For Equity’s Sake: Fix the School Facility Program

Ten years ago California boldly redesigned its way of funding K-12 education. Enacted in 2013, the Local Control Funding Formula (LCFF) allocates a greater share of aid to local school districts for each of their students who is a member of a disadvantaged group, including those who are English Learners, are unhoused or reside in a foster home, or whose household reports income below the threshold of poverty. In doing so, California collapsed dozens of State-defined funding categories into just three – base, supplemental, and concentration funds – that are weighted in proportion to students’ needs. 

Prior to 1978, California school districts raised and spent school funds locally, a system that produced gross inequality in the basic resources available for students. Ever since, the State has tapped its General Fund to support core programs and operations at all public elementary and secondary (K-12) schools. As its name suggests, LCFF restored some discretion to local districts for how State education dollars are used; nonetheless, LCFF aims to increase equity by targeting resources for disadvantaged students, especially in districts where socioeconomic disadvantages are most prevalent. 

But until California adopts a similar approach to funding its aging school facilities, the promise of educational equity will remain unfulfilled. Equitable funding to modernize school facilities is the great unfinished work of the State’s school finance revolution.  

After 10 years of experience, California’s educators, policy actors, and research scholars remain in strong  consensus around the goals and principles  underlying the LCFF.

LCFF was a landmark policy that transformed California’s public education funding landscape. It institutionalized a structure founded upon equity and collective accountability by redistributing funding based on targeted student groups.

LCFF has set a national model for equitable school finance laws.   

Support for LCFF also arises from  research .

The evidence suggests that money targeted to students’ needs can make a significant difference in student outcomes and can narrow achievement gaps.

Since 1998, California has boosted investment in K-12 school buildings and grounds via the School Facility Program (SFP). Voter-approved ballot initiatives have generated $43 billion in State general obligation bonds to finance the program, to which Governor Newsom has added about $2 billion from the General Fund since 2021.  SFP supports both new school construction and modernization projects such as renovating classrooms, re-roofing, or replacing integral building systems including heating, ventilation, and air conditioning (HVAC). SFP supports these periodic larger “capital” projects while LCFF funding goes towards ongoing “operating” costs.

Most, but not all, of California's 938 local K-12 school districts (also known as local education agencies, or LEAs) have received some funding for their capital needs through SFP.

The interactive maps below show elementary and unified K-12 districts that received new construction funding, districts that received modernization funding, and districts that received any type of SFP support between  1998 and 2022. The maps make clear that SFP has had broad reach across the state.

Click on the maps to make them larger and select individual districts to see a pop up of their information. 

Even so, the State plays only a supporting role in funding school facilities, as grants from SFP augment funds raised by local school districts. In fact, since SFP began in 1998, districts have raised nearly three dollars for every dollar contributed by the State – $125 billion to $43 billion. Between 2009 and 2019, local dollars accounted for 84% of capital expenditures by California’s school districts. General obligation (G.O.) bonds financed by residential property assessments were the main source of the locally-contributed funds.

And the funding was inadequate to ensure students the opportunity to learn in healthy, modern conditions.

Analyzing 2018-19 School Accountability Report Card (SARC) data collected by each school district, the Public Policy Institute of California found that:  38 percent of California students go to schools that do not meet minimum facility standards ; 25% attended schools with damaged floors, walls, or ceilings; and 14% went to schools with malfunctioning electrical systems. Fifteen percent of students attended schools that had at least one extreme deficiency, with underlying issues like gas leaks, power failures, and structural damage. Another analysis by researchers at Lawrence Berkeley National Labs and UC Davis in 2020 found that only  15% of classrooms had healthy indoor air ventilation .

What’s more, if we consider how the environmental impacts of climate change are multiplying and intensifying, putting school facilities under unimagined degrees of stress from heat, wildfire smoke, and other extreme conditions, then we have to suppose the State's facility standards, which date to 2007, no longer match current conditions and needs. As a result, it’s likely that  more than 38% – perhaps more than half – of California students are going to schools that are less than fully equipped to safeguard their health and safety. 

This matters very much, because  excellence and equity in K-12 education begin with quality and resilience in school facilities.  Characteristics of a school’s physical environment – for example, moderate indoor temperatures and well-ventilated and filtered indoor air – are linked to improved student engagement, concentration, cognition, and performance. 

