporter of the LCFF and the goals of both improving outcomes and support for students that need and deserve additional resources, as well as providing for the needs of all students.

We believe an equitable funding formula is essential in leveling the playing field for students. And while we've made some progress, and we've seen many bright spots across the state since the LCFF was enacted, as the research and Dr. Johnson laid out, we have more work to do to make more progress. And we cannot truly achieve our goals of equity without sufficient funding in the formula.

And I know we're gonna get into this a little bit more in the next panel, but we believe it's fundamental to the success of the LCFF. And as a reminder, when the state enacted the LCFF, we created funding targets, targets funded over several years. So while the state adopted the new formula in 2013, it was not fully funded until 2018. And then additionally, these targets were based on historic funding levels, not sort of adequacy or needs that students need and deserve. So just wanted to provide that sort of backdrop there.

And then, additionally, we recognize this is a formula and not a revenue source. We can't, it's hard to talk about potential changes to the formula when the entire formula is underfunded. And so, despite, you know, recent investments, we still have, you know, an underfunded system.

And then additionally, as others have mentioned on, you know, the spending decisions at the state and the continuous improvement accountability system is really important in all of these conversations and in improving outcomes. So I'll leave it there. Thank you.

Thank you. I will, made a decision in reading all the documents leading to tonight. I think panel two is very germane to panel one. So I was going to ask them to come up and speak, and then... But I'd ask all of you to stick around because I know I have questions for each and every one of you. But if any of the colleagues have questions specifically for this panel, I'm also happy to take those questions now. If you feel like you have to take... Mr. Muratsuchi, you want to ask questions of this panel? All right, go ahead.

Thank you. Yes, I. I mean, I... Yeah, I'm not sure how it would, you know, be consistent with the next panel, and so I just want to take this opportunity. I do have a few. So, first of all, Professor Johnson, I was trying to... You have a bigger slide deck than what you focused on in your presentation.

And so I was trying to frantically keep up with you, but you had one slide that talks about explaining the 84% to 95% variation in school spending effectiveness. And am I correct in understanding that these five points that you identify are the most effective ways in which the concentration and supplemental funds are spent to help close the achievement gap? Okay.

Yes. Can you hear me? Yes, that is correct. Meaning when, this is important because the reform is distinctive in its multiyear design, pre-committing funds. And so districts were assured that it would not be temporary, reversible change and could plan long term transformative initiatives rather than one off expenditures.

In the context of like the pandemic, when you have like, a federal commitment of pandemic funds, that's one year, district leaders receive that money and usually allocate it to buildings, like a one off expenditure. They don't allocate it to instruction centered spending because if they hire more teachers, they know they'll have to incur teacher layoffs because it's a reoccurring expense.

So the importance of a commitment of sustained investment is it changes how districts choose to then allocate the funds. And we finding district instruction centered spending is one of the most critical parts that is boosting the student achievement.

When they allocated a pension debt, buildings, administrative salaries, we did not see this significant boost in achievement in the ways that we saw it when it was allocated to class size reductions, teacher salary, that in combination reduced teacher turnover. Yes.

Okay. I mean, I appreciate that, but what these five categories of most effective school spending with the supplemental dollars. I mean, it appears to me that these, like, especially class size, teacher salaries, and maybe teacher turnovers related to both class size and teacher salaries. But those three, it's my general understanding that those would be district wide investments rather than focusing on school sites where the poverty level or the EL numbers are the highest. Would you agree?

I would suggest that, for example, in high concentrated poverty schools, sometimes the teacher turnover is as high as one in two teachers leaving the profession in the first five years. The kind of ability to invest creates a culture and system where you're not only able to attract high quality teachers, but you're able to develop and recruit and sustain that.

So if you reduce class sizes, but the smaller class sizes are taught by inexperienced teachers without the credential, without the effectiveness, then those smaller class sizes don't actually lead to those kind of improvements. So it's the combination of smaller class sizes with experienced teachers in combination, not like one at a time.

Sure. Yeah. I mean, all of these obviously interact with each other. But I guess my point is focusing on the point that Dr. Kirst and others have made that debate about whether the investments should be district wide versus school site focused that... You know, like for example, LA Unified. My understanding is that, you know.

Our local teachers unions are very much against differentiated salaries based on where you teach. And so given that your average school district is spending 85% of their revenues on salaries and benefits, and the investments of the supplemental and concentration dollars appear to me to be district wide investments rather than school side focused investments.

I think that's an astute observation. I think what I'm only emphasizing here is that this balance between autonomy and accountability means that we have to keep our eyes on the intra-district resource allocation decisions that do affect educational opportunity within the district. And the ESSA requirements, for example, require schools to report spending at the school level, not just at the district level.

And so our ability to try to account for the school spending in standardized ways so that we can ensure that the resources are not being inequitably distributed within the district is certainly a thing that will require continual improvement and our eyes and attention as researchers, practitioners, and policymakers. And so I definitely think that that's true.

Can I just say one last thing, which is the synergy between TK and this LCFF increase, increases in spending. Meaning the increases in school readiness that TK were able to produce are able to be sustained through the early elementary school spending. But remember, the LCFF funding formula was really designed in a pre-TK environment.

So we want to kind of think about how we ensure that the interaction between the early elementary school spending and the TK kind of are able to continue to complement each other. And the funding formula can help in that way. And I say that because that's really happening at the school and classroom level, not at just at the district level. And so those are things that I think we've seen in the data, the synergy between TK and the LCFF induced increases in early elementary school spending. Sorry. Thank you.

Thank you. This is definitely not intended to cut off conversation. We're going to have very robust, lengthy after the next panel. It just, there's so much material that really goes together that I think it just makes a lot more sense for us to do that. Even though the agenda was really well laid out originally I think.

So let's, if I can ask, I think only one of the panelists right now is staying. That's Ms. Hardeman. Otherwise, I'll ask the next panel to come forward and then we'll try to figure out how we situate all of you for the discussions and questions from Members as soon as this panel is complete for panel one and panel two.

Thank you for your time.

Thank you. Please don't go too far.

Yes, because I have, I have questions for all of the panelists. Thank you.

All right. And we're going to begin with Mr. Levin with the American Institute of Research. You are ready? We are ready for you. Thank you, and please proceed.

Okay, great. First of all, thanks so much for having me. I'm going to try to go through these slides pretty quickly and stick to my time. I want to give you a little bit of background who you're talking to here. I'm Jesse Levin. I'm a principal research economist with the American Institutes for Research.

I've been working on issues of adequacy and equity for about 20 years in many, many states. I'm also a native Californian and have gone through my schooling career through k-12 and university in California. And in addition, I didn't put this down here, but I have two sons who are both in public schools in California.

I also currently serve on the California Department of Education Technical Advisory Board. I was previously a member of the California Practitioner Advisory Group, and I did a term as school board trustee in my local district, Pacifica School District. So this is all pretty close to my heart, and I love all the conversation that I've heard thus far. Agree with just about all of it. So I wanted to go over a little bit about my research and what my work does.

I go into states and work with states to try to examine and improve their school funding mechanisms. And there are two key goals of any funding formula. One is really an adequacy goal. I know we've talked about, oh, let's try to limit the talk about adequacy.

But, you know, adequacy, I always put it in simple terms, how large must the pie be in order to provide all students an opportunity to meet the state's educational goals? And this has to be regardless of what a student's needs or circumstances are where they attend school. The second key goal is equity.

And equity is you have to appropriately distribute these dollars to allow for this equal opportunity for all students to achieve at some common level. And that level can be adequate or less than adequate, however you define them. Now, in order to meet these goals, you need accurate estimates of what the differential cost of producing outcomes are for different types of students who learn in different environments. So those are the two key goals. And I just want to kind of motivate the rest of my talk with what I'm going to call cost factors and I have not been. I've not been cycling my slides, have I? I don't even see if the slides are up there.

We're going to get them up, but the panel does have your slides.

No worries. I'm on slide four for those of you who have this. So cost factors are simply characteristics that influence the cost of providing, of generating student outcomes, but are outside of a district's control. And there are some very important categories of cost factors that we use in these studies. And the first is student needs.

And we've talked about student needs a lot here. There's been less talk, if any, about scale and sparsity. So we recognize that schools are, schools and districts are units of production or producing organizations, and it becomes, on average, cheaper to produce outcomes the larger is the scale of production.

So in the context of LCFF, we do have this small schools adjustment, right? So that is really an adjustment for diseconomies of scale. We also look at things like population sparsity, or the degree to which a district or schools are rural versus urban.

Now we also look at programmatic adjustments, and we have some of those in LCFF as well. Grade range, and tk just came up as well, and that's a great example of something that we might all think about. How do we appropriately differentially fund those schools that are offering more tk or less tk?

And then finally, the price level of inputs, or the geographic variation of what it costs to attract and retain teachers and other educational staff. This is a key cost factor that should be taken into account, and that came up earlier. I just wanted to lay these out on the table for everybody. So. And here is the next slide. I'm not sure if that's cycling. There it is. Okay, so I'm just gonna reiterate. LCFF was revolutionary in California. My little note here says it really marked a path out of an overly restricted dark forest of categorical funding programs.

And it resulted in improvements in terms of equity across districts, certainly improved the autonomy with which districts had control over the means to success, their resources. And it could be said that it also improved transparency, that we have a better idea of how funding gets to individual districts and why one district has more funding than another district.

So in terms of the student, the student needs weighting here. We all know about the three traditionally underserved groups, students eligible for free or reduced priced meals, English learners, and foster youth. This is my, I guess the last thing that I wanted to say is our establishment of LCFF...

We joined a lot of other states that have these weighted student funding formulas. 38 other states currently use these types of weights and have a setup. This is the most basic here that the one formula that I'm going to show you is a base per pupil funding amount.

That would be really our base grant rate times some weighted number of pupils. And that's the way all of these are set up. And you can have a lot of other adjustments for those other cost factors that I talked about. Those could be through weighting your numbers of pupils or through other means. So this is where I want to get us all thinking about how can we improve LCFF in the future. And I have two questions for everybody to be thinking about. The first is, are the components of LCFF truly cost based?

That is, do they represent an accurate differential cost of producing outcomes for students with different backgrounds learning at different locations? One part of that is is the base rate high enough? So these would be for our students that have no additional needs, those who are not traditionally underserved.

And this is where my talk bleeds over a little bit into adequacy, right? Is that base rate enough? And of course, the base rate is what drives these differential funding adjustments as well. So it's very, very important. In addition, we have the grade level adjustments that are through the base rate.

So we have to think about whether the adjustments for the different schooling levels, and including tk now, are appropriate. That is, do they represent the differential cost of producing a similar level of outcomes for these different types of programming that are being offered?

Can I ask you for a final comment?

Oh, yeah. Sure.

I have lots of questions for you, too.

Wow. Of course. So my final comment is... Well, you've already heard about costs or funding adjustments. The other question that I have for all of you is, are there any adjustments, cost factors that are missing? And one key cost factor is really geographic variation in the price levels. Okay.

One result, I just went into the comparable wage index, which is a Department of Education product, and I did a little digging and showed that we have huge variation in California in terms of what it costs to hire and retain educational staff. In Bellevue Elementary, it costs 27% less than the state average, versus in San Francisco.

This is based on 2021 figures. San Francisco, it costs 21% more. Now, these are... This is a factor that's outside of the control of the district, largely. Okay. The way that this is measured here. And so we should seriously consider implementing some sort of additional adjustment that accounts for this cost factor. I'll stop there. There's a lot more. You have the slideshow. Thanks.

And to that last point that was just made, that was also raised in the previous panel, which is why I thought it was important to have all of you speak. So our next panelist is Mike Fine with Fiscal Crisis and Management Assistance Team, FCMAT.

Thank you. Good morning, Chairs and Members. Happy to be with you this morning. Mike Fine, the Chief Executive Officer of the state's Fiscal Crisis and Management Assistance Team. I'm going to echo some of the comments you've already heard and probably will hear later this morning.

I'm going to do that through talking about some principles and then talk about some specifics. The Local Control Funding Formula does not need a major overhaul, simply a few adjustments that will improve both its relevancy and adequacy to continue to support California students.

The basic building blocks of the LCFF are strong and accomplishing the original purpose of the design. We need to leverage the formula's strengths while being careful not to harm its basic design. Adequacy is important for logical reasons but also contributes to fiscal stability, an area that FCMAT certainly focuses on. But it's also important to reinforce the thought.

