Alameda County Students and Families
Joint Statement re Regional Cost Supplementation
to Account for Varying Costs of Living and Varying Costs of Providing Services
to Reduce Fiscal Deficits in Alameda County School Districts

WHEREAS:
1. The original blueprint for the Local Control Funding Formula (“LCFF”) incorporated regional cost differences – second in importance only to disadvantaged students’ needs – in the proposed “more rational, more equitable” school finance system. (“Reforming California School Finance,” Alan Bersin, Michael Kirst, Goodwin Liu, April 2008);
2. The inclusion of regional costs was omitted from the LCFF implementation in 2013 as a simplifying decision;
3. Alameda County bears a high regional cost burden, measurably above the state average in all major comparisons:
1. 121% (Making Ends Meet, California Budget & Policy Center, December 2017: $92,267 vs. $75,952 for a two-working parent family of four)
2. 109.4% (MIT Living Wage, indexed)
3. 106% (California Department of Education, Child Care Reimbursement study)
4. 118% (US Housing and Urban Development Section 8 Voucher, 2 BR)
5. 114% (California Comparative Wage Index, 2014 Update [Los Angeles County as base at 100%])
6. 108% (California Comparative Wage Index, 2006 [LA as base at 100% -- this was the study used in the Kirst whitepaper above])
7. 106% US Bureau of Economic Analysis
4. Based on the second indexed measure listed above, the MIT Living Wage, the most predictive index across all California counties, Oakland Unified School District (“OUSD”) is suffering a $35.3 million annual regional cost deficit. This is compared with equally disadvantaged districts in the 48 average- or low-regional cost counties;
5. This ongoing structural deficit has contributed significantly to OUSD’s fiscal challenges, which has led to decisions to close schools, loss of students to charter schools, deterioration of parent-teacher-board relations, and teacher turnover;
6. OUSD Superintendent’s proposed Citywide Plan envisions potentially closing 24 of Oakland’s 87 public schools (27.6% of Oakland’s public schools!), which will leave Oakland with only 63 public schools and 45 charter schools managed by privately run but publicly funded school boards;
7. OUSD has begun voting to close public schools;
8. OUSD is facing an imminent teacher strike in which the teachers are demanding smaller class sizes and increased livable salaries;
9. LCFF-funded school districts in ten other high-cost counties are suffering similar strictures and deficits;
10. While property tax revenues keep pace with regional costs, providing the four highest-cost counties with “excess” Educational Revenue Augmentation Funds that are distributed to non-education agencies, rather than serving the needs of their most disadvantaged school districts;

THEREFORE, let it be resolved that the undersigned organization calls upon our California Governor and State Legislators to effect a supplement for regional costs in the Local Control Funding Formula, substantially in form following (new text in bold):

Regional Cost Supplement
Proposed Education Code Language

SEC. 28 Section 42238.02, subdivision (d), section (2) of the Education Code is amended to read:

(2) (A) In each year the grade span adjusted base grants in paragraph (1) shall be adjusted by the percentage change in the annual average value of the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States, as published by the United States Department of Commerce for the 12-month period ending in the third quarter of the prior fiscal year. This percentage change shall be determined using the latest data available as of May 10 of the preceding fiscal year compared with the annual average value of the same deflator for the 12-month period ending in the third quarter of the second preceding fiscal year, using the latest data available as of May 10 of the preceding fiscal year, as reported by the Department of Finance.

(B) Commencing with the 2019-20 fiscal year and for each fiscal year thereafter, the adjusted base grant in subparagraph (2) (A) shall be increased in counties where high labor, housing, and regional cost conditions prevail, to approximate a point where their education dollars have the same purchasing power as generally prevail in the state. The total average daily attendance of all districts and charter schools in the counties included shall represent no more than 35% of statewide average daily attendance The adjusted base grant for each school district and charter school in the following counties will be increased by the percentages shown, or as stipulated by the Legislature no later than May 10 of the year prior to the fiscal year concerned (for example, on or before May 20, 2020 for the 2021-22 fiscal year):
Alameda County 9.4%
Contra Costa County 9.4%
Marin County 23.8%
Orange County 3.2%
San Diego County 2.0%
San Francisco County 23.8%
San Mateo County 23.8%
Santa Clara County 10.1%
Santa Cruz County 3.4%
Ventura County 2.3%