LAUSD receives almost 80 percent of its money for the K-12 education program from the State. So, when there is an economic decline on the State level, it directly affects LAUSD's budget. The District also receives funds from local and federal sources.
The largest source of revenue for the K-12 operating program is the “Revenue Limit.” The Revenue Limit is a combination of local property taxes and state sales and income taxes, which the State allocates to the District on the basis of the District’s average daily attendance (ADA). Each California school district has its own revenue limit based on its type (elementary, high, or unified), size (small or large), historical spending patterns, and numerous other variables. LAUSD’s 2009-10 revenue limit is $4,961 per student.
This figure is down significantly from the previous year, when the District’s revenue limit was $5,645 per student. Again, it is critical to note that the District receives this per student revenue based on the average number of students who attend school on a daily basis and not on its total K-12 enrollment.
In addition to the Base Revenue Limit, the State allocates other revenue, some for general purposes, like Lottery Revenue, and others for specific purposes, such as K-3 class size reduction, home-to-school transportation, middle and high school supplemental school counseling, professional development and other categories. More recently, in order to give school districts flexibility in an environment of reduced resources, the State has lifted restrictions on certain categorical funding, allowing districts to redirect the funding to any educational purposes. However, the State also reduced funding for these programs. In all, the District’s categorical funding in 51 programs was reduced by 15.4% in 2008-09 and 4.5% this school year.
Another major source of revenue for LAUSD comes from the federal government. Most federal funds are to be used for specific purposes or categories of students and are meant to supplement the District’s base program. The largest single component of federal revenue is the Title I grant, which the District receives based on its US Census poverty data. This revenue must be spent for low-income students. Another federal grant, Title III, provides additional resources for English Learners. The Individuals with Disabilities Education Act (IDEA) provides additional funding for Special Education students. Federal funding increased 15% primarily due to funding from the American Recovery and Reinvestment Act.
The State of California also provides revenue for low-income students and English Learners through what is called Economic Impact Aid.