A Preliminary Analysis of California’s New Local Control Funding Formula

California recently overhauled its K–12 public education finance system. Enacted in 2013, the Local Control Funding Formula (LCFF) replaced California’s 40 year-old funding formula. The LCFF increases district officials’ fiscal flexibility; provides more resources to districts serving larger proportions of low-income, English learner (EL), and foster youth students; and requires district officials to engage community members in district decisions. This article expands on a study conducted by a team of 12 independent researchers that investigated the early implementation of the LCFF. The study sought to answer three research questions: (a) how are district officials using their newfound budget flexibility? (b) how are district officials engaging parents and other stakeholders? (c) what are the opportunities provided to districts under the LCFF and the challenges it creates for them? Data include 71 semi-structured interviews with district stakeholders across 10 diverse districts in California and 22 interviews with county office of education (COE) officials across the state. Findings include that respondents were cautiously optimistic Education Policy Analysis Archives Vol. 24 No. 34 2 about the LCFF. District officials appreciated increased budget flexibility and the focus on community engagement. Inevitably, however, district and COE officials experienced challenges in implementing the law during its first year.

resources, the state requires district officials to create and adopt a publicly available accountability document-a Local Control Accountability Plan (LCAP)-with community input (Taylor, 2013). In addition, the state assigned the responsibility of reviewing and approving districts' LCAPs to the county offices of education (COEs), creating a new oversight role for COEs (Taylor, 2013).
Governor Brown ushered the LCFF through the California legislature, and it was passed with bipartisan legislative support (Beltran, 2014). Governor Brown believed in the principle of subsidiarity, or that education could be more effectively managed at the district-rather than statelevel, and that it was impossible for the state to micromanage education across all districts in California, given the large differences in local needs (Brown, 2013;Brown, 2014). Thus, the LCFF is designed to shift responsibility for education from the state to the district level (Brown, 2014). To the authors' knowledge, no other state, particularly one as large as California, has enacted a similar reform, although components of other states' education finance reforms are analogous to provisions of the LCFF. For example, in its 2012 Bridge to Excellence Act, Maryland simplified its funding formula by reducing the number of categorical grant programs and allocated additional resources to districts with larger proportions of low-income and EL students; however, resources allocated to districts on the basis of the proportion of low-income students and EL students had to be spent on those student populations and were not unrestricted funds as they are under the LCFF (Scafidi, 2008). In 2007, the state of New York allocated additional Contracts for Excellence Funds to low-performing districts, but these funds could be distributed only to certain schools and had to be spent on students with the greatest education needs and in specific program areas (New York State Education Management Services, 2013). The LCFF is unique in that it grants district officials substantially more fiscal flexibility.
Understanding that the LCFF is still a work in progress, this paper reports findings from a study of the early implementation of the LCFF in California. The study sought to answer three research questions: (a) How are district officials using their newfound budget flexibility? (b) How are district officials engaging parents and other stakeholders? (c) What are the opportunities provided to districts under the LCFF and the challenges it creates for them? Findings were initially presented in Toward a Grand Vision: Early Implementation of California's Local Control Funding Formula by Daniel Humphrey and Julia Koppich (2014). 3 The purpose of this paper is to explain the LCFF and to report on its early implementation. We first provide a brief overview of school finance in California and explain the provisions of the LCFF. Next, we discuss the literature that informs how districts and schools have used increased fiscal flexibility and engaged their local communities under past reforms. We proceed to describe the data collected and methods used by the study team. We then expand upon the findings initially published in the report by Humphrey and Koppich (2014) by including additional data and findings. Finally, we provide implications of the LCFF and highlight areas for future research.

A Brief Overview of School Finance in California
Equity, efficiency, and adequacy are the three primary concerns of school finance (Odden & Picus, 2008;Rice, Monk, & Zhang, 2010), and California's previous school finance formula was heavily criticized for being inequitable and inefficient and for providing districts with inadequate funding (Loeb, Bryk, & Hanushek, 2008;Timar & Roza, 2010). Efficiency in allocating resources involves maximizing student outcomes given a set of inputs (Stiefel, Schwartz, Rubenstein, & Zabel, 2005) or using the least costly combination of resources to produce a certain student outcome (Rice et al., 2010). Equity concerns fairness in educational services and goods (Rice, 2004) and is measured in two ways: Horizontal equity exists if students with similar characteristics receive the same amount of resources, and vertical equity is achieved if students with greater educational needs receive sufficient additional resources (Berne & Stiefel, 1984). Adequacy concerns providing resources and services that are sufficient "to provide all students an equal opportunity to learn to high performance standards" (Odden & Picus, 2008, p. 75).
Over the last 10 years, districts in California received approximately 10% of their funding from the federal government, 61% from the state, and 29% from local revenues, on average (Education Data Partnership, 2012). Prior to 1979, however, the majority of district funding came from local sources (Bersin, Kirst, & Liu 2008). The state courts, legislature, and voters are responsible for multiple laws that influenced the education finance system in California.
Since the 1960s, state funding for public education in California has been allocated to districts in two forms: as unrestricted funds for general education purposes and as categorical, or restricted, funds for specific purposes (Weston, 2011). In 1971, the California Supreme Court ruled that the then-existing funding formula was unconstitutional because it resulted in a wide disparity in per-pupil expenditures for general education purposes across districts (Education Data Partnership, 2012;Weston, 2011). The Court required the state to equalize per-pupil expenditures for general education purposes for districts of the same type (e.g., elementary, high school, or unified) and size in terms of student enrollment (Weston, 2011). In response, the California legislature in 1972 limited how much districts could spend per pupil for general education purposes; the amount that districts could spend per pupil for general education purposes became known as the "per-pupil revenue limit" (Education Data Partnership, 2012, p. 1). Bersin et al. (2008) contend that revenue limits are still the most important component of the California education finance system. One problem with revenue limits, as Kirst (2006) explained, is that revenue limits place the focus on equalizing resources across districts without regard for how much money is needed to provide students with an adequate education or for differences in costs across districts. The equalization approach does not account for vertical equity or in other words, differences in students' needs across districts.
Then, in 1978 in response to increasing property taxes, voters passed Proposition 13, which "create[d] a uniform statewide property tax of 1%" and limits increases in property taxes to 2% per year (Weston, 2013, p. 1). The passage of Proposition 13 led to a 50% reduction in local revenues for public education (Bersin et al., 2008), and as a result, most districts began to rely heavily on state aid to fund public education (Kirst, 2006;Loeb et al., 2008). As a result, California's education finance system became one of the most centralized systems in the country (Kirst, 2006). While other states implemented similar laws to Proposition 13, other states did not also enforce per-pupil revenue limits; the combination of per-pupil revenue limits and Proposition 13 substantially hindered districts' abilities to raise money for public education locally (Kirst, 2006).
Around 3% of districts exceed the per-pupil revenue limit with local revenues and thus do not receive state aid for general education purposes, although these districts may still receive state categorical aid (Education Data Partnership, 2012;Kirst, 2006); these districts are referred to as basic aid or excess revenue districts (Education Data Partnership, 2012;Taylor, 2013;Weston, 2013). Basic aid districts typically have high per-pupil expenditures, serve low proportions of targeted students compared with other districts in the state, and are mostly located in northern California (Kirst, 2006;Weston, 2013).
Given the loss in local funds for public education and out of concern for the insufficient funding for public education, voters passed Proposition 98 in 1988 (Bersin et al., 2008). Proposition 98 guarantees that the state will allocate a certain proportion of its revenues for public K-12 and community college education (Kirst, 2006). However, funding for public education is negatively affected by downturns in the state economy and is "vulnerable to the state's volatile sales and income tax receipts" (Bersin et al., 2008, p. 2;Kirst, 2006). In other words, future funding for public education is uncertain because it depends on the success of California's economy (Loeb et al., 2008).
Voters also prevented $5.6 billion of budget cuts to public education in 2012 by passing Proposition 30, which increased the state's sales tax and the income tax for households with annual earnings of more than $250,000 (California Budget Project, 2012). 4 Still, per-pupil spending for public education in California lagged that in the majority of states, even when adjusting for geographic cost differences (Loeb et al., 2008). Adjusting for teacher salary differences across states, California spent 30% less per pupil than the average state, resulting in larger class sizes and fewer staff members-including teachers and principals-per pupil than in other states (Loeb et al., 2008). Loeb et al. (2008) found these spending differences to be consequential because California was ranked the seventh lowest in eighth grade math achievement and the third lowest in eighth grade reading achievement compared with other states, and students in all racial and ethnic subgroups performed worse in California than in other states.
Another important component of California's education finance system is categorical funding. Prior to the LCFF, categorical funds comprised roughly one third of state funding for public education (Education Data Partnership, 2012). Categorical funds are restricted funds, and each categorical fund may only be used for a specific program or student group (Education Data Partnership, 2012). Thus, district officials cannot transfer funds from one categorical program to another or spend categorical funds for general education purposes (Bersin et al., 2008). State categorical funds do not count towards each district's per-pupil revenue limits.
Categorical funding began in the 1960s "as state legislators reacted to political pressure to address the needs of disadvantaged children and signaled their lack of confidence in local educators to do so successfully" (Bersin et al.,p. 2). Categorical funding intensified in the 1970s and was maintained by politicians as "each new program create[d] a constituency intent on preserving it" (Bersin et al.,p. 2). Categorical funding was also used by politicians as a mechanism for preventing increased state aid from being spent to increase teachers' salaries (Kirst, 2006). The number of categorical funds increased dramatically over time. In 1993, 57 different categorical programs were identified, but due to lack of accessible documentation, it was difficult to determine the exact number and purposes of the categorical programs (Timar, 2006). In 2004, 223 state and federal categorical programs were documented, and multiple categorical programs were designed to achieve the same purpose (Timar, 2006).
Due to the inherently political nature of categorical funding, categorical funds were not equitably allocated across districts (Loeb et al., 2008;Timar, 1994;Timar & Roza, 2010). Although districts serving greater proportions of low-income students generally received more categorical funding than other districts, categorical funding was not systematically allocated to districts on the basis of students' needs (Loeb et al., 2008;Timar, 1994). Moreover, there was substantial variation in categorical funding for districts with similar student populations (Weston, 2011). Brewer and Smith (2008) also argued that the state's categorical funding was inefficient-a "one size fits all" solution (pp. 31-32). Similarly, Weston (2011) contended that restrictive, categorical funding may prevent districts from allocating resources to meet local needs, which may be particularly problematic in a state as large and diverse as California. Loeb et al. (2008) also pointed to inefficiencies by arguing that the state's categorical funding system was not designed to help district leaders meet their goals for student performance; rather, it was designed to monitor district compliance with state regulations, and district leaders had to spend substantial resources to ensure such compliance. Finally, Duncombe and Yinger (2006) found categorical funding in California to be inefficient because the extent of categorical funding was negatively correlated with districts' abilities to improve student achievement.
Experts in California school finance have argued that over time, California's education finance system became overly complex and convoluted (Bersin et al., 2008;Kirst, 2006). Timar (2006) aptly concluded: The current system of school finance [in California] is one that has been cobbled together in response to various pressures over the past thirty-some years. What is missing from the resulting patchwork of policies is an underlying framework or set of principles to guide the system. As a result, the system has little coherence or clarity. For instance, the policy goal of inter-district equalization is achieved through revenue limits, but undone by categorical programs. (p. 31) The state's education finance system was ripe for change when Governor Brown and the California legislature signed into law the Local Control Funding Formula, which replaced California's previous school funding formula with a more streamlined, transparent, and equitable formula.