And Mr. Brooks, Mr. Allen said this earlier, it's important to reinforce the thought that the strength and the success of the formula should not be judged on the success, or lack thereof, of adequacy. While these hearings are not focused on the Local Control Funding Formula, I'm sorry, the Local Control and Accountability Plan, I do believe, I do not believe that we can have a complete conversation about the formula without talking about the LCAP itself.

The chairs will undoubtedly ask questions about the flow of funds to support student needs and how the funds reach students to close the achievement gap. The LCAP is what ties the formula to students. Some of the adjustments I'm recommending we explore during this analysis will improve adequacy, but ultimately, adequacy is about sufficient input of funds to the formula.

An adequate base grant would relieve much of the variance, conflict, and challenge we see in districts today who go to great lengths to justify using their supplemental and concentration grant funds for basic services, as opposed to the equity adjustments to better serve historically underperforming students.

Likewise, an adequate base grant would better support Special Education Formula through AB 602 master plan funding. AB 602, as you know, provides an incremental increase in funding, recognizing the need for higher service levels for our special ed students.

While many complain that funding for special ed is inadequate, and it is, we need to remember that special ed students generate LCFF funds first and then AB 602 funds second. Adding an increment to an already inadequate LCFF rate doesn't make up for inadequacy.

My list of suggested mechanical adjustments include these. First, and several have alluded to this, the cost of living adjustment, or COLA. The longstanding COLA that we use today predates the LCFF, so it's been in use for 35 years or so and was not a component of LCFF.

But the calculation of COLA uses a national metric to represent the changing cost of government goods and services. This may or may not be reflective of the change in costs for California school districts and classrooms year over year. COLA is the funding mechanism used to cover increased annual costs, assuming caseload and program remains the same.

Annual COLA adjustments are used to cover step in column increases in salary, increases in health benefits, increases in employer contributions to CalSTRS, and and increases in utility and energy costs, all as examples. It's time to explore the use of a California specific metric, and given that 85% of school district expenses are labor related, a California metric that is heavily influenced by labor cost elements. That would align COLA to what schools actually experience and the challenge that they have in supporting their classrooms.

As part of the exploration of a more appropriate COLA, we should talk about regionalized COLAs or geographic adjustments. Dr. Kirst mentioned this, something we've talked about for a long time but really never gotten traction. One of the positive attributes, though, of the LCFF is that the base rate is the same by grade span for all districts.

This is an improvement over the former revenue limits, which varied by district. Regionalized COLAs would create a variance in the base rates which go against an important principle in the LCFF base rate. So we need to balance the need for regionalized consideration against this idea of consistency.

Geographic adjustments may not be appropriate for high, may not only be appropriate for just higher cost areas, but also should consider other factors common in rural and necessary small schools and potentially districts with other characteristics. Second area would be supplemental and concentration grant rates.

The current rates for supplemental and concentration grants at 20% and 50%, respectively, were not based on research at the time we adopted the LCFF. I believe the supplemental rate, which serves all unduplicated students, is too low. Unduplicated data by site rather than district. This is also a topic that's already been raised.

We've begun to implement add ons and other program funding based on site metrics. It is time. Is it time to consider the same for LCFF is my question. Discussion should take place about the pros and the cons and the impacts on the equity related goals of the LCFF for funding unduplicated students based on the number and concentration by school site rather than number and concentration by district.

There's no question that one of the cons of this approach is that average daily attendance would also need to be computed and reported by site, and the funding would need to be computed by site instead of the district, creating a significant change in data collection and allocation mechanics and the resulting workload impacts at both the state and local level.

Mr. Fine, a couple finishing comments here please.

Sure. I will just highlight my other points to consider. One is the metric to be used for poverty. I think other panel members will touch on that today. Unduplicated students. Do we have the right unduplicated students? Should some be duplicated? Should we distinguish between long term English learners versus English learners, migrant students, and so on?

LCFF add ons. The LAO reported on this last spring as part of our discussion about Prop 98 challenges in the current budget, and I don't think it got the traction it needed, but would certainly recommend you revisit the LAO's recommendation. Are those add ons that we put in place on day one still relevant today?

And then finally, I would highlight, and Rucker did this as well, the tk versus tk through three grade span funding we have some unintended adverse consequences of blending those together in the grade span adjustment and we probably need to separate tk. We can use the same rates but separate tk out of that calculation so that we don't have unintended consequences on staffing in k through three. Thank you very much.

Appreciate your specificity and also the testimony. Appreciate that. Ms. Hardeman.

Great, thank you. Again, Katie Hardeman with the California Teachers Association. As mentioned earlier, we believe the overall funding for the LCFF is not sufficient to achieve the goals of adequacy and equity. CTA has long supported efforts to increase the overall target base rates for the LCFF, and in turn that increases the supplemental concentration grant funding as well, lifting up kind of all components of the formula. Overall, the funding is not sufficient to meet basic needs. Some of these include addressing the teacher shortage.

As we mentioned earlier, increased salaries, lower class sizes will help ensure students have a high quality teacher, which we know especially important in our low performing schools, which is why we see kind of that district wide approach sometimes, especially in high concentration poverty districts. And then also increasing the number of mental health professionals, counselors, nurses, support staff in our schools and addressing this growing responsibility of schools to kind of address the whole child.

With that being said, we appreciate the conversation and welcome discussion around the various components of the formula. As mentioned, you know, agreed, the regional cost differences matter. We often hear from our members that they are unable to afford to live in the places that they teach because, you know, students receive the same ADA regardless of where in the state they live. So that's certainly a valid policy consideration.

Also, special education. Don't want to kind of repeat everything, but that was, you know, kept separate from the LCFF. These students continue to be kind of the lowest performing and siloed in our accountability system. So, you know, consideration for that. And then we've heard oftentimes this sort of concentration grant cliff effect.

We've, you know, I know you're discussing concentration grant later on, but we've heard from our locals about districts sort of teetering in and out of concentration grant status, which creates instability for their budget. And then finally, the grade span adjustment.

You know, we believe the grade span adjustment is just not sufficient to fully fund those lower class sizes for those lower grades. And therefore, that's often negotiated away at the bargaining table because the statute allows for that and the funding is just not sufficient to cover that.

So essentially, the grade span adjustment, in most cases, is not achieving sort of the policy goal of lowering class sizes. So ultimately, any changes to the formula will likely require additional resources, and so that has distributional impacts. And so we want any policy discussion to be thoroughly vetted on all these components. So I'll leave it there. Thank you.

Thank you very much. Appreciate that. Dr. Tim Stowe, Torrance Unified School District. Welcome.

Good morning, Chairs Alvarez and Muratsuchi and Members of the Committee and staff. Thank you for the opportunity to be here and give you perspective from the local level of the LCFF. As introduced, I'm Tim Stowe, fifth year superintendent in Torrance. We are a district of 22,000 students about 20 miles southwest of Los Angeles.

We are one of the most diverse school districts in the State of California, if you look us up. So, by way of background, I also was the chief academic officer in 2013 when the district helped form the California School Funding Coalition that advocates continuously for increase in base funding.

Through those early efforts and collaborating with legislators, we actually were able to significantly increase the account for, or significantly increase the base grant, which accounted for pre-LCFF categorical programs that helped all students. So Torrance has an unduplicated pupil percentage of 38%, making us mostly reliant on base grant funding.

In some years, the growth in the base grant keeps up with the cost of educating our students, as it did in 22-23, when the state went above and beyond in providing funds above the COLA. However, in years like the one we're in, the 1.07% COLA translates to a negative .37 COLA for what we call the Torrance funded COLA. And this is something that takes into account enrollment changes, employee step and column increases that you've heard about, STRS and PERS increases, and rising utility and insurance costs.

This does not reflect the consistent increases in contributions from the General Fund to support programs for students with disabilities, as special education funding has not kept pace with increased student needs. And for Torrance, it's roughly $50 million every year that's contributed to our special ed line out of the General Fund.

As an aside, we are not a district that is severely declining in enrollment, and so if we were, that negative TUSD COLA would be even greater. So without significant supplemental or any concentration funding, we face a set of challenges, including competing with our better funded districts for retaining and recruiting experienced educators.

From our perspective, the base grant merits an annual steady increase to meet the needs of all students. We think there's value in setting a new aspirational target to recognize the challenges facing education today and into the future. So as we think about LCFF 2.0, we remember the great investments that were made in the early days, in 2013 through 2017-19, when it became fully funded.

And while there were challenges in implementation, including unknowing from year to year how much we were going to get, we do recognize that the funds flowing into local school districts were at historic levels, and so thank you. If in the near future the Legislature is fortunate enough to be able to be considering how the new resources might be used, please know this. We do not need more categorical programs.

What we do need are adequate resources to address the needs of all students, needs that are far more complex than they were when the LCFF was adopted. For years we've hypothetically thought about and struggled with what LEAs would do with more adequate funding.

So for this brief period in Covid and post-Covid times, we've had more funding to be able to think about. So I'm going to share some ideas with you about how you can understand the situation in Torrance a little bit better. We've been very thoughtful and judicious with the use of one time dollars, not expending those in one or two years, but really taking a long term view of what can we put in place that we always wanted to but couldn't.

So, utilizing one time dollars from AB 86, Learning Recovery Block Grant, and educator effectiveness, to name some, we put programs in place that we couldn't pay for out of base grant funding. We now have, for the first time, full time counselors at each elementary school.

We have full time mental health therapists at each of our middle and high schools. We have implemented and provided, above the supplemental funding, elementary middle school intervention teachers. We have extended day tutoring, accelerated learning opportunities and credit recovery, summer engagement and enrichment, professional learning for our teachers and even our classified staff, and of course, the ongoing cost of textbooks and instructional materials.

Dr. Stowe, I'll ask you to conclude please.

So all of these things I just mentioned are over $10 million annually and more than 3% of our budget, and they will run out in 2027. So we have some, you know, some thinking to do between now and then. Really want to emphasize that these programs help all students, and we have evidence to show that it's working. And anything we can do to continue to support that conversation around additional base grant funding, I'm happy to be able to be a part of. Thank you.

Thank you for being here and sharing that. From the Shasta County Office of Education, we have Mike Freeman. Welcome.

Good morning, everyone. I am honored to be here representing Shasta County and having a part of this conversation. I want to introduce you a little bit to Shasta County. Dr. Tim Stowe here has almost as many students in his district as we have in our entire county.

We have 26,000 students in Shasta County, 24 districts, including our own student programs and county office. So 25 districts, 15 charters. We're also in the early childhood business, so that's another 10,000. So we'll say 37,000 young people in Shasta County. And they matter. And context matters, and local control matters, and this discussion matters.

So I really do appreciate the time you're giving us, and I appreciate the input from my fellow panelists and from the previous panel. And I agree that I'm looking forward to the conversation as we have an opportunity to bring those two together. As we think about, as we think about adequate.

Well, as I think about the base grant, it is difficult to not address adequacy. I believe California is the fifth largest economy in the world, and how could we be in the lower percentiles of state funding when I feel the disproportionality in what this economy means to this country and what maybe education might mean to this state.

So I do appreciate the historic increases, and I would say that that is the floor. And I appreciate the conversation and the analogy about the remodel. We have free and reduced and the application... In California lunch is free, and so we're still asking districts to get the application done so that we can get the unduplicated count accurate. And so we're in this interesting spot. And me and five minutes don't really get along. So I'm going to try to keep this short, but I'll just make an analogy from the instructional side of things.

When we talk about multiple tiers of systematic support in our classrooms, if I have tier one general level first instruction problems, I can't intervention my way out of those problems. And I would just make that analogy when we're talking about LCFF and the funding formula. It has been transformational.

We cannot supplemental and concentration our way out of base grant problems. So if I could just emphasize that. This is not easy. I've made a picture, I've kind of painted a picture of what Shasta County looks like. California is vast and varied, and that context, that local control does matter. Base adequacy allows superintendents, allows districts to address today's challenges today, and challenges are continually changing, the challenges that are confronting our schools right now.

Right now, I'm grateful for local control because some of our districts have chosen to use some of those funds for generators that they are about to turn on because we're facing a power shutoff protocol that started up in our area at 11:30. Right. So like that's just, that's a new reality that maybe in 2012 wasn't a reality. So as we think about no matter where you are in this State of California, it's been touched on already. But 80 to probably 85% in some places of the money is going to people, and we don't have enough people.

By addressing base, by having this conversation and remodeling, giving us additional targets to increase that base, it's going to empower our districts to champion public education and recruit. Because we need to recruit. The number of people that were working in Target yesterday and are teaching 25 kids today has increased. And I think that they've got 15 minutes of experience, and that kid in front of them is a different kid. And it's challenging.

