State’s new funding formula designed to direct additional dollars to students in need

California’s budget for 2013-14 has brought major changes to the way school funding is allocated, with the goal of channeling greater resources to the students who need them most.

At this week’s Board of Education meeting, Alan Schlichting, IUSD’s director of student support services, offered an overview of the state’s new Local Control Funding Formula and what it means for Irvine.

Here were some of the key takeaways:

The Local Control Funding Formula, or LCFF, starts with a base funding level that is the same for all districts, though the amount allocated per-student is differentiated slightly by grade level. Next comes a layer of supplemental funding in the form of an additional 20 percent of the base for each English-language learner, low-income student and foster youth.

There is a third pot of funding called a concentration grant, and that’s equal to 50 percent of the base, but only for schools and districts where English-learners, low-income students and foster youth exceed 55 percent of the total enrollment. (IUSD doesn’t qualify for the latter grant.)

Schlichting said the LCFF model has replaced the Revenue Limit formula that’s been in place for nearly 40 years, as well as about three-quarters of the state’s categorical programs, which are smaller pots of money designated for specific purposes. Under the new system, he said, school leaders — along with parents and other local stakeholders — will have greater flexibility to determine how best to use available dollars to further local priorities that improve student outcomes.

Still, the LCFF won’t be fully funded until 2020-21. Until then, school districts are expected to receive about the amount of funding they were eligible for in 2012-13, plus an additional amount each year to gradually close the gap. (To put that in perspective, the 2012-13 funding levels were well short of what they were in 2007-08, before the state’s budget crisis hit.)

Greater accountability

California’s new funding model for education also includes additional accountability measures. Under LCFF, school districts and county offices of education must each develop, adopt and annually update a three-year Local Control and Accountability Plan (LCAP) with input from parents and other community stakeholders.

The initial plan, due July 1, will based on a template adopted by the State Board of Education. Districts will be required to identify annual goals, take action and measure progress for student subgroups across multiple performance indicators, including academic achievement, school climate, access to a broad curriculum and parent engagement.

Academic priorities must be tied to each district’s spending plan, so the school board will be expected to approve the accountability plan before adopting its annual budget, Schlichting said. County superintendents will be tasked with reviewing these plans to ensure alignment of projected spending, services and goals. And county offices of education will provide technical assistance if the plans are rejected. The state superintendent of public instruction may also intervene if a school district fails to show improvement across multiple subgroups in three out of four consecutive years.

The local impact

So what does this all mean for Irvine?

It means more funding will target students with the greatest needs, including English-Learners, foster youth and low-income students. It also means the state is looking at broader benchmarks of success. Instead of simply focusing on test scores, the LCFF requires schools to develop plans to boost student engagement, increase parent involvement and create more positive learning environments. Finally, school leaders and parents will have a greater say over spending to ensure academic programs and services meet the unique needs of local students.

“We will have additional resources for students, and especially for those students who have greater needs,” Schlichting said. “We will have the opportunity to collect information from our stakeholders and make local decisions on how we’re going to move forward. There will be increased accountability, where we look at many pieces of data to determine how well our district is doing. And there will be alignment between our budget and the LCAP plan that we put together.”

Expect to see more on the NewsFlash about this topic. In the meantime, you can review Schlichting’s slide presentation here. And for even more information on the Local Control Funding Formula and the Local Control and Accountability Plan, check out these resources:

Superintendent addresses the Common Core, technology and growth in new video

Each year around this time, we like to sit down with IUSD Superintendent Terry Walker for a sort of state-of-the-district conversation. And there was no shortage of topics when we caught up with him for our interview in October.

In this five-and-a-half minute video, the superintendent discusses the new Common Core instructional standards, educational technology, the new state funding formula and the district’s rapid growth. Take a look.

IUSD adopts budget based on state plan that’s complicated but ultimately positive for schools

The IUSD Board of Education voted to adopt a budget for the 2013-14 school year on Tuesday night, and for the first time in years the forecast for Irvine and other districts looked relatively bright.

