By Sharon Bernstein
LOS ANGELES (Reuters) - Public schools in California would receive significantly more money to educate students from disadvantaged backgrounds under a deal announced on Tuesday that would dramatically reshape public school funding in the nation's most populous state.
The deal, part of a broader agreement on the state's budget, also gives local school districts more control over how they spend the $55.3 billion that the state expects to allocate for the upcoming fiscal year, which begins July 1.
The deal comes as California, which has the ninth largest economy in the world, is experiencing its first budget surplus in years. All told, the state will spend $96.3 billion next year, and set up a rainy day fund of about $1.1 billion.
The new system for funding education is being closely watched by education reformers around the country and lawmakers in other states.
It would provide school districts with a base amount of $7,537 for each child annually - $537 more than Democratic Governor Jerry Brown had originally proposed.
On its own, that's considerably less than many states spend per child. But under the new plan, school districts would then get more for each child who lives in poverty or does not speak English well. Still more would go to districts that have high concentrations of these students.
The proposal generated considerable controversy when it was first announced, because it would have left some suburban school districts with less money than they would have had under the state's current system.
But Brown, who has championed the plan, and top legislative leaders said on Tuesday that they had reworked the formula so that doesn't happen.
"We increased the base grant so that no district lost," said Senate Pro Tem Darrell Steinberg, who represents the Sacramento area.
The new system would make California's "one of the most progressive school finance systems in the nation," said Rebecca Sibilia, fiscal strategy specialist for the education reform group StudentsFirst. "Even more importantly, it represents an important step toward funding California's students based on their unique needs."
The plan, worked out by a conference committee late on Monday, is expected to be approved as part of the larger budget package by both houses of the legislature before the end of June.
(Reporting by Sharon Bernstein; Editing by Cynthia Johnston and Sandra Maler)