This change could deliver billions of more dollars to California schools. Here’s the tradeoff

By Carolyn Jones, CalMatters

For years, California schools have pushed to change the way the state pays for K-12 education: by basing funding on enrollment, instead of attendance. That’s the way 45 other states do it, and it would mean an extra $6 billion annually in school coffers.

But such a move might cause more harm than good in the long run, because linking funding to enrollment means schools have little incentive to lure students to class every day, according to a report released Tuesday by the nonpartisan Legislative Analyst’s Office. Without that incentive, attendance would drop, and students would suffer.

If the Legislature wants to boost school funding, analysts argued, it should use the existing attendance-based model and funnel more money to schools with high numbers of low-income students, students in foster care and English learners.

When it comes to attendance, money talks, the report noted. For more than a century, California has funded schools based on average daily attendance – how many students show up every day. In the 1980s and ’90s, the state started to look at alternatives. A pilot study from that time period showed that attendance at high schools rose 5.4% and attendance at elementary schools rose 3.1% when those schools had a financial incentive to boost attendance.

This is not the time to ease up on attendance matters, the report said. Although attendance has improved somewhat since campuses closed during the pandemic, it remains well below pre-COVID-19 levels. In 2019, nearly 96% of students showed up to school every day. The number dropped to about 90% during COVID-19, when most schools switched to remote learning, but still remains about 2 percentage points below its previous high.

Attendance is tied to a host of student success measurements. Students with strong attendance tend to have higher test scores, higher levels of reading proficiency and higher graduation rates.

“It’s a thoughtful analysis that weighs the pros and cons,” said Hedy Chang, president of the nonprofit research and advocacy organization Attendance Works. “For some districts there might be benefits to a funding switch, but it also helps when districts have a concrete incentive for encouraging kids to show up.”

True cost of educating kids

Schools have long asked the Legislature to change the funding formula, which they say doesn’t cover the actual costs of educating students, especially those with high needs. The issue came up repeatedly at a recent conference of the California School Boards Association, and there’s been at least one recent bill that addressed the issue.

The bill, by former Sen. Anthony Portantino, a Democrat from the La Cañada Flintridge area, initially called for a change to the funding formula, but the final version merely asked the Legislative Analyst’s Office to study the issue. The bill passed in 2024.

A 2022 report by Policy Analysis for California Education also noted the risks of removing schools’ financial incentive to prioritize attendance. But it also said that increasing school funding overall would give districts more stability.

Enrollment is a better funding metric because schools have to plan for the number of students who sign up, not the number who show up, said Troy Flint, spokesman for the California School Boards Association.

He also noted that schools with higher rates of absenteeism also tend to have higher numbers of students who need extra help, such as English learners, migrant students and low-income students. Tying funding to daily attendance — which in some districts is as low as 60% — brings less money to those schools, ultimately hurting the students who need the most assistance, he said.

“It just compounds the problem, creating a vicious cycle,” Flint said.

To really boost attendance, schools need extra funding to serve those students.

Switching to an enrollment-based funding model would increase K-12 funding by more than $6 billion, according to the Legislative Analyst’s Office. Currently, schools receive about $15,000 annually per student through the state’s main funding mechanism, the Local Control Funding Formula, with an additional $7,000 coming from the federal government, block grants, lottery money, special education funds and other sources. Overall, California spent more than $100 billion on schools last year, according to the Legislative Analyst.

Motivated by money?

Flint’s group also questioned whether schools are solely motivated by money to entice students to class.

“Most people in education desperately want kids in class every day,” Flint said. “These are some of the most dedicated, motivated people I’ve met, and they care greatly about students’ welfare.”

Josh Schultz, superintendent of the Napa County Office of Education, agreed. Napa schools that are funded through attendance actually have lower attendance than schools that are considered “basic aid,” and funded through local property taxes. Both types of schools have high numbers of English learners and migrant students.

“I can understand the logic (of the LAO’s assertion) but I don’t know if it bears out in reality, at least here,” Schultz said. “Both kinds of schools see great value in having kids show up to school every day.”