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Lesson 8.1

Spending:
Does California Skimp on Education?

California has skimped on schools for years. These charts bring it home.

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Is it true that students in California receive less support for their education than students in other places?

Yes. It’s true.

California Skimps

California consistently skimps on education. The California Budget and Policy Center reports that California’s support for K-12 education ranks low by almost any measure. “In 2014-15, California ranked 42nd among all states in spending per K-12 student, after adjusting for differences in the cost of living in each state.”

California was once a top funder of public education, but that was long ago. A 2016 report, “California’s Challenge: Adequately Funding Education in the 21st Century”, estimates that “the amount of additional funding that would be needed to move California to the average funding level of the top 10 states is $47 billion to $56 billion, roughly a doubling of current state funding.” In a long, slow slide, California has joined Florida and Texas toward the bottom of the national stack. Funding per student in California, adjusted for inflation, is only slightly above where it stood forty years ago.

Education expenditures per student by state, 1970 - 2012(est), adapted from EdSource Education expenditures per student by state, 1970 - 2012(est), adapted from EdSource "States in Motion" interactive graphs http://edsource.org/states-in-motion view #7

There has been an uptick in per pupil spending since the low of the great recession thanks to a growing economy and the passage of Proposition 30 in 2012, but California still lags the 2013 national average of $11,667. The chart below breaks this down by showing the average California spending by type of school district.

Ed-Data-Dollars-per-studentSource: Ed-Data.org

If California's low funding per student is news to you, you are in good company. Most Californians have no idea that funding for their schools is so meager. According to a 2012 survey by the Public Policy Institute of California "Fewer than four in 10 Californians (36%) think that the state’s per pupil spending for K–12 public education is below average compared to other states."

Over half of Californians believe that per-pupil spending in this state is near the top, or at least average. They are mistaken. Education spending per student in California is very low relative to other states, and has been since the 1970's. How low? Consider this: the ten states that fund education most generously, on average, spend more than $7,500 more per year on each student than California does. Over 13 years of skimpy schooling, that's an investment gap on the order of $100,000 per student.

CSBA-CA-vs-top-10-statesSource: CSBA

Really?

How can this be? Isn't California a rich, high-tax state?

Yes, California is a fairly rich state. Based on the 5 years from 2009 to 2013, the state's median household income of about $61,489 exceeded the US average of $53,482 by a full 15%.

And yes, California also collects higher taxes than most states. California's state and local tax receipts relative to the state economy exceed the national average by about 7%. For the 2009-10 fiscal year, California's Legislative Analyst Office (LAO) pegged California's state and local tax burden at $11.30 per $100 of personal income, high enough to put it in the top ten states in the country. (High-income taxpayers might be surprised that the state's overall tax rate exceeds the national average by only 7%. They might also be surprised to learn that the tax system in the state is regressive, meaning that lower income taxpayers carry a higher burden than wealthier taxpayers.)

If California has an economic tax base 15% larger than average per household, and levies state and local taxes at a rate 7% higher than average, how can it possibly fund K-12 education so far below average per student?

Youthfulness

A small part of the answer is that California is a youthful state with more students per taxpayer than most states. Funding for education must be spread among more students in California than in most other states. Texas faces this challenge to an even greater extent than California. Florida, famous as a retirement destination, has a relative abundance of taxpayers per student.

California has more students per capita than most states, so the resource pie for education is sliced more thinly in California than in states with fewer young people. An interactive version of this chart can be found at EdSource.

Other Priorities

Age demographics cannot fully explain California's skimpy education funding. For the last four decades, most states have committed a greater slice of their overall economic resources to education than California has done. (The level of funding for education as a percentage of the economy is sometimes called education funding "effort.")

California consistently commits less of its economy to K-12 education than the national norm. Historically, California has committed less of its economy toward K-12 education than other states.

In 2014-15, public primary and secondary education accounted for about 3.48% of California's economy. Powered by passage of Proposition 30 and a big boost in the state's education budget, this was a significant increase in "effort" from prior years in California. Nevertheless, California still lagged in its level of commitment to education relative to the rest of the states, where education accounted for 3.94% of the economy.

If budgets are an expression of values, does the state's long pattern of anemic investment mean that Californians place a relatively low value on public education? It might. Since 1970, California has increased spending on prisons and incarceration about three times as much as it has increased spending on education.

California's habit of skimpy investment in education since the 1970s is strongly connected to Proposition 13, which flipped the education finance system from local funding to state-sourced funding. That idea will be picked up in lesson 8.3. The next lesson, however, explores the really bad news: Dollars are only good for what they can buy, and California is an expensive place to run a school.

Clueless

Education is the largest function of government.

