A scathing audit on school funding that found the state did not meet promises made six years ago to help English language learners, foster children and students from poor families sets up a 2020 test of the clout of the California Teachers Association and the California Federation of Teachers – and of the willingness of Gov. Gavin Newsom to take on the unions who were early backers of his successful 2018 candidacy. 

State Auditor Elaine Howle’s review focused on how school districts in San Diego, Oakland and Clovis had implemented the Local Control Funding Formula, which was adopted by the Legislature in 2013 at the behest of then-Gov. Jerry Brown. The governor and then-Senate President Darrell Steinberg, D-Sacramento, were among several leaders who said the LCFF would be a game changer by getting additional assets to struggling students.

But Howle found instead that billions in extra funds the formula directed to districts with high percentages of English learners, foster kids and poor families had been used for general needs – including raises for teachers. She concluded there was little or no evidence that the LCFF had boosted these students’ performance.

“In general, we determined that the state’s approach [to Local Control] has not ensured that funding is benefiting students as intended,” Howle wrote.

Howle’s finding confirmed all the major criticisms of the formula that have been raised by education reformers and by civil rights lawyers who have repeatedly sued Los Angeles Unified over its treatment of poor minority students. 

Bill to track school funding couldn’t even get a hearing

But these groups have never gotten far with Local Control changes. Last spring, Assemblywoman Shirley Weber, the San Diego Democrat who pushed for the audit, couldn’t even get Assembly Education Committee Chairman Patrick O’Donnell, D-Long Beach, to hold a hearing on her bill to require disclosure of how LCFF dollars are being used.

Howle’s audit gives Weber new evidence to push for tracking such spending, and she has said fixing Local Control is her top priority in 2020. But O’Donnell, a former teacher who is close to the CTA and CFT, is unlikely to drop his opposition to tracking the funding.

A key question is likely to be what the governor does. While Newsom won the early endorsements of the two teacher unions, he spent the 2018 campaign telling editorial boards and the Los Angeles and Silicon Valley billionaires who back education reform that he too wanted to fix Local Control to ensure it helped struggling students and had proper accountability protections.

But any attempt to get school districts to stop spending LCFF dollars on teacher compensation – and on rapidly growing teacher pension costs – will go directly against the CTA and the CFT. They already see available school funding as inadequate and are both pushing for billions of dollars in tax hikes in two measures expected to be on the ballot in November 2020. They also won changes that will make it more difficult for charter schools to be approved or renewed using the argument that charters were diverting funding from regular public schools at a time when those schools are desperately underfunded. They are unlikely to accept the notion that the audit must be acted on.

Meanwhile, Newsom has so far used his political capital to advance an education reform that teachers unions also may question. But the reform – using metrics to track the performance of students throughout their K-12 journey – isn’t nearly as contentious as the state forcing many school districts to reorient their Local Control spending and stop using it for raises and pension bills.

But in January, the Legislative Analyst’s Office warned that none of the 50 state school districts it surveyed — including California’s 11 largest districts — had adequate safeguards in place to deal with the influx of new funds. Now the first of what could be many lawsuits has been filed alleging LCFF dollars are being taken for uses not permitted by the 2013 law. The L.A. School Report website has details:

The lawsuit, filed by ACLU SoCal, Public Advocates, and Covington & Burling LLP on behalf of Community Coalition South Los Angeles and L.A. Unified parent Reyna Frias, says the district … has already misdirected $400 million in 2014-15 and 2015-16 combined, and if not corrected, will amount to $2 billion in funds misdirected away from high needs students over the next 10 years. …

 

At issue is the district’s accounting practices regarding its LCFF dollars. The lawsuit alleges that by counting prior spending for “special education” as spending on services for low-income students, English language learners and foster youth, it deprives many students of the funds because not every special education students falls into those categories.

 

“LAUSD’s inclusion of special education funding is improper under the LCFF statute and regulations, and therefore violated mandatory duties created by the statute and regulations,” the lawsuit states.

ACLU has history of successfully suing LAUSD

The ACLU’s involvement is notable because of the group’s long record of successfully challenging L.A. Unified’s actions in court. The cases include suing over extreme teacher turnover at heavily minority schools; “last-hired, first-fired” teacher retention policies; and the treatment of gay students by teachers and staff at one school.

The ACLU has a pending lawsuit against LAUSD and the state over disparities in teaching time between affluent schools and those in poorer communities.

Its latest lawsuit was foreshadowed by the release last month of a UC Berkeley study showing L.A. Unified was commingling LCFF funds with its operating budget and prioritizing new hiring instead of programs to specifically help English-language learners and foster children.

Among the findings:

Despite pro-equity goals, we found that the bulk of LCFF investment dollars (the $145 million) was not distributed according to any transparent needs index. Furthermore, fiscal priority was placed on restoring adult staff positions often not directly tied to instruction, especially the dollars allocated to elementary schools. …

 

The District largely ignored their equity formula in distributing investment dollars to elementary schools. A policy decision was made internally to allocate a librarian position, instructional specialists, and assistant principals to most elementary schools, regardless of the TSP count. … This appears to reflect the District’s priority placed on re-staffing adult positions, rather than stemming from any distinct strategy for narrowing achievement gaps. …

 

[The] bulk of LCFF dollars has seeped into the district’s base budget with … little apparent regard to the students who generate the new dollars.

Black lawmakers already had warned about diversion

As CalWatchdog reported in March, the possibility of LCFF funds being diverted is a major issue for the California Legislative Black Caucus. In January, speaking on behalf of the caucus, Assemblywoman Shirley Weber, D-San Diego, testified at a state Board of Education meeting that “any authority for the use of supplemental or concentration grants to schoolwide and districtwide expenditures must clearly link the services to demonstrated effectiveness in increasing student achievement and closing achievement gaps, and demonstrate that the expenditures are proven effective for ‘concentrations’ of unduplicated children in schools in the district where concentrations exist.”

According to the UC Berkeley study and the allegations in the ACLU lawsuit, that’s not what is happening in California’s largest school district.