John Fogarty, the district’s assistant superintendent of business services, said IUSD’s spending plan was based on the latest projections out of Sacramento, where Governor Jerry Brown and the Legislature recently reached agreement on a brand new funding formula for K-12 education.

You may remember that the old Revenue Limit system granted each district a base level of per-student funding along with a raft of categorical payments that were tied to specific programs. The new model provides an increased base level of funding while allocating additional dollars to help support English-language learners, students in foster care and students who are eligible for free and reduced-price lunches. Fogarty said it’s expected to generate approximately $315 per student in additional revenues for IUSD.

Though there are a number of details to be revealed, including the unveiling of a new accountability system, the extra funding would appear to begin an era of recovery for California’s public schools after years of devastating cuts.

“This is a much better budget picture than we’ve seen in many years,” Fogarty said.

At the same time, he said, a convoluted accounting requirement from the state will prompt IUSD to dig into its reserves for one more year. Here’s why:

During the economic downturn, Irvine fell into an alternate funding formula known as Basic Aid, in which a district is funded by its own property taxes. This usually means more revenue, but in the interest of equity, the state decided in 2009 that it would annually scoop away any extra funding from Basic Aid districts. Because California waits a year to take these dollars, IUSD will be stripped of about $10 million for the 2012-13 school year sometime in 2013-14, Fogarty said.

With that in mind, the spending plan approved for IUSD on Tuesday night outlines $233.2 million worth of expenditures – both restricted and unrestricted – against $225.7 million worth of total revenue. The difference will be offset by reserve set-asides, and Fogarty predicted that positive ending balances will return in 2014-15 and 2015-16, marking the end of deficit spending. (Click on the graphic above to view his presentation.)

Here are some other takeaways from Tuesday’s budget discussion:

•  Unlike the previous Revenue Limit funding model, the state is now differentiating base per-student funding depending on student grade levels. In addition to that base, supplemental funding equal to 20 percent of each student’s base grant will be allocated to support English learners, students from low-income families and those in foster care. A separate concentration grant will benefit districts in which at least 55 percent of students meet the above criteria.

•  Fogarty cautioned that challenges remain, including implementation of the new Local Control Funding Formula and increases in health care costs.

•  IUSD could also fall in and out of Basic Aid over the next few years as new residential developments and an influx of new students shake up revenue calculations, Fogarty said. The district is projecting 998 new students this year, followed by 1,437 in 2014-15 and 1,941 in 2015-16.

•  Revenue in California is up about $4.5 billion through April, partly as a result of the passage of Proposition 30. The state’s Legislative Analyst’s Office appears to be more optimistic about new revenue than Governor Brown, who is taking a more conservative approach, Fogarty said.

•  The governor and the Legislature have agreed to allocate $1.25 billion to help school districts implement the new Common Core instructional standards. Districts will be asked to develop specific plans for utilizing these funds.

Board approves resolution seeking changes to governor’s plan for education funding

The IUSD Board of Education on Tuesday adopted a resolution calling for changes to the governor’s plan to overhaul education funding.

Under Governor Jerry Brown’s “Local Control Funding Formula” proposal, supplemental funding would be provided to school districts based on their proportion of English-language learners and students who are eligible for free and reduced-price lunches. However, base funding would be benchmarked at levels from 2007-08, and there are no provisions to restore billions of dollars in recent cuts to separate categorical programs.

While board members agreed that the system for funding education should be improved and applauded the governor’s efforts to address the greater needs of specific student groups, they acknowledged that the first priority of educational leaders is to ensure that base revenue is sufficient to deliver core content and services to students.

The resolution adopted by the board recommends restoring the losses public schools have endured before earmarking new funds for specific needs. It also states that any reallocation of funds should target students who need additional resources rather than districts or schools that serve a percentage of students in need.

In March, Assistant Superintendent of Business Services John Fogarty shared revenue and expenditure assumptions with the board and outlined the potential impacts of Governor Brown’s proposal.

Under Brown’s plan, Fogarty said, IUSD would receive $2.2 million less in 2013-14 than it would under the current Revenue Limit calculation, and that number swells to $31.5 million in 2021, when the Local Control Funding Formula is projected to be fully implemented. Fogarty noted at that time that the formula was a starting point for state deliberations, and it could be altered significantly through the legislative process.

