California needs a new master plan to close the education equity gap

Credit: Alison Yin/EdSource (2017)

California’s next governor will have a historic opportunity to address the massive educational equity gap threatening the state’s future prosperity. What’s needed to unlock the full potential of all our children is a new, broadly supported “Master Plan” for investing the riches of the world’s fifth largest economy at every level of public education.

The Getting Down to Facts II studies and other recent reports highlight the powerful headwinds facing the Latino and African-American majority in our schools:

• Much of the K-12 learning gap for low-income Latino and African-American students can be traced back to the lack of high-quality preschool learning opportunities.
• An underfunded K-12 system often perpetuates the learning gaps by offering fewer teachers, administrators, counselors and health professionals than almost anywhere in the United States. One recent study estimated that funding needs to be increased by some $25 billion to meet the state’s education performance goals.
• State support for higher education has dropped from 17 percent of the General Fund in the 1970’s to under 12 percent. Tuition and fees have risen to a level beyond the reach of many, undermining college enrollment and completion for African-Americans and Latinos and leaving the state short a million bachelor’s degrees by 2030.

If we hope to build a prosperous California that will not continue to depend on imported high-skilled labor, the question is not if, but how, the state raise will new revenues to invest across its education system.

Here are a few examples of ideas that are circulating, along with rough estimates of the revenues they would generate for the state’s General Fund (which support the University of California and the California State University systems) and Prop. 98 (the General Fund portion reserved for K-12 and community colleges):

• Progressive forces have gathered the signatures for a 2020 ballot initiative to reform Prop 13 by requiring the regular reassessment of commercial property at fair market value while leaving in place existing protections for residential property. It should raise $11 billion for the general fund and $4.5 billion K-14 education.
• As Warren Buffet famously pointed out, Prop 13’s annual 1 percent cap on property taxes and 2 percent annual limit on increases in reassessed value provide the wealthy a much greater tax break than low- and moderate-income homeowners. It’s worth considering reducing this tax subsidy for the highest value multi-million-dollar properties. ($5 billion to general fund; $2 billion for K-14 education)
• Another Prop 13 amendment that has been floated, including by Governor Schwarzenegger’s Committee on Education Excellence, would bump the annual 1 percent cap on property taxes up 0.1 percent, with the additional 10 percent dedicated to education. ($5-$7 billion to K-14 education)
• Though poor salesmanship helped sink former Gov. Gray Davis, re-instituting the 2 percent Vehicle License Fee that existed from 1948-98 and dedicating everyone’s extra payment to education could bring meaningful new revenues. ($6-8 billion overall; $2.5-3.5 billion to K-14 education)
• Services now make up about 80 percent of California’s economy but most of the state’s income derives from personal income and sales taxes on goods. Though most states impose some type of business and personal services tax, California is one of a handful of states that does not. Legislators are beginning to introduce proposals to tax business services and reduce the sales tax, including an effort this year. Like property taxes, a services tax is less volatile than income taxes. (After sales tax offset, $7 billion to general fund; $3 billion to K-14 education)
• California is the only major oil-producing state that fails to tax the extraction of oil. Maybe taxing oil for our children’s future could finally surmount the industry’s refusal to pony up. ($2 billion directly to K-14 education)
• In the early 2000’s California stopped collecting its own revenue from an estate tax. Some lawmakers have proposed re-imposing  a California estate tax consistent with pre-tax reform federal rules ($5 billion to general fund; $2 billion to K-14 education).
• Unlike cities and counties (and most other states), California school districts cannot raise general taxes (like sales or income taxes), only “special taxes” (e.g. regressive parcel taxes) — and those only by two-thirds voter approval instead of a simple majority. Restoring the ability of school boards to institute general taxes with a simple majority (more than 50 percent) would require a constitutional amendment and a mechanism to ensure the state compensates poorer districts that lack the capacity and resources of wealthier ones. Permitting local jurisdictions to raise new revenues outside Prop 98 is probably a key component of the long-term school funding solution. ($12-15 billion for K-12 education).

While raising revenues, the next governor should also commit to a high quality 21st-century data system that integrates PreK-12, higher ed and workforce data. If California does not modernize its ability to track the return on its investment in education, any push for significant new spending will carry with it a major vulnerability. Currently, we are one of only seven states that does not integrate K-12 and higher education data. Connecting and expanding the state’s data systems would better equip California to detect and respond to systemic inequities, performance gaps and shortfalls.

There is no one answer as to how to arrive at an adequately funded public education system. Any comprehensive solution will need to use a mix of measures, some from this list and likely others not yet conceived. Little chance of a systemic attack on California’s educational equity gap exists though without a strong champion in the governor’s seat, one who carries a bold vision and a public will-building agenda to provide the state’s black and brown student majority the best opportunities California can offer.

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John Affeldt is a managing attorney at Public Advocates in San Francisco, where he focuses on educational equity issues through litigation, policy advocacy and partnerships with grassroots organizations. 

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