Report: Californians make more, but pay less toward education than those in other states

October 8, 2013

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California has made some historic strides in it efforts to boost school funding and provide additional resources to the neediest students, but a new report finds that spending on each student still falls below nearly every other state, in part because Californians pay less in taxes to support schools.

California’s lackluster school funding is nothing new, but the study by the California Budget Project, a nonprofit fiscal and policy analysis organization, found that “California’s financial support for schools lags its capacity.”

“The state has more per capita in personal income than the rest of the United States but spends much less per capita income than the rest of the United States,” said Jonathan Kaplan, senior policy analyst for education at the Budget Project.

In the report, per capita personal income is described as “a measure of the financial resources available to help support schools and other public systems and services.” Most folks use the common definition – taxes.

The Budget Project traces this gap back to Proposition 13. The 1978 ballot initiative imposed limits on property tax increases. Until then, local tax revenues accounted for nearly half of school funding. Since then, districts have had to rely more heavily on the state to meet their education funding needs.

In the 2012-13 fiscal year, Californians’ per capita personal income was more than $47,000, more than $3,000 above the national average. Nevertheless, just 3.18 percent of that personal income went to schools in California, compared to more than 4 percent in the rest of the country. The majority of funding – 57 percent – for California schools comes from the state, while only about 32 percent comes from “local sources, primarily local property taxes,” the report said. “In contrast,” the report said, “schools in the rest of the U.S. received roughly an equal proportion of their funds from the state and from local sources – 44.3 percent and 45.7 percent, respectively.”

The average spending by all states on education, excluding California, is $11,755 per student, according to the study. California allocates about $9,280 per student, nearly $2,500 less than the national average. Compared to the highest-spending states, California trails Illinois in per-student spending by $4,080, and New York by $6,700. California also ranks at the bottom – 51st – in student-to-teacher ratio (measured by the total number of students in the state divided by the total number of certificated teachers).

A couple of significant actions by voters and lawmakers in the past year will improve the state’s financial situation and provide more funding for students who it need it the most.

Proposition 30, the ballot initiative approved by voters last November, could bring in as much as $6 billion more a year for public schools through a temporary four-year sales tax increase for everyone and a seven-year income tax hike on the wealthiest Californians. But even that “will not provide California schools with sufficient resources to meet the challenges of educating the state’s students,” according to the report.

Foremost among those challenges is that educating low-income and English-learner students costs more because those students require additional resources, and California schools enroll the largest share of those students than anywhere in the country. More than 30 percent of the nation’s 4.4 million school-age English learners attend California public schools, and a majority of students – 53 percent – are eligible for the free and reduced-price lunch program, an indication that they live near or below the poverty level.

The Local Control Funding Formula (LCFF), approved as part of the state budget starting this fiscal year, fundamentally restructures how the state funds schools “and makes California’s education finance system more transparent,” write the reports’ analysts.

Under LCFF, schools receive a base amount of money of about $7,643, which varies by grade level. On top of that, districts receive a targeted supplemental grant of 20 percent of the base, determined by how many English learners, foster youth and low-income students are in the district. LCFF also provides a concentration grant, amounting to 50 percent of the base grant, to districts whose disadvantaged students make up more than 55 percent of their enrollment.

While LCFF “is an important step toward aligning state dollars with student needs,” according to the Budget Project, reaching the target level determined to provide an adequate education to all students would require some $20 billion more each year.

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