How Our School District Is Funded

This article is part of a series. Please refer to the Addendum article (https://alamedaclarion.com/2020/02/05/ausd-2020-measure-c-addendum) for additional notes. Inline notes that reference the Addendum will signify this with the label Addm.X where X is the number in the Addendum.

Summary

• Alameda Unified School District (AUSD) gets a little less revenue from basic state and county funding than average.
• A combination of a different mix of students and bigger transfers to charter schools make the bulk of the difference in our revenue levels.
• However, our very large existing parcel tax raises more than enough funds to fill this revenue gap.
• And several other districts that pay their teachers better receive less LCFF funds and indeed, less overall General Fund revenue.

Show Me the Money

When the subject of a new parcel tax came up on Nextdoor in the fall, a number of people asked the same question that I did: why does AUSD need more money? One common answer was that we don’t get enough money from the state and county. “Enough money” is a hard term to quantify. It’s even harder to believe when, as the AUSD has already told us, there are plenty of districts in the same county that somehow get enough money to pay their teachers better. So how much money do we get¹?

Let’s first look at a general revenue breakdown. School funding falls into four general categories: LCFF, Federal, Other State and Other Local. LCFF is the basic funding that generally forms 70-80% of most district’s funding. It combines state funds and county property tax transfers. “Federal” consists primarily of federal education grants and normally aren’t very substantial. “Other State” consists mostly of program funds from the state that aren’t in LCFF like each district’s share of lottery funding. Last, “Other Local” consists of city and county level transfers not part of LCFF. Parcel taxes are accounted for in this last category².

Figure 1 shows the districts sorted left to right by overall General Fund³ revenue. We can see, as with many of these comparisons, that Alameda sits somewhere in the middle. Two important bars to note for Alameda are the blue one for LCFF and the black one for “Other Local”. By inspection, we see that our LCFF is smaller than average and our “Other Local” is above average. I already showed in my previous⁴ article why our “Other Local” is larger: because our existing $0.32/sq.ft. parcel tax brings in over $1300 per ADA. But let’s look at that blue bar. What is LCFF anyway?

LCFF or “Local Controlled Funding Formula” is a program that was enacted in 2013-14 and basically consolidates the way the state provides money to counties and creates rules for how counties then combine that money with local tax dollars. This combined amount is then doled out to school districts as their main form of funding⁵. Each district gets a different amount based on the formula. So where does Alameda rank?

In Figure 2, we see that Alameda is a little below average in terms of basic LCFF funding. The black horizontal line is the county average. Alameda received $8547 per ADA compared to the average of $8884 and we are exactly the median. The average district gets $337 per ADA more than we do right from the start. Notice though, that all of the districts that get even less LCFF are ones that pay their teachers better. Conversely, Oakland is the only district that pays teachers even less than Alameda⁴ and it receives the most LCFF per ADA in the whole county. There isn’t really a strong correlation between LCFF funding and how much a district pays its teachers.

Why do we get less LCFF? A detailed explanation will require a whole separate article, but the simple answer is that the general formula favors certain types of special needs students. For example, having more low-income and English as Second Language (ESL) students will cause more LCFF funds to be distributed to a district. Alameda has fewer of these students than many other districts⁵.

One last item to highlight is the amount of money that Alameda transfers to charter schools. As Figure 3 shows, Alameda diverts more LCFF money per ADA to charter schools from local property taxes than any other district except Oakland. Notice two key things: first, most districts, including the ones that pay their teachers better, have little or no charter school transfers. Second, if you eliminated that transfer and were able to add that money back to the overall LCFF, Alameda would actually have an above average rate of LCFF funding.

Conclusions

In our quest to find the money to pay our teachers more, we have taken a very high-level look at district revenues. Although we do get a bit less money from the state and county through the LCFF and we do transfer more to our charter schools, the amount is too small to explain our low teacher pay. Plenty of better paying districts get even less LCFF than we do (Castro Valley, Pleasanton, Dublin). And with our much larger existing parcel tax we already fill the gap⁶. So from a revenue perspective, there should be enough money. Then where does the money go?

In my next article I’ll look at expenditures. That’s where things get really interesting.

Footnotes

1. The district has scoped their argument around teacher pay to Alameda county. This is reasonable but it means I am only considering “enough money” in that context and ignoring broader questions, which also frequently crop up like, “Does California spend enough on schools?”
2. California Department of Education. “California School Accounting Manual, Part II Standardized Account Code” Structure” ftp://ftp.cde.ca.gov/fiscal/acctcode/CSAMPtII.PDF (Accessed Feb 11, 2020). See the section on Object Codes 8000–8999 starting on p.108.
3. See Addm.3 on General Fund accounting.
4. See https://alamedaclarion.com/2020/02/05/why-does-alameda-underpay-its-teachers/
5. See Addm.2 on LCFF.
6. Our combined $337/ADA deficit in LCFF plus the $550/ADA we transfer to charter schools adds to $887/ADA whereas we have seen our parcel tax raises $1364. So we already fill the gap with $477/ADA left over.