As Californians struggle to determine what constitutes a sufficient level of education funding, one yardstick is what California spends compared with other states. So here’s a question: How does California rank in K-12 per-pupil spending nationally in the latest studies? a) 46th; b) 41st; c) 29th; d) 22nd.

The answer is all of them. Depending on how spending is calculated and how up-to-date the data are, the per-student amount differs by thousands of dollars, and the state’s ranking varies widely.

This FAQ explains the most frequently cited methodologies, their differences and the reasoning behind them. While useful, state spending comparisons won’t provide Californians the answer only they can answer: What would constitute adequate funding in the state with the world’s sixth-largest economy, and with the largest number of children living in poverty and highest percentage of English learners in the nation?

Which organizations are the primary sources of information on per-student spending data?

  • Education Week, which each January updates Quality Counts, a comparison of state education systems. States’ per-student spending is one component.
  • The National Education Association, which releases its annual survey of state spending each May .
  • The California Budget and Policy Center, a Sacramento-based nonprofit, which periodically has done its own annual analysis to determine California’s per-student ranking. Its most recent report was published in January 2017.

What are the big differences in their methodologies?

EdWeek uses data collected by the federal government, the National Center for Education Statistics. The center publishes 2-year-old data because it waits for states to update their actual spending, and the center takes months scrubbing the information to make sure the state data are comparable. EdWeek then applies a cost-of-living factor, the Comparable Wage Index, which has the effect of lowering the rankings of states with high costs of living. Developed for the federal government by a professor at Texas A&M University, the index incorporates regional variations in the salaries of college graduates.

The California Budget and Policy Center, in an analysis that examined the advantages and disadvantages of various data sources used to rank California’s K-12 spending, concluded that it’s appropriate to apply the comparable wage index to spending rankings because high-cost states like California “are able to provide fewer services for the same level of spending than schools in states with lower costs of living.”

Because school districts spend more than 85 percent of their budgets on employee compensation, it makes sense to apply a wage-based cost-of-living index, as opposed to indexes that compare goods and services, said Jonathan Kaplan, a senior policy analyst for the California Budget and Policy Center.

The comparable wage index effectively lowered California’s per-student spending from 87 percent of the national average to 78.5 percent in 2013-14, which, in turn, lowered its state ranking.

The National Education Association’s data, based on surveys it sends out to states, are more current but depend on states’ best estimates of spending. Those can change significantly if, for example, a legislature makes mid-year budget cuts. NEA annually revises data for the two previous years, and it doesn’t apply a cost-of-living adjustment, such as a comparable wage index. Both NEA and the National Center for Education Statistics exclude bond payments for facilities and other capital costs. NCES includes costs of summer and after-school programs and administration of the California Department of Education, while NEA excludes those costs. (See comparison.)

The California Budget and Policy Center uses the most recent NEA numbers, but then applies the comparable wage index for its California rankings.

All three sources compare states’ school expenditures, not revenues. (This EdSource FAQ from 2004 explains the difference.) The California Budget and Policy Center offers a clear comparison of methodologies in this chart.

Where does California rank on the most recent calculations?

In EdWeek’s 2017 Quality Counts, California ranked 46th out of the 50 states and Washington, D.C., spending $8,694 per student – $3,462 less than the national average of $12,156 per student. This was based on data from 2013-14, the first year of California’s Local Control Funding Formula, the state’s financing system that provides additional money to districts based on enrollment of low-income students, foster children and English learners. The state’s economy has improved substantially since then, and the state’s  spending  on K-12 schools has increased significantly. Using the same methodology, it’s likely its ranking will improve for the current school year (2016-17).

In its May 2016 Rankings and Estimates report, NEA revised its 2013-14 rankings. California ranked 26th, with $10,329 in per-student spending, $1,017 less than the U.S. average of $11,346. Spending ranged from $21,263 in top-ranked Vermont to $7,143 in Arizona. (See 2016 report, pages 54-57 and 64.)

By 2014-15, California benefited from a surging economy, and the passage of Proposition 30 increased sales and income taxes. Its ranking jumped to 22nd. Its per-student spending of $11,145 was $564 below the national average of $11,709.

In NEA’s estimate for 2015-16, California was 22nd again, and the gap between the state’s $11,329 per student and national average of $11,943 grew slightly to $614 per student – 95 percent of the national average.