And I know that we're post pandemic, but much like what we've seen with Hurricane Milton, like after the storm is the pickup, and we're in this process of cleanup, and there's some serious cleanup that is still needed. Everything about LCFF, everything about the Local Control Accountability Plan is needs driven.

Our needs need to be driving this process, and our post pandemic needs are a reality. We've all gone through the same storm, but we have been in different boats. And I think that the challenges that are being in front of people are taking resources that we would love to put in the classrooms.

But in order to remove barriers and help learning happen in the classrooms, we're having to add some of the resources that our kids need. In Shasta County, we have a diversity that looks a little different. We have adverse childhood experiences. We lead the State of California in things like premature death.

Those are realities. That those kids are being dropped off in schools, and districts need to be empowered by the Local Control Funding Formula in order to do this. I'm just going to quote Bill Parcells, if you're going to ask us to cook dinner, let us buy the groceries. Right. So that base grant gives us the control that we need to be able to do the things that our kids need.

Thank you. And you, you and five minutes don't get along, but you did quite well. That was five minutes, so thank you. I'm going to ask that the members of panel one step forward, and I'm going to ask a few folks to take a seat up here. We'll have Mike Fine with FCMAT.

Please join us up here. And Brooks Allen with the Board of Education. If you could join down here. We also have the Legislative Analyst Office that's present. We've got a couple of folks from that office available. And yeah, all the other panelists who are on the second panel, please stay because you're going to have some questions here, too.

We have Aaron Eredia with CDE arm of education here, Michael Alfredis with the Lao, and also Edgar Cabral with the Lao. Available for all of us for questions. So thank you. You know, this is analogous what we're doing now to the conversation we're having today.

We're trying to make sure among the confines of what we have to work with that we can make this work well. So appreciate you all being so flexible with that. I want to start off with a few questions, hopefully get the discussion going and then turn it over to my colleagues.

Let me start with acknowledging and maybe thanking and perhaps apologizing for stealing the Doctor Johnson's example of what we're doing. I think it was really well said in terms of remodeling.

And I was just thinking, okay, how can I try to expand that really great metaphor, I guess previously LCFF we had a really old house with a bad foundation, with bad electrical work, maybe, maybe additions that weren't permitted, and it just wasn't the house that we could live in.

So we rebuilt is what I gathered from you and from others. Right. LCFF we rebuilt and stronger foundation with a lot of key pieces in place.

But perhaps now, as some of somebody else said, you know, we need to do things like TK is now and you, you had a baby, so you gotta add a kid room, and that's a different type of room and, but it's part of the whole house and it needs to fit in well. And so appreciate that metaphor.

It's been really, really helpful to think through everybody's comments. I also want to recognize Miss Gable and Miss Reese who set up the conversation today.

And I know folks felt like they were getting cut off, but the intent was to build upon each other so we could have a conversation that increased everybody had additional value to the conversation, to our questions.

So I want to thank them for their thoughtfulness in this and your flexibility and understanding as we try to move through the agenda.

But Doctor Johnson, which is who I said I was gonna start with this, was mentioned again, why we had the two panels, among the two panels on the regional cost adjustments on LCff, Doctor Kirsch said it, we had. I think Mister Fine said it. I think Mister Levin said it. We heard it time and time again.

Can you just. My question is, what is your proposal on how we want to get to the, how all of you who presented ideas and proposals, how could we do that? And obviously we're not going to figure it out today, but give me some thinking that you had on how we fix that.

I certainly defer to others that can weigh in. Certainly there's many here that can do that. But I think the one thing that I would just center is that instruction centered investments matter the most for student achievement improvements.

And that means that how we hire teachers and the teacher salary structure that enables it to be most competitive is something that we can't be silent on. And currently the formula is silent on it, which is understandable in 2013. I don't think it's something that we can afford to be silent on now going forward.

There are, in labor economics, there's what's called the comparable wage index that tries to create what is the competitive salaries in particular occupation sectors and regions that adjust like in the same way we have a CPI inflation adjustment, right. For put things in real dollars.

We want to make sure that the funding enables the purchasing power of that funding to purchase the same input as my esteemed colleague at air is right, emphasizing, right. So I will defer to Jesse because he's done a lot of the work on how we operationalize that.

But let me just say there's science to that that doesn't have to be politicized or make into like losers and winners. We're trying to build a system.

That's a great point because in fact, I was going to ask that question of Mister Levin because I read your report from now I know it's a couple years old, 2018. That was on getting down to facts technical report. And you do point out in this report.

Anyway, I happen to represent an urban area, but I try, at least in this role, to be mindful of students throughout the State of California and my colleagues who represent other districts and you in this report talk about rural areas also being deficient.

Now, I can't find the note, but I know you mentioned it specifically, but you also are an advocate or at least mentioned the concept of the differential pay per region. So I want to ask you how you bring those two together given that you've identified that as a conflict.

So thank you so much for the question. This is a great example of how different cost factors all have to be taken into account. It's all intertwined. So you have this tension where urban areas tend to be more costly to hire and retain staff than rural areas.

However, that can be offset by the DIS, economies of scale of operating in a rural area in such a small scale.

So we would never, it's been a while since I wrote that, but I'm pretty sure the point that we made is that you want to be able to control for both of these cost factors, the DIS economies of scale. Right now you have this small school adjustment.

You do not have this adjustment for the price level of educational inputs. So I would argue that you really need both of those. The comparable wage index is Low hanging fruit. This is something that is part of the National Center of Education Statistics. It's a product of theirs.

It was developed by a brilliant economist, Lori Taylor at Texas A and M and co author colleague. So it's very easy to implement. It's an index value that's centered around one. So if it's 1.1, it costs 10% more to hire and retain staff, 90% cost 10% less.

I gave you just two examples that were empirical, of Bellevue and of San Francisco in 2021. There was a stark difference. Right now, LCFF is not appropriately funding according to that important cost factor.

And more generally, I want everybody to think about whether all of the cost factors that we have in place, whether all the cost factors that we think should be in place are in place, and the ones that we do have in place, are they accurate? Those are my two main points. Thank you.

Thank you. Doctor Johnson, I had a question on the. You have, I appreciate your almost last slide. Well, the last slide was great too, on the autonomy and accountability balance. Right. But the prior, the one before that, you've identified three very specific things on the supplemental grant currently lacking progressivity point that you make.

The LAO has a report that they put out in January of 2023 on, and I'm sorry I didn't give this ahead of to the LAO team, but they probably know this so well. They probably remember there is supplemental and concentration grant increase by quartile of Low income students. And so there is some growth.

Are you suggesting that the growth needs to be more progressive, more aggressive, maybe tiered differently as opposed to bi quartile. What do you mean by this particular point that you have?

I think that when we think about the funding formula and impact it's had, I think of comparing the pre LCFF formula with the post LCFF formula that applied for every school, every district across the state for multiple years. So we do that.

You apply the funding formula for each year in the years leading up to and in the years that the LCFF is being rolled out. And the reason that's important is because the LCFF did remove things while replacing it with the supplemental concentration grant.

If you just look at the supplemental concentration grant, but don't account for what it removed, like the economic impact aid, then you start to realize that the change to the LCFF system left the progressivity of the funding formula kind of unaddressed in the zero to 55% range. Meaning the overall increase in the spending overall did get raised.

But like, if you're a 20% district disadvantage unduplicated versus 45%, you're experiencing much greater need, but you're not getting no more. Sorry. You're not getting any more funding through the LCFF system. I'm saying that could be improved by changing or rethinking the weights.

Got it. That's very specific. Thank you. Do you also have. This could be a quick answer. Data sets that show that some of those schools in the 20% range or lower were previously receiving more funding. Do you have data set that demonstrates that?

I wouldn't say more because the increase overall in funding did increase the system. Overall, but I would say over the course of years.

But I'm wondering from implementation timeframe, I.

Guess the way I think of it is the student achievement and success of students began to be improved less quickly for those students in the 25% to 50% range. Yeah.

And you have those graphs and you.

Start seeing it bend down. Now I'm not saying it led to like, losses, but it led to less accelerated improvements than otherwise would have been the case.

Great. Thank you. I want to ask Doctor curse, are you still on with us? Doctor curse? Yes, I am. Great. Thank you so much for patiently waiting for us. I want to focus on your comments on the decision to send money to the districts as opposed to the schools.

And you specifically talked about accounting systems not being placed. And maybe Mister Fine might want to talk about this too. But can you share with me the concerns about that specific decision?

Yes. Before I do, I just want to make a comment on cost of living. I think we should look at real estate prices as well. I've been looking at those and they vary a lot more, I think, than the wages. So I would just. Real estate is so important here and may not be as important nationally. Yes.

In our thinking, we were, of course, very reluctant to get into. If you want to balance things with schools, you have to go like title one and compute the weights on the basis of school sites. And that can be done, but then you may not be.

You're just hindering the flexibility so much that as many witnesses have said, they've had to, in effect, raid the supplemental and concentration funds to cover the base.

And, you know, just having the state tie the hands of the local districts that you've got to spend this much on each school site seemed to us to be excessive state control and proceeding with humility. We didn't think we were smart enough to know how to do that. And so that, I think, was the, the area accounting.

I would like Mister fine to comment on this. Nobody much brings this up, as far as I know. I came into this business in 1964. The school accounting systems nationwide haven't changed.

So that things that are really going to schools, like professional development and mental health, they show up sometimes in this central Administration budgethouse and not in the school budget.

And so I, and moreover, school board Members keep saying to me that we can't tell how many personnel we have of special types, you know, like counselors, from looking at the school budget. So, you know, it isn't a fine grained, informative accounting system, but I hope. Mister fine, thank you.

Yeah, Mister Fine, do you have some thoughts on that?

Thank you, chair, for the question. So I disagree a little bit. I happen to believe that the standardized account code structure that we have available to schools is very, very flexible. And if we want to do it by school site, we can do it by school site. We just need to mandate that that's how we do it.

It is much easier not to do that. And so we take the least burdensome route here. Right.

But to Doctor Kurtz's point, there are services that we deliver to schools, to kids that are district wide services that may involve itinerant staff that we share either on a regular schedule or not a regular schedule with each site and so on, that breaking that down almost by hour at a school site is questionable whether there's a value in doing that.

There's a lot of work, right. To do that, that we don't do today. So there's, but there's a balance here. But the existing State of California standardized account code structure, which is, reflects an overhaul.

I've lost track of time but a while back, but certainly not back to Doctor KUrtz experience, as far back as he's noted, would provide, provides the flexibility to do this. It's just a matter of saying that's what we want done.

Thank you. Thank you. I have a question for Mister Lampert on this term that I really caught my attention. The declining enrollment dividend and utilization of that. I'm becoming more and more informed on the obviously school financing, just in General. But as I mentioned, the beginning of my comments, the data is pretty clear.

We have less students now and we have more funding. Right. That's happening. And so at some point, I believe, given the data, I've seen, but there might be new data that I could be proven wrong.

These things are going to cross to the extent to where there's going to be significantly more funding on a peer people basis if that's how you do the calculation than there is today, which maybe that gets us to the adequacy at some point, just not because by intention but because of the way this is headed. Perhaps.

But as we get to that, I'm interested in the declining enrollment dividend and the utilization of that for subgroups or what you think should be used for. And I'm wondering why not other growth just in 98 to be used? Why focusing just on that particular dividend? Maybe?

I think I know what the answer is, but I'd like to hear your thoughts.

Thank you Mister Chair. I mean many folks have talked about. Needing the base increase s and c increase and you hear declining enrollment. zero, that means more dollars. So you know, what we're proposing is pretty straightforward, that to use those declining enrollment dollars as you're saying we're going to more.

It's not all size fits all, but some districts will have more. And that's a way to address what right now is too small LNC and overall base. But I do just want to emphasize hearing all these comments. It's like what was LCFF?

Because what I hear from a lot is, well, but we need the flexibility to Fund this and we need these district wide needs. Yes, of course that's not what LCFF was. LCFF was streamlining the funding, dealing with the categoricals and an equity based formula for kids in poverty, English union fathers. It wasn't addressing the overall amount.

And so we need to keep that focus. I mean we ranked 9th, 10th, an overall tax burden, state local. If we were 9th, 10th in education spending. I mean that's a pretty simple solution. Let's do that.

