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

Yes. It’s true.

(1) California spends less per student than other states do

California consistently skimps on education, and has done so for decades. By how much? Well, buckle up. Measuring and comparing is more complicated than it might seem. This post presents data about education funding and the context of that funding.

The most basic way to compare states’ support for education is to look at the number of dollars they spend on K-12 education each year and divide by the number of students. By this unsophisticated measure, California is middle-of-the-pack. Ordinary. The chart below shows annual expenditures per student in each state, adjusted using the Consumer Price Index (CPI), the most widely-used measure of inflation.

It’s tempting to look at the chart and imagine that it’s good news. After all, the overall trend is upward, right? And sure, California was below the norm for a long while, but it has climbed up to average! So what’s the problem?

There are many problems with simply comparing education dollars per student, most importantly this: dollars are only valuable for what they can buy. The CPI measures inflation in the cost of stuff-in-general, but most of the underlying costs associated with education have risen at much higher rates than the CPI. For example, the cost of earning a college degree (which teachers need) has risen faster than core inflation. So has the cost of health insurance, which school districts provide to teachers as part of their benefits.

Another vital shortcoming of the simple dollars-per student chart is that costs vary from one place to another. To express the differences between states' true investment in students, EdWeek, a national publication that focuses on education policy, restates the numbers, deflating or inflating them in order to make them comparable. (See the EdWeek report Quality Counts. Subscription required.) This is a meaningful and effective approach, but it can lead to confusion because the report expresses its findings in terms of "adjusted" dollars per student. In this lesson, we make no such adjustments. California's long history of low investment in education is amply evident without them.

(2) California commits less of its economy to schools

The broadest way of looking at shifting social priorities is to look at the size of different social sectors in the overall economy. For example, in 1960, health care was about 5% of the US economy. As medical progress improved and life expectancy improved with it, health care’s share of the economy expanded to more than 17%. On a national basis, this is often expressed as a percentage of Gross National Product (GDP). When comparing the economies of states, the measure most equivalent to GDP is total personal income.

Societies tax themselves in various ways to scrape together money for infrastructure and services that are important to them, and those tax-funded services are part of the economy, too. The budget policies that determine where money is spent reflect priorities — Martin Luther King reportedly described budgets as moral documents.

Why doesn’t California spend more money on education?

Economists refer to the relative level of spending on a social priority as economic effort. Public education is a small portion of the economy in every state, but it varies. Relative to other states, California spends substantially less of its total economy on public K-12 education. California is a low-effort state when it comes to education.

(3) It costs more to educate students in California than it does in other states

Costs vary from place to place, and California is a high-cost state. Most of the costs of education are people costs. It’s expensive to hire college-educated adults such as teachers, counselors, librarians, and administrators. Relative to other states, the cost of living in California is high, and districts must offer competitive salaries in the context of their local labor market. (Ed100 Lesson 3.8 examines teacher pay in depth.)

(4) California has an average number of kids to educate

In some states, age demographics make it relatively easier to fund schools because there are more taxpayers and fewer dependents. California is not among those states. California is often compared with Florida and Texas because they are all large states with a high proportion of students learning English, though California has America's highest proportion of English Learners. The age demographics of these states differ significantly, which can make comparisons among them a little confusing. Like Hawaii and Washington, D.C., Florida enjoys the benefit of an older tax base — it has more taxpayers and fewer children. Texas, by contrast, is more like Utah, a young state where funds for education must be spread among more students. California falls in between.

(5) California has very large class sizes and fewer support services

The math is inescapable. A state with average funding per student, an average number of students per taxpayer and higher-than-average pay for teachers must make do with fewer teachers. Students experience this difference in the form of large class sizes, a topic we take up in detail in Lesson 4.2. Because teachers are crucial to student success, and because they are represented at the negotiating table, when times are tight school districts tend to avoid cutting teacher positions, instead sacrificing everything else they can first, including counselors and administrators. Wherever class sizes are chronically large, as they are in California, students have less of everything.

(6) California has somewhat high taxes, overall

Public education relies on a combination of state and local taxes in each state. The mix differs a bit from one state to the next, and as Ed100 Lesson 8.3 will explain, California dramatically shifted away from property taxes after passage of Proposition 13 in 1978. Higher income taxes, particularly on high earners, partially filled the gap. According to research by the Tax Foundation, the total “tax burden” in California is a few percentage points higher than in most other states. WalletHub replicated this finding in 2020 using similar methodology.

California's highest-income earners are taxed at a higher rate than taxpayers in most other states. In total, though, the state's tax system is regressive, meaning that taxpayers with lower incomes carry a higher tax burden than wealthier taxpayers. Want to know even more? California's Legislative Analyst produced a report with a full rundown of California's Tax System in 2018.

A budget is an expression of values

Does California’s long pattern of low investment in public education mean that Californians place a relatively low value on it? It might. For example, since 1970 California has significantly increased spending on prisons and incarceration. To be clear, schools are a much bigger piece of the budget pie than prisons, but spending on prisons grew far faster than spending on schools.

Structurally Skimpy

Long-time observers of California's education system often trace the state's habit of skimpy investment in education with Proposition 13, which flipped the education finance system from stable local funding (through property taxes) to volatile state-sourced funding (through income taxes). An unintended consequence of this structural change is that it weakened voters' political will to tax themselves. In general, voters are most likely to support taxes that help their immediate community. They are less apt to trust that taxes levied on a statewide basis will be spent well. By flipping the basic revenue model from local to statewide, California overturned its political underpinnings. School funding in the state has never recovered.

Does funding for education matter?

Why is it important to know that California skimps on education? Because it turns out that money really does matter. It seems obvious, but for a very long time education outcome data were so low-quality that it was quite difficult to prove a connection between money and learning. The connection was significantly clarified in a pair of 2018 studies titled Money and Freedom, which found that "money targeted to districts with the greatest student need has led to improvements in student outcomes."

Other research has corroborated the connection. For example, How Money Matters, a study by the Learning Policy Institute, concludes that "on average, aggregate per-pupil spending is positively associated with improved student outcomes."

The difference in funding for education between California and other states is not small, and adjusting it in a serious way would require an act of political will. If serious money were added, where would it go, and what might result? These questions are taken up in Ed100 chapter 10.

Clueless

Education is the largest function of government.

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 a 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.

Source: PPIC

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

Updated August 2017
Updated April 2018
Updated October 2018. Updated and reworked extensively January 2021.