Who Stands to Gain from Changes in School Enrollment Funding? [ppic.org]

By Julien Lafortune and Joseph Herrera, Public Policy Institute of California, January 31, 2022

Amid concerns over growing absenteeism since schools reopened this fall, the state legislature is considering a change in how schools are funded. Currently, California is one of seven states that fund schools using average daily attendance (ADA), meaning that districts do not receive funding for students on days they are absent. Critics contend that attendance-based funding penalizes schools serving students more prone to the socioeconomic factors that drive absenteeism, while proponents counter that it provides incentives for schools to address poor attendance. Past research has found that states with high-incentive student-count methods—such as the ADA method currently in use—have lower absenteeism and higher graduation rates.

Proposed legislation would provide supplemental funding for enrollment in addition to ADA-based funding, so long as districts demonstrate effort to address absenteeism. To understand the impacts of this potential shift, it is crucial to look at how attendance varies across districts, and how that relates to student demographics.

Such a shift would be a financial boon to districts currently struggling with poor attendance. For example, in Los Angeles Unified (LAUSD), average daily attendance has been roughly 77.5% of fall enrollment in the past five years before the COVID-19 pandemic. A switch to enrollment-based funding could mean a 22.5% increase in funding through the state’s funding formula, or more than $1 billion in additional funding. Districts with high attendance levels would see less of an increase—and may stand to lose some funding if the dollars devoted to enrollment-based funding are not supplemental but instead crowd out existing state K–12 education spending.

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