Thank you for reminding us about that. I appreciate that. I think I'll just ask a couple more and then turn it over. On the. Actually to Miss Hardiman, you made a comment in the second panel which I really like to hear more about.

Is the teachers a concern or the lack of ability of teachers in the high need school. You talked about how sometimes that's more challenging. I'd like to get your thoughts on how this can make. What can we do? Again, this is about how or what do we need to do?

How can we do it so that we can allow for teachers in high need schools that sometimes struggle with maintaining teachers because of the challenges there?

Yeah, I mean, I think it comes down to overall funding, right. For lifting up salaries and class sizes and all that across our schools.

But I think the point I was trying to address was around when we do have sometimes district wide initiatives, especially in high concentration districts, it may be to lower class sizes for the entire district because they have so much need throughout the district. And so that is one thing we've seen.

There is an ability to kind of address just your lowest performing or highest need schools within the district. So there's an ability to do that and it doesn't impact the salary schedules or anything like that. It's really just staffing needs and additional staff in those schools.

And we've seen that with the increase in the concentration grant in recent years, focusing on the number of staff support in those schools.

Does the formula allow for schools within the district with higher concentration to have different staffing ratios in schools that don't, and utilizing funding to do that? And do you see that happen in a lot of districts, or.

I've heard some. I don't know how, I have a specific number on how many districts do that, but I have heard some cases that happen.

Okay, I'm interested in that, and certainly those of you who work with districts, I'd like to learn more about that. I have more, but I want to turn it over now to my colleagues to ask some questions. So we'll go with Mister Murtuchi.

Thank you. I. Wanted to pick up on. You. Know, since we're talking about what are the improvements that we can make on LCFF. I wanted to focus on Professor Johnson's list of the most effective expenditures using concentration and supplemental grants.

And I wanted to see if Doctor Kirst, as one of the original architects of the Local Control Funding Formula, to see if he would agree if these ways of spending the concentration in supplemental dollars are these the most effective to achieve the equity goals of LCFF?

Addressing class size, addressing teacher salaries, teacher turnover, guidance counselors, health services, and teacher professional development. Doctor Kirst still online?

Yeah, I think that's a hard question to answer because it depends on the local context, and so what their particular needs are may justify that. I do think that allocating funds to improving instruction is often indirectly doing that, rather than indirectly through pensions or something, is really much more effective in raising the attainment of our students.

And Doctor Johnson raised that too. So I think that's the area there. But I don't have an answer to that. And that's why I defer to a local context that varies so much.

But if I can just follow up before maybe asking Mister Zasueta representing Axa or Doctor Stow or Mister Freemandhead for the local context. Practically speaking, how do you concentrate? How do you focus expenditures of concentration and supplemental dollars? Given that 85% of a school district's budget goes for salaries and benefits? It makes sense to me.

I think it makes sense to most people that if, if a student needs help with reading or math, that you get them either a literacy coach or a math tutor. Some targeted support or intervention.

But given the realities of school districts operating with 85% of their entire General Fund budget going towards salaries and benefits, how do you target those kind of instructional supports, either Doctor Johnson or Doctor Kirsten?

I think what Doctor Curst is highlighting is that we're not promoting a one size fits all. We're just trying to provide some guideposts about there are patterns of investments that are consistently having impacts on student achievement and these are the collection of five that I've highlighted.

I think we're also just saying that you can have a district that has a large proportion of English language learners, and you can imagine that their emphasis will be hiring teachers with bilingual experience in instruction and particularly in the early elementary school grades.

If you have a high proportion of English language learners, it will be a much more important investment on the early elementary teacher recruitment that have that kind of bilingual ability. I'm just saying that's not every district or school. So there's like an attention to the heterogeneity in what is the largest, most diverse state system in the country.

So we're just trying to be attentive and again, exhibit humility and not saying we know all the answers.

Okay, thank you, Mister Friedman. Yeah, I would love to jump in. Just as a County Office of Education, we are in the business of providing support. I think of, it's not rocket science, it's meta research. John Hattie's effect size is teacher efficacy. And like, what can we do to improve the teacher efficacy?

So if we are looking at improving reading, how is it that we're able to increase the efficacy of the teacher in the classroom, providing that instruction? Again, kind of going to that tier one and just reality, we have staffing issues that impact all things, all aspects of that work.

So for example, if we're in the professional development business and we're trying to provide professional development to increase teacher efficacy in the classroom, and the districts are saying, sorry, we can't sub because we don't have a sub, we don't have. We have a sub shortage.

And actually they've been able, they've had to use their funding to increase sub rates to attract substitutes. So again, the ability to have the flexibility and the local control to do what is needed to solve the problems. And so when I think how do I get, how do we get better? It is teacher efficacy.

But again, there's levels to the solving that. Thank you.

Okay, Mister Allen. Yeah, thank you, chair. I just wanted to see if it could be helpful to unpack. I've heard your question a couple times and wanted to point out a couple things that might be helpful.

I think already there's been reference to if we talk about site based needs and really driving more resources, sites with the greatest needs. There's a few things. And again, LCF has not been static. Right. For the past 11 years, we've had a lot of evolving efforts, one which just hasn't come up. It's not the formula.

But I would just highlight, because the Legislature has been a part of this, is investing $250 million to ensure that nationally board certified teachers are well prepared and then are incentivized to go teach in our highest need schools. Those are the kinds of things that we can do to better serve high needs schools.

Also, the underlying assumption for supplemental concentration resources when given to a local educational agency is that those are supposed to be focused on increasingly improving the services for the highest need students.

If you choose to do that in a way that is district wide, there's actually a higher threshold of justification and rationale that you have to provide in your local control and accountability plan, which underscores this need.

In fact, just recently, Legislature, we've helped with the governor's leadership help push through to have even increased focus on saying, are you really looking at, regardless whether it's an unduplicated people group or another student group such as African American students, that has traditionally been underserved and has deep, deep achievement gaps, what are you doing to look at those needs and drive your resources there?

And you referenced the salary schedule. That's obviously a critical issue. There's also staffing ratios. That's why you have a concentration grant add on that actually works about decreasing those staffing ratios at particular sites. So regardless of whether you're talking salary schedule being the same across the board, you can actually have more staff.

The final point, and again, you know, making up for my five minutes, when we look at the expanded learning and opportunity grant program, we look at community schools. We've talked about a number of the huge transformative investments that the Governor and the Legislature have done in partnership.

Those have been driven, really in a means tested way to try to resource those schools and districts that are highest needs and oftentimes the sites within them. So I just. When we talk about this and we think about how to be differential, we talk about having differentiated supports for our schools and for our students.

These are all ways that the Legislature and the Governor have already been doing this in the past 11 years and that we should continue to seek to build on.

Okay, thank you. If I may, I want to make sure that I don't have a five minute time limit here. Doctor Kirst, you said that as one of the original architects of LCFF, that there was no clear idea on how to address special education.

I mean, clearly, I know as a former school board Member, I recognize what Doctor Stowe was saying about the challenges of running a school district with the unmet special education funding needs. Does the idea of having a, an additional LCFF category for special education students, does that make sense?

Is there a concern that, that may incentivize the over identification of special education students? Want to hear your thoughts on that specific idea?

Yes. Well, I would refer you to the extensive report that Wested did on special education finance with very specific recommendations on how to revamp it in California. I was on the technical Advisory Committee for that study, and it has differential rates, weights, I should say, for different kinds of disabilities that students are functioning with.

You know, extreme disabilities would get one weight and then minor, less extreme disabilities, lower rates. So among other things. So I think that there is a way there forward. And they also talked about governance and accountability in separate reports that the Legislature Commission. So, yeah, there's a problem of over identity.

It could be a problem of over identification. And I think there's ways of checking on that and finding out whether that what's causing it. We have very different rates now. They vary enormously across school districts.

And I think we need to understand better what's going on there, and then we can help answer your question as to how to adjust for over identification.

All right, thank you. I want to see if any of the other panelists had any further thoughts on.

I just have one comment on that, if I may.

So, as my colleague from Shasta County referenced, tier one instruction, and if that's the core instruction in the classroom that occurs every day, and if that is solid and the students come to us, and whether it's pre k or kindergarten when they enroll with us, if we have a high quality teacher that's providing solid tier one instruction, and we have good systems of support to help them there.

I believe that over time you'll see fewer students needing special education at the upper grades because we have those early interventions. And so again, the weighting and how we might do that.

There was a concern when the LCFF was put into play regarding districts not exiting students from becoming English learners because again, that they counted toward their supplemental or concentration.

I continue to advocate for the base and that the more money we can put in those early interventions, that we may see fewer students needing special ed services down the road.

Thank you. Last I. Several panelists have talked about the need for a regional COLA. And Doctor Kirst, you said that this is the one aspect in that 2008 paper which I read that was not acknowledged ultimately in the local control funding formulae. I want to ask for a little history lesson.

Why was it not included in the LCFF?

It never got any political traction or discussion whatsoever. I don't know the exact nature of the politics, but the issue never got off the ground. I think all districts feel that they have special cause, and it's very difficult to convince anybody that they're the, you know, Low cost compared to somebody else.

So all I can say is that it was just dropped immediately. It wasn't like there was debate. It wasn't like there was any consideration of how regional costs might work in terms of specific school districts, and it just disappeared.

Maybe, Mister Zasweta, you can give us also a statewide perspective.

Can you turn on your microphone, please? Thank you.

All right, I'll make a General comment as it refers to a lot of these policy changes that were considered at the time. And I think for those of us that were involved in, the majority of us were involved in one way, shape or form, that these issues are always much harder in a zero sum environment. Right.

And I think this is why we had so many of these conversations about winners or losers or. This was a very different conversation in terms of what we were dealing with. LCFF, the second we had runs come out, right. And I don't even remember who was the first entity or whether it was a state.

But the second we had spreadsheets about, this is what this iteration of the formula will mean for x district. The political environment changed.

And I think this is the challenge, frankly, that the state's gonna have with a lot of these ideas about how do we do this, while still making sure that this conversation doesn't become about taking from some to give to others. I mean, our Members love talking about. We all refrain from talking about it.

The challenges of budgeting based on Ada instead of enrollment. Right. This is something that comes up over and over because it's a real issue. Our leaders have to budget on fixed costs and make projections about what that's going to look like. But as we've seen over the last five years, that's been a very.

That's been an environment that's been very volatile. Right. So that's just one example. I will say that kind of the conversation that we obviously taking advantage of those moments where the state, whether it because of funds that are being redirected, but that really, and that, I don't think any of us brought up Prop 30. Right.

I believe it was Prop 30 at the time. The only reason we were able even to engage in this is because we had an influx of new revenues that we were then able to redistribute. So I would say that this issue, like every other one, was probably just how it was going to pan out.

The second you started doing regional differentiation, it was going to have a disparate impact on what people were going to get.

Mister Lumber, just real quick, adding on to that, the history is just the complexity. I mean, the needs of rural districts, there's extra costs there. And then there was discussion about some higher income districts, the parent contributions, which obviously aren't part of the public. So it just got very complex.

And that's why, as Doctor Kerr said, it was like, wow, this is just too much to grapple with.

All right, thank you, Miss Bonta.

Good afternoon. Thank you so much to the chairs for pulling this together. I think it's a very critical conversation. I wanted to focus in on a couple of areas.

One is the notion and kind of the reality that we are now in a State of declining enrollment that we didn't anticipate when we developed out the Local Control Funding Formula. We talked about it a little bit. Several of you all did in your presentations.

I want to make sure that we kind of don't end up in a place where we have a very simplistic formula that says fewer students, less funding needed.

I believe that the, that the nature of instruction, like, if you treat that as the kind of the core of the funding driver, the nature of instruction has become inherently more complex over the same period of time.

Where we are asking children, where we are asking teachers and school communities to be able to provide more supports and services, we have a completely different take, for instance, on mental health and wellness and the impact of a child's mental health and wellness on their ability to fully engage in their instructional activities.

So I just wanted panelists to kind of speak about what recommendations they would make specifically around how either through weighting formulas, how we would treat the advent of declining enrollment as something that's very dynamic for us right now.

Within making any changes to LCFF, I would love to hear from Mister Fine first and then kind of head over this way. And Mister Brooks. Thank you.

Mister Allen. Thank you Misses Bonta. I think the idea here that was put forward was as Ada across the state drops as a result of declining enrollment, not as a result of lower attendance yields, but just as a result of declining enrollment, it gives the Legislature an opportunity, gives them funds that can be allocated out. Right.

