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Lesson 8.9

More Money for Education:
What Are the Options?

School donations are great, but…

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The preceding lessons explained the problems. California's funding for education is quite low. The cost of providing education here is high.

As a result, student-teacher ratios in California are unusually high, which makes it even harder to address the considerable needs of California's students: More children in California live in poverty than in most states; many are learning English; and many have special education needs.

Because education funding depends heavily on income taxes paid by the top 1% of taxpayers, it tends to boom and bust with the stock market. Polls consistently show that majorities of Californians would support taxes for schools in their own community, but California's Proposition 13 makes it very difficult to pass local taxes.

Understanding the Problem

These systemic challenges are not new, and there have been many attempts to address them. They fall into four categories:

  • A Larger Slice. Commit more of the state budget toward education
  • A Bigger Pie. Raise taxes at the state level to provide more money for education
  • A Different Pie. Allow local taxes to provide new money for education
  • Actual Pie. Hold bake sales (and other local fundraisers)

Solutions have to start with an understanding of the problem. In about 2005, a coalition of education funders pooled their efforts to sponsor Getting Down to Facts, an ambitious research effort to give clear advice to the Education Excellence Committee, an expert panel appointed by then-governor Arnold Schwarzenegger to recommend changes consistent with the research. (Disclosure: Ed100 founder Jeff Camp served on this committee.)

Among its main recommendations, released in January 2008, the committee called for a thorough reinvention of California’s school funding system. It envisioned a model in which more money would go toward schools where more resources were needed to help students succeed. Much of this recommendation was accomplished in 2013 with passage of the Local Control Funding Formula (LCFF).

California schools are not within bake-sale distance of nationally normal funding

The committee also urged lawmakers to add several billion dollars to the state education budget. The opposite happened. When the “great recession” hit, K-12 funding was cut dramatically. Education budgets fell about 20% between 2008 and 2012. It took seven years for education funding to recover to its 2008 level, adjusted for inflation.

A Larger Slice for Education

Polls assure us that, in principle, Californians want better-funded schools ... if they don't have to pay for them. For example, in 1988 voters passed Proposition 98, a measure that didn't increase taxes -- but required lawmakers to commit a greater portion of the state budget toward education.

At budget time, advocates for other causes (like social services or the environment) can be excused for regarding the education budget with a degree of envy. The budget process is zero-sum: there are winners and losers. Proposition 98 has often served as a powerful advantage for education advocates; if a draft budget falls meet the minimum bar of the "Prop 98 guarantee" lawmakers can expect a stern conversation and the occasional threat of litigation.

Litigation (or the threat of it) over education budgets is not unique to California. Because education is a basic function of government, it tends to be mentioned in state constitutions. In some states, education advocates have successfully prompted increased spending through judicial pressure. Efforts to spur increased education spending (beyond the Prop 98 minumum) through education "equity and adequacy" litigation are common among the states, and in some places, notably New York, have spurred major increases in educational investment. Related cases have not been particularly fruitful in California. (See our blog for more.)

Litigation over the condition of education has not been entirely without effect, however. In 2004, California settled a class action case usually known as the Williams Case. The settlement established some minimum requirements and services that schools must provide, including up-to-date textbooks, qualified teachers, enough seats for students, and classrooms free of vermin.

Of course, education advocates cannot just rely on initiatives and litigation to make the case that public education deserves its share of the budget pie. After all, other functions of government need funding, too. The California Budget Challenge is an informative, playful, nonpartisan, nonprofit website that helps to make budget tradeoffs more concrete for voters in California. It feels a bit like a game, and works well as a group activity.

A Bigger Pie

Occasionally, the solution is not zero-sum. In 2012, voters rescued schools from big cuts by passing Proposition 30, which raised taxes, though only on the state's wealthiest earners. The taxes were extended to 2030 when voters passed Prop 55 in 2016.

A Different Pie: Local Taxes and changes to Proposition 13

Survey results consistently show that Californians can be supportive when taxes are local, and in support of local schools. Solid majorities (roughly six in ten) say they would support a local tax to support schools in their community.

In this case, the will of the majority is not enough. By passing Proposition 13, in 1978 California voters amended the California constitution to make it very difficult to pass taxes. The theory is that voters, like Odysseus, should have the power to tie themselves to the mast to resist temptation. Prop 13 requires that local governments, including school districts, must get 2/3 voter approval to pass special taxes. Prop 13 also prohibited school districts from raising property taxes based on the value of property ("ad valorem" taxes), except for issuing General Obligation Bonds for facilities.