Overview of the Local Control Funding Formula
The Local Control Funding Formula (LCFF) increased local control in education. Local control under the LCFF is increased fiscal flexibility for district officials, increased community involvement in district decisions, and increased district oversight by county office of education (COE) officials. In the next two sections, we explain the new funding formula and the new Local Control Accountability Plan (LCAP) requirement of the LCFF.

New Funding Formula
One premise of the LCFF is to provide more dollars for general education purposes to districts that serve greater proportions of targeted-low-income, English learner (EL), and foster youth-students as opposed to providing all districts with roughly the same per-pupil amount as under the old system (Office of Governor Edmund G. Brown Jr., 2013). The new funding formula accomplishes this goal by allocating state dollars for general education purposes in terms of base, supplemental, and concentration grants (Taylor, 2013). Base grants, which represent the bulk of the funding, are based on districts' average daily attendance in four grade spans: (a) $7,557 per student for grades K-3, (b) $6,947 per student for grades 4-6, (c) $7,154 per student for grades 7-8, and (d) $8,505 per student for grades 9-12 (Taylor, 2013).
The LCFF provides additional funds, or supplemental grants, for targeted student populations. Each district receives an additional 20% of the grade-span base rate for each student who qualifies for free or reduced-priced meals, who is an EL, or who is a foster youth (Taylor, 2013). Supplemental grants are based on unduplicated counts of targeted students; in other words, a district will receive a maximum adjustment of 20% above the grade-span base grant for any one student, even if that student falls into more than one targeted subgroup (Taylor, 2013). Finally, districts receive concentration grants if more than 55% of students are targeted students; for each targeted student above the 55% threshold, the district receives an additional 50% of the grade-span base grant (Taylor, 2013). Table 1 shows how state aid for general education purposes is related to the proportion of targeted students in the district. For example, districts with 100% of targeted students receive 42% more per pupil than districts with no targeted students. The new funding formula also re-directed approximately 48% of prior state categorical aid into base, supplemental, and concentration grants. Although the new funding formula is arguably more equitable than the prior funding formula in providing additional funding to districts serving greater proportions of targeted students, the additional funding may fall short of what some researchers estimate is needed (Levin et al., 2013). For example, Duncombe and Yinger (2004) estimated that weights of at least two are needed per low-income and EL student to achieve the same educational outcomes as other students. Moreover, the LCFF provides additional funding based on unduplicated counts of targeted students, and it is unclear to what extent districts need additional funding per category of targeted students to achieve desired student outcomes (Loeb et al., 2008).
Most districts received increased state aid under the LCFF compared with the prior education finance system, and districts with substantial proportions of targeted students received the greatest increase (Taylor, 2013). However, a hold harmless provision ensured that no district received less state aid than in the year prior to the enactment of the LCFF (Taylor, 2013). Basic aid or excess revenue districts benefitted from this hold harmless provision (Weston, 2013). 5 However, a few basic aid or excess revenue districts-those that were not among the 10% of districts with the highest per-pupil expenditures in 2012-13-also received an economic recovery target add-on, which was "equal [to] the difference between the amount a district would have received under the old system and the amount a district would [be expected to] receive" under the LCFF (Taylor, 2013, p. 5). All basic aid or excess revenue districts are still required to complete LCAPs and meet other LCFF requirements (EdSource, 2016;Taylor, 2013).
Given that no district lost money and most districts received increased state aid, the LCFF necessitated an additional $18 billion investment in public education compared with the funding levels prior to the LCFF's enactment (Taylor, 2013). The state decided to phase in new LCFF funding levels over an eight-year period (EdSource, 2016). During the first year of LCFF implementation, districts received a prorated amount of state aid based on their predicted amount under full implementation of the LCFF (EdSource, 2016).
In re-directing 48% of state categorical aid to unrestricted funds, the LCFF increased district officials' budgetary discretion. However, the LCFF does impose a few restrictions. First, districts must meet the law's "proportionality requirement," which requires districts to "increase or improve services for [targeted student populations] in proportion to the increase in funds apportioned on the basis of the number and concentration of [targeted students]" (Cal. Ed. Code, 2013a). However, "the exact meaning and regulatory effect of this proportionality clause is currently unknown" (Taylor, 2013, p. 6). For example, how does one increase services by a certain percentage when services are not measured in units such as hours or dollars? Moreover, an increase in services does not necessarily mean an increase in expenditures.
Second, districts are incentivized to lower class sizes for grades K-3 to no more than 24 students per class because if districts do not, the state will allocate $712 less per student for all students in the K-3 grade span (Taylor, 2013). The one exception to this rule is that districts do not need to meet this class size requirement if the district has negotiated a collective bargaining agreement that specifies a higher maximum average class size (Taylor, 2013). Third, minor spending restrictions include that districts must maintain their current levels of spending on transportation and adult education, at least in the short term (Taylor, 2013). Finally, although the LCFF eliminated 48% of state categorical aid, districts that still receive state categorical funds for various programs and services-including special education, preschool, after school programs, assessments, nutrition, adult education, and transportation-must spend the categorical funds on the specified programs (California Department of Education, 2014b).