Because Proposition 98 is driven by at least test one, is certainly not driven, not influenced by Ada. So the pot of money in a test one environment would remain x. We now have fewer kids to serve.

So it simply gives us an opportunity to further invest that money, not necessarily in changing the formula, but in increasing rates, whether that's a base rate, but leave the structure of the formula alone, as chair mayor searches proposed a couple times, or in changing the supplemental grant as example, from 20% to 25% or even.

Well, Ted, back to the original conversations. I think we were at 35%, if I remember correctly. A lot of water under the bridge when we first rolled this out, right?

So that's where the opportunity exists, is in actually implementing some of the remodeling to pay for the remodeling you would use existing Prop 98 funds that otherwise would be on the table for the Legislature to consider using for schools in some other way.

So just a focused use of what will be available to you under Prop 98 in a declining enrollment environment, which right now we are, and the state demographer with the Department of Finance would need to speak to this.

But I believe the current forecast is that we're going to be in declining enrollment through about the mid forties before we start to actually, before we kind of hit the bottom out, because we've got this birth rate impact at the lower grades right now and it still has to work through the system.

So we've got a number of years of opportunity here I think would be.

The point, Mister Allen, and then perhaps air.

And I'll go by their name. Good.

I would, I probably would just echo what Mister Fine shared and just note that one of the other pieces that we're all looking at is when we think about, even if the total number of students is going down, that the actual proportion of our total students who are what we consider high need, and regardless of the various metrics we have, continues to increase.

And those combined factors, I mean, we oftentimes talk about, zero, who's generating additional funds. I mean, that's over two thirds of our students. I mean, so when folks talk about not in this room, but we have folks oftentimes talk about, zero, who are those high need students? As if it was going to be a minority of students.

It is those are our students, that is California students. And so when we look at that proportion and we even look at particular groups, and this is, again, possibly where there are opportunities to look at iterations, you look at unhoused students, the number of unhoused students has increased.

And so as we see some of those happening at the same time that we see declining enrollment, that's where I would just go back to Mister Fine's comments about the opportunities that might be presented by that.

So I just wanted to go back to scale as a cost factor. Okay. It's really important. Now, what we find, and this is really empirically across many, many studies, is that costs dramatically go up when district size falls below about 2000 really goes up. And when you get to the most rural districts, it's way up there.

After that, the cost curve really flattens out after about 2000. So it depends where the declines you're talking about are.

But I strongly suggest that we all think about putting in a scale factor that we feel is appropriate, that accounts for the cost of operating on a small scale, I love the idea of this enrollment or this premium and trying to put it, whether it's in the base, if you put it in the base, it's gonna be spread over everybody.

Right. But I guess I just want to really be clear that are we comfortable with the small schools adjustment as it is right now? Do we think it reflects the additional cost that the very small districts have? And scale adjustments can be implemented in various ways. It could be for categories of size or you could.

Economists hate that, by the way. We don't like these categories. We like smooth functions. Right? So you can't game the system and try to get rid of that one extra student. So you go into the smaller category and get extra fun. So we don't like discontinuities because, because it can cause in the worst case, perverse incentives.

But in even the normal case, as we see in terms of the kink, the 55% kink, we don't see a lot of equity gain below that kink, but above that we see huge equity gains. Right. So that's a classic example of a discontinuity and how it might not work as well as you think for all students.

Thank you for that. I did want to also just address the comment I think that came up regarding one of the unduplicated student subgroups that we do have around ELL students. I think Mister Fine made a comment about just recognizing the diversity of our ELL students just to the panel.

Broadly, do you believe that we need to have a finer grained metric around ell students so that we are better capturing essentially kind of the cost of education, given the additional factors that are excellent?

When you have somebody who's a long term ell student, somebody who's newer to the country and is migrants a part of a newcomer community, and what might we be able to do when we're thinking about fine tuning our LCFF with regard to that?

As a district that has over 50 languages spoken, sometimes we get students from a country and we don't have any teachers that speak that language or paraeducators or anybody in the community that can help bridge those gaps. Other languages, we have a larger amount of folks.

So it's always a challenge, whether it's a classroom teacher or engaging with the family, to help onboard them and provide services. But to talk about what that discrete number might look like and do we give more for certain students or long term?

I couldn't answer that question, but it is a challenge when we have, it's like the Low incidence funding for special education. When you have a couple students that speak a particular language or a family moves in, how do you serve them without textbooks and other kinds of resources, or even people that speak that language?

So technology has been helpful, quite honestly, and Google translate and some of those things. But I don't know how you look at a funding formula to better serve those families.

Yeah. One of the things that Doctor Kirsch brought up, and I think it was acknowledged at the beginning of these conversations 10 plus years ago, is that it's unduplicated. Right.

And I think our leaders and our folks on the ground will be the first to tell you that you have a student, let's say that's an English learner and a foster youth and Low income, they potentially may have a different set of needs than somebody who just fell into one of the categories. Right?

And I think this was acknowledged from the get go. So I think in an ideal world, some acknowledgement, differentiation, we get back into the same challenge in terms of complexity, and especially given we all hung on. I think it was Mister Allen who talked about the remodeling.

When I hear these questions, then it's like, okay, well, what would that mean in practice in terms of the overall formula? So I think that's always going to be the balance we're going to have to look at as we think about these potential changes about what does that mean across the fold?

But I think some acknowledgement that even as we have it today, that. Yeah, I think the policy decision was probably made out of necessity.

I mean, I think if you ask Doctor Kirsten and the original thinkers on this now, if there's some room to at least have those conversations, I think it's a good point that you brought up one example and there's a number of those cases about, even within the categories that we have, that there's differentiation of needs there.

I'll move on for the sake of time to my other questions, if that's okay. I think one of the areas that I always am very compelled to make sure that we're addressing is how we fully integrate our TK system, or kind of the new grade that we created into, into the overall restructuring of our educational system.

There have been a couple of comments around making sure that we have kind of the interaction of LCFF. Really take into account that we have this new grade TK.

I think Mister Johnson, you particularly related to the idea that we might need to be able to keep the same reimbursement rate, but offer a different grade span adjustment to be able to do that.

So I just wanted to kind of give some space for discussion around what we do about TK and the LCFF to make sure that we are acknowledging the different, again, instructional needs of children in their earlier years that haven't been addressed, and perhaps also have Mister Lembert address that as well.

Yeah, and I'll certainly have Mike fine join my comments here. But I think the most important thing to recognize is that the early, especially TK, the 10 to 112 to one kind of staffing, that the smaller class sizes are so essential to ensure the student learning fosters school readiness.

And because of that smaller class size needed and not wanting it to then balloon to 30 students in 1st, second and third grade, because somehow the incentive structure of LCFF, forced by regulatory demand, a 10 to 112 to one ratio, but then basically they end up going to overcrowded early elementary school classrooms.

What we find is when that occurs, which is not uncommon, but when it does occur, the fade out of achievement improvements from TK is much more likely. On the other hand, when we find they have those TK experiences that often stimulate learning in those early grades.

In that early experience, they're not only school ready, but they're in classrooms in 1st, 2nd, 3rd, that maintain those investments so that the classrooms are still of reasonable size with high quality teachers. And then we're seeing the achievement persist through the end of fourth grade, through the end of elementary school.

And so it's that synergy between the early investment and that includes the diagnosis of health screenings that allow the identification of speech and language delays the identification of particular health needs that when they go unaddressed or are only diagnosed much later, it could be ADHD, other kinds of learning challenges that we actually see not only a reduction of potential special education classifications, but actually fostering greater and promoting that.

So I'm talking about like a synergy of education and health investments that do require a staffing ratio to have attentiveness to that. The only thing I'll just say, though, is the LCFF results that we've been able to demonstrate have shown improvements for English language learners as well. And you were mentioning the English language learner.

And I have a paper with Sean Reardon and Sara Novikov, Stanford, where we show the greater diversity of English language learners, particularly in the parental language, in linguistic diversity, that has increased over the past decade. And so we really highlight that to say that the English language learner need is not a monolith. Right.

And so we're just trying to bring attention to the descriptive portrait that's uniquely California. Let me be quiet here and certainly let Mike fine chime in because I didn't know that he's attentive to the pieces that have to do with LCFF and TK aspects in particular.

The only thing I would add misses Bonta is we have some unintended consequences with respect to the TK being included in the TK three grade span adjustment calculation. As we push TK down class size or ratios down, we have to remember that we accomplish that a little different, class by class, grade by grade.

Some districts do that with two certificated folks. Some districts achieve 12 to one with a certificate in classified. In fact, that's the more common way to do it. For those that use two teachers, two certificated, then they are diluting the grade span adjustment policy intent of the Legislature for grades k 12 and 3.

If you have 12 to one or 10 to one at TK, to Doctor Johnson's point, it allows you to have higher class size at the other grades.

And we defeat what I think was the very intentional policy of this state, which goes back all the way back to years ago when we introduced class size reduction in its first form. Right? So I think we just need to separate those because we get a differentiated treatment.

Whether a district decides to staff that TK room with two teachers or a teacher in classified, classified personnel don't influence that ratio in the way we calculate it. It's only certificated. So depending on how a district does it, it gives us a disparate result. And I don't think the Legislature intended to have that unintended consequence.

And I would just jump in briefly agreeing with all that. And of course, you know, getting rid of the class size reduction, categorical, but that extra focus on 1st, second and third grade. I would, however, just want to make sure there's no confusion here.

I mean, TK is our universal preschool, which is essential for California to catch up with the rest of the world. And that class size, that 10 to one is critical.

And so not to lose sight of that as we focus on early grades, not maybe finding districts in the short term, which is another issue, which might not be the best, but really keeping that focus on it being developmentally appropriate for TK.

And just real quick, as somebody you had asked earlier just for clarification, and it's come up several times now, that declining enrollment dividend, to your point we should be reinvesting. That gets us a step, but not as far as we need to go on really making sure our schools are appropriately funded.

One more. Sorry, the concept around kind of a regional COLA. We in a different space with in healthcare, for instance. We just went through a pretty significant debate about that.

I wanted to just have Miss Hardyman comment on what the potential impacts of approaching our COLA with, again, kind of a fire in your grain that would allow for a regional alcohol. What you believe that might do for workforce issues across the state.

Sure. And to clarify, I think CTA doesn't have an official position on this, but it's certainly come up from our Members that are not, you know, can't afford to live in the neighborhoods that they teach in and they have to commute very far away.

And so we are definitely interested in looking at that, being able to provide some sort of different rate for those, you know, potentially those districts that have those very high costs so that teachers are able to potentially live in those neighborhoods and teach those students.

Thank you Miss Bonta, Mister Hoover.

Thank you Mister chair. I really appreciated the comments or the questions Assembly Member Bonta brought up relating to ell students. And I kind of wanted to build off that a little bit with, I guess, a question for whoever would like to answer.

My district has a school district that's in a very unique position from the standpoint where we have an entire community that is well above the 55% ell threshold. However, it is within a Unified School District that is far below the 55%.

Because of that, it's one of the only districts in the region in my county that does not qualify for concentration grant dollars. So I thought it was interesting earlier the comment made about how standardized account code structure does not actually provide obstacles.

It would just be simply the Legislature deciding that, you know, things could be done a little differently. So I guess my question is, what is the feasibility of even, say, maybe a concentration grant money being calculated at the school site level versus calculated at the district level for these instance unique instances.

And I'm sure my district isn't the only one dealing with this, where you do have a lot of students that are not getting that additional support because of that district wide formulation. So I was just curious if anyone had any comments on that.

I'll start, sir. So first, on the standardized account code structure, it really deals with the local district's accounting and accountability and then reporting right where we have to start in this particular conversation is in the funding that the state first does.

So first we're going to have to, we already identify unduplicated counts by school site that's readily available data. What we don't do today is report average daily attendance by school site. We local districts have that data, but it's not. Ada is aggregated when it's for a district, when it's reported to the state.

So the first burden here is to break out Ada by school site at the state level from a reporting, we would need to put make an investment in technology and probably at the California Department of ED, some staffing related to that. Not probably, they probably didn't appreciate that caveat.

They would definitely need some help with regard to staffing. Once we have that data, then the allocation process just follows the formula, right? The secondary question is if you want to account how each school or how each district then are spending those funds, that's where SACS is.

Sorry, use the acronym where the standardized account code structure is flexible enough to do that. We just don't require it today.

I think we have to remember there's an important principle here, and that is the LCFF base grant, supplemental and concentration grant are all treated as unrestricted funds for the local district to make a decision driven based on their partner's input and their expertise of their staff and how all that comes together in the LCAP specifically for supplemental concentration.

