Brenna Swift, The Union Democrat

California's school financing system has been overhauled for the first time in 40 years, forcing Mother Lode districts to revise their budgets but promising to fill gaps left by the recession.

Financial prospects of local schools look much brighter than they did last summer, when school officials drew up their budgets on the assumption that a temporary tax increase would fail at the polls and require drastic cuts.

The improving economy and passage of the tax increase, Proposition 30, meant the budgets adopted by local districts in June generally don't include reductions to student programs or other dramatic cost-cutting measures.

Most local schools will also start getting more for each student under a new school-funding scheme, known as the "Local Control Funding Formula," signed by Gov. Jerry Brown July 1.

The formula, to be phased in over the next eight years, will do away with a complicated financing system that originated decades ago and divided money into categories for specific purposes like arts education.

Under the new formula, districts will get a base grant for each student depending on grade level, plus additional money for each student who is low-income or learning English.

Schools with large numbers of poor or English-learning students will get even more.

School board members will have more latitude to decide how money is spent, free of the old restrictions that tied sums of money to particular uses - hence the name "local control."

But that comes with greater demands for accountability, said Claudia Davis, Associate Superintendent for Business Services at the Calaveras County Office of Education.

"Each school district would create a plan for how they're going to spend the resources they have that ties to how they're going to meet the needs of … (their) students," Davis said.

She said the rules that will govern the process are still unclear, since the new funding formula is such a dramatic departure from old budgeting requirements.

"It's a massive, massive overhaul of the system," said Tami Ethier, Assistant Superintendent for Business Services at the Tuolumne County Office of Education.

The Local Control Funding Formula, championed by Brown, initially set aside more for districts with large proportions of poor children, English-learning students and foster kids.

Some school officials, such as former Summerville Union High School District Superintendent John Keiter, complained rural districts would lose out on funding while urban ones gained.

Keiter called the new formula a "bad deal for Tuolumne County," which has smaller numbers of students learning English than many other California counties.

Lawmakers eventually reached a compromise that boosted the amount of funding for all districts by several hundred dollars per student, regardless of their background.

The goal is for districts to be financed at the same level they were in 2007-08, the last year education was fully funded in California.

"The most positive thing is that there is some new money for schools," Ethier said. "No matter what, there's nobody losing money."

Local school officials said they're waiting on more information about the exact amounts they'll get next year under the Local Control Funding Formula.

That will vary based on the gap between what districts received last year and target amounts they'll get eight years from now.

Yet there's no guarantee that the funding will materialize in the state budget every year, making long-term predictions difficult, Davis said.

Local school districts approved budgets in June that followed the old funding model. They have about several more weeks to make changes based on the new formula and state budget.

Summerville Union High School District will get about $50,000 next year from a provision that evens out funding for districts that wouldn't receive enough under Local Control, said Chief Business Official Tonya Midget.

"It's certainly not a windfall of money like some of the school districts," Midget said. "We need to still find ways to save and live within our means."

Belleview School District is benefitting from the same provision. But under the formula, extra money for disadvantaged students depends on the number who sign up for free and reduced-price school lunches.

Some local districts, including Sonora Elementary and Columbia Elementary, are hoping to boost that number by getting more families who qualify to sign up.

"Once it gets out there that this is the new funding for schools, and all the districts go on board with it, then more parents are going to understand it," said Columbia Elementary Chief Business Official Norma Hunt.

Sonora Union High School District's finances improved as California's economy recovered, said Sonora High Superintendent Mike McCoy.

But Calaveras Unified School District Superintendent Mark Campbell said his district is still deficit spending and will continue considering cuts, depending on revenues received next year.

Cost-trimming measures could include closing Rail Road Flat Elementary School due to declining enrollment, cutting band programs and more.

Several districts in Tuolumne and Calaveras counties are on an alternative funding model dependent on property taxes, meaning their revenues fluctuate with local property values.

Those districts - including Bret Harte Union High School District, Vallecito Union School District and Twain Harte-Long Barn Union School District - could benefit less from the new funding model.

Davis said Brown's new funding formula likely won't be a cure-all, at least not for awhile. She pointed out that California came in 47th in the nation last year in Education Week's ranking of per-pupil spending.

"Even when we get to these target numbers, we're still going to be in the bottom of the nation," Davis said. "That's really going to be the key, getting to that middle ground nationally."