Meanwhile, the board on Tuesday also adopted a separate resolution opposing the governor’s plan to merge funding for regional occupational programs and career technical education with base revenue for school districts. The move would effectively eliminate the dedicated funding for both programs, putting them at risk in many districts.

“The real issue that we are concerned with is that if the ROP dollars are mixed in with base dollars then, statewide, we are going to be reducing the number of ROP courses that are offered to students,” said board member Sharon Wallin, who also sits on the board for Coastline ROP.

“It’s ludicrous that we would be willing to decimate ROP in the state,” added board member Michael Parham.

The resolution notes that ROP and career technical education courses are integral to a comprehensive instructional program. In addition, research has shown that these programs contribute positively to academic motivation, engagement and performance, resulting in increased high school graduation rates.

IUSD cautiously projects an increase in funding in 2013-14, though challenges remain

The Board of Education voted to certify IUSD’s Second Interim Report as “positive” on Tuesday night, meaning the district expects to meet all of its financial obligations for the current year and two subsequent years.

Before the vote, Assistant Superintendent of Business Services John Fogarty shared revenue and expenditure assumptions with board members and discussed the potential impacts of Governor Jerry Brown’s latest budget proposal.


Fogarty said the centerpiece of Brown’s spending plan for public schools is what’s known as the “Local Control Funding Formula,” which would provide additional dollars to school districts based on their proportion of English-language learners and students who are eligible for free and reduced-price lunches. Though the concept may be well intentioned, some districts would receive less funding than they would qualify for under the traditional Revenue Limit system.

In fact, under Brown’s plan IUSD would receive $2.2 million less in 2013-14 than it would under the current Revenue Limit calculation, and that number grows to $31.5 million in 2021, when the Local Control Funding Formula is projected to be fully funded. Still, Fogarty pointed out that the new formula is merely a proposal at this point, and it could be altered significantly through the legislative process.

Given that uncertainty, school districts are being advised to budget conservatively, and IUSD filed its Second Interim report assuming a cost-of-living increase of about $89 per student in 2013-14 after years of significant reductions. Factoring in a separate increase in block grant funding for mandated programs, Irvine could receive an overall bump of $3 million to $5.7 million next year, depending on how the governor’s plan shakes out.

While that is welcome news, Fogarty cautioned that IUSD continues to operate with a structural deficit, meaning expenditures are outpacing revenues. The district has strategically relied on one-time reserve funds to preserve valuable programs and staff during the budget crisis, but those funds won’t last forever, he said.

“We’ve suffered tremendous reductions over the last four years, and we appreciate the efforts of our teachers, leaders and staff to maintain excellence in and out of the classroom,” Fogarty said this week. “Certainly challenges remain, but our hope is that the worst is behind us.”

Every school district in California is required to examine and certify its financial condition twice each fiscal year. Positive is the ideal certification, while “qualified” indicates a district may not be able to meet its financial obligations for the current year and the two subsequent years. A “negative” certification means a district will not be able to meet its financial obligations over this span.

Budget Notebook: The passage of Proposition 30 means no furlough days for the current year


This month’s election has finally brought some clarity to IUSD’s budget outlook, and perhaps given rise to a little optimism.

Specifically, the passage of Proposition 30 has prevented midyear “trigger cuts” at the state level by generating revenue for schools and other programs, as California voters have agreed to temporarily raise taxes for high-income earners while increasing the sales tax through 2016.

That doesn’t mean a windfall of new funding for our schools by any stretch, but it does stop Sacramento from leveling additional cuts in the middle of the current school year. It also means our district won’t need to consider furlough days for the current school year. Considering what this loss of instructional time would have meant for our students and staff, we consider this a huge step in the right direction.

You may recall that state lawmakers based this year’s spending plan on the assumption that Proposition 30 would win approval, but the initiative’s passage was far from a sure thing, leaving school districts to ponder twin scenarios. Most developed their own budgets with contingency plans that included furlough days.