Local Control Accountability Plans (LCAPs)
All districts and charter schools are required to develop and adopt an LCAP based on a template created by the State Board of Education (Taylor, 2013). In their LCAPs, district officials must (a) outline their goals around the state's eight priorities, (b) report how they will allocate resources to meet their goals, (c) specify improved services for targeted student subgroups, and (d) describe how they engaged community members in district decision-making (Taylor, 2013). The LCFF requires district officials to engage their local communities in goal setting and resource allocation decisions (Affeldt, 2015), and the law requires COE officials to oversee the approval of districts' LCAPs. All of these requirements are new under the LCFF.
Districts were required to complete the LCAP template for the first time in the 2014-15 academic year (Taylor, 2013). The LCAP template contained three primary sections (State Board of Education, 2013). 6 In the first section, district officials described how they involved stakeholders in the process of developing the LCAP and the impact of stakeholders' feedback on the LCAP (State Board of Education, 2013). Specifically, district officials reported, "What changes, if any, were made in the LCAP prior to adoption as a result of written comments or other feedback received by the local education agency through any of the [agency's] engagement process" (State Board of Education, 2013, p. 4).
According to the law, district officials should consult with teachers, principals, administrators, other school personnel, local bargaining units, parents, and pupils in developing their LCAPs (Cal. Educ. Code, 2013b). In addition, district officials must develop and consult with a parent advisory committee that includes parents of targeted student subgroups as well as with an EL-specific parent advisory committee if at least 15% of students and at least 50 pupils in the district are ELs (California County Superintendents Educational Services Association, 2014). 7 The law requires that both parent committees review the LCAP (Taylor, 2013). Although the superintendent is not required to adopt the committees' recommendations, he or she must respond in writing to recommendations made by the committees before the LCAP may be approved (Heilig, Ward, Weisman, & Cole, 2014).
The second section of the LCAP focused on district goals. District officials formulated annual goals that addressed each of the state's eight priority areas: basic services, course access, implementation of state standards, parent involvement, pupil achievement, pupil engagement, school climate, and other pupil outcomes (Taylor, 2013). District officials were also able to include their own goals even if their goals did not directly address one of the state's eight priorities (State Board of Education, 2013). Officials then had to identify the schools and numerically significant student groups for which the goals were applicable and determine metrics by which to assess their progress toward meeting those goals (California County Superintendents Educational Services Association, 2014). 8 At a minimum, district officials were supposed to incorporate into their LCAPs the 24 state-required metrics-such as school attendance rates-that measure progress towards each of the state's priority areas (Affeldt, 2015). Finally, on the basis of the selected metrics, district officials had to specify progress indicators for all students and for targeted student subgroups by which to determine if districts were meeting their goals for the baseline year (2014-15) as well as for the following two years (State Board of Education, 2013). In other words, districts' goals had to be measurable.
In the third and final section of the LCAP, district officials reported the specific actions they would take to meet their goals and the services they would provide for all students and for targeted student subgroups (California County Superintendents Educational Services Association, 2014; State Board of Education, 2013). Officials also had to reference "all fund sources used to support actions and services" outlined in the LCAP for all students and for targeted student subgroups (State Board of Education, 2013, p. 7; Taylor, 2013). Once adopted, the LCAP is effective for three years, and each year district officials must "review the district's progress towards meeting the goals set forth in its LCAP, assess the effectiveness of the specific actions taken toward achieving these goals, and describe any changes the district will make as a result of this review and assessment" (Taylor, 2013, pp. 12-13). District officials must also annually update the expenditures that are tied to specific actions and services for all students and for targeted students (State Board of Education, 2013).
Although COEs have traditionally held an oversight role for the districts that they serve, the LCFF dramatically expands their role in this regard (California County Superintendents Educational Services Association, 2014). Under the LCFF, the state assigns the COEs the responsibility of approving, requiring modifications to, or denying districts' LCAPs (California County Superintendents Educational Services Association, 2014). 9 The three statutory criteria that determine whether the LCAP is eligible for approval are (a) that it adheres to the State Board of Education template, (b) that there are sufficient expenditures listed in the LCAP to fund the district's stated actions and services, and (c) that the district shows the proportionality requirement is satisfied (California County Superintendents Educational Services Association, 2014; Cal. Educ. Code, 2013c).
When districts' LCAPs do not meet these three criteria, COE officials must take additional steps (Taylor, 2013). COE officials may provide technical assistance to district officials, assign an academic expert to assist the district officials in identifying and implementing effective programs, and/or refer the district to the California Collaborative for Educational Excellence, a new state agency that will provide support to struggling districts (Cal. Educ. Code, 2013d).
The state will also eventually release new rubrics that the COEs will use to evaluate district LCAPs and identify districts that are in need of assistance (Taylor 2013). These rubrics will "serve as tools to ensure [districts] are able to align resources to implement strategies that result in meaningful student outcomes" and identify areas "in need of additional support to meet the adopted standards for district and school performance relative to the state priorities" (State Board of Education, 2015, p. 4).

Literature Review
This study investigates how district officials used their new fiscal flexibility and engaged their local communities in the initial stages of the implementation of the Local Control Funding Formula (LCFF). In the first section of this literature review, we discuss how district and school leaders have used increased fiscal flexibility under past reforms and if increased fiscal flexibility has resulted in improved outcomes. In the second section of this literature review, we summarize research on how district and school leaders have engaged their local communities, the challenges that leaders have faced in attempting to engage their local communities, and how meaningful community engagement can be achieved.

Fiscal Flexibility
This study investigates how district officials used their increased fiscal flexibility over state categorical dollars under the LCFF. The most relevant example of a past reform similar to the LCFF context was the California legislature's 2008 decision to temporarily suspend state categorical fund spending restrictions for select categorical programs (Taylor, 2010). To help districts cope with the 2008 budget crisis and large revenue cuts to education, the California legislature temporarily suspended categorical funding restrictions for approximately 40 state categorical funds out of a total 60 state categorical funds (Taylor, 2010;Weston, 2011). 10 The 40 categorical funds were lumped together into a "flex item" that essentially served as unrestricted funds that could be used for any education purpose, as long as the allocation of funds was discussed at a regularly scheduled and public hearing (Taylor, 2010, p. 5). The 40 categorical funds accounted for $4.5 billion, 38% of state 9 COEs receive additional funding for these oversight responsibilities under the LCFF. Oversight responsibilities are funded on the basis of (a) a minimum grant per county, (b) the number of districts in the county, and (c) the average daily attendance in the county (California Department of Education, 2015). 10 The California legislature also loosened other state restrictions (see Taylor, 2010). categorical funds, or 7% of all general purpose funds for the average district (Taylor, 2010;Weston, 2011). At the same time, California districts received $6 billion in flexible federal stimulus funding for K-12 education from the American Recovery and Reinvestment Act of 2009 (Taylor, 2010).
In a study of 10 diverse districts in California, Fuller, Marsh, Stecher, and Timar (2011) investigated how district officials used their new fiscal flexibility when also facing severe budget cuts. The authors found that in nine out of the 10 districts, district leaders combined flex item funds with their general education funds, and in 50% of districts, leaders re-allocated the newly flexible funds to balance their budgets and minimize layoffs. District leaders selectively cut back categorical programs, and leaders did not use "hard evidence" to decide which programs to cut (Fuller et al., 2011, p. iv). In a few cases, district leaders used flex item funds to fund new initiatives (Fuller et al., 2011). Although district leaders liked their new fiscal flexibility, they continued to feel constrained by preexisting legal mandates, student needs, union contracts, and budget shortfalls (Fuller et al., 2010).
Although district leaders gathered input from stakeholders on district goals and priorities, leaders generally decided how to allocate the flex item funds (Fuller et al., 2011). Some district leaders felt that they did not have adequate time to involve many stakeholders due to the tight timeline of re-budgeting in the middle of the academic year. One district leader reporting making decisions before advocacy groups could form and oppose his/her decisions (Fuller et al., 2011). Fuller et al. (2011) also found that in most districts, principals and school staff were not involved in the resource allocation decision process.
Another researcher surveyed leaders in California districts to determine how they allocated their flex item funds (Taylor, 2010). Although the survey response rate was 22%, the researcher argued that the survey sample was representative of all districts in California: The district leaders who completed the survey represented 37% of the state's total student enrollment, and district leaders in half of the 10 largest districts in California participated in the survey (Taylor, 2010). The survey results indicated that the majority of district leaders found that the new fiscal flexibility made it easier for them to balance their budgets and align resources with their priorities (Taylor, 2010). On the other hand, the majority of district leaders were unclear as to how much funding should be allocated directly to school sites (Taylor, 2010). District leaders preferred that additional categorical funds had been included in the flex item (Taylor, 2010).
According to these same survey results, more than 60% of district leaders shifted money away from the prior categorical programs (including adult education, high school class size reduction, deferred maintenance, school and library improvements, professional development, school safety, arts and music, gifted and talented education, instructional materials, supplemental instruction, and counseling) and instead, re-allocated these funds to support direct classroom instruction (Taylor, 2010). Some of the categorical funds were affected in major ways while others were only affected in minor ways (Taylor, 2010). When funds were re-directed away from these categorical programs, district leaders made corresponding programmatic changes (Taylor, 2010). Regarding how district leaders allocated the federal stimulus funding, the majority of district leaders used federal funds to minimize teacher layoffs, make one-time purchases, and restore spending reductions to affected categorical programs (Taylor, 2010).
The two previous studies relied on district leaders' self reports of how they allocated resources in 2009. Because the state's accounting system no longer required district leaders to specify how much they allocated for any categorical program included in the flex item and because flex item funds could be spent on any general education purpose, researchers could not determine how district leaders allocated their flex item funds in "any systematic way" (Weston, 2011, p. 29).
Other reforms have focused on increasing budgetary discretion at the school level. At first glance, weighted student funding or site-based budgeting appears to be similar to the LCFF's funding formula. Under a weighted student funding system, districts allocate money directly to schools on the basis of a formula that takes into account school and student characteristics (Levin et al., 2013); schools with greater proportions of high-need students receive additional resources, although which students generate additional funding and how much funding is generated by certain student groups varies across contexts (Levin et al., 2013). Additional resources may also be allocated to schools on the basis of school characteristics such as geographic isolation, grade level type, and school size (Levin et al., 2013). Typically, under a weighted student funding system, school staff experience increased autonomy in determining school goals and budgets (Shambaugh, Chambers, & DeLancey, 2008), although there is variability across school sites in the degree to which school staff control budget decisions (Levin et al., 2013).
Two California districts-Oakland and San Francisco-implemented weighted student funding formulas (Chambers, Shambaugh, Levin, Muraki, & Poland, 2008). One study of these two reforms found that substantial variation in school-level respondents' perceptions of how much budgetary discretion they were afforded . Another study of the weighted student formula in San Francisco only found that some respondents felt that schools had little budgetary discretion because funding was tight and because teachers' salaries and benefits accounted for 80-85% of schools' budgets . The authors were not able to determine exactly how much budgetary discretion school leaders in San Francisco had; the authors could not determine what proportion of schools' budgets were truly flexible funds because the district could not provide the total amount of unrestricted funds that were allocated to each school site .
Respondents in both districts reported making staffing changes as a result of the reforms . However, the number of full-time staff per student remained unchanged in both districts after the implementation of the weighted student formulas , and the distribution of novice teachers across schools in the district remained unchanged (Chambers, Levin, & Shambaugh, 2010). Further, respondents reported that few programmatic changes were made as a result of the new weighted student formulas . Finally, the authors noted varying capacity at the school level to make appropriate resource allocation decisions .
Prior studies on fiscal flexibility reforms point to the difficulty in analyzing resource allocation, given the nature of fiscal flexibility (Chambers et al., 2010;Shambaugh et al., 2008;Weston, 2011). In sum, there is limited evidence on the effects of fiscal flexibility (Fuller et al., 2011;Petko, 2005). Petko (2015) concluded that there is not enough evidence to embrace reforms involving student weighted formulas or local control in general.
The LCFF can be classified as a local control reform, and local control can be generally characterized as "efforts to strengthen education by placing greater rights and responsibilities in the hands of lower level participants," where lower level participants may refer to a range of stakeholders with various levels of authority, including teachers, parents, community members, principals, district officials, school board members, and mayors (Meyer, 2009, p. 457;Walberg, Paik, Komukai, & Freeman, 2000). In general, past local control reforms have not proven to be effective (Elmore, 1993;Malen, 2011;Meyer, 2009). Studies have found that merely shifting authority from a higher to a lower level and vice versa has had "little discernible effect on the efficiency, accountability, or effectiveness of public schools" (Elmore, 1993, p. 34). Meyer (2009) recommended that local control reforms should be accompanied with "monitoring and accountability rules that help us to know if the new model worked" (p. 470).
This study investigates how district officials responded to increased fiscal flexibility over state dollars in the early stages of the implementation of the LCFF. Similar to prior studies, this study also relies on district officials' self reports of how they allocated resources (Fuller et al., 2011;Taylor, 2010). Although the original intent of the study team was to report on how district officials allocated their resources, the available evidence was not sufficient for the study team to systematically determine how resources were allocated. In addition, given that the LCFF was recently implemented when the study team collected the data, the team did not attempt to investigate any impacts of LCFF implementation. This study adds to the literature by analyzing how district officials responded to increased fiscal flexibility under the LCFF.