I n Los Angeles, for example, upgrading school facilities produced up to 10% gains in student achievement.  Conversely, poor facility conditions have been found to hamper teachers’ delivery of effective instruction, degrade the social climate of the school, and  encourage student absenteeism.  As further evidence, consider the COVID-19 pandemic. COVID overwhelmed California’s K-12 schools, especially their indoor air quality systems. Facing a deadly airborne pathogen, public health authorities shuttered the schools. The resulting disruptions to children’s learning, social development, and emotional health still require tending by teachers, caregivers, and communities today.  And learning loss measurably widened achievement gaps between Black, Hispanic, and Indigenous students and their White peers .

Now, like a permanent pandemic, climate change is a force multiplier that deepens the disadvantages faced by students in low-wealth communities and communities of color,  where they are both more likely to experience extreme heat and less likely to be protected at school by high-performance air conditioning and ventilation . Learning gaps linked to these inequitable conditions will persist, and likely worsen, unless all schools are prepared to mitigate climate-related hazards and stay open, protecting students’ and teachers’ health even as surrounding conditions change.

Actually, it’s worse than that. Under current rules, the distribution of SFP funding is regressive: disadvantaged students get the least help. 

The  Public Policy Institute of California found  that, since 1998, school districts with students from lower-income households received $860 less, per student, from the State for their facilities projects than districts with students from higher-income households. 

Districts also had over $800 less to spend on facilities for each Latino student than for each White student, and nearly $700 less for each Black student than for each White student.

These inequities come into sharper focus when we focus on modernization projects separately from new construction. 

In our own research – part of the second wave of  “Getting Down to Facts”  studies in 2018 – we found that districts receiving the most SFP modernization funds were those with the highest local property values: on average, values nearly 3 times greater than districts receiving the least per-student funding. In dollar terms, districts in California’s wealthiest communities got $4,000 - $5,000 more, per student, to modernize their facilities than districts in the least affluent communities. 

These patterns of funding inequity were further confirmed in a 2022 report by the California State Auditor, who  concluded :

...that the State can improve the facilities program by increasing funding and making changes to improve equity in the way K‑12 facility modernization is funded."

School facility modernization is especially important in California, for at least three reasons:

1.  K-12 enrollment is declining  in many parts of the state, so there is less need for new school construction, to accommodate growth, than there is need to extend the life and performance of existing facilities. A typical California K-12 school is more than 50 years old.

2. Modernization is the key to  creating sustainable, resilient schools that safeguard students’ health and learning against climate-driven threats .

For example, schools can:

• Provide their own steady, emissions-free power by installing onsite solar and battery storage.

• Improve classroom air quality with high-efficiency, emissions-free HVAC systems using electric heat pumps.

• Protect against heat exposure by replacing blacktop with shaded, heat-dispersing green schoolyards.

3. The State’s commitment to universal pre-Kindergarten education – which Governor Newsom has made a top priority – depends, in part, on  preparing K-12 school sites to serve these most-vulnerable young children.  To effectively provide early education opportunities, many schools will need physical upgrades and modifications.

Nonetheless, for these critical modernization projects, SFP is magnifying the inequity of resources that are available to higher vs. lower-wealth districts. How can that be?!?

Remember, about 3 of every 4 dollars spent on school facilities is raised locally, mainly through taxes on properties within a school districts’ attendance area. 

A district’s total assessed value reflects the combined value of all properties in the district’s geographical area. However, State law sets limits on how much of the assessed value a district may tax, or “bond against.” Current law allows unified K-12 districts to issue bonds totaling up to 2.5% of the total assessed value of properties within its area. This limit defines a district’s “bonding capacity.”

The interactive map below shows all unified and elementary school districts classified by quintiles of bonding capacity per student. In the lowest quintile, districts have an average of about $8,000 per student, while in the highest quintile, districts have an average of about $92,000 per student. Click on the map to zoom in and see more information about a specific district.

In this system, advantage is held both by larger districts, with more properties to tax, and by districts in wealthier communities where properties have greater value. Districts in communities with higher assessed property values can impose a lower tax rate, yet raise the same amount in bond funding than could be raised by a district in a community with lower property values. The district with lower property values in its area – which is to say, a community of lesser wealth – would need to impose a higher tax rate to raise the same amount. Imposing a greater tax burden on a community of lesser wealth is the very definition of a regressive tax. 

