The current California education funding system lacks transparency and is extremely difficult for parents, policymakers and taxpayers to understand. In addition, under the current system, districts receive notably different per-pupil funding rates; affluent schools often receive more funding per pupil than less affluent ones.

Last year Governor Brown successfully passed a sweeping tax increase through Proposition 30 that will lead to significant increases in revenue for California schools, projected to total $17 billion dollars over the next four years. Since Proposition 30 and Proposition 98 legally mandate through the state constitution that the majority of new tax revenue goes to the K–12 education system, the legislature has little discretion over K–12 school finance. In the 2013–2014 state budget process, the policy debate has shifted from arguments over increases in K–12 education spending to a discussion of how to allocate new K–12 spending obligations in a simpler, more equitable and transparent manner.

Accordingly, Governor Jerry Brown proposed a new school finance plan for California in the 2013–2014 budget, called “Local Control Funding Formula.” It increases funding to school districts with a larger number of disadvantaged students by financially weighting those students according to need, simplifies current byzantine school finance regulations and gives school districts more autonomy over finances.

More specifically, of every dollar allocated through the formula, 80 cents will go to the base grant for every student, 16 cents will go to supplemental grants for dis -advantaged students in every district, and 4 cents will go to a concentration grant for students in districts with more than 50 percent disadvantaged students.

While Governor Brown’s plan distributes money to school districts with larger numbers of disadvantaged students, it does not do enough to ensure that the money gets to these students’ schools or to the students themselves—aside from threatening audits or sanctions if disadvantaged students fail to meet performance targets. This is worrying, since studies of staff-based budget allocation and within-district inequities show that money already devoted to disadvantaged kids is often not reaching their individual schools, even when specific funding streams like Title I are designated for disadvantaged students.

Brown’s plan would be greatly improved in this respect by integrating the following recommendations:

1. Distribute all the extra weighted funding for at-risk and English Language Learner students on a per- pupil basis to the particular schools in which those students enroll, funneling funding for disadvantaged students directly to them, rather than to the district.

2. Authorize school principals, rather than districts, to spend the funds for their students as they see fit, according to their students’ needs.

3. Implement a modern school-level financial reporting system, ensuring that extra funding reaches the disadvantaged student and that school district finance allocations are transparent to the public.

California could easily adapt the current language in the charter school section of Assembly bill 88 or Senate bill 69, which are legislative alternatives to Governor Brown’s budget proposal, to accomplish this. Charter school student funding is weighted per pupil to customize to each student’s needs, and individual schools are held accountable for how they spend those dollars. For true accountability and equity, every school in California should have to follow charter-school reporting requirements by holding individual schools and their districts accountable for student outcomes and financial expenditures.

This is the Executive Summary of a Reason Foundation Report. Find the full report here