Instead, the trailer bill language places some new requirements on LEAs with regard to LRE funds that are unencumbered as of July 1, 2024, but does not fundamentally alter the current authorized uses for these funds. We are hopeful that with further clarifications and a bit of planning, the new requirements will be manageable for most LEAs.
One note: although this trailer bill language is just a proposal that can be modified or rejected by the Legislature, it would be unusual for the Legislature to reject a settlement agreement negotiated between the Governor and the plaintiffs of a lawsuit against the State. While we expect some further clarification of requirements related to LRE funds, the trailer bill language is very likely to stay consistent with the settlement agreement and therefore not be significantly modified.
Background
Cayla J. v. the State of California was brought in November 2020 by fifteen families in Oakland and Los Angeles. The suit focuses on learning loss during COVID, particularly for specific groups of students. The plaintiffs argued that the “delivery of education left many already-underserved students functionally unable to attend school.” The parties agreed to settle the lawsuit contingent upon legislation that adds specificity to the use of LRE funds that are unencumbered as of July 1, 2024. The settlement agreement allows plaintiffs to re-open the litigation if less than $2 billion of unencumbered funds remain as of July 1, 2024, although we doubt either the plaintiffs or the State would be excited about the prospect of scrapping the settlement and going back to court.
Under current law, the LRE funds are allocated to LEAs based on their percentage of unduplicated students and may be used through the 2027-28 school year. Allowable uses for the funds include increased instructional time or summer programs, accelerating progress, learning recovery programs, pupil supports, and access to instruction for credit-deficient students.
Under the proposed new language, LEAs with LRE funds remaining after June 30, 2024, may continue to use the funds for the aforementioned allowable uses but with added requirements for a needs assessment and additional reporting. Unrelated to the settlement, the trailer bill also allows LRE funds to be used for professional development related to the 2023 Math Frameworks.
Needs Assessment
Beginning July 1, 2024, an LEA receiving LRE funds must develop a needs assessment regarding the use and expenditure of any unencumbered block grant funds which identifies students in the greatest need of learning recovery supports and interventions, and includes a review of academic performance and chronic absenteeism. Note that the trailer bill does not specifically define the term “unencumbered.”
For the review of academic performance, LEAs must at least assess the performance on English language arts and mathematics of student groups identified in the “Very Low” or “Low” status on the California School Dashboard. For chronic absenteeism, the review must include at least student groups identified in the “Very High” or “High” status on the Dashboard.
LEAs may include local metrics as part of the needs assessment and may also contract with a third-party to develop or otherwise support the development of the needs assessment.
LCAP Reporting
Perhaps more importantly, the needs assessment will be reported as part of an LEA’s LCAP from July 1, 2025, through June 30, 2028, and must include identification of all planned expenditures of LRE funds unencumbered as of July 1, 2024 (associated actions and analysis of the implementation of those expenditures must be in the Annual Update). We understand that funds planned for use in the 2024-25 fiscal year could still be used according to those plans, with the presumption that a description of the plan would be included in an LEA’s July 1 adopted budget (and, of course, that the plan is consistent with existing LRE expenditure rules).
The LEA must also explain the rationale for the LRE funding uses selected and the research behind the evidence-based actions and services utilized by the LEA.
Specifically, for LRE funds not encumbered as of July 1, 2024, LCAPs from July 1, 2025, through June 30, 2028, would need to include the following:
- Identification of all planned expenditures;
- Identification of at least one metric to monitor the impact of each service provided;
- Articulation of the rationale for selecting the planned actions;
- Explanation of how research supports each selected service.
As mentioned above, we expect some further clarifications before 2024 Budget language related to this settlement is finalized. The main takeaway is that the authorized uses of LRE funds have not changed, but there are more specific assessment and reporting requirements related to those funds.
We’ll provide further updates as needed, and in the meantime let us know if you have any questions.
-Abe
Abe Hajela
Partner | Capitol Advisors Group