The Funding Trap: How Attendance Policy Shapes Who Gets to Be Present

Co-authors: 

• Desiree O’Neal, Ph.D. Student, USC Rossier
• Dr. Taylor McGee, Assistant Professor, Christopher Newport University
• Keena Jones, Ph.D. Student, USC Rossier
• Akunna Uka, Ph.D. Student, USC Rossier
• Alvin Makori, Ph.D. Student, USC Rossier
• Dr. Kirsten Elliott, Enterprise Client Executive, NetApp
• Dr. Kendrick Davis, Professor of Research and Co-Director at USC STEM Center, USC Rossier

Across California, educators and policymakers are grappling with two challenges that increasingly shape the stability of public schools: chronic absenteeism and equitable school funding. Although these issues are often discussed separately, one framed as a challenge of student engagement and the other as a question of resource allocation, they intersect within the structure of California’s school finance system. 

California’s school finance system is anchored in the Local Control Funding Formula, adopted in 2013 to distribute resources more equitably across the state’s public schools. Under LCFF, districts receive a base level of funding for each student along with additional resources for students who are low-income, English learners, or in foster care.

In California, the number of students who attend school each day–what is referred to as Average Daily Attendance (ADA)– plays a central role in determining how much funding districts receive. When attendance declines, so too can the resources available to support students. While the formula is designed to direct more resources toward students facing the greatest barriers to opportunity, The Cost of Equity underscores that recent funding shifts have exacerbated long-standing inequities for Black students and that attendance-based funding structures (ADA) can reinforce those disparities. 

Historically, this structure was intended to encourage schools to promote regular attendance. Yet the system also introduces financial volatility into district budgets, particularly in communities where structural challenges make consistent attendance more difficult to achieve. In practice, schools serving students who face the greatest social and economic barriers may also be the schools most likely to experience fluctuations in attendance-based funding.

Recent policy developments have brought renewed attention to the interplay between chronic absenteeism and equitable school funding. In January 2026, the California Legislative Analyst’s Office released a report examining whether the state should move away from its long-standing practice of funding schools based on ADA and instead adopt an enrollment-based funding model. The report found that more than 90 percent of California’s school funding flows through programs tied to attendance counts, highlighting how deeply the state’s funding system is tied to daily school attendance. At the same time, the analysis estimated that moving fully to an enrollment-based funding structure would require roughly $6 billion in additional annual state spending disbursed to schools, illustrating the fiscal challenges associated with changing the system.

These questions are unfolding alongside broader debates about education funding in California. Governor Gavin Newsom’s proposed 2026–27 state budget projects $125.5 billion in Proposition 98 funding for K–12 schools and community colleges, approximately $7.4 billion higher than the estimate released in June 2025. The proposal maintains the state’s Local Control Funding Formula (LCFF)—the primary mechanism for distributing education funding—and includes a modest cost-of-living adjustment for school programs. As lawmakers review the proposal ahead of the state’s annual May budget revision, discussions about the relationship between attendance, funding stability, and student opportunity continue to intensify.

Together, these debates and fiscal challenges highlight a broader policy challenge confronting California’s education system: how should school finance systems respond when attendance patterns shift and demographic change reshapes enrollment across the state? This blog builds on two recent USC Critical Policy Collective reports—The Cost of Equity, which examines how funding shifts disproportionately affect Black students, and Combating Chronic Absenteeism, which analyzes chronic absence as a racialized issue in California.

Chronic Absenteeism and the Conditions of School Participation

Chronic absenteeism has emerged as one of the most pressing challenges facing schools in the years following the COVID-19 pandemic. A student is considered chronically absent when they miss 10 percent or more of the school year, regardless of whether absences are excused or unexcused.

During the pandemic, absenteeism rates increased sharply across the United States. Although attendance has improved as schools returned to in-person instruction, many districts continue to report absenteeism levels that remain higher than before 2020. These patterns reflect more than individual student behavior. They often emerge from broader social conditions that shape whether students are able to attend school consistently.

Transportation barriers, housing instability, family caregiving responsibilities, and health challenges all affect attendance patterns. As Combating Chronic Absenteeism makes clear, these burdens are not evenly distributed: Black, Native, and Pacific Islander students in California have faced some of the highest rates of chronic absenteeism, with Black and Latine students from low-income backgrounds and students with disabilities continuing to experience disproportionately high rates. In many communities, these factors intersect with economic pressures that make regular school participation more difficult. Attendance can also be shaped by wider external conditions. For example, in California, the deployment of Immigration and Customs Enforcement (ICE) agents into communities has been cited as a contemporary factor associated with increased absenteeism. Chronic absenteeism is therefore increasingly seen not just as a school issue but as a reflection of the structural conditions shaping students’ daily lives. As such, the consequences for students are substantial. Research consistently links chronic absenteeism to lower academic achievement, reduced graduation rates, and diminished college and career opportunities. For schools and districts, however, absenteeism also carries financial implications that receive far less public attention.