The main available instrument for local taxation is the "parcel tax," which has been ruled permissible because it is not "ad valorem." Parcel taxes are based on the existence of a parcel of property rather than on its value. Under the rules of Prop 13, a school district can propose a parcel tax and pass it with 2/3 of votes cast. It is very difficult to get 2/3 of voters to agree to anything, but some districts manage it. Lesson 8.10 goes into more detail about parcel taxes.

In any major conversation about education funding, the elephant in the room is Proposition 13, which we discuss in another lesson. Multiple efforts to amend this crucial measure have gone nowhere. It remains popular, especially among Californians who have owned property long enough for it to have gained in value. The Silicon Valley Community Foundation commissioned a major review of Prop 13 in 2013 to explain the issues and challenges. It seems likely that at some point new changes to California's property taxes will again be proposed, but then again it has seemed that way for a long time.

Any time there is a hint of a possibility of a chance for change in the 2/3 rule, it is a big deal. For example, a 2017 California Supreme Court ruling in a case about medical marijuana dispensaries appeared to suggest some wiggle room. If a measure originates as a citizen initiative, the ruling suggested, a majority should suffice to pass it.

Fundraising: Actual Pie

When all else fails, school communities scramble to get what they need.

Voluntary donations cannot match the funding power of a tax.

Let's start with the obvious. When times are tough and school funding suffers, people who care and are able will do what they can. This happens all over California, but unequally. Some wealthier communities (which under LCFF receive significantly less funding than those with large numbers of low-income families) can raise hundreds of dollars per student -- sometimes more -- through voluntary giving. Some schools hold elaborate auctions. Some cut to the chase with "check writing campaigns." Others hold a wide variety of fundraising events.

How much is a "normal" amount of fundraising for a school? No one really knows.

Data about local donations to school-related nonprofit organizations are not collected or reported in a consistent way. It is quite literally impossible to know how much is raised and how the funds are used. Some schools and school districts have established local education foundations. Others depend on their local PTAs and other parent organizations to provide money for everything from field trips to extra staff to extra stuff. But even in the wealthiest communities, donations cover at most the cost of a few salaries per school.

California schools are not within bake-sale distance of nationally normal funding. Voluntary donations cannot match the funding power of a tax. But under current California law, communities have few options for taxing themselves to support their schools. The next lesson will examine the options in a bit more depth.

Updated September 2017

Review

Education costs thousands of dollars per student per year. In a typical school in California, how much of that cost is covered through donations?

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

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user avatar
Jeff Camp - Founder June 28, 2016 at 12:08 am
Superb study by PPIC of voluntary giving to schools through their PTAs, PTOs, booster clubs and other sources. This kind of information isn't easy to get! The overall numbers per pupil are quite small, even in rather wealthy districts and schools. The authors (Weston et. al.) conclude that voluntary giving only modestly offsets the redistributional impact of LCFF on wealthier districts. http://www.ppic.org/content/pubs/report/R_1015MWR.pdf
user avatar
Carol Kocivar June 10, 2016 at 2:17 pm
The Right to a “Quality” Education
In many states across America, courts have played an important role in determining whether funding for public education is adequate. So far, in California, the courts have said, “NO. This is not something for the courts. The legislature has to deal with this.”
Learn more in our blog about the issue of whether California’s low funding is unconstitutional?
/the-right-to-a-quality-education/
user avatar
Carol Kocivar January 29, 2016 at 3:53 pm
Up-Date on Court Adequacy Cases
Oral arguments in Robles-Wong v. California took place in the Court of Appeal in San Francisco on Wednesday, Jan. 27, 2016. Plaintiffs in this case include three statewide education associations (CSBA, ACSA and CA PTA), nine school districts, and approximately 60 individual students and their families.
Robles-Wong is designed to clarify the State’s constitutional obligation to fund an educational system that provides all students the education they need to compete and succeed in our global economy.
http://edsource.org/2016/california-lawsuit-appeal-pursues-claim-of-inadequate-education-funding/94008?utm_source=Jan.+28+daily+digest+--+Jane&utm_campaign=Daily+email&utm_medium=email
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