In its January 2017 brief “California’s Support for K-12 Education Is Improving, but Still Lags the Nation,” the California Budget and Policy Center ranked California 41st for 2015-16 using the comparable wage index. The state’s $10,291 per student was $1,961 less than the $12,252 per student national average, but was about $2,000 higher than it had been in 2012-13, before the passage of Prop. 30, when California ranked 50th.

How could California also be 29th and 22nd  in the same year?  

There are two ways to calculate a state’s student enrollment, which in turn affects calculations of per-pupil spending and a state’s ranking.

One method, called average daily attendance or ADA, is based on the average number of students in attendance over the course of the school year.  That’s how districts in California and many other states receive their funding, so that’s the method that the California Budget and Policy Center uses. It has been the traditional method. The other way is to calculate funding based on the total student enrollment as of Oct. 1. NEA and the National Center for Education Statistics report per-student spending by both methods, although the NCES prefers to use fall enrollment; one reason is that definitions of average daily attendance vary from state to state. Per-student spending based on ADA tends to be higher than by fall enrollment.

Using average daily attendance figures, NEA ranked California 33rd in 2013-14, compared with 26th using fall enrollment, and 29th in 2014-15 using ADA, compared with 22nd by fall enrollment.

Are there other useful ways to rank state spending?

Yes. One is by a concept economists call “effort” – such as how much a state spends on schools as a percentage of the personal income earned by its residents. In 2015-16, based on that measure, California was 37th, according to the California Budget and Policy Center, spending 3.29 percent of its personal income on schools, compared with the national average of 3.78 percent.

Using gross state product to measure a capacity to tax, EdWeek said California tied with three other states at 4th from the bottom, spending 2.7 percent of its taxable resources on schools, compared with the national average of 3.3 percent. Vermont committed more than 5 percent of its taxable resources on schools.

So what’s the takeaway? 

Since 2011-12, the low point in funding following the 2007-08 recession, California has increased K-12 funding by more than $20 billion. As a result, its average per-student spending has significantly increased, and its ranking among the states has improved in the three most frequently cited studies.

But there’s a big variation in the state’s ranking among the three because they use different methods and different data. California has moved up some but continues to be in the bottom fifth of states, according to Education Week and the California Budget and Policy Center, while the National Education Association places California near the middle. It’s important to understand the methodology for whatever ranking is being used.

One more wrinkle: Under the Local Control Funding Formula, per-student funding among districts will range by several thousand dollars or more in a few instances. California’s average spending per student won’t tell you much about how much any one district gets. Go here to see what the “current expense of education” per student in each district was in 2015-16. These figures exclude several expenses such as food services, facilities acquisition and construction costs.

* Preliminary data

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  1. John Walker 2 weeks ago2 weeks ago

    This is appreciated because I am constantly wrestling with this number as a board of education member trying to figure out how and where to put the money we do receive. The part of this that I still cannot get a handle on is how much do we spend on "mandated" expenses that do not get reimbursed. The new model Sacramento uses is the little bonus one time funding after the budget is … Read More

    This is appreciated because I am constantly wrestling with this number as a board of education member trying to figure out how and where to put the money we do receive. The part of this that I still cannot get a handle on is how much do we spend on “mandated” expenses that do not get reimbursed. The new model Sacramento uses is the little bonus one time funding after the budget is set in May. Expenses like internet access infrastructure which we had to contract out to the tune of tens of millions of dollars, computer devices which is an expense expense that eats, teacher contracts which CTA is pushing as high as they can because they know funding increases are now essentially gone.

    After mandated expenses there is very little left which is very frustrating when you really want to customize where the money goes depending on where you are and the makeup of the students.

  2. Sam Hicks 2 months ago2 months ago

    My son just started kindergarten in a district where the minimum recommended annual donation to PTA & Kiddo is $1,500. I’m wondering if there’s any analysis that counts this income / spending too. I imagine that it exacerbates inequality amongst districts.

  3. Kevin Robinson 2 months ago2 months ago

    The bottom line is California is not #1 no matter how we slice it. Being the most populous and richest state (6th largest GDP in the world), we should be ashamed at how we rank in education.

