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This story was originally published on EdSource.

Districts across California face a looming crisis as funding freezes, proposed cuts and a government shutdown jeopardize critical resources for millions of students and threaten to disrupt classrooms, staffing and services. Federal volatility leaves even well-designed state and district funding systems vulnerable, and leaders must act now to ensure every dollar counts, especially for the country’s most vulnerable students.

California is far from immune to federal turbulence, receiving about $8 billion annually in federal K-12 education funding. This summer, with more than $800 million at stake, state leaders joined legal challenges to safeguard funding for core services, including those for low-income students, special education, English learners, and foster and homeless youth.

But California has also built its own framework to direct resources where they are most needed, progress that matters even more when federal dollars are unstable. Through the Local Control Funding Formula (LCFF), state dollars flow to local education agencies in the form of base grants for all students, along with supplemental and concentration grants for specific student populations. This targeted approach ensures that significantly more funding follows higher-need students, and research links LCFF to improvements in test scores, graduation rates and college readiness. 

Los Angeles Unified (LAUSD) has gone a step further. Through initiatives like the Student Equity Needs Index (SENI) and the Black Student Achievement Plan (BSAP), the district channels additional discretionary dollars to its highest-need schools, giving school leaders the flexibility to address pressing local priorities. LAUSD’s approach produces intentional differences: The district allocates $19,217 per pupil on average, with the highest-need schools receiving about $7,300 more per student than the lowest-need schools.

These initiatives have pushed California and LAUSD closer to student-centered funding, but they remain imperfect. As federal support grows more uncertain, including funding for low-income students (Title I), the Individuals with Disabilities Education Act (IDEA), and programs that help provide meals and essential services, these systems’ shortcomings leave students more exposed. 

The cracks show in the disaggregated LAUSD data: Schools of similar type and need levels can end up with very different per-pupil allocations, and in some cases, schools at opposite ends of the need spectrum receive nearly identical per-pupil funding. This variation suggests that funding does not consistently align with student needs. For instance, one driver of these disparities is enrollment, with smaller schools often appearing better funded per pupil because fixed costs, such as a principal or custodial staff, are spread across fewer students. 

Additionally, higher per-pupil allocations do not necessarily translate to more resources to spend in classrooms. For small schools, much of that money is tied up in covering basic operations rather than student services or programming. Other barriers, from staffing rules to the allowable uses of discretionary funds, further limit what principals can do with their dollars, a problem we explore in our recent report.

The challenge of putting available dollars to work, especially for students who rely on them the most, is not unique to LAUSD. Money only matters in what it enables, and protecting students from federal unpredictability requires making the most of state and local dollars. To build stronger, more resilient funding systems, state and district leaders can take several steps now to make the most of their resources: 

• Strengthen need-based funding formulas. California’s funding formula and LAUSD’s student needs index demonstrate progress in directing resources toward student needs. State and district leaders should protect and expand these models to ensure resources flow where they are most needed.
• Ensure per-pupil dollars reflect real needs in schools. States and districts should review per-pupil funding variation and address mismatches that leave similar schools with very different resources. Regular reviews and greater transparency can help ensure that funding aligns with what schools actually need.
• Support schools to adjust to enrollment realities. As student populations change, school budgets — typically tied to enrollment and average daily attendance — can drop quickly. States should consider ways to stabilize funding to protect schools from sudden losses when enrollment dips and give leaders time to adjust responsibly.
• Empower school leaders to use funds strategically. LAUSD has taken steps in the right direction by giving principals more support, flexibility and training in spending resources. Other districts can follow suit by simplifying budget rules, expanding professional development and ensuring principals have the tools to make student-centered spending decisions.

If federal funding disappears, the only safeguard is how effectively states and districts use what they have. The call now is for leaders to confront this reality head-on: to make their systems strong enough that when Washington wavers, students are not the ones left paying the price.