Of course, it's important to acknowledge that most Californians have no idea at all about their state's level of investment in education, either in absolute terms or relative terms. According to an annual survey by the Public Policy Institute of California (PPIC), only 15% of Californians can correctly identify the biggest slice of the state's budget. Nearly half think that the state spends more on prisons than any other function.

PPIC-DataSource: PPIC

California funding for K-12 education is skimpy, but it is still the largest function of government.

Review

Which of the following represents the largest amount of spending in the state budget?

Answer the question correctly and earn a ticket.
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Questions & Comments

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user avatar
Carol Kocivar December 29, 2016 at 4:05 pm
"It Turns Out Spending More Probably Does Improve Education." This article from the New York Times summarizes a new report that finds that money matters. It looks at the benefits of greater investment in lowest income school districts.

http://www.nytimes.com/2016/12/12/nyregion/it-turns-out-spending-more-probably-does-improve-education.html?rref=collection%2Ftimestopic%2FNational%20Bureau%20of%20Economic%20Research&action=click&contentCollection=timestopics®ion=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
user avatar
Carol Kocivar October 27, 2016 at 3:30 pm
Education Spending Update from The California Budget and Policy Center:

"California spent an estimated $2,000 more per K-12 student in 2015-16 than in 2012-13, inflation-adjusted. Largely as a result, the gap in spending per student between California and the rest of the US narrowed from more than $2,600 in 2012-13 to roughly $1,000 in 2015-16.