Community Engagement
The LCFF requires district officials to solicit feedback from their local communities on district goals, priorities, and budget decisions and to develop their Local Control Accountability Plans (LCAPs) in collaboration with stakeholders (Affeldt, 2015). Historically, there have been various efforts across the country to engage local communities and parents in school-level decisions-such as through local school or site-based councils (Malen, 1999;Ortiz & Ogawa, 2000). According to our recent literature review, there have been few opportunities for community members and parents to engage in district-level decisions, with the exception of participation on school boards. The distinction between district-level and school-level community engagement is nontrivial because research has shown that schools within a district, particularly in a large district, can vary substantially in terms of important aspects such as teacher quality and student demographics (Lankford, Loeb, & Wyckoff, 2002). Moreover, many of the prior community engagement reforms-including local school councils and district-level school boards-have involved community engagement in terms of a few elected members from the community (Ortiz & Ogawa, 2000); under the LCFF, district officials are required to engage their communities at large (Affeldt, 2015). Nevertheless, prior studies on community engagement reforms have implications for the LCFF because they have documented the variation in community engagement across sites, the challenges with engaging traditionally underserved community members, and the structures that are necessary for meaningful community engagement to occur (Best & Dunlap, 2012;Gutmann & Thompson, 2004;Kirst, 2010;Malen, 1999).
Local school councils or site-based councils are one example of a widely implemented reform that focused on engaging community members in school-level decision-making. Similar to the premise of the LCFF, the premise of these councils was to give more decision-making authority to local actors, including parents and teachers (Malen, 1999). The creation of local school councils resulted in meaningful community engagement when community members had "significant influence on significant issues" (Malen, 1999, p. 210). However, Ortiz and Ogawa (2000) noted that councils varied in the extent to which local actors other than school administrators had decisionmaking authority. For example, Moore (2002) analyzed research conducted on local school councils in Chicago and found that when the local school councils were comprised largely of parent and community members as opposed to solely school staff, the local school councils had substantial decision-making authority. According to Moore (2002), "[The local school councils] hired their school's principal…set priorities for school improvement, and determined the school's budget" (p. 6). On the other hand, Malen (1999) noted that councils often "reflected and reinforced a traditional pattern of power wherein professionals, notably principals, control school policy, teachers control instruction, and parents provide support" (p. 210). Meyer (2009) remarked that there are "as many interpretations [of reforms] as there are parties to the process" (p. 468).
Community members may be involved with district-level decision-making through school boards. Members of the community may be elected or appointed to serve on school boards (Center for Public Education, 2011). Traditionally, "School boards [have done] things like set the budgets, establish school boundaries and set school policies" (Center for Public Education, 2011, para. 2).
However, "Local school boards...have been losing influence over education programs for some time to state and federal officials and other interests" (Kirst, 2010, p. 1). Instead of setting agendas and budgets, school boards are frequently "reactive forces trying to juggle diverse and changing coalitions across different issues and levels of government" (Kirst, 2010, p. 7).
Studies on community engagement have found that a community's ability to engage in public education depends, in part, on local capacity (Best & Dunlap, 2012;Gold & Simon, 2004;Gold, Simon, Cucchiara, Mitchell, & Riffer, 2007;Noguera, 2002;Uslaner & Brown, 2005). Studies have shown that low-income and underrepresented groups tend to be less involved than more affluent community members in all types of civic life such as voting, community organizing, and volunteering (Uslaner & Brown, 2005). In education, "Where poverty is concentrated and poor people are socially isolated, the parents of the children who experience the greatest difficulty in school also tend to be the least involved" (Noguera, 2002, p. 3). Best and Dunlap (2012) found that not all families have the time and resources to be highly involved; other barriers to family involvement include "speaking a language that is unknown or devalued in a school, immigration status, encountering bias, or previous negative experiences with the education system" (p. 1). Engaging an underserved community that has not had a strong background in civic engagement first requires building the civic capacity of community members (Gold & Simon, 2004;Gold et al., 2007).
Studies on community engagement have also identified the necessary-but not sufficientstructures that must exist for community members to be become meaningfully engaged in public education. Meaningful community engagement is facilitated by an informed public and transparency in decision-making (Gutmann & Thompson, 2004;Noguera, 2004). To be effective, meaningful community engagement requires district and school staff to keep the public informed about district and school plans and priorities as well as the public's rights and responsibilities (Gold et al., 2007;Noguera, 2004). In addition, transparency of information is required for the community "to be able to evaluate what works and what does not work" (Gold et al., 2007, p. 42). When only a few stakeholders have full information, community engagement is reduced to engagement of a "small number of well-organized people," and the public at large is unable to hold districts and schools accountable (Noguera, 2004(Noguera, , p. 2163Rennee & McAllister, 2011).
Another requirement for community engagement to be successful is stakeholder collaboration, which requires that stakeholders see beyond their own interests to create agendas that serve all citizens (Gold et al., 2007). Collaboration is challenging, however, because "groups have distinct interests that often lead them to work against each other in ways that dissipate energies and blunt reform efforts" (Stone, Henig, Jones, & Pierannunzi, 2001, p. 140). In addition, advocacy and interest groups can exacerbate collaboration challenges (Gold et al., 2007;Stone et al., 2001;Yankelovich, Rosell, Gantwerk, & Friedman, 2006). For example, through case studies of local organizational involvement in public education, Gold et al. (2007) found that special interest groups "focused almost exclusively on the interests of their separate constituency or groups [which] contributed to an absence of discussion about how best to meet the needs for broader community well-being" (p. 41). Beliefs about others' perceived lack of competence may also impede collaboration (Shatkin & Gershberg, 2007). One study found that principals and teachers frequently initially resisted community engagement out of concern that the public would make ill-informed decisions (Shatkin & Gershberg, 2007).
This literature review points to the challenges in engaging local communities in public education and foreshadows the challenges that California's district officials will likely encounter in engaging their local communities in district decisions as required by the LCFF. This study adds to the literature by documenting how district officials attempted to engage their local communities to meet the new LCFF requirements and by discussing some of the challenges and successes that district officials faced.