Under a “financial hardship” provision of SFP, the State does provide marginally greater matching grants to districts whose minimal bonding capacity – less than $5 million total – makes significant modernization, let alone construction, nearly impossible to afford. But the $5 million threshold is so low that less than one hundredth of one percent (.001%) of students live in qualifying districts – just 58,000 in a system that serves nearly 6 million students. Generally, these are districts with very small enrollments; in fact, an exceptionally small district can qualify for hardship aid even if property values in its area are relatively high.

If a district’s own bonding capacity isn’t sufficient to support the modernization of its schools…

and if SFP matching funds don’t lift the district over that financial threshold…

then the district risks being trapped in a cycle of deferred maintenance, which can only lead to dilapidation of its school facilities. 

In fact, our research found that nearly  40% of local school districts across California  are struggling in exactly this way.

Each year the Board…budgets money for deferred maintenance, [but] unplanned and catastrophic problems such as major roof leaks and broken air conditioners…crop up at the worst times. When these happen, the district must draw from its ever-shrinking reserves.

Such a downward cycle not only leaves students and teachers in decaying facilities; it also drives districts to carve funding for repairs from their operating budgets. This, in turn, leaves fewer dollars available to invest in educational services, doubling the adverse impact on students and teachers. 

These outcomes directly contradict LCFF, which provides supplemental funds for the most vulnerable students on a per-student basis, wherever they are. Whether large, small, or mid-sized, a district that serves proportionately more of the most vulnerable students receives meaningfully greater State support through LCFF – but not through SFP.

Now, as the Governor and Legislature look to a 2024 school facilities bond measure, there comes a priceless opportunity to fix SFP and align it with the equity principles in LCFF.

Here’s the good news: California does not need to wholly engineer another new school finance system. Compared to what went into designing LCFF, the fix for facility funding is less complex and radical. Instead, California can enhance and preserve what it has.

The way forward starts, of course, with re-funding the School Facilities Program. The State’s role in funding school facility modernizations may be a supporting one, but it’s essential. Governor Newsom and the Legislature have recognized this by allocating General Fund dollars in recent years to keep SFP afloat until a prospective new bond measure can come into effect. 

Most fundamentally, State leaders should bring SFP’s Modernization Funding program into the LCFF era by adopting a weighted funding formula that provides supplemental and proportionate matching funds to districts with the greatest facility-related needs and challenges.

It appears that legislative members, to their credit, are embracing the wisdom in that approach. The two bills ( Assembly Bill 247  and  Senate Bill 28 ) proposing a 2024 statewide school bond to refund SFP both propose a slightly revised funding formula that would increase the State’s share of support for school facilities projects based on two main factors:

• the proportion of students in the district who are disadvantaged, as defined using the same criteria established in LCFF;
• the district’s per-student bonding capacity.

This policy direction would help remedy decades of inequitable State funding that has gone disproportionately to wealthier districts. It is a tool with the potential to fix the worst flaws of SFP.  

However, the proposed increases in the State’s share of a project, ranging from 1% to 5%, are too small to be of significant benefit, especially for districts facing the greatest challenges and disadvantages. 

Given the history of persistent funding disparities, a more determined fix is needed. Such an approach would more effectively compensate for differences in local property wealth, which is the main driver of school district capital funding.

SFP formula changes must ensure that California is acting to increase equity through SFP as it does through LCFF, with the aim that every child in every community throughout our state goes to school in a facility that is equipped to protect their health and ensure their opportunity to learn.

For equity’s sake, now is the moment to fix the School Facilities Program. 

To learn more about our work on school facility equity, please visit the  Center for Cities + Schools website .

 _{Note on data sources: This storymap points to data and analysis findings from multiple sources. Secondary sources each have their own methods and data sources. The interactive maps were created by UC Berkeley's Center for Cities + Schools using the following sources: SFP apportionment data obtained from the California Office of Public School Construction. Property value data obtained from EastShort Consulting. All other school district data obtained from the California Department of Education. All SFP funding dollar amounts reported in the interactive maps have been adjusted to May 2023 using the  Turner Construction Index .}  

 _{All school images generously provided by  HMC Architects , unless otherwise noted.}