Right. So we don't require that they break those dollars out. Now, many districts do for just internal tracking and accountability. Back to the LCAP. What did we say we were going to do? What did we actually do? Best practice would be to do that, but we don't mandate that they do that today.

So two pieces to the equation. One is don't aggregate Ada, and that thus will take a 10,000 line spreadsheet at the Department of ED and probably make it 100,000 lines. Right. And then need to manage that. And then what do you want from an accountability standpoint in reporting back from the local district?

And I would just add, as someone who uses those data a lot and at the detailed school level, and then link it to the student level records, etcetera. What Mike is saying is definitely true. I think the one thing I would just say is we're the most technologically innovative state in the country.

Our lcaps need to be digitized. And what I'm saying about that is not just a formula, like, not just archaic.

I'm saying to foster the development of best practices, you have to know what other districts who are doing better in a particular way in allocating resources, what they're actually doing and not digitizing it doesn't foster that kind of inter district learning. And from a system wide improvement, that's what I think is essential and it creates more transparency.

The reason I'm saying this is because you can be a district and a district leader. We got superintendents right here, right, who decide I want to strategically allocate some of my best principles to some of the most disadvantaged schools in my district.

Having the stable leadership of some of the best principals is some of the best attractors to some of the best teaching ability and skill in the place. Like a stable principle creates much more on ramps to high quality teachers wanting to work even in a more disadvantaged place.

Principal may decide to say, we're going to have a higher teacher salary schedule for teaching in some of those more disadvantaged schools. The evidence then may show that that yielded better fruit in terms of student success.

That then creates the kind of knowledge that other districts can then adopt so that we're positive outliers is spreading like those best practices. That's not what currently is being, I think, done at the rate that could be possible.

Appreciate it. And one last one. I'll just make it as quick as I can here.

Talking about declining enrollment, talking about Ada, there are some ways, I guess, currently built in to address or maybe soften the declining enrollment issue, giving school districts the ability to, for example, use current year Ada, prior year Ada, or an average of those three years of Ada.

I guess my question, it's a two parter, and the second one might be a little bit trickier. But the first one would be what is kind of what we're seeing the most commonly used when it comes to, and maybe for our superintendents or even Mister Zazueta, about which one of those is the most commonly used in California.

And the second part would be we have nearly 1300 charter schools in our state. We have over 670,000 charter school students. Charter schools are only allowed to use current year Ada.

And I wanted to see how does that serve our kind of equitable goals in California if we're not allowing those educational institutions to also use these other two options?

I'll take the question on the breakout in what method of Ada, and actually the Department of Ed's representative is really the expert here up through this year.

I'm sorry, up through last year, once we made that policy change, the majority of school districts by far use the three year average for the very reason that we introduced that proposal in that year's budget. That the Governor introduced that proposal in that year's budget. And that was because it brought stability.

As we cross into, during the pandemic, as we crossed July 1 into the new fiscal year, that dynamic changes dramatically, and it goes back to what it historically was, which is most districts are probably because most districts are declining.

They're now using the prior year Ada because starting July 1 of this year, the three year average no longer includes pre pandemic data. See, pre pandemic data was elevating the average Ada. Now our three year formula only uses pandemic years or post pandemic years, where it was lower.

So that change has happened and districts are feeling the impact of that. There's no question they've been, I shouldn't say artificially increased, but there was a slight artificial increase in their Ada, right? That we were funded Ada, I should say. And now that just the dynamics of it have gone away, the choice is still there.

I'm sorry, I shouldn't call it a choice. The district gets whatever's best for them. It's automatic. They don't choose one or the other or one of the three. They get whatever gives them the most increase in funding. As far as charter schools, that's a policy issue that's best addressed by somebody else.

Anyone? Okay, please.

I'm not touching that last one. I just want to clarify, just to. I want to speak to my, to my county, and declining enrollment is a complicated issue and I don't want to oversimplify it. And I'd just like to point out a little bit of perspective beyond just birth rate.

I would be curious to see what statewide private homeschool affidavit numbers look like post pandemic, because I know that a lot of folks left our system not because they weren't born, but because of the way schools address some of our public health in response to the COVID pandemic and also immunization and vaccination legislation.

So I don't want to oversimplify it by just saying declining enrollments because people aren't being born, and just to speak, just to speak to that, to kind of close that comment.

While it varies a little bit by county and region, and Mike certainly, or Superintendent Freeman certainly has a different number in Shasta than maybe elsewhere. It did. Private school affidavits and enrollment both did go up during the pandemic, but they are settling back to their historical norm.

But they are also insignificant counts in the context of declining enrollment. They just simply don't have that much of an impact. That may vary a little bit by district, right? But statewide they are insignificant.

Thank you, Mister Hoover, Mister Muratsuchi had one final question.

Thank you. This whole line of discussion is made me want to ask this follow up question, which is some Member Lempert, were you a Senator or Assembly Member? Assemblyman Lempert, you.

I like this concept of a declining enrollment dividend, and I wanted to take that to address this to Mister Allen as the special advisor on education to the Governor.

Given that the focus of LCFF is on equity and closing the achievement gap, and given the data, I believe Doctor Johnson in one of your slides cites that we can make the biggest difference in closing the achievement gap through early, early childhood education investments.

It always seemed to me to make sense that if we have declining enrollment demographically, statewide, less enrollment, same, hopefully more Prop 98 funding with larger budgets, why not just invest those dollars in early education, like for example, mandatory kindergarten?

Take that as a mandatory kindergarten question. I think that what we've seen is as a state, I mean, I can briefly address that. Mandatory kindergarten has not been included in the Legislature's budget. That has moved forward. So that's one easy answer on why. That hasn't moved forward, just on that idea.

If we have a declining enrollment dividend, if our k 12 enrollment is declining, then that opens up.

Well, I would just underscore, and I think it's been touched on repeatedly throughout the discussion today, that one of the key things that California is a state for the Governor and for the Legislature has been focused on is ensuring full implementation of transitional kindergarten upkin in the 2526 school year.

That is fundamentally about reaching out and reaching those earliest grades. And if we look at other differential investments, have really focused a ton of that are in the earlier years and early grades. So I'd say there's probably widespread agreement in terms of the importance of those early interventions.

It goes to what was discussed earlier about tier one instruction in those earliest years. I think there's broad and widespread agreement that underscores what the Legislature and the Governor have been on some of those investments.

And I just want to clarify, since the term, the reinvestment I highlighted a few times, our proposal and our suggestion would be to divide that between increasing the supplemental consultation rates and the base. And just as a larger point, you know, just like we talked about district versus district, I think we run into real trouble.

We talk about early childhood versus k 12 versus higher ed. And that's not a pie in the sky statement. Look at other states. And so let's focus on other parts of government where we rank among the top one or two or three per capita.

And so we do real damage to kids and families when we say, let's take from k 12 in early childhood or other way around. That said, I like where you're headed with this. We need to invest massively in our early childhood system, including childcare.

But when you look at our taxes, we can do that if we really put the focus on prioritizing education prenatal to higher ed. And then sure, other parts of this budget might have to suffer, but that gets to what is our priority.

Thank you.

Thank you. That very good last point. My Chairman Suchihdev and raised by others on adjusting different cost factors. I think that's a term Mister Levin used. So I think that's something to consider. I mean, it's one thing to say we're doing TK, which is a great investment as we know from the data and the research.

But if we are then later not investing in the same way, to continue that in grades k through three with larger classrooms, then what are we really doing?

And so when it comes to the use of a dividend, focusing that investment in the right way as opposed to creating maybe new programs that don't continue to double down on the investments that you all work hard to sort of create through our new formula. And that needs to go going forward.

So I think looking at additional factors to adjust is something that is an actionable item and certainly looking for your continued feedback on that, whether it's the regional differentiating using different COLA, although as outlined in our Lao report, several years of beyond COLA adjustments at least, and we're talking about billions of dollars.

So again, nobody's saying it's sufficient, but that has been done. And so we looking at that, looking at add ons, I mean, there was something, there is something there. We are talking about significance, amounts of money. And is that a potential dividend of some type to help grow the base?

I stay with the analogy that was made on the house. You know, it's the only thing we got to remember is it flooded not long ago, Covid is what it was. Right. And we probably need to make sure we invest.

And there were some dollars to do that, both from the state and mainly from the Federal Government, and that was all good. But that did leave some effects. Right. When there's flooding in a home, you can suffer from the mold, can create asthma. I suffer from asthma.

So I know that, you know, in this case, our kids, there's learning loss that happened. That was very real. And so how do we address that or adjust that again, is it's another factor in the next several years for the students who, the cohort of students who live through that.

And we must invest in them, in ways that is beyond perhaps what we thought was sufficient even before that happened. And so I think all those things need to be really, really focused on. And then just the last thing, and if anybody has thoughts on this, feel free to jump in.

But, you know, how can we talk about what wasn't addressed before, which is adequacy, right? And it was for a reason and a purpose, perhaps. But we are now having that conversation because it's an important one to have, thanks to the work that I know Mister Murasuchi has been doing.

But many of you, what can we do without the fear of scarcity? Because that's not what we're trying to do. So maybe a dividend or maybe switching some things here and there might help us create or eliminate that fear of scarcity, but then also the one that always hangs over, which is litigation.

How do we talk about that in a way, and I think you've presented some concepts and ideas, but I maybe to end this, just ask, is there anything else you want to add before we move on? And also, if the Lao's office or Department wants to say anything, this would be a good time.

I'm sure you took a lot of notes, so I'm just going to span the room. And if you want to say something, please, please jump on the front days. Anything you really want to, really want to say. You didn't get a chance to say it. Go ahead. No?

Okay. So that report that I led, that you referred to earlier on, that was an adequacy study, one of four that has been done for California. I led two of those. All of them said the same thing, that we have to spend significantly more.

I was the guy who had to basically do the roadshow and say, this is what I found. This is how much more. And I got a lot of sticker shock. I got a lot of big, wide eyes.

I would say that one thing that came up, I think, earlier on, I can't remember who said it here, was to try to compare us to other states. So I showed that even the adequate cost figure that I came up with, and it was something like 30 plus percent more than we were currently spending. Sounds astronomical.

That adequacy level was still less than the top five or six spenders, New York, Vermont, all these New England states, Massachusetts. Right. And in some cases significantly less than what they were currently spending at the time, this was all 16, $17.

So it is possible if we put in the fiscal effort, somebody else mentioned that we're the fifth largest economy in the world. So it's possible, I think, that we have to map a way to get there if we set an adequacy target. Remember, that's the first fundamental question I put to the group.

How big must that pie be? If we have that target? We can always work towards it. We shouldn't say we're going to do this overnight. That probably is not possible. But we are no strangers to Faison. Indeed, LCFF was phased in in terms of the funding, and so we should make a plan to do that.

I mean, it's pretty common sense, right? But it takes a lot of planning. I mean, the only other thing that I can say is my experience in New Mexico. We developed a formula that was great. Both sides of the aisle loved the formula. However, it didn't come with a compatriot revenue source.

So we developed the Bill that had the formula in it, but there was no Bill that they developed that had the revenues, and they're a much poorer state, so a lot of their revenues come from minerals, things like that. So it died, you know, it died.

It was a great formula that would have been adequate and equitable, but. And that was, I think, a mere 14% increase. That's what I have to say. Thank you.

Anything you want to share? Do you want to leave us with anything? We're good. Okay, one more.

I would just say our folks are working so hard, our classroom teachers are working hard, our superintendents and administrators are working hard. I would not confuse the them getting the job done with were good. And I think. I think that even I would not confuse a lack of I wish casp popped.

I wish those scores looked so much better. I would not confuse the lack of gains as local control isn't working. And I think I would just also say, if we want a powerful LCAP, LCAP is being diluted by other plans. Our folks have minimal bandwidth.

And if we want LCAP to get to the document, that is strategic planning and continuous improvement and community engagement, we have. There's minimum bandwidth. And if we are doing other plans that feel very categorical, LCAP will become more and more compliance and less and less of an actual impact document.

Thank you. I want to thank all of you. You all contributed so much to today's conversation. Really, really appreciate all of your time. You're welcome to stick around for the second half. We are going to obviously not end by one as was scheduled in the agenda.

We will continue to go on for issue number 3 and 4 with both of those panels, but I am going to take just a five minute break. We've been sitting here now for almost 3 hours, so just a break for us and we'll be back in five minutes. Thank you all.