Data and Methods
Data were collected by a team of 12 independent researchers from June to October of 2014. To gain background information on the Local Control Funding Formula (LCFF), team members first interviewed state policymakers, legislative staff, and leaders of organizations who were closely involved with designing the LCFF and with supporting districts in implementing the LCFF. The team also reviewed approximately 40 districts' Local Control Accountability Plans (LCAPs), which were available online.
The team then selectively sampled 10 districts across California in which to conduct interviews. Selected districts were diverse in terms of enrollment, geographic region, urbanicity, and proportions of English learner (EL) and low-income students. The team ensured that at least one rural district and at least one basic aid district were sampled. Although the team strived to ensure that the sample was reasonably representative of districts in the state, the sample of districts and interviewees may not be representative of all districts and stakeholders in California, given the large number of districts in California and the ranges of district needs and stakeholder viewpoints across the state. In each of the 10 districts, the team conducted interviews with district officials, stakeholders, and county office of education (COE) officials. 11 For each district, the team interviewed the superintendent and the district official responsible for the budget and requested interviews with the chief academic officer, the human resource officer, and personnel responsible for overseeing EL, foster youth, special education, and early childhood education programs (see Table 3). 12 The team also interviewed district officials holding other positions who were identified as having been heavily involved in the LCAP creation process. Additionally, the team interviewed district stakeholders such as school board members, union representatives, and parents. The team conducted a total of 71 interviews across the 10 districts. Prior to conducting interviews, the team reviewed all 10 districts' LCAPs along with minutes of local school board meetings and other documents available on district websites. In eight of the 10 districts, the team also interviewed COE officials. Further, the team conducted phone interviews with officials from an additional 14 COEs around the state. Overall, the team interviewed officials at 22 different COEs out of the total 58 COEs in California; those 22 COEs serve 458 districts in California.
Findings emerged primarily from the interview data but were triangulated with district LCAPs, school board minutes, and other district documents. The research team used a two-step analysis process. First, researchers responsible for each district site visit and COE interview coded the data and wrote a detailed summary of findings across several categories-e.g., general view of the LCFF, resource allocation, community engagement, the budget and LCAP development processes, and COE support. Then, all team members participated in a 2-day in-person analysis meeting to discuss the findings across all sites and generate themes, noting similarities and differences across the 10 districts and 22 COEs. Thus, the team's findings represent those from the entire sample and are not heavily dependent on findings in any one district or COE.
We built on the research team's work and conducted a secondary data analysis. Humphrey and Koppich's (2014) report was intended to provide high-level feedback to state policymakers, and our intention was to include more data and detail in the presentation of the findings. We reviewed all of the interview data and re-coded all of the data according to the team's major findings. We also asked members of the study team to review our findings to ensure that the substance and tone of our presentation of the findings were consistent with the study team's initial findings. Although our findings are consistent with those initially published by Humphrey and Koppich (2014), we highlight additional findings and provide additional evidence and detail for the findings presented in Humphrey and Koppich's report.

Findings
Respondents viewed the Local Control Funding Formula (LCFF) with cautious optimism. District and county office of education (COE) officials liked the new school funding formula but were still concerned about the adequacy of funding in California. Increased fiscal flexibility led to some district officials engaging in needs-based budgeting for the first time and increased collaboration among department heads for nearly all study districts. However, some district and COE officials were concerned that the state will legislate tighter requirements on the use of state funds.
The Local Control Accountability Plan (LCAP) development process was beneficial for some districts, but most district officials faced a number of challenges in developing LCAPs. District officials struggled to define the purpose, audience, and scope of their LCAPs. The fast timeline and the time-consuming development process of the LCAP also posed challenges for district officials. In addition, although respondents positively viewed the community engagement requirement of the LCAP development process, district officials generally lacked the capacity and skillset to engage their local communities, particularly the families of the targeted student subgroups. COE officials also experienced capacity challenges and were concerned about their ongoing capacity to oversee district LCAPs, as required by the LCFF.
The following two sections discuss these findings in more detail. The findings are organized by respondents' viewpoints of the new school funding formula, increased fiscal flexibility, the process of developing LCAPs, COE officials' new oversight roles, and districts' attempts to engage their local communities.

New Funding Formula
District stakeholders praised the new funding formula, and most agreed that allocating more dollars to districts with larger proportions of low-income, English learner (EL), and foster youth students was the right thing to do. One district superintendent stated: This governor and this state board [of education] did something that has never been done in the United States without a court case. It changed the distribution mechanism from an equality formula to an equity formula...I think that that unto itself is noteworthy, stunning, and amazing.
Several COE and district officials, however, made the case for revising the formula to allocate supplemental and concentration dollars based on duplicated counts of targeted students as opposed to unduplicated counts. One district official commented that with unduplicated counts, districts were receiving additional dollars on the basis of the proportion of low-income students because the vast majority of ELs and foster youth were also low-income students. COE and district officials serving large proportions of students who were both low-income and EL argued that districts should receive additional resources to address both student poverty and English language proficiency.
Although most district officials liked the equity component of the new funding formula, nearly all district officials were still concerned about the overall adequacy of funding. District officials that received additional funds this year because of the LCFF were appreciative of the new money, but district officials questioned whether the LCFF, even when fully implemented, would provide them with enough resources to offer a high-quality education to all students. Officials in districts with both small and large proportions of targeted students emphasized that funding is still not sufficient. More than one district official reiterated that even when LCFF is fully implemented, the average district will be only at its 2008 funding level. With the 2008 economic downtown, many districts had to cut back services, and some districts had deficit spending. One school board member said, "We are a cancer patient no longer in the emergency room but we are far away from adequacy." One district official questioned whether the increased state funding was adequate to both restore basic services for all students and provide additional supports to targeted students: I think one of the hard parts though is that I don't think that you can provide targeted supports on top of a foundation that is deficient and expect to get great results…. If you are able to [restore basic services] and then really truly supplement, then there are opportunities to have this really be a game changer for those subgroups and for all students.
Although state funding for public education has increased over the last few years, districts faced new and rising costs that outweighed such increases. Some districts faced rising costs per pupil due to declining enrollment and increasing facility costs. The new pension obligation, which requires districts to absorb a larger share of the cost of teachers' and other district employees' pensions, concerned district officials in particular. For one district, this meant doubling the percentage of its budget that it currently contributes toward employees' pensions. Some district officials were concerned that if funding for public education decreases and the new employee pension obligation stands, districts would not have adequate resources to maintain the programs and services that they currently offer.