While Proposition 30 prevents additional losses this year – $12.2 million for Irvine Unified alone – it is important to recognize that this measure does not add new dollars or restore prior cuts. Meanwhile, our district, like most others in the state, continues to operate with a structural deficit as a result of previous reductions, which have shrunk our funding envelope by 22.3 percent since 2008.

Our district has made a strategic choice to temporarily backfill these shortfalls with one-time reserve funds to ensure today’s students aren’t shortchanged by the sluggish economy. But reserve funds are similar to personal savings in that they won’t last forever. While projections indicate we may be able to maintain current spending levels through 2013-14 without new revenue, our deficit will have to be addressed sooner or later.

We will also continue to monitor talks out of Sacramento, where Governor Jerry Brown is expected to release his next budget proposal in January. A revised version of his spending plan will likely follow in May, and we’re anticipating that a new budget will be in place by the summer.

In the meantime, we are happy to report that Irvine’s own school funding initiative, Measure BB, also passed on Nov. 6. This local measure will significantly increase the amount of funding IUSD generously receives from the City of Irvine through the Educational Partnership Fund, which supports health and guidance needs, and the Challenge Match Grant, which directly impacts classroom instruction. The latter grant is a dollar-for-dollar match with the Irvine Public Schools Foundation, and I encourage you to learn more about the foundation’s fundraising efforts by visiting

I don’t have to tell you that the last few years have not been easy, yet our district has remained a great place for kids thanks to the leadership of our Board of Education, the dedication of our tremendous employees and the generous support of this community. We remain as committed as ever to making every penny count in Irvine, and, as we discussed at our most recent Board of Education meeting, we are continuing to pursue new opportunities for revenue enhancement. Expect to hear more on this important topic.

Because there will always be some volatility at the state level, I can’t promise that there won’t be occasional setbacks for public education. But I have never been more excited to be a part of this organization, which continues to explore the potential of new innovations and technologies capable of leveraging the talents of our extraordinary staff and maximizing our support for each student.

While we can only hope that the darkest days of California’s fiscal crisis are behind us, I can say with confidence that the best is yet to come for the Irvine Unified School District.

Board Briefs: School board continues to pursue opportunities for new revenue

Following an emotional presentation marking the departure of two longtime trustees, the IUSD Board of Education on Tuesday engaged in a lively discussion over revenue enhancement opportunities.

Last year, the board directed members of the district’s Finance Committee to recommend revenue-generating options to supplement state funding, which has dropped precipitously as a result of California’s budget crisis. A smaller subcommittee researched best practices around the country and ultimately came up with a number of possibilities, including student parking fees, collaboration with the Irvine Ranch Water District, alumni donations, mandated tuition for visiting foreign students, naming rights for facilities and a parcel tax.

Superintendent Terry Walker told the board on Tuesday that some of the above strategies were already in play. For example, he said, IUSD’s high schools collect parking fees, and the district continues to meet with IRWD representatives to explore potential partnerships.

Meanwhile, he said, two recommendations on the list have potential to bring in additional funds: Naming opportunities for facilities, including gyms, stadiums, theaters and media centers, and a technology bond or parcel tax.

Board members directed staff to research the viability of these options before reporting back at a future meeting.

Kuwabara and McInerney honored

Earlier in the evening, board members and district staff celebrated the service of Sue Kuwabara and Carolyn McInerney, who are each stepping down after 12 years.

Kuwabara, who has served on a number of influential boards, coalitions and committees, including the CIF Southern Section Executive Board, was praised for her empathy, insight and compassion. McInerney, a founding member of the Irvine Public Schools Foundation who was later appointed to the California Commission on Teaching Credentialing by Gov. Arnold Schwarzenegger, was similarly lauded as a thoughtful and fair-minded leader who brought candor and accountability to the board.

“Beyond just the 12 years you’ve been on the school board, your leadership goes back decades,” Superintendent Walker told the departing trustees, who were presented with special crystal awards and flowers.

