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February 28, 2017

4 min

Method Schools Team

An Overview of Per Student Funding in the United States and California for Traditional and Charter Schools

The United States Constitution left the responsibility for funding public schools up to state and local governments.

Due to the importance education plays in establishing and maintaining a powerful nation, the federal government, beginning in 1965 with the Elementary and Secondary Education Act (ESEA), assists the states and schools financially.

How much money individual schools receive within each state depends on the number of students enrolled. This is known as per student funding.

How Per Student Funding Works

Individual states develop funding formulas to determine how much money a state allocates to each school district. Each of these formulas uses per student funding as a foundation.

Foundation/Base Formula

25 states and the District of Columbia use the Foundation/Base formula. In these states, each school receives a base amount of money for every student. Once the state or district determines that amount, the state allocates additional money based on individual student needs.

Schools and districts with special education students, for example, or English Language Learners (ELL) students receive additional funds for those students.

Modified Foundation/Base Formula

12 states use a Modified Foundation/Base formula to determine per student funding. The modified formula differs from the traditional formula insomuch that each district in these states use different criteria to determine the base-level amount.

As with the traditional formula, schools receive additional spending per students with special needs.

Teacher Allocation Formula

7 states fund their schools based on the number of teachers, administrators, and support staff required to effectively run the school as determined by student enrollment.

The Teacher Allocation formula serves the same function as the other two methods since the number of students in a school directly correlates to the number of teachers, administrators, and support staff needed. In addition, schools with large numbers of at-risk, ELL, and special education students require more teachers and, therefore, would receive more money.

Other Funding Methods

2 states fund their school districts based on the previous year spending. Districts in these two states receive the same amount of funding as the previous year, plus an increase for inflation.

2 states use the Dollar Funding Per Student method, which is similar to the Foundation/Base Formula, except that the state legislature stipulates the exact amount per student.

Hawaii, consisting of a single school district, uses a weighted student formula to fund individual schools.

California's Local Control Funding Formula

California's Local Control Funding Formula (LCFF) dictates funding in California schools. The primary goal of the LCFF is to improve academic outcomes by targeting more money to school districts that serve high-needs students. The law also strives to give local school districts more authority to decide how to spend education dollars, and hold them accountable for getting results. In California, funding goes to school districts rather than individual schools.

According to California's EdSource, "money from the Local Control Funding Formula accounts for about 80 percent of general funding that districts get from the state." The LCFF base funding formula provides between $7,000-$9,000 per student as a base.

The average total amount California school districts receive on a per pupil basis is just over $9,500, according to the U.S. Census Bureau Annual Survey of School Systems. This is below the national average of just under $13,000.

California's Local Control Funding Formula equalizes funding for charter schools and traditional school districts. Here's a simplified breakdown of charter and traditional school funding.

  • Schools receive a base grant for each student enrolled.
  • Schools receive a supplemental grant for students who qualify for free and reduced-price meals or are English learners, homeless, or in foster care.
  • Schools receive an additional bonus if the percentage of supplemental grant students exceeds 55%. Charter schools, however, only receive the additional bonus if both the school and the local school district exceeds the 55% threshold.

Funding Charter Schools

Charter schools are public schools that function outside of school districts. Because they are public schools, money for charter schools come primarily from public funds. How much public funds a school receives is based on a per student formula.

The methods and the amount of funding charter schools receive, in comparison to traditional public schools, depends on the state and, in some cases, depends on the region within the state.

According to the Center for Education Reform (CER), few states fund charter schools on an equal basis with traditional public schools, even those with strong charter school laws.

Nationwide, charter schools receive approximately 64% per pupil compared to non-charter public schools.

How Charter Schools Are Funded in California

California funds charter schools using one of two methods.

  • Locally Funded. Locally funded schools receive funding through their authorizing district or county office. Districts sometimes refer to these schools as dependent charter schools.
  • Direct Funded. Directly funded schools receive funding directly from the state. Districts sometimes refer to these schools as independent charter schools.

According to the Education Commission of the States, California charter schools "receive a combination of state aid and local funds according to the same weighted student funding formula applied to traditional public schools."

Although California legislates equality between per student funding for traditional and charter schools, it is important to note that charter schools do not have equal access to facilities or facilities funding. Charter schools often secure their own facilities, using public and private financing, or donations.

In addition, charter schools rarely have access to local school bonds or certain types of taxes that benefit traditional schools. Charter schools are also denied access transportation and other programs.

Although Proposition 39 ""requires school districts to provide charter schools that serve 80 or more in-district students with “sufficient” facilities that are “furnished and equipped” and reasonably close to where the charter school wishes to locate," compliance varies among districts.

Despite these funding disadvantages, charter schools nationwide and in California continue to serve students with innovation, instruction, and lower student-teacher ratios. In fact, charter schools nationwide spend more money per pupil than they receive, mostly as a result of fundraising and private donations.

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