Fiscal Flexibility
The LCFF afforded district officials increased flexibility in deciding how to allocate state funding, and they liked their new budgetary flexibility. One assistant superintendent stated, "One benefit is that the [leader] can say, this is a need in my community and this is where I want to put the money. That flexibility has been nice." Another COE official stated, "I think it's one of the most positive things that happened to public education in the last 40 years. [The LCFF allows us to focus] attention on areas where we have the most need." Some district officials were pleased with the reduction in state categorical funding. One budget director explained that categorical funding was problematic because there were a large number of categories and some "pots of money" contained insufficient funds to make significant programmatic improvements. Another superintendent argued that categorical funding was inefficient because it was impossible to spend the exact amount available in each categorical fund, and in some cases small amounts of funds remained. Having flexibility to use all available funds was a "big deal." Other budget directors, although they supported the idea of increased fiscal flexibility, found the new changes to be daunting, particularly in the first year of implementation. One superintendent explained that although budget directors did not like categorical funding, they at least understood it, whereas the LCFF required districts to decide how to allocate resources that were once restricted, necessitating a budget process that differed from the way it has been done for the past 40 years. This superintendent noted that the LCFF was not a typical change, such as a change in textbooks, but was instead a "fundamental shift." Similarly, other respondents referred to the LCFF as a "culture change," "mind shift," and "paradigm shift." In some cases, fiscal flexibility sparked changes in the way district officials developed their budgets, and officials in a few districts moved to a needs-based budgeting process. As one district official described, "This year we began the [budget development] process from 'What do we need?' rather than from 'What can we afford?'" In these districts, officials determined their priorities and needs first and then created the budget last. This was a change from the past when district officials started with the previous year's budget and made only slight revisions to it due to restricted categorical funds. To assess their needs, determine priorities, and identify programs and services that would best meet their students' needs, some district officials examined data about student performance, attendance, and course-taking patterns and reviewed information gathered from the community. One respondent stated, "This is a really big deal. I love it. We're finally [asking] who are the students with the highest need and how do we address those needs?" On the other hand, according to one COE official, some district officials continued to let the "budget drive the decisions" by determining what they could afford and then creating district goals that fit the budget. In addition, officials in a few districts used their increased budget flexibility and influx of funds to address their structural deficits and/or restore programs, services, and staff positions that had been eliminated in recent years due to budget cuts. One COE official estimated that around 60% of its districts were still in "restoration mode" due to years of deficit spending. One district official described that the staff's attitude was, "Let's climb out of a hole." However, even though some district officials used the majority of new funds to restore resources, some district officials still responded to stakeholder input by budgeting a few "high-priority, low-cost" items. A few district officials also noted that when the structural deficits were addressed, officials would be able to be more responsive to stakeholder input. Even if district officials did not budget their community's high-priority items, many district officials did incorporate stakeholder input in setting district priorities, which may ultimately influence resource allocation decisions.
Regardless of whether district officials shifted to needs-based budgeting, nearly all districts in the study shifted to joint program-fiscal teams to develop their budgets. Because the LCFF requires district officials to incorporate stakeholder input and explicitly tie dollars to district goals, budget offices could no longer develop the budget in isolation. Prior to the LCFF, district budget offices would determine how much money would be allocated to various departments based on available resources and categorical fund requirements. Each department would then create its own budget, and there was little to no discussion about how resources should be allocated among the different departments. One district official concluded, "The LCAP process really pushed the emphasis on collaboration. We recognized that people were working in silos. And we had to change." With the elimination of many state categorical funds and the increased state aid for most districts, district officials reported that LCFF resulted in changes to resource allocation. However, exactly how districts allocated base, supplemental, and concentration funds remains unclear. The state's accounting system did not change under the LCFF. Thus, district officials continued to use the state's standardized account code structure to report how they allocated unrestricted and categorical funding (California Department of Education, 2014b). Because base, supplemental, and concentration funds are all unrestricted funds under the LCFF, the state does not require district officials to differentiate how they allocated base, supplemental, and concentration dollars (California Department of Education, 2014b).
According to the California Department of Education (2014b), district officials were supposed to report how they allocated supplemental and concentration funds in their LCAPs. 13 However, LCAPs are submitted for review to the COEs, not to the state. Moreover, it was impossible for the study team to determine exactly how district officials allocated these funds via district LCAPs. First, the LCAP is a repetitive Microsoft Word template, not a sophisticated budget tool. Second, rather than providing an exhaustive list of expenditures, districts' LCAPs highlighted districts' goals and tied expenditures to the listed goals. We found that district officials did not always include supplemental and concentration dollars that were not tied to any district goal; for example, when one district used supplemental and concentration funds to restore the budget deficit, this allocation of funds was not listed in the district's LCAP. Finally, we found that the sum of supplemental and concentration dollars listed in districts' LCAPs generally did not match the amount of supplemental and concentration dollars allocated to districts.
When asked how they allocated resources, district officials reported using new state funds for the implementation of Common Core standards (including professional development for teachers), new or improved technologies, academic interventions, expanded learning time in the summer and/or after school, additional instructional staff (e.g., reading specialists, instructional coaches, and more teachers for class size reduction purposes), behavioral and social-emotional supports for students (e.g., counselors), facility improvements, and additional operations staff (e.g., janitors and plant managers). Five districts raised teacher salaries. As one superintendent said, "We haven't given raises in four years. We couldn't let that go on." District officials also reported funding new supports and programs for targeted students. District officials reported using new dollars to expand programs for EL students, enhance social services for foster youth, and add parent liaisons to better communicate with underserved communities. Some district officials reported that the LCFF will allow them to do more for targeted groups in the future.
District officials debated whether to allocate more state funds directly to school sites. Six (out of 10) study districts allocated a portion of the state money directly to school sites, and several districts used formulas that based school allocations on proportions of targeted students in the schools. Some district officials believed that schools should receive increased budget discretion under the LCFF. Alternatively, some district officials believed that because the district would be held responsible for meeting the goals outlined in their LCAP, resource allocation should be determined at the district level.
District officials also struggled with how to allocate their supplemental and concentration funds. Officials were not certain if they could use these funds district-wide or if the funds had to be spent on services for targeted student populations. Although these funds are unrestricted, officials are required to meet the proportionality requirement of the LCFF and "increase or improve services" (Taylor, 2013, p. 6) for targeted students by a certain percentage. However, many respondents were uncertain about what this requirement meant in practice. In addition, the LCAP template required district officials to (a) differentiate expenditures for actions and services for all students and for targeted student subgroups and (b) provide justification if supplemental or concentration funds were allocated district-wide when less than 55% of the students in the district were members of targeted student subgroups-districts had to justify that the resource allocation decision was the "most effective use of funds to meet the district's goals" in the state's eight priority areas for targeted student subgroups (State Board of Education, 2013, p. 10). These requirementsalong with limited guidance from the state-confused district officials and caused them to question if supplemental and concentration funds were truly unrestricted funds or if the funds were intended only for targeted student populations, like categorical funds.
District officials believed that the state would eventually ask them how they spent their supplemental and concentration dollars. All of the district officials interviewed by the research team kept track of how they spent their supplemental and concentration funds in their own accounting system, even though they were not required to do so by the state. Moreover, district officials were very concerned that the state will ultimately legislate tighter requirements on the use of supplemental and concentration funds. As a result, district officials worried that their new fiscal flexibility was temporary.
Yet district officials were adamant that their newfound fiscal flexibility should not be revoked. District officials agreed that they should be held accountable for results-especially for improved outcomes for targeted students-but they wanted the freedom to achieve the results in the way they thought best. As one district official remarked, "If they're truly flexible dollars, then let us control [them]." District and COE officials wanted more time to adjust to the new system in general before the state made any substantial changes to the law. One respondent echoed a common plea: "Please leave it alone. Give us time to get used to it, to learn how to work with it, and to make it work for us." Another respondent stated, "We need consistent law and policy… If we apply the resources and districts are given time, we'll see good things for kids. That's our goal."