  4. Armein Tortle 4 months ago4 months ago

    I can simplify this for you. It's because California leans against the Mexican border and we're supporting their citizens as well (a.k.a. illegal aliens, though sometimes in the local media around here they try to paint it better with terminology such as "undocumented resident" or "undocumented citizen" – neither of which exist as a status). The local businesses all exploit them for extremely cheap labor, often don't pay overtime, sick pay, medical benefits (required beyond … Read More

    I can simplify this for you. It’s because California leans against the Mexican border and we’re supporting their citizens as well (a.k.a. illegal aliens, though sometimes in the local media around here they try to paint it better with terminology such as “undocumented resident” or “undocumented citizen” – neither of which exist as a status). The local businesses all exploit them for extremely cheap labor, often don’t pay overtime, sick pay, medical benefits (required beyond 20 hrs. of work per week); this dilutes the wages others in the workforce can expect and a livable wage in the area becomes a joke. The illegal alien children (born here or not) attend our schools, and it results in an overburdened school system with pupils who otherwise wouldn’t be attending if it weren’t for the exploitative nature of the illegal immigration and greedy business owners.

    California just cannot help itself. It’s incapable of saying “no” to taking care of Mexico’s population. It will never stop, it will only get worse – as many children who were born here to illegal parents now have a foothold and legal voting status and still have familial ties to Mexico and would love to assist the rest of their extended family members migrating here illegally.

    The state is screwed. Oh, and we give driver’s licenses to illegal aliens as well. Yah, that makes a ton of sense to me. :/

  5. Smita Patel 7 months ago7 months ago

    Financial data for 2015-16 have just been released on Ed-Data. The Current Expense of Education graph at the state level shows the growth in per/ADA spending over the past 5 years.

    Replies

    • John Fensterwald 7 months ago7 months ago

      Thanks, Smita.
      Very useful.

  6. ELLEN WHEELER 8 months ago8 months ago

    Thanks for doing this analysis for us all, John. It's useful to be able to reference your work as we're out and about and asked "Just how much does California spend on students?" The short answer is "it's complicated"! Read More

    Thanks for doing this analysis for us all, John. It’s useful to be able to reference your work as we’re out and about and asked “Just how much does California spend on students?” The short answer is “it’s complicated”!

    Replies

    • John Fensterwald 8 months ago8 months ago

      Yes, it is.

  7. John Fensterwald 8 months ago8 months ago

    Glad the piece worked, Rick and Stephen. I’ve been hearing rankings thrown around so long I figured everyone could use a refresher course.

    I appreciate your comments.

  8. Rick Pratt 8 months ago8 months ago

    Nicely done, John.

  9. Stephen Blum, Esq. 8 months ago8 months ago

    Yet another fine article from John. California is lucky to have such a fine writer to provide us with information concerning education in our state. He continues to provide an abundance of information regarding education issues without infusing his personal views. Thanks for all your fine work over the years.

  10. Floyd Thursby 8 months ago8 months ago

    Part of it is how we spend money. If we raised it by a lot, it would be a waste if we didn't prioritize merit pay, ending LIFO in return for higher pay, ending seniority pay, providing quality tutoring services such as have been so successful in many of the highest performing areas, parent education and year round learning. You could probably double the spending per pupil and barely see a budge in … Read More

    Part of it is how we spend money. If we raised it by a lot, it would be a waste if we didn’t prioritize merit pay, ending LIFO in return for higher pay, ending seniority pay, providing quality tutoring services such as have been so successful in many of the highest performing areas, parent education and year round learning.
    You could probably double the spending per pupil and barely see a budge in the achievement gap. We need to address motivation, effort, parenting and skills. We need to ask why kids need a whole summer off when it shows a damage to their performance. We need to give every low income kids a tutor for 3 hours a week similar to what Kumon and Sylvan do, and the areas with the highest test scores have a lot of these tutoring centers.
    Money is a small factor. Some Asian countries spend far less than we do and have better results. It’d be great to spend more and tax and decriminalize drugs, gambling including sports betting, and prostitution, and stop giving people sentences like 28 years for driving around yelling threats from a pickup truck, but it could all be a waste if it just goes into the pot.
    My kid’s middle school spent $18 million on an upgrade which was barely worth $5 million, but it has to be a union firm, and they don’t control costs at all. It wasn’t as much work as building 36 houses would be, but you could have built 36 houses for that in my neighborhood, and even that is only due to excessive regulation, you could build 200 in Kansas for that. Here we upgrade a middle school and you see people standing around. Status quo has to change before we get a windfall or it will be wasted.