August 13, 2004

Wealthy Schools Getting Billions More

By Miguel Loza

Los Angeles -- California unfairly channels $13 billion in education aid, most to wealthy school districts, through a disparate array of 124 programs with unknown benefits for students, according to a study released July 14, by Policy Analysis for California Education (PACE).

The so-called categorical aid programs, which offer restricted funds for specific educational needs — including special education, bilingual education, school safety, school improvement, staff development and educational technology — have grown dramatically and now comprise one-third of all state spending on public schools.

The study, “Categorical School Finance: Who Gains, Who Loses?” by education finance expert Thomas B. Timar — faculty affiliate of the PACE research center, associate professor in the School of Education at UC Davis, and associate director of the Institute for Education Policy, Law and Government, also at UC Davis — reveals that billions of dollars now actually go to higher-wealth school districts, worsening inequities in school funding.

“The goals of categorical finance reform should be to create a system that targets funds where they are needed and does so equitably and efficiently,” said Timar. “Sadly, these well-intentioned programs were originally targeted at kids who need extra resources. Now this $13 billion quiver of arrows is shot in various directions, rarely hitting the bull’s-eye and spent with no apparent effect,” he added.

“A nice first step would be to spend the same dollar amount in every school district,” says Jackie Goldberg (D-Los Angeles), who introduced AB 2675, a measure that would simplify and try to equalize existing categorical funding by consolidating them into block grants, “but equity should go beyond that. Equity of achievement and outcome is what we should strive for, even if it means that we spend more on students from the poorer neighborhoods.”

Under one program — the Targeted Instructional Improvement initiative — average per-pupil funding was $136 in 2001-02. The Sausalito/Marin City Unified School District — a wealthy district with per-pupil revenues of $18,245 for that year, $11,000 more than the average for elementary school districts — received $1,893 per pupil from the program.

In contrast, Kern County’s Semitropic Elementary School District, with much higher percentages of minority students and free-lunch recipients, with only $6,596 in revenues per pupil, received no funding from the program, despite the demonstrated greater need, according to the study.

Information received by EGP from the LAUSD’s Budget Services and Financial Planning Division shows that the local district receives approximately $2.3 billion in categorical funding, with $468 million coming from the Targeted Instructional Improvement grant, translating into $627 per pupil from this specific program. This means that LAUSD, which has per-pupil revenues of approximately $8,000, receives much less than the wealthier Sausalito/Marin City Unified School District, despite lower achievement rates and a larger special needs population.

According to LAUSD, the biggest chunk of categorical funding for the district is for special education students, for which it receives $675 million from federal and state funds. It also receives significant funding for class reduction in grades K-3, economic impact aid, regional occupational centers, intervention programs, year round incentive programs and school improvement.

Unlike many critics of categorical funding, LAUSD acknowledges the positive benefits from these programs. “The categorical funds we receive enable us to provide a wide range of services to our students,” says an official district response provided to EGP by Susan Cox of the LAUSD Office of Communications. For example, “Low-achieving students at low income schools receive extra preschool education, reduced class size, counseling assistance and a limited degree of health care… thanks to categorical funding.”

However, the PACE study points out, as schools struggle to balance their budgets, they have to rely on fewer unrestricted general funds than they did a generation ago. Although the overall average per-pupil spending in the state has actually increased, schools have $355 less per pupil in discretionary general funds than they did in 1980, with most of the increase coming from spending on categorical programs.

One of the principal reasons for the explosion of categorical, restricted funding has been the desire of legislators to control how funds are spent. The study says that since Proposition 98, passed in 1988, which guarantees K-12 and community colleges a minimum level of funding, legislators have avoided placing money in general funds for schools because they fear the money will be used to increase teachers’ salaries — already the highest in the nation.

With categorical funds representing more than 30 percent of overall per-pupil funding, and roughly 80 percent of per-pupil funding going to salaries and benefits, fewer dollars are left for instructional materials, facilities maintenance, professional development and instructional improvement, according to the study.

Timar denounces this lack of local control over school districts. Currently, how much money a district gets and how it is spent is decided primarily in the legislature, through the politics of the budgetary process, and not in the local communities by local school boards, who, he says, can best determine and address the particular areas of educational need their students face.

“School districts definitely need to have more control,” says Goldberg, whose school financing measure also attempts to give local school administrators greater flexibility. “The legislature has to realize that it doesn’t know everything and that local boards best know their students and can determine the ideal pathways to follow.”

The LAUSD does not completely agree. “We believe funding for school districts should recognize that different students have different needs… The current state and federal funding system does recognize the differential need of our students. This is good, (although) there are probably alternative ways to allocate funding to districts and schools that would make more sense,” said the official response.

“Our view is that all parties should be heard,” responded the LAUSD when asked if the legislators have too much control over the education of California’s children, “Once funds arrive…the district should have some ability to consider the totality of needs and design a program… to meet those needs. (But,) the legislature does have a legitimate role in identifying national and state priorities for education and assisting local districts to accomplish these priorities,” it added.

Reprinted from L.A. Eastside Sun, Aug 10, 2004

Return to the Frontpage