LCAP Development
Despite the challenges of developing LCAPs for the first time under a tight timeline, several district officials noted that the LCAP development process was beneficial because it involved multiple stakeholders at the district level and resulted in substantially more collaboration across departments than what was typical: The LCAP development was a painful but good process. It brought together units that hadn't worked together before. It forces us to think about how to improve student learning. Now many of us have a better idea about how our work meshes with the work of others.
Yet district officials faced a number of challenges in developing LCAPs. One challenge stemmed from uncertainty about the purpose of the LCAP. District officials struggled to determine whether the LCAP was essentially a template that needed to be filled out or a plan that "told their story." Some district officials worked with outside organizations that told them that the purpose of the LCAP was to tell the story of what students in their districts needed and how the district was going to meet those needs. However, many district officials quickly determined that telling their story in their LCAP was not an easy task. They struggled to both outline their priorities and goals in a readable way and fulfill the numerous requirements of the template. As one county superintendent stated, " [District] people got excited about telling their own story until they started getting into the template and the Word document, which was super tedious and people got [discouraged]." As such, many district and COE officials questioned the purpose of the document and concluded that the LCAP was essentially one more compliance document that they had to fill out. One county superintendent said, "Let's accept the fact that the template is a compliance piece of paper and tell the story with another piece of paper that is a high-level executive summary." Because the LCAP felt like a compliance document, district officials also questioned the intended audience of their LCAPs. They struggled to produce LCAPs that were both comprehensive and accessible to the general public. While district officials wanted to reference all their sources of funding-including state and federal dollars-so that readers would have a clear picture of how the district was spending its money, they knew that in doing so the document would not be readable and accessible for the average community member. Ultimately, many district officials determined that it was more important to include all sources of funding for actions and services listed in their LCAP in order to obtain COE approval and settled for the fact that their LCAP would not be comprehensible for the average community member.
Another challenge for district officials was that the LCAP template required district officials to separately report expenditures for actions and services for all students and for targeted student subgroups. As a result, some district officials found it difficult to determine which expenditures (e.g., base, supplemental, or concentration) should be allocated to which student populations (e.g., all students or low-income, EL, or foster youth students only). One COE official said that was "a big issue" in districts serving high proportions of both low-income and EL students. Although district officials felt that the same set of services was applicable to both low-income and EL students, the COE officials pushed the district officials to consider differences in the needs of EL and lowincome students.
In addition to the lack of clarity around resource allocation, districts' LCAPs often did not clearly outline progress indicators on which to determine if district goals have been met (e.g., decrease truancy by 5% each year). According to COE officials, identifying progress indicators was the most challenging aspect of the LCAP development process for district officials. In our review of 40 LCAPs, the research team found few examples of clear and specific progress indicators. Because districts' goals were at times broad, it was difficult to measure success in achieving goals with specific progress indicators. For example, one district had the goal of increasing students' feelings of safety, but it was unclear how progress would be evaluated or which metric would be used to determine that progress had been made. In addition, districts officials did not always have the necessary baseline data to determine appropriate progress indicators, and therefore, some districts found it impossible to estimate progress over a three-year period.
District officials also struggled to plan for and develop goals for a three-year period because they were uncertain about how much money they would receive from the state over the next two years. One district official explained, "You don't know how much money you're going to get over the next three years. So you are stuck in the same, 'depending on the availability of funds.'" Many district officials reported that completing the LCAP template was time consuming, particularly given the fast timeline, the fact that it was a new process, and the lack of existing models of what LCAPs should look like. Some district officials noted that there was a lot of preparatory work that had to take place before the LCAP template became available in March 2014. One superintendent said that she started the LCAP development process in September 2013 and therefore had to draft parts of the LCAP three to four times before she received the LCAP template from the state. Once the template was made available, the turnaround time was ambitious. One district official said, "What should have taken a year, we had to do in six months." Further, in a few of the case study districts, most of the drafting of the LCAP fell on one person. In one district, the assistant superintendent stated, "It's a good thing I had surgery and six weeks to recover. I needed all that time to draft the LCAP." Capacity to complete the LCAP was particularly an issue for some small districts given their limited number of central office staff.
District officials also lamented the lack of integration of the LCAP with other existing plans and required reporting. One district official stated, "We have so many requirements: the LCAP, district plan, school plan, Title 1 Plan. [We need to] make it simpler, make [it] one single comprehensive plan." A COE official recognized the need to eliminate duplication of effort: "We need to look at [required] elements and overlap. Let's hope that … we're not expecting districts to continue to duplicate, triplicate, and quadruplicate these efforts." Respondents suggested integrating the LCAP with other plans and streamlining the LCAP template for small districts with limited staff.
Some officials from basic aid or excess revenue districts also expressed frustration with the LCAP development process. Officials in these districts were frustrated by the amount of time they had to spend developing their LCAP despite the fact that their districts do not rely on state aid to fund public education and did not receive additional state aid under the LCFF. These district officials erroneously saw the LCAP as a requirement tied specifically to supplemental and concentration dollars, not as a new statewide requirement. Still, some district officials from these districts saw the value in developing the LCAP. One basic aid district that had high overall test scores but low test scores for EL students saw the LCAP development process as an opportunity to think deeper about ways to improve EL students' achievement.

COEs' New Oversight Roles
COE officials were optimistic about the potential of the LCFF and recognized the benefits of the LCAP development process. Though COE officials' primary responsibility under the LCFF is to approve districts' LCAPs, most COE officials offered workshops and training sessions for district officials and often worked individually with district officials as the new LCAP process unfolded. Some COE officials found that assisting district officials with developing their LCAPs and approving the LCAPs helped them forge relationships across departments within the COE-as departments had to work together to support district officials-and strengthened their relationships with the districts. COE officials experienced challenges, however, that accompanied taking on new district oversight and support roles without much preparation or training. Many COE officials reported feeling that the LCFF was a moving target. A COE superintendent said, "One of our big challenges was, how do we communicate when the airplane is being built while it's in the air." Some COE officials reported that they received little guidance on how to perform their new oversight role and would have liked to receive training from the state. One COE official explained: If county offices are going to have the oversight [role], we need training. The state's position was, "You got the materials and you were supposed to be the expert." We need [professional development] and assistance about what our role is. We felt like we were a centimeter step in front of [the districts].
Most COE officials, however, did receive support from the California County Superintendents Educational Services Association. The California County Superintendents Educational Services Association's approval manual was particularly useful for COE officials because it detailed the statutory requirements for the new law and focused on developing a process for reviewing districts' LCAPs. In addition, the California County Superintendents Educational Services Association held trainings for COE officials and provided ongoing technical assistance for COE officials as they began to oversee districts' LCAPs.
COE officials reported that LCFF's new oversight responsibilities have challenged their administrative capacity. One COE official estimated that his/her staff spent 50% of their time approving LCAPs. In another county, the COE official estimated that it took six hours to review a single LCAP, and the COE had to review a total of 19 LCAPs. In many cases, COE officials had to sacrifice other work-such as work on the implementation of the Common Core and Next Generation Science Standards-in order to oversee districts' LCAPs. Other COEs hired new personnel to take on the LCFF responsibilities, which created additional challenges as these staff had to learn about both the LCFF and the districts the COE served. COE officials serving small districts had to take on a greater role in some instances when the small districts had limited central office staff and/or felt overwhelmed by the LCAP development process.
Because the state is currently developing new rubrics that the COEs will use to evaluate district LCAPs and identify districts that are in need of assistance, COE officials worry that these rubrics will require that COE officials more closely review districts' LCAPs before approving them and that the review process will take even more time than it did during the first year of LCFF implementation. As such, COE officials questioned their ability to continue do this work without additional resources from the state. As one COE official stated, "We're running on fumes."

Community Engagement
The majority of interviewees welcomed the new community engagement requirement of the LCFF. District officials reported that they worked hard to engage their local communities and took the process seriously because they believed that hearing from the community was beneficial. One COE associate superintendent noted, "[District officials] liked hearing from the community…there was actual valued added." District officials engaged community members through multiple formats, including community meetings, public forums, and online and paper surveys. During the community meetings, district officials generally provided parents and other community members with information about the LCFF and the district's LCAP. The majority of district officials in the study also solicited feedback from parents during the community meetings and through surveys and comment cards.
Despite their attempts to engage their communities in district decisions, most district officials reported-and were even surprised-that turnout at community meetings was generally low, particularly for families of targeted student populations. One district official estimated that only 4% of their students' families either attended a community meeting or completed a survey.
A few district officials obtained high turnout rates at community meetings by enacting strategies that removed barriers for community members to attend the meetings. These strategies included holding the meetings at multiple times-including evening and weekend times-providing transportation to and from the meeting site, and offering food and childcare. Districts that were successful in achieving high survey response rates attempted to make a personal connection with stakeholders. For example, in one district with a high percentage of parents who were illiterate and/or did not speak English, parent coordinators helped parents fill out the surveys. In another district, recruited volunteers interacted one on one with at least 10 people in their immediate circles to talk through the online surveys. Finally, some districts increased community engagement by employing external organizations (e.g., Building Healthy Communities, WestEd, Ed Trust West) to convene community meetings and/or facilitate with the community engagement process in general.
For example, in one district, an outside organization trained parents to facilitate the parent information sessions; district officials believed that having parents lead the sessions fostered greater parent involvement and more genuine conversations.
Many COE and district officials noted that many districts did not have the capacity or the skillset necessary to engage their communities. Even when district officials were successful in achieving higher rates of turnout, district officials reported that the more affluent parents were typically the ones who showed up to the meetings and completed the surveys. A school board member remarked, "The schools with the highest parent involvement had the lowest unduplicated counts [of targeted students]. Parents at the poorest schools have two and three jobs." With a short timeline to complete the LCAPs, most district officials spent their efforts attempting to engage parents and other community members, and teachers and their unions were frequently left out of the process. Union respondents remarked that teachers' voices frequently went unheard. Similarly, school administrators were not systematically engaged in the district decisionmaking. As one COE official stated, "We had school administrators who were not a part of the process until [the LCAP] was crafted, unless a meeting was held at their school." Another COE deputy superintendent stated, "Principals were left out of this process the most because there just wasn't the time. When it comes to implementing the plan, the principals are going to say, 'We didn't agree to this.'" In contrast, smaller districts were more likely to set aside time to gather teacher and principal input.
Beyond gathering stakeholder input, district officials also struggled to figure out how best to engage stakeholders in complex educational and/or budgetary decisions. Some district officials stated that parents were not well equipped to give feedback on curricular matters. One director of special education stated, "[Parents] don't understand what's going on in the classroom, so to ask them to provide feedback, they don't even get it. [We] are asking them to provide feedback on something that no one is an expert on." As such, some district officials were uncertain of which issues to present to the public for stakeholder input. Across the study districts, there was variation in which decisions were presented to the community. Some district officials solicited input on budgetary decisions and/or district goals, while others asked for feedback only on an almostcomplete LCAP. Very few case study districts asked for stakeholder feedback on both district goals and budgetary decisions.
District officials were also challenged to determine district-wide priorities when stakeholders had differing and sometimes competing priorities. For example, one district official remarked that in his/her particular district, creating district-wide priorities was challenging because "Schools in the north [were] low-income, and schools in the south [were] high-income; in the north, the emphasis was on basic skills and in the south, it was on extended learning." District officials also remarked that it was difficult for parents to think beyond their child's needs and consider the needs of an entire district.
These challenges were exacerbated by the short time frame that district officials had to engage their communities. District officials explained that they had to develop their budgets long before they began the process of engaging the community, which led to distrust among community members who felt that all decisions had already been made by the time the community was involved. In addition, one district official noted that the community engagement process happened before the district received achievement data, which meant that districts were talking to community members with incomplete information about students' needs. District officials stressed that with more time, they could have engaged more stakeholders and better incorporated stakeholder feedback into district decisions.
Overall, there was variation in whether community engagement efforts led to changes in districts' budgets and LCAPs. Some district officials did what they were already going to do and then got "consensus" from parents. For example, one chief academic officer remarked, "Most [districts] took their existing strategic action plans, their existing goals, and went out and framed it as, 'These are the things we're doing, is there anything else?' And then they got consensus." In these districts, parents were frustrated that they dedicated so many hours yet felt that the district staff did not actually incorporate their ideas into the LCAP. Alternatively, a few district officials did incorporate the community's recommendations into their LCAP. In one district, the community was concerned about the loss of instructional time for students who were suspended and expelled, and the district created progress indicators around reducing suspension and expulsion rates.
Engaging the community in a way that led to significant changes in district decisions proved to be challenging for many district officials. District officials often reflected on their attempts to engage their communities and identified what they would do differently the following year, such as engage families sooner or engage a more representative sample of community members. Still, district officials continued to struggle with what to do with community input.

