Despite one lawmaker’s assertion that it could boost funding for 90% of districts in the state, California appears to have pivoted away from an effort to fundamentally change the way it funds schools, after a report found the shift could have unexpected consequences.
Although schools plan their budgets based on the number of students enrolled in their district, California is one of seven states that fund schools based on actual daily attendance. So under the current formula, when students aren’t in school, regardless of the reason, districts lose money. Chronic student absences, meaning students miss 10% or more of the academic year, can result in a significant loss of funding.
With student enrollment declining as expenses soar, schools throughout the state have turned to budget cuts, layoffs or school closures to repair budget deficits ranging from $6 million to over $100 million. And some California lawmakers have called for changes to the way schools are funded.
But a bill introduced by Senator Anthony Portantino, a Democrat representing Burbank, took efforts one step further and directed the state to evaluate the tradeoffs of switching to an enrollment-based funding formula.
Portantino’s bill, SB 98, argued switching to an enrollment-based formula could boost funding for about 90% of school districts in the state, with the biggest boost going to districts with more low-income students, as those districts tend to have a larger percentage of chronically absent students.
The bill, signed by Newsom in 2024, directed the Legislative Analyst’s Office to submit a report to lawmakers analyzing the effects of changing the funding formula to rely on student enrollment instead of attendance.
But that report, released in January, found that while an enrollment-based formula would increase funding by more than $5 billion and primarily benefit districts that have lower attendance rates and serve a greater percentage of socioeconomically disadvantaged students, it would likely reduce student attendance in the long run and could further exacerbate student learning loss.
The LAO concluded that instead, the state should pour those additional dollars into the current funding formula to boost all school funding or specifically increase funding for schools serving a greater number of foster youth, English language learners and low-income students.
Rather than pursuing a change to its school funding mechanism, the state seems to seek to improve its current model by taking steps to reduce chronic absenteeism — pledging to halve chronic absence rates in the next five years and passing two bills to protect students from immigration enforcement, which has been found to cause a spike in student absences, especially in elementary schools.