Sustained support for core education programs

For California children in public schools, the final, enacted state budget for 2023-24 delivers steady support despite a stock market unnerved by a spike of inflation.

The main portion of the education budget each year funds a system known as the Local Control Funding Formula (LCFF). This is the money that goes directly to school districts to pay for operating costs like educators, administrators, counselors, transportation, building maintenance, etc. To sustain the purchasing power of school systems, this year’s budget includes the largest cost-of-living adjustment (COLA) in the history of the LCFF system (8.22%). The budget also increased resources for special education, transitional kindergarten, nutrition, and preschool.

In other good news, the budget continues to support ongoing priorities such as community schools, before- and after-school programs and summer learning.

A note of caution

Budgets are built on predictions. Will Californians actually earn income and pay taxes at the levels predicted in the budget by the state Department of Finance? No one knows for certain.

The state Legislative Analyst Office (LAO), which is independent from the Department of Finance, has warned that it regards the budget forecasts as on the high end. It cautions that a $30 billion shortfall is likely in future years under these assumptions. If this prediction comes to pass, Dan Walters of CalMatters argues that new cuts or new revenues will be necessary to find balance. The state Department of Finance tracks key indicators monthly.

Many planned investments have parents smiling

The budget contains many investments that parents and communities have asked for. Let’s take a look.

In the Ed100 blog
It’s time to screen all students for dyslexia risks

Screening for risks of dyslexia: At last, California has a plan. The budget provides $1 million to convene an independent panel of experts to create a list of approved methods to screen all children grades K-2 for the risk of reading difficulties, including dyslexia, by the 2025-26 school year.

In the Ed100 blog
Schools have new money for arts education. What should they do now?

The Arts and Music in Schools: Voters passed the Art and Music K-12 Education Funding Initiative (Prop 28 of 2022), guaranteeing funding for arts education. (Nearly $1 billion in 2023-24)

Free meals in school: California was the first state to make free meals universal in schools. Five other states have followed so far.

Equity multiplier: New in 2023-24, schools with the highest concentrations of low-income students, English learners, homeless, and foster youth students will receive additional funding through an equity multiplier. The budget provides $300 million in new, ongoing funding to accelerate learning gains and close opportunity gaps of historically underserved students.

How does California pay for this? Education budget basics

Funding for public K-12 education in California comes from three main sources: state income taxes, local property taxes, and the federal budget, in that order.

State income taxes that go toward education are strongly influenced by the economy, the stock market, and the terms of Proposition 98, passed by voters in 1988. Prop. 98 defines a minimum level of spending that the state is obligated to allocate to public education. The combination of expected property tax receipts for education and state funds for education are known as the Prop. 98 minimum funding guarantee.

Property taxes that go toward education (and which are included in calculation of the Prop 98 guarantee) were more or less set in stone by voters who passed Proposition 13 in 1978.

Federal funds for public education were temporarily elevated by pandemic programs.

Proposition 98 funding

California voters amended the state constitution in 1988 by passing Proposition 98. This measure obligates the state to spend a certain percentage of the General Fund on public education each year. State general funds for education, plus local property taxes for education, in combination, are known as Proposition 98 funds. Driven by changes in the economy and the stock market, the 2023-24 education budget remains below the high mark two years ago.

How is the money spent? Well, glad you asked. Here’s the link to K-12 Proposition 98 Funding by Program. The top five programs are the Local Control Funding Formula (most of the funding), followed by special education, expanded learning opportunities, state preschool, and child nutrition.

Per pupil funding sustained

The line graph below shows how per pupil funding in California has increased over time, even in the pandemic. Note that this chart calculates dollars per student enrolled as of the October “census” date. Other sources may show a slightly higher figure per student because (unlike most states) California funds schools according to Average Daily Attendance (ADA).

If you look at the dashed line in the chart above, it shows that California funding per pupil increased significantly since 1988-89. That’s great news, right?

But when adjusted for inflation — the solid line — the news doesn’t look as good. Yes, revenue has grown. But so has the cost of running a school. School funding in 2023-24 has just about kept pace with inflation. A loaf of white bread cost about 60 cents in 1988. The same loaf costs about $1.89 in 2023.

Total education funding

In addition to the Prop. 98 sources, which are state and local, the federal government provides ongoing support for things like nutrition, special education, aid for low performing schools, and support for disadvantaged children. For a few years it also provided money to public schools for pandemic relief.

California no longer lurks in the basement of national school funding.

The 2023-24 enacted budget total education funding is $129.2 billion ($79.5 billion General Fund and $49.7 billion other funds) for all K-12 education programs.

With core state and local funding at $17,658 per student in average predicted daily attendance for 2023-24, California funding no longer lurks in the national basement of national school funding. The state is now probably in the middle of the pack… but no one really knows. Governments compile data with excruciating slowness. Comparable data will take years to emerge.

Local Control Funding Formula

Prop. 98 funding is mostly distributed on the basis of student attendance. School districts, charter schools and county offices of education receive additional funding for low income students, English learners, homeless and foster youth under a system known as the Local Control Funding Formula (LCFF). The base funding amount per student in attendance varies a little by grade level. Added to that is supplemental funding based on the number of students with higher needs. Districts with a very high percentage of needy students get even more support through a concentration grant.

Below are the LCFF funding rates for 2023-24

Not so good news: Delays/cuts in one time funding

Some education programs are funded as ongoing obligations, expected to continue from year to year. Others are supported on the basis of one-time funding. When facing a shortfall (a budget problem, in eduspeak), these programs are considered expendable.

• Ongoing funding typically is money from secure ongoing revenue.
• One-time funding, in comparison, is from revenue sources that are not stable, like tax revenue received in excess of the budget.

The prudent rule is that one-time money should not be used in a way that creates obligations for ongoing expenses, such as hiring new teachers or bargaining salary increases.

Prior education budgets contained significant one time funding initiatives. This gave the Governor and legislature the flexibility to delay or cut items without affecting ongoing programs.

Getting to the source

This rather epic post is only possible because detail-oriented people do the important work of making information available even as it changes through the budget process. If this sort of stuff interests you, here are some resources you should know about:

• California 2023-24 education budget summary
• California State Budget
• California Department of Finance
• California Legislative Analyst Office
• California Department of Education
• California Budget and Policy Center: Public Policy Research
• EdSource