Discussion
This study provides a snapshot of how district and county office of education (COE) officials navigated their new roles and responsibilities during the first year of implementation of the Local Control Funding Formula (LCFF). At the time of data collection, districts were just beginning to make adjustments to how they created their budgets and engaged their local communities. In general, respondents wanted more time to adjust to the new system before the state made any substantial changes to the law.
Yet the LCFF is a moving target. Since the data were collected in the fall of 2014, the State Board of Education revised the Local Control Accountability Plan (LCAP) template (Association of California School Administrators, 2014), and districts used the new template to submit their annual LCAP revisions in the spring of 2015. The state is also developing rubrics that the COEs will use to evaluate district LCAPs and identify districts that are in need of assistance (State Board of Education, 2015). 14 The state is currently developing a new statewide accountability system that will integrate districts' LCAPs, the evaluation rubric that COEs will use to evaluate districts' LCAPs, and the state's new academic standards and assessments (State Board of Education, 2015).
Whether the LCFF will achieve its intended purposes is yet to be determined. One premise of the LCFF is to provide more resources to districts that serve low-income, English learner (EL), and foster youth students (Office of Governor Edmund G. Brown Jr., 2013). Districts serving larger proportions of these targeted student subgroups receive additional state aid under the LCFF, but it is currently unclear to what extent targeted students are benefiting from additional state aid. District officials are required by law to "increase or improve services" for targeted students (California Education Code, 2013a). On the basis of districts' LCAPs, however, we could not determine exactly how district officials allocated resources or to what extent district officials planned to increase or improve services for targeted students. Further, the LCFF funding weights for targeted students fall short of what some researchers estimate is needed for targeted students to achieve desired student outcomes (Duncombe & Yinger, 2004;Levin et al., 2013).
A second premise of the LCFF is to give district officials increased flexibility in how to allocate state funds to best meet local needs and ultimately improve student outcomes (Office of Governor Edmund G. Brown Jr., 2013). District and COE officials liked their increased fiscal flexibility and believed that it may result in more efficient spending. Most respondents believed that the LCFF was a vast improvement over California's former school finance system. Some advocacy groups, on the other hand, believed that supplemental and concentration funds should be spent only on the targeted student subgroups; for example, the California Endowment (2014) worried that "Without clearer regulations, funds intended to help close the achievement gap will simply roll into more general school funding streams and will fail to support high-needs kids" (para. 31). More research is needed to determine if district officials are allocating state funds efficiently and equitably. At this point in time, researchers cannot determine exactly how district officials allocated resources using either districts' LCAPs or the state's current accounting system, which now combines newly flexible dollars including supplemental and concentration funds in the broad unrestricted funds category.
A third premise of the LCFF is to move toward a system where stakeholders have an increased role in holding districts accountable for achieving the goals and outcomes that districts articulate with community input. Districts in our study generally lacked the skills necessary to engage their local communities in authentic decision-making on complex educational issues. In particular, districts needed more support in reaching families of low-income, EL, and foster youth students and in facilitating collaboration among different groups so that district goals were representative of stakeholders' opinions. Prior research points to the difficulty of achieving meaningful and sustained community involvement in education (Gold et al., 2007;Hess, 1999;Malen, 1994;Meyer, 2009), particularly in districts serving people with low civic engagement (Noguera, 2004). More research is needed to determine how to support district officials in engaging their communities in a meaningful way. More research is also needed to understand the implications of shifting district oversight from the state to the COE level. COE officials reported that they needed additional supports to oversee districts' LCAPs.
Despite the challenges and uncertainties resulting from the first year of the LCFF implementation, we view the LCFF as many respondents did, with cautious optimism. The LCFF appears to be a dramatic improvement of California's former education finance system. Districts serving greater proportions of targeted students receive increased state aid. District officials have increased fiscal flexibility to make decisions based on local needs and fewer spending restrictions due to state categorical funding requirements. District officials were also working to involve their local communities in district decisions. However, we know from prior studies on local control reforms that a change in a governance structure in and of itself is likely insufficient to dramatically improve student outcomes (Elmore, 1993;Malen, 2011;Meyer, 2009). We found that district officials had varying levels of capacity to perform their responsibilities under the LCFF, and we believe that the responsibility of improving student outcomes still largely depends on the capacities of district officials and their local communities. 7. Budget, Technical a. Are you tracking the LCFF supplemental and concentration funds separately in some way (versus treating everything as one big pot)? b. Are you tracking expenditures on programs or items for which there are no longer specific state standardized account codes? 8. General, Wrap Up a. Do you think the new funding formula will help you serve students better? Do you anticipate better outcomes? b. Anything else you would like us to know?

Districts' Budgeting and LCAP Development Processes
a. How were you involved with the budgeting process in the districts you support? Did you review district LCAPs? b. Did the COE provide supports to districts in the budgeting or LCAP development process? i. Were representatives from the districts you support brought together for training or discussion? c. For the districts your county serves, what is the range of the LCFF's impact? d. How many districts have increasing versus flat budgets? If increasing, by how much? e. How did the budgeting process vary by district?
i. In broad strokes, how similar or different were the districts' approaches to developing LCAPs and thinking through how to allocate new dollars? ii. What contextual factors drove the differences? f. Districts may have various ways of setting goals, tracking progress, and developing district strategies. How did this year's budgeting process differ from these other exercises in planning? i. How were they the same? ii. Were they redundant? iii. Are they aligned? g. What supports do districts need to work through the new budgeting process? h. What were some of the processes around community involvement? i. What were some of the best practices and challenges? j. Who was involved?
i. Were all subgroups of parents involved? ii. Were unions involved in decisions? If so, how? iii. How were teachers and school administrators involved in the process? 2. Priorities a. What are the key priorities in the districts you support? Did you observe any trends? b. Are these priorities different than in previous years? 3. Resource Allocation a. Were there any patterns in district budgetary decisions in the following areas? i. English learner students ii. Low income students iii. Foster youth iv. Early childhood education programming v. Other student-need priorities b. In what ways were funds allocated differently this year than in years past? 4. COE Capacity a. What, if any, capacity challenges do you anticipate your COE is likely to face as you continue to oversee districts' LCAP work? b. Did you feel adequately supported by the California Department of Education to support districts with the LCAP development process? c. This year was about approving LCAPs on having met basic requirements. In the future, will you play more of an evaluative/assistance role? 5. General/Wrap Up a. What is your opinion of the new funding formula? b. Are the additional resources allocated in the supplemental funds likely to meet the needs of the targeted populations? What improvements in outcomes for the targeted populations do you expect to see? c. What challenges has LCFF brought and what benefits? d. What was the process for getting your county LCAP approved by the state? Are there any suggestions you'd like to share for improving the process?