Enrollment Decline and Financial Stability

Attendance patterns are not the only factor shaping school funding in California. The state’s public school system is also experiencing declining enrollment, adding another layer of complexity to district finances, because fewer students enrolled in a school means fewer resources.

California’s K–12 enrollment has fallen from approximately 6.2 million students in 2019–20 to about 5.8 million in 2024-25, reflecting broader demographic changes, including declining birth rates and migration patterns. These trends are expected to continue over the coming decade, and many districts are reeling because enrollment decline can compound financial pressures. In an attendance-based funding system, districts may face two simultaneous challenges: fewer students enrolled overall and fewer students attending on a given day. Together, these trends can create uncertainty for districts attempting to plan budgets, maintain staffing levels, and sustain programs designed to support students.

Funding, Attendance, and Equity

The policy debate emerging in California reflects a tension between school finance structures and enrollment trends. Attendance-based funding can incentivize schools to promote regular student participation. At the same time, many of the factors driving absenteeism, including housing instability, transportation access, health challenges, and economic hardship extend well beyond the control of the schools themselves.

Taken together, these dynamics illustrate the complex relationship between K-12 finance structures and educational equity. California’s LCFF system was designed to direct additional resources toward students facing the greatest barriers to opportunity. Yet, when funding is tied closely to attendance, districts serving communities—including Black students and other historically marginalized student populations—may also experience greater financial volatility.

As policymakers evaluate potential adjustments to the state’s school finance system, they must weigh the benefits of financial stability for districts against the fiscal implications of altering a system that has historically emphasized attendance as a central funding metric.

Looking Ahead

Taken together, these findings suggest that chronic absenteeism cannot be addressed through isolated school-level responses alone. California’s recently released Attendance Guide along with the Chronic Absenteeism Statewide Resources Hub developed in partnership with CCEE, offers one example of the state’s growing attention to this issue, highlighting strategies for early identification, root-cause analysis, and coordinated support. Because attendance is shaped by broader structural conditions and carries direct consequences in an attendance-based funding system, the most effective responses will need to connect school practice, public policy, and future research.

Build Stronger Attendance Infrastructure and Early Intervention Systems: Schools and districts need systems that identify attendance concerns early, use disaggregated data to surface disparities, and respond through tiered supports matched to student need. This includes strengthening educator and staff capacity to interpret attendance patterns, implement culturally responsive interventions, and respond before disengagement becomes chronic. At the policy level, it also points to the importance of early warning systems, transparent reporting, and accountability structures that make inequities visible rather than obscuring them.

Address Barriers to School Participation: Chronic absenteeism is often rooted in conditions that extend well beyond the school itself, including transportation barriers, housing instability, caregiving responsibilities, mental health needs, economic hardship, and fear tied to immigration enforcement. A meaningful response must therefore move beyond punitive attendance logics and invest in wraparound supports that help remove these barriers. Flexible attendance approaches, transportation access, school-based services, and protections for immigrant students and families should be understood as part of an attendance strategy, not separate from it.

Strengthen Family and Community Partnerships: Schools cannot address chronic absenteeism alone. Family trust, multilingual communication, and sustained collaboration with community-based organizations, transit agencies, housing providers, and other local partners are central to improving attendance over time. These partnerships are especially important in communities that have experienced long-standing exclusion or underinvestment. Treating families and community partners as co-creators of solutions can help shift attendance work away from compliance and toward shared responsibility for student success.

Align Funding, Policy, and Equity Goals: California’s current system creates a deeper policy contradiction: schools are expected to address absenteeism and support students with the greatest needs, yet they can lose resources when attendance becomes more unstable. That tension suggests the need for stronger alignment between attendance policy, funding design, and future research. Current debates over enrollment-based funding, attendance stabilization, and statewide absenteeism reduction efforts point to an important opening for policymakers and researchers alike. The central question is not only how to improve attendance, but how to ensure that schools serving historically marginalized students are not left with fewer resources when instability rises.

Viewed together, these recommendations underscore a broader point: chronic absenteeism cannot be addressed as a narrow issue of student behavior. It must be understood as a structural and policy challenge, one that requires California to better align school participation, resource stability, and equity.

About the USC Critical Policy Collective

The Critical Policy Collective (CPC) is an immersive, multi-school training and research endeavor based at USC, designed as a precursor to the future Critical Policy Institute. Led by faculty and students from the Rossier School of Education and the Dornsife College of Letters, Arts and Sciences, CPC envisions evolving into a nationally recognized hub for justice-oriented policy scholarship and student-driven impact across the P–20 educational landscape.