Kuwabara and McInerney will be succeeded by newly elected board members Lauren Brooks and Paul Bokota, who are set to be sworn in on Dec. 11 at the board’s final meeting of the year.

Board Briefs: IUSD approves a spending plan for 2012-13 with contingencies

At its final meeting before the start of a new fiscal year, the IUSD Board of Education this week voted unanimously to adopt a spending plan for 2012-13.

The budget, approved Tuesday night, outlines $214.6 million worth of expenditures – both restricted and unrestricted – against $207.6 million worth of total revenue. The difference of about $7 million will be offset by reserve set-asides, according to John Fogarty, assistant superintendent of Business Services.

IUSD has been forced to make approximately $38 million worth of onetime and ongoing reductions in recent years as a result of California’s budget crisis, which has yet to be resolved. Though the newly adopted state budget calls for flat funding for K-12 schools, Fogarty pointed out that it’s heavily dependent on a November ballot initiative that would temporarily raise taxes for high-income earners and increase the sales tax by 0.25 percent through 2016.

That’s created twin budget scenarios for local districts, he said. If the initiative passes, schools would be “held harmless” with relatively flat funding. If voters reject the temporary taxes, public schools would be cut by about $5.5 billion, and that would translate into an ongoing annual loss of approximately $12.2 million for Irvine.

IUSD has set aside funds and implemented a freeze on all non-essential spending to help soften the impact of potential midyear cuts in 2012-13, yet the district still projects a potential shortfall of more than $3.5 million under the worst-case scenario. As a result, IUSD and its employee groups have agreed to take up to seven furlough days if the tax initiative fails.

Fogarty also noted the district has been operating with a structural deficit that must ultimately be resolved, regardless of what happens in November. Without new revenue or additional reductions, he said, IUSD faces significant shortfalls in 2013-14 and beyond.

To view the slide presentation that was shown to the board, click here, or on the graphic above.

Continuous Improvement Efforts

Board members unanimously approved IUSD’s Continuous Improvement Efforts for 2012-13 and thanked the staff members and students who collaborated on the comprehensive educational guide.

Crafted and revised by members of IUSD’s Curriculum Council under the leadership of Assistant Superintendent Cassie Parham, the Continuous Improvement Efforts document serves as an academic roadmap for teachers and administrators to support instructional goals.

The text specifically promotes the development of essential capacities in the areas of knowledge, communication, problem-solving and relationships/interpersonal skills. It also establishes a districtwide goal to align instruction with the new California Common Core standards, and it asks schools and teachers to set their own goals to support the essential capacities. The document, available online, concludes with guiding principles and guiding practices.

Other action taken

The board also authorized Fogarty to enter into negotiations with HMC Architects as the design firm for the district’s fifth comprehensive high school and approved IUSD’s Strategic Initiatives for 2012 through 2017. The Strategic Initiatives, which can be accessed here, spell out the district’s core values, essential beliefs and strategies for moving forward.

Budget Notebook: IUSD looks at possible furlough days amid hazy state budget outlook


Every May, for better or for worse, the budget picture becomes a little clearer for school districts, as the state begins to solidify its spending plan for the next fiscal year.

Unfortunately, that doesn’t seem to be the case this time around.

With California’s budget deficit ballooning and the governor pinning his revenue hopes on a November ballot initiative, school districts are left with a growing number of uncertainties for the fiscal year that begins July 1. Most districts – if not all – are planning for the very worst.

IUSD is taking a more strategic approach. Having already made $38 million worth of cuts in recent years, we are working closely with our employee groups to secure up to seven furlough days, which could be triggered next year depending on how much we receive from the state in 2012-13.

We recognize that furlough days are far from an ideal solution, as they represent a loss of instructional days for our students and reduced compensation for our hard-working employees. They can also prove inconvenient for families that like to plan ahead. But for a majority of districts in Orange County, furloughs have become a stark reality over the last few years, and we view them as a necessary means to preserving flexibility and maintaining our core instructional programs during this fiscal crisis.