Thank you very much.

Everything.

There obviously can't do that before you want to.

A good question. I've been retired for a number of years. I, it's hard to get, I think our view or something, really, 62% of the kids have, I'm not over, not right, but they're not. Well, thank you. Didn't go far. That's what I would have said if. You had asked short term.

All right. Good afternoon, everybody. Thank you for giving us a chance to take a little recess, but we are coming right back onto our third and fourth panels again.

This is the Assembly Budget Subcommitee Number Three on Education finance and the Assembly education Committee with our joint oversight hearing on California Local Control Funding Formula, fiscal design and outcomes oversight.

So this panel, which I think we will take the same approach that we did with the first and second panel, we will do panel three and panel four, and then we'll have questions, as you saw, was very dynamic and robust conversation with Members of the Committee.

So on this particular panel, which is titled achieving LCFF supplemental grant design and outcomes, this issue will study the LCFF supplemental grant design principles, current system and student outcomes from this component of the formula and recommendations to improve these outcomes.

I'd ask all of you, as you heard the previous panels, to try and not repeat what was already said, but build up, build off of each other. It will help us create a more, again, robust conversation. So I want to thank you all for your patience and for being here.

And we'll start with Julian La Fortune with the Public Policy Institute of California. Welcome.

Thank you. Thank you, panel. Thank you, Assembly Members C,hair. I'm really thrilled to be able to present and talk about some of our research here today. So just a little bit of background. My name is Julian La Fortune.

I'm a senior fellow at the Public Policy Institute of California, and we've been studying LCFF for several years now looking at a lot of the fiscal design elements as well as the impacts. And I think the panels before me have really appropriately set the stage.

LCFF was a transformational shift, a stronger equity focus, a greater flexibility focus to California school finance and research has documented academic gains from these shifts, but student achievement is still far below our expectations. Stubborn gaps by race and income persist. Now, over a decade later, it's worth considering what works and what could work better.

There are three broad points I wish to make. First, the evidence of impact is stronger for district than student level gaps. So from 2015 to 2019, pre pandemic, the ELA proficiency gap between Low income and higher income students fell by about 2.5 percentage points, or 8%.

But the gap between lower and higher income districts fell by more six percentage points, or 15%. And this underlies the crux of my remarks. We have a formula that targets districts and district need. The impact of supplemental and concentration funding is most clear when we compare districts and less so when we compare student groups.

Which brings me to my second point, how funding is targeted to schools and students matters. A substantial portion of supplemental funding appears to be spent broadly, like base funding. As a result, demographic differences across and within districts flatten the equity impact of the formula. Let me outline this with a brief hypothetical.

Suppose we give every district $10,000 of base funding. The supplemental grant then yields $2,000 per high need students. If districts fully target these funds, this is like putting an extra $2,000 in the backpack of every high needs student in the state, so to say.

But if districts spend equally across students, this yields about a $1,400 increase for high needs students and a $1,000 increase for other students. In other words, without targeting, the relative gain for high needs students is only $400 instead of 2000, an 80% reduction. Now, about 17% of Low income 20% of EL students are in non concentration districts.

More than half of high need students are in districts with less than 80% need, which receive more supplemental than concentration funds. We also see this by school. Over 20% of school sites in districts with moderate need, between 30% to 55% high need could be considered concentration schools with 55% or greater high need.

Thus, the ultimate impact of the formula depends effectively on how districts target dollars. And yet, our research documents that there is incomplete targeting. So, on average statewide, for every dollar a school generates in high need funding, spending is only $0.63 higher than at other schools in the same district, with the rest being spread more equally district wide.

And that brings me to the third point, who we choose to target matters. So in forthcoming work we have set to release next month month, we examine high need definitions and implications. Free and or reduced price meal rates, or FRPM, have diverged from statewide income and poverty measures.

Many states have moved away from FRPM in their funding formulas, and universal school meals further complicates this measure and motivates considering a shift. Now, the socioeconomics of districts with similar FRPM can vary because it's a course measure. Consider two actual districts about 30 miles apart in the same county. Both have similar FRPM. District A has 69%.

District B has 67%. However, District B has nearly half the poverty rate and 50% higher household incomes. And yet the formula does not reflect these differences, with less than a 3% difference in per student LCFF funding between them. One final point on the WHO.

Unlike California, many states Fund multiple categories of need in a duplicated rather than an unduplicated manner. For example, Low income EL students receive funding for both socioeconomic disadvantage and their EL supports. Our forthcoming research shows that duplicated counts will better reflect need and would improve funding equity.

Now, of course, changes are not simple and could create winners and losers absent new revenues. In part for this reason, many argue we must first ensure adequate funding as a baseline. Of course, this is a necessary step, yet efforts to improve equity are worth considering even in the absence of new funding.

Our research suggests that better targeting and greater transparency are important places to start to ensure that current supplemental dollars are indeed reaching the high needs students for whom they're intended. Thank you.

Thank you very much. Appreciate that. Moving on to our next panelist, which is Carrie Hannel from Bellwether Research and Pace.

Yes, good afternoon, sharers. Thank you for hosting this hearing today. My name is Kerry Haddell and I am a senior fellow with Pace, which is a nonpartisan research center supported by faculty directors at five California universities.

I am also a senior associate partner at Bellwether, which is a national nonprofit that focuses on educational equity with a deep school finance practice area.

In these roles, I've conducted extensive research on school funding systems both in California and in other states around the country, and my involvement with LCFF dates back to 2011, when, as part of the LCFF Equity coalition in my role at Ed Trust West, I advocated for and oversaw the some of the implementation and monitoring of the new funding reform.

I'd like to start by just commenting on some of the strengths that we've talked about. Thanks to LCFF, California does have one of the most progressive funding systems in the country.

By directing more resources to districts with higher numbers and concentrations of Low income and EL students, the state has made a major positive step toward supporting the educational success of California's most vulnerable students. The formula is also relatively simple, transparent, and easy for education stakeholders to understand.

And as others have shared, there's evidence that suggests that it's working. The funding formula, in many ways, has served as a template for funding reforms across the country.

We see states building upon and refining in many ways what LCFF has accomplished in California, but there have been some new challenges in implementation that point to opportunities for improvement, which I'll address. The first challenge is that while the state funding distribution is equitable, the per pupil spending at the local level doesn't always reflect the same pattern.

When Pace looked at 1920 expenditures, we found that districts between the zero and 20% unduplicated threshold spent about the same per pupil as districts between the 80 and 100% threshold. So the highest and lowest poverty school districts were spending about the same per pupil.

And then in between there was a trough in spending for districts with about 20% to 55% unduplicated. The concentration grants have since increased in size, and the state has implemented the equity multiplier.

And it's true that these funding reforms might help boost spending for the highest poverty districts, but they are likely to do little to address those districts in the middle. The relatively flat spending that we've seen is likely due to a mix of factors, but I'll name three of them.

First, Low poverty districts tend to be more successful in raising additional local revenues through sources like parcel taxes, and they're more likely to be basic aid, so retaining excess property tax wealth. Second, middle poverty districts are less likely to receive significant federal funds like title one.

And third, because high poverty districts have higher absenteeism, they suffer a larger fiscal penalty under the Ada based funding formulae. And together these patterns suggest that the LCF supplemental weights might not be large enough to offset these other fiscal inequities. To address this, the state could increase the size of the supplemental grant.

It could switch from an Ada to an enrollment based funding formula like virtually every other state has. Or it could combine the supplemental and concentration grants into a single grant that more smoothly grows in proportion to the concentration of unduplicated students students and eliminates the discontinuity that earlier panel talked about at the 55% threshold.

To pay for this, the state could phase out legacy programs like Tig, economic recovery target, and MSA. These add on programs conflict with the equity and coherence goals of LCFF. It could also capture some of the savings from declining enrollment.

As the earlier panel discussed, the next challenge that I want to address is that the supplemental grant provides the same funding weight to unduplicated students, regardless of differences in needs.

While the simplicity is a strength of the funding formula that we should continue to hold onto, and in many ways it's also a shortcoming, since districts serving students with multiple or greater risk factors do need more resources to help those students succeed. For example, els who are Low income require greater supports than els who are more affluent.

Long term els require different support than newcomers, and foster youth face additional challenges as compared with other economically disadvantaged students. Some other states and I'll just name Tennessee as one example, have adopted funding formulas that do provide duplicated weights and also that have larger weights for students who have more acute needs, including differentiation for English learners.

And the final issue I want to name, which one of my colleagues also addressed, is the free and reduced price meals indicator in the system. The measure has many shortcomings. Even before recent policy changes, the free reduced price lunch measure did not accurately capture student economic disadvantage.

And now that California provides free meals to all students regardless of household income, families have less incentive to complete those enrollment forms. It further erodes the usefulness of that measure. Researchers have found that other measures, like Snap participation, for example, are more effective in differentiating between schools with moderately high and extreme levels of poverty.

And with that, I'll just say these are the three suggestions that we made. Happy to dig into those further and appreciate your attention today.

Thank you. We'll move on to Jonathan Kaplan with the Learning Policy Institute.

Thank you. Good afternoon. Chairs Alvarez and Maricci and Members of the committees, thank you so much for the opportunity to appear before you today. My name is Jonathan Kaplan.

I'm a senior policy researcher and advisor at the Learning Policy Institute Institute, an organization dedicated to advancing evidence based, evidence based policies in education to ensure equitable learning opportunities for all children.

I'm focusing on the LCFF supplemental grant and how it centered the principle of equity in California's education finance system, as well as options for addressing the challenges in its fiscal design to start.

The California Legislature deserves much credit for creation of the LCFF supplemental grant because it did center equity in the finance system, including focusing on the issue of the money, actually does matter, and that money dedicated for students with additional needs is crucial as a result of including the supplemental grant in the fiscal design of the LCFF.

We have findings that we have been talking about today from Professor Johnson and others that show that LCFF induced increases in per pupil spending of improved student outcomes in math and reading, reduce the probability of grade repetition, increase the likelihood of high school graduation and college readiness, and decrease suspensions and expulsions.

We know that by using multiple years of data, we can see that the evidence that the LCFF has actually had an increase, the LCFF supplemental grant, has helped achieve student outcomes. However, there are challenges presented by the fiscal design of the LCFF supplemental grant, many of which have been discussed today.

One question really that's come to the center is whether the supplemental grant itself is adequate to achieve desired outcomes.

A soon to be published report by my colleagues at the Learning Policy Institute include a review of adequacy studies conducted in five states between 2016 and 2023, which shows that the LCFF 20% supplemental grant is at the lower end of the range of weights recommended for English learners and below the lowest recommended weight for at risk students, which is most often defined by a measure of family income.

Analysis of those adequacy studies found that these weights translated into additional per pupil funding of nearly $6,500 in Washington, DC, and more than $9,900 in Delaware and Maryland. The same analysis estimated that California's 20% supplemental grant weight translated into additional funding of $2,100 per student, which is provided to school districts.

As many have discussed, on an unduplicated count of both student groups. This means that the level of funding provided by California supplemental Granthenne Falls well below the adequacy levels recommended for these other states.

How does that how does this supplemental grant actually compare to what states provide an additional funding for English learners and students from Low income families?

The forthcoming report by my colleagues by my colleagues at LPI shows that California's 20% supplemental grant is at the lower end of the range of states that use a single grant weight for either English learners or at risk students.

Moreover, of the 42 states that provide funding for both English learners and at risk students, California is only one of six states that provides funding based on the unduplicated count of both of these student groups. This points to a significant challenge that has been noted many times here.

Students who have multiple needs do not generate multiple grants in the supplemental grant. The use of unduplicated counts as the basis for the supplemental grant fails to recognize that students that generate supplemental grants are diverse and have distinct needs for achieving desired outcomes.

Yet, the LCFF supplemental grant does not recognize those distinct needs, nor does it recognize that students that have multiple needs often face multiple challenges. What options could be employed to improve the fiscal design of the supplemental grant? One option for improving the supplemental grant is to increase its weight.

This can improve the adequacy of the supplemental grant, and a second option would be to calculate the supplemental grant based on duplicated counts of students targeted for additional support, which would improve equity as well as adequacy by recognizing their compounded needs.

Lastly, recognizing student groups with additional needs not currently targeted to receive additional funding would both improve adequacy and equity in the supplemental grant. For example, the LCFF supplemental grant does not specifically identify students experiencing homelessness as a group that have additional resource needs. While most homeless youth are subsumed within the category of students from Low income families.