http://calbudgetcenter.org/resources/californias-spending-per-student-increased-due-proposition-30-still-trails-rest-us/
user avatar
germanb May 25, 2016 at 1:30 pm
what amazes me that is never talked about (unless quickly dismissed) is why it is that California has been near the bottom for "per-student funding" but consistently one of the top 5 states in "average teacher salaries"....
http://www.cde.ca.gov/fg/fr/sa/cefavgsalaries.asp
The system seems to be more in place to employ teachers than educate kids. I hope the millennials start taking notice and force the change that is needed to save the public educational system. It's going to take more than just MORE MONEY.
user avatar
Lynette Garcia March 4, 2017 at 2:44 pm
Take it easy. If you lower my income, I will not be able to teach here. I can barely afford a condo now. It isn't as simple as you may think. Plus, I pay for a lot of the supplies that I need in the classroom. Do you pay for your supplies at work? The school pays for the bare bones. I pay or make what goes on my walls. I pay for what makes learning fun or interesting. They provide books, some of those are outdated.
user avatar
Jeff Camp - Founder March 8, 2016 at 12:18 pm
The ever-scrupulous California Budget and Policy Center summarizes various measurements used to compare California's investment in public education with that in other states and the nation as a whole. Any way you look at it, California skimps on education. December 2015 analysis: http://calbudgetcenter.org/wp-content/uploads/Californias-Support-for-K12-Education-Ranks-Low-by-Almost-Any-Measure_FactSheet_11.17.2015.pdf
My criticism of the analysis: it would be even more meaningful to compare California to the rest of the US *excluding California. This state is so large that it influences the average, making California seem more normal than it actually is.
user avatar
Jeff Camp - Founder February 12, 2016 at 2:02 pm
Is education spending going up or down, and by how much? It's appallingly difficult to know. National information about expenditures for education are compiled several YEARS after the fact. (A pace of delivery established well before the internet, when scribes on horseback delivered data via papyrus sheets.) The latest official information is frequently an economic cycle out of date, reporting on a boom year when as the current budget goes bust, or vise-versa. Calbudgetcenter.org is one of the few organizations that sticks its neck out, a little, to offer an informed guess before the officially blessed numbers are in: after all, education is a big component of state budgets, and budgets are public. http://www.cbpp.org/sites/default/files/atoms/files/12-10-15sfp.pdf
user avatar
Carol Kocivar November 23, 2015 at 3:00 pm
There are several resources that compare education spending state by state.
A big item in the comparisons is whether they adjust for differences in state costs of living.
Hint: California has a high cost of living.
A report from the California Budget and Policy Center, "Key Considerations When Comparing California K-12 School Spending to Other States" provides a good overview.
http://calbudgetcenter.org/resources/key-considerations-when-comparing-california-k-12-school-spending-to-other-states/
user avatar
Brandi Galasso September 30, 2015 at 7:37 pm
Can I ask a true honest question? How do you know if its mis-spending but with good intention and meaning? And how much could it truly be administrators with deeper pockets and at end of day a little left over to stretch between all their schools. Because at what point do people stop reading and accepting budgets that are not true? Going out and asking "is this correct?" Because I did this the last 2 years and it's unbelievable what goes on with school funding. If you don't know enough you don't see it -- but if you do it's unbelievable. I read that we should be no worse then 2012/13, but we received as a school this year title 1 $44,000 and LCFF base $20,000 and supplement $20,000. That's only $84,000 compared to $222,000 in 12/13. And we are 90% EL but the services above and beyond are services we already had nothing new. Where can we get the real truth?
user avatar
davidstephen72 June 23, 2015 at 10:17 pm
"Skimping on funding?
I really do not think so.
Year after year, pouring more and more money is not the answer.
The answer lies in "what is done with the money." Higher salaries for teachers and administrators does not really equate to increased learning.
Case in point: years ago, the Kansas City School District poured in massive amounts of money to "fix the problem."
Result? No significant difference in learning.
Washington, D.C. Schools are the highest funded schools in the U.S.
Yet, their schools are the lowest performing by every measure.
What is needed is a major overhaul of our system beginning earlier than the traditional Kindergarten.
Why not redesign pre-school, Headstart, Early Headstart, Transitional Kindergarten, etc. to really make a difference?
Invite parents, grandparents, aunts, uncles, etc. into the classroom on a regular basis.
Such was the success of our now defunct Parent Education Programs in
California. We had no trouble enrolling one adult per child to assist in the teaching/learning of pre-K students. We even had waiting lists of willing participants.
We attended three hours per class–three classes per week.
Imagine: The teacher, the assisant., and one caring adult per child.
Class size? 25 students. The teacher was paid at the rate of a classified employee, minus any med/dental benefits, and no retirement plan. Far, far more affordable than a credential Kindergarten teacher, who faces 25 students by her/himself
daily.
PARENT EDUCATION IS TRULY "CLASS SIZE REDUCTION"
Yes, we need to reform education and not keep pouring money when it makes minimal difference.
Just check out the data coming out of Headstart. Billions of dollars spent and what
has been the return?
user avatar
Meghan B August 18, 2014 at 9:49 pm
How is it that such a large portion of the state's general fund (I believe 40%) is spent on education, and yet the percentage spend per total income is lower than for most states?
Also, I think it would be clearer to say, "3.3% of total income" rather than "3.3% of its economy," if that's what you mean. The phrase "its economy" isn't exactly clear to me.
user avatar
Jeff Camp - Founder August 29, 2014 at 10:01 pm
Getting education spending statistics right is an endless challenge. In this context, the "right" way to look at it is to include elements beyond the state general fund, such as "local" expenditures and federal expenditures. Regarding the 3.3% statistic, this is education expenditures as a percentage of total personal income, which is usually reckoned to be the right denominator for describing the big, big picture of an economy. I became interested in this approach when debates started about our health care system. When analysts began describing the economic weight of the American health care system over time and relative to other countries, I wondered whether a similar approach could help us understand the big picture of our investment in education. As far as I have been able to determine, this is the most robust way to get the "real" big picture. I used "of its economy" rather than the more technical definition because this seems to make sense to more people.
user avatar
Jennifer B June 12, 2014 at 1:31 pm
Do Californian's place an unusually low value on public education? No. Polls and voting patterns often suggest that, in fact, public education is one of the few areas that voters are willing to fund.
However, this reality creates a significant moral hazard for California public education. Taxes that are portrayed as "funding education" often go elsewhere -- or back fill diversions of base taxes that we all thought were funding education.
The majority of counties, for example, do not accurately represent where our property tax dollars actually go. Unless your county shows 10-30% of total property tax dollars diverted to "in-lieu taxes to cities and counties for VLF reduction and Economic Recovery Bonds," it is significantly overstating property taxes to education.
The state, meanwhile, shows the $6+ billion of General Fund monies it spends to backfill these transfers as General Fund expenditures on K-14 education. (When it is able to backfill these transfers. It has not done so fully in seven of the ten years since they were instituted.)
And the premise of Proposition 30 (2012) was not to increase education funding, but simply to forestall cuts.
California voters are told that the lion's share of property and income taxes go to education ... yet little seems to trickle through.
user avatar
Paul Muench October 31, 2014 at 9:22 pm
By looking at the States In Motion data from EdSource it seems that 1978 was a critical year in education funding. Before that CA was consistently in the top half of education spending for states. After that CA has steadily declined to our current position as one of the states at the bottom of the funding spectrum. Of course that was the year of Prop 13. But that year also seems to have other important milestones for CA. Of the 40 odd years of data represented on EdSource it's the nadir of students per capita. Maybe that's part of why Prop 13 passed. And according to Pew Research it's also the time when Hispanic student enrollment started to increase rapidly in the United States. From 7% in 1978 to about 24% today. Then came Proposition 1 in 1979 which was upheld by the Supreme Court in 1982 which helped re-segregate schools in CA. And then Prop 187 that passed with broad support in 1994 but was ruled unconstitutional by the federal courts. Perhaps Prop 30 marks an end of an era of continuous decreases in school funding largely based on race and class. Redefining hope and optimism is never easy, but let's hope 2012 is another landmark year for CA.
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