On May 15, our Board of Education formally ratified a tentative agreement between our district and the Irvine Teachers Association that includes seven potential furlough days for 2012-13, and similar negotiations are underway with our other employee groups. It is my hope that we won’t have to use any of them. At the same time, I want to thank all of our employees for their willingness to work together to help resolve our fiscal challenges, and for making significant sacrifices that have spared jobs and maintained our standing as a world-class school system for our 28,000 students. Words are almost insufficient to express my admiration and appreciation for the educators and support staff at every level of this organization.

As I mentioned previously, lawmakers in Sacramento have offered little in the way of concrete information as we approach the final weeks of the school year. Yet, with our district’s spending plan due in June, here’s what we do know:

State tax receipts are coming in lower than expected, and some earlier state cuts have been blocked by the federal government. As a result, California’s deficit has nearly doubled to approximately $16 billion, and that means the potential of even deeper cuts.

Meanwhile, Governor Jerry Brown is hoping to augment the revenue side of the ledger with a ballot initiative that would temporarily raise taxes for high-income earners and increase the sales tax by 0.25 percent through 2016. If that initiative passes in November, schools would be “held harmless” with relatively flat funding. If voters reject the tax increases, public schools would likely be cut by about $5.5 billion, and that would translate into a loss of approximately $11.5 million for IUSD.

Fortunately, our district has set aside some funds and implemented a freeze on all non-essential spending to help blunt the impact of midyear reductions. But under our worst-case scenario, the one in which we’re cut by an additional $11.5 million, we are projecting a shortfall of more than $5 million for 2012-13. Furlough days would bridge this gap, though a structural deficit would still need to be addressed for future years.

If there’s any good news, it’s that class sizes are not set to increase in IUSD, and our popular art, music and science programs are not in jeopardy. Not every district can make this claim, yet we have managed to preserve our cornerstone instructional programs thanks in large part to the leadership of our Board of Education, sacrifices made by our incomparable staff and contributions from community partners, including the Irvine Public Schools Foundation, the City of Irvine and the Irvine Company. I would also like to thank you, the members of this community, for helping us weather this storm with your volunteer time, your valuable ideas and your generous donations to IPSF, which has worked with the City in recent years to pay for valuable class-size support.

In good times and bad, this community works because each of you comes together on a daily basis to collaborate on solutions that benefit our students. I have no doubt that there are brighter days ahead for our state’s economy and, in turn, our district’s finances. In the meantime, I thank you for all that you do to help our schools.

IUSD Board of Education discusses state budget implications, certifies financial report

With IUSD projecting a shortfall of about $5.3 million for the next fiscal year, the Board of Education voted this week to certify the district’s latest financial report as “qualified,” meaning adjustments will be necessary to present a balanced budget in June.

John Fogarty, assistant superintendent of business services, said school districts are required to base their multi-year projections on the governor’s January budget proposal, which is heavily reliant on a November tax initiative. If that initiative is rejected by voters, public education would be reduced by $4.8 billion, or about $370 per student, according to Governor Jerry Brown’s plan. Including a proposed transportation cut, Irvine would lose approximately $11.5 million.

IUSD has taken proactive steps to blunt the impact of the potential reductions, including the implementation of a budget freeze and the suspension of deferred maintenance contributions. The district was also able to add to its reserves after cuts for the current year came in lower than expected. Using these onetime dollars to backfill the larger structural deficit, IUSD now faces a shortfall of approximately $5.3 million for 2012-13, Fogarty told the board.

California requires every school district to examine and certify its financial condition as “positive,” “qualified” or “negative” in financial reports that are submitted twice during each year. (First Interim Reports are filed in December and Second Interim Reports are submitted in March.) “Positive” is the ideal certification, signaling that a district will be able to meet its financial obligations for the current year and two subsequent years, while “qualified” indicates a district may not be able to meet its obligations without additional action. A district would file a “negative” certification if it was unable to balance its budget.

Fogarty expressed confidence that IUSD will be able to produce a balanced budget by the June 30 deadline after making the necessary reductions and adjustments. At the same time, he said, the state requires all districts to certify their Second Interim Reports based on current projections.

To read a PDF recap of Tuesday’s meeting, click here.