The supplemental grant may not be providing the level of support that these students need to achieve desired outcomes. Thanks for the opportunity to speak with you. I look forward to having any questions you may have.

Thank you, and thanks again for the material provided ahead of time. Natalie Wheatfall loom with Ed Trust west thank you.

Good afternoon, Committee Members. First, I would like to join my fellow panelists in thanking chairs Avraz and Murat Suchi for holding this really important hearing as we raise at Ed Trust west.

In our report entitled more to be done that we released last November, we believe that the Legislature has a critical role to play in ensuring that LCFF is successful in closing long standing gaps in academic outcomes experienced by students of color and multilingual learners in California, and holding these types of oversight hearings is the first step in making sure we're addressing those issues.

I certainly agree with what others have shared in terms of LCFF's monumental impact on the positive direction that we've gone in California in addressing the perpetual inequities, both in resources and outcomes that negatively impact students of color, students in poverty, and multilingual learners in California schools.

However, we see that these gaps in outcomes that have perpetuated since LCFF's passage we see that the supplemental grant has insufficiently addressed those academic outcome inequities.

There have been very slow gains, in particular for black and brown students in California over the past 10 years, and if we remain on this same trajectory, Latinx students won't all be at grade level in math until the year 2060, and they won't all be at grade level in English language arts until 2046.

For black students, they won't all be at grade level in math until 2089, and they won't all be at grade level in English language arts until 2071. And in these assessments we took into account pre pandemic outcomes information, not even factoring in the dip in CAF scores after the pandemic.

So I share that just to reinforce the urgency that we have in incorporating race and thinking about race as we're thinking about the supplemental grant.

And in so doing, I fully acknowledge that there are significant barriers to addressing race directly within the funding formula itself from Prop 209, and there are concerns about the potential impact of unfavorable Supreme Court decisions that would potentially limit the ability to take rates into account in thinking about the supplemental grant.

However, as other folks have shared on this panel and in previous panels, there is a significant need to address the inadequacy of the supplemental grant in the cost that it does take to educate the students in our system. And a lot of those costs come from the systemic disparities that student groups experience based on race.

And there's opportunities to look at myriad types of data to present as cost factors that we should take into account in the allocating those resources. We can look at things like educational attainment of parents, rates of home ownership by neighborhood, rates of system involvement, chronic illness.

And some of these similar types of markers of need have been incorporated in things like the student equity needs index in Los Angeles Unified School District, in which they use levels of asthma cases by neighborhood, Covid cases, instances of gun violence, et cetera.

And I think that these types of measures would signal that districts and schools would need to pay closer attention to these types of factors as they're serving students. And that would be an added benefit to the point that assemblymember Alvarez raised around the need to have LCFF reflect our values.

This would incorporate the values of addressing the systemic disparities because of systemic racism within the formula itself, as well as provide additional resources. And in addition to taking into account these additional markers of disparity, we agree with what other folks have shared.

So I won't go into too much detail that there are significant benefits to be had to allocating and calculating the supplemental grant at the school site level, both to make sure that the dollars are more closely following the students who generate them, but also to create additional transparency that communities need to understand how their schools are using dollars to benefit students that have significant levels of need.

And with that, I will conclude my remarks and thank you so much for having us join you today.

Thank you for being here. Appreciate you. And from the San Diego Elementary School District, we have Doctor Gina Potter. Welcome.

Good afternoon. Chairs Alvarez and Muratsuchi. It's truly an honor to be here today. My name is Doctor Gina Potter and I'm the Superintendent for the San Ysidro School District, and I also serve as a council advisory Member to the California Collaborative for Educational Excellence.

And finally, I've had the honor to serve 20 years as a leader for AXA, as the current Vice President for legislative matters.

So our school district serves one of the most vulnerable populations of children in the entire State of California. We are a culturally vibrant community and we are located just north of the Mexican border and the San Yucidro port of entry.

We serve almost 4500 amazing students, preschool to 8th grade, and of those students we have, 57% are English learners, of which we have 18 languages. We have 24% or one of the highest population of unhoused or homeless students in the entire State of California. That's one in four of our students.

We have 75% who are socioeconomically disadvantaged and 14% of our students are students with disabilities.

As a former CBO or chief business official for 13 years in a different district, and the former chair of 42 school district cbos in the County of San Diego, I had the honor to serve a school district during the great Recession and I say honor rather than challenge, so we can be part of positive it was a very difficult time.

But what came from the great Recession was the advent of the Local Control Funding Formula. During the great Recession, I recall distinctly Proposition 98 reducing by almost 30%. I remember year over year budget cuts six years in a row from 2007 to 2012. We all we did were budget reduction plans.

I remember a revenue limit deficit factor that at the height of the recession was 22% and cash deferrals of up to 40% of inter district cash deferrals.

Thankfully, having served on a state task force that gave input into the creation of the LCFF and the LCAP from 2011 to 13, I distinctly remember all of a sudden we came out of this cloud of the great Recession and thanks to leaders like our chair Murasuchi, they created one of the most progressive funding formulas in education across the United States, known as the LCFF.

And the nation was interested in it as well as they were creating their every student succeeds act. With that said, before that we had over 40 categorical restrictive programs. We could not make heads from tells.

And so knowing that we were able to merge all of these categoricals and bring local control to school districts and bring these supplemental and concentration grants was truly a blessing to all of the districts that we represent in the State of California.

And so began the LCFF in 201314 and the recovery of funding to education that took six years to recover from pre great Recession levels. And so it took us until 2018 to 19 to get back to what we were funding education in 20067. And these figures are adjusted for inflation.

So it's important to note that indeed the LCFF was a recovery. We were in recovery mode. We weren't into the mode of adequacy. Finally, I'll point out that the Edsour's education law center, making the grade rankings, ranked us b for equity recently.

We're now ranked 9th in the United States for the most equitable education formula, and I think we should be applauded. And I thank you for that. And because we are the fifth largest economy in the world, unfortunately, we are falling near the bottom in k 12 spending in relation to our California's total wealth.

And then the NEA ranked us 25th in the United States for education funding per student. Often I'm asked, how do you spend the LCFF supplemental on concentration dollars in your district? Because of my 100 page LCAP, nobody can seem to find it. So I placed it on one page to help make this a very efficient hearing.

And we spend it in remarkable ways. So I thank you and I thank the Legislature for the supplemental and concentration funds because we now have implemented a dual language program that just won the Golden Bell from the California School Boards Association for our Rapid Reclassification program.

We now hit a mark of 22% reclassifying English language learners in five years, which now outpaces the entire state's average of reclassifying English language learners. We also have a nationally ranked and award winning ScI-FI program in our school district because of these funds.

And we also won all of the classroom of the future awards for our Sci-Fi program. And on the last page you can see some wonderful photos of our students in action learning science and physical education and really learning how to move into these fields.

We also have a notable social emotional well being and mental health services program that's recognized by the District Attorney's office in San Diego. county. We have social workers and psychologists, and even a curriculum across all of our classrooms are social emotional.

Doctor Potter, time moves very quickly. I know you have a last slide. You might want to focus on that one. I will move.

Thank you. Thank you, chair. So on the left side you see the successes that our district has, including reducing chronic absenteeism in six of our schools by 22% to 53% of reduced chronic absenteeism in a single year. And then finally, what are the needs? So our asks are five things.

One, Fund education in California in the top 10 states, and the top 10 states Fund education with 18,000 to 24,000 per pupil in spending. Our current base grants from the LCFF are only 10,000 to 12,000. So you can see we need to increase the base grant by about eight to 12,000 per student.

Provide additional funding for our homeless and foster youth and consider a duplicated count for this subgroup of students. Students increase special education funding. Right now our General Fund contributes 67% of the total cost of special education in our district. And then finally utilize an alternative method of calculating poverty rate because we already have the universal mills.

So we do need a new formula or calibration for that. Again, it's such an honor and thank you so much for listening and for caring about the 6 million students we serve in California.

Thank you to all of you. And just like previously, don't go too far. We're going to take panel number four and then we're going to bring you all up and we're going to have a discussion together. So thank you. I'll ask the panelists for issue four to please come forward.

This panel is focusing on achieving equity the LCFF concentration grant design and outcomes this issue is about the LCFF concentration grant fiscal design principles and current systems. And I soon out comes from the component of the formula and recommendations. Again, keep saying that on every panel recommendations.

We want to hear that from you on how to improve outcomes. So we have Julian once again from PPIC, provide overview on this issue. And Julian, you'll go first.

Great. Thank you Mister chair. Thanks again for the opportunity to speak. So just to, I guess, elaborate now on some of what I discussed earlier and focus a little bit more on the concentration grant design.

I do want to mention big picture first, that like California, more than half of states Fund for concentrated poverty or need in some way. And broadly, these reflect a body of research that documents specific place based concentrations of economic, environmental, health, and other socioeconomic factors that compound educational challenges.

And indeed, our research and other research on LCFF finds that concentration funding has improved test scores and improved a through g completion rates. And nationally, research tends to find larger impacts in a per dollar sense in lower income and higher need contexts.

So with that said, the evidence for equity and efficacy of the concentration framework is strong and well supported. So for this panel, I want to return to the theme discussed earlier about whether dollars intended for high need students are indeed reaching them or whether they operate effectively as base funding.

And in fact, when we look at this specifically for concentration districts, or for those districts that receive concentration grant funding, we find that they in fact spend more equally and target less. Earlier I mentioned that spending is roughly $0.63 higher at a school for each high need dollar it generates over other schools in the same district.

Yet this targeting is even lower than in concentration districts so in the median concentration district, we observe targeting of less than about $0.35 on the dollar in the first year of pandemic 20202021 and then under 15 cents per dollar pre pandemic.

We also have examined LCAP planned expenditures to see whether spending plans that districts write are proportional to the funding that they receive in supplemental and concentration dollars. And here concentration districts have also shown less targeting.

About 80% of concentration districts planned less LCFF spending on high need student groups than the total supplemental and concentration funding they received, and that share actually is less than half in over 25% of concentration districts, again suggesting that dollars are spread more equally across students and schools.

Now, of course, this lack of targeting perhaps is not surprising and may not even be as much of a policy concern in a concentration district. Dollars spent district wide there will still mostly benefit high need students no matter how they're spent or on whom. But this lack of targeting does have consequences.

Just under half of higher income students in the state are actually in concentration districts, and many large districts have variation in need across school sites, including very affluent schools with much lower concentrations of need. Thus, if these funds are not further targeted within district, again, the equity impact of the concentration grant itself is diminished.

So then what then can we do about ensuring targeted dollars reach high need students? And I think, as mentioned in the earlier panels, a first key step is better transparency.

Lcaps are not financial documents, and the site level spending data that we have is extremely limited, collected for federal purposes, and comes with many caveats and limitations on its use. Next, greater accountability over targeted spending is worth considering.

As I mentioned before, California is not unique in its funding for need or concentrated need, but some other states require that all or a portion of additional targeted dollars are indeed spent on the students that generate them. This includes states across the political spectrum, Maryland, Washington, and Texas. I wish to offer one final consideration from our research.

We find that even in districts that do spend more on their high need school sites, the resulting staff mixture is not equivalent. High poverty schools see smaller class sizes but led by less experienced educators with fewer credentials.

Thus, when we measure more equal or equitable spending even within districts, the distribution of staffing resources may not reflect this effort. Recent efforts to address these dynamics may help, including expanded concentration grants and the equity multiplier. And to my knowledge, research has not fully studied their impacts.

Nonetheless, ensuring that efforts to improve funding equity don't overlook these staffing distributions, I think, is key to maximizing both the efficiency, the equity, and the efficacy, ultimately, of our concentration grant funding and of LCFF more broadly. Thank you.

Thank you. Now we'll have from the Learning Policy Institute, Jonathan Kaplan. Again. Make sure your microphone is on.

Thank you again, chairs Alvarez and Marici. I'm going to try to draw out the slides here. Again, Jonathan Kaplan, senior policy advisor and researcher at the Learning Policy Institute. My comments here are going to focus on the concentration grant, its successes, and the challenges that those successes highlight, and strategies for improving the LCFF's fiscal design.

You know, the Legislature should be commended for including the concentration grant as part of the fiscal design of the LCFF. It was, you know, I was around in 2013, there were significant questions about whether or not that was actually going to occur, but now we know that the concentration grant has actually been quite successful in its approach.

It acknowledges that school districts with larger concentrations of disadvantaged students have additional challenges and provides progressively greater amounts of funding as the share of disadvantaged students increases above 55%.