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Higher Education Finance: How Does California Stack Up?

Radhika Mehlotra July 26, 2018
Cap On Money

California’s public higher education spending per student has increased significantly since the end of the Great Recession—it is now higher than at any time since 2002. According to a recent report by the State Higher Education Executive Officers Association (SHEEO), spending increased 41% per student (based on full-time equivalents and adjusted for inflation) between 2012 and 2017 in California, compared to 17% across the rest of the nation. California’s percentage change was third highest in the nation, after Oregon and New Hampshire (both with an increase of 47%). However, both of those states provide much less support per student: in 2017, New Hampshire appropriated $2,959 per student and Oregon allocated $6,514, compared to California’s $10,157. California also ranked third in terms of absolute increases ($2,960 in California, compared to $3,781 in Hawaii and $3,608 in Illinois).

California’s funding increases have not been evenly distributed across the three public systems. Since 1988, the community colleges have benefited from the Proposition 98 funding guarantee for K–14 education. As a result, per student funding for the community colleges is now at an all-time high, but is still below peak UC and CSU funding levels.

Governor Brown recently signed the state budget for 2018–19, which includes $19.2 billion General Fund and local property tax funds for all public higher education systems—about 8% more than the 2017–18 allocation. This continues the recession recovery trajectory and prevents tuition increases at UC and CSU. Moreover, the governor and legislature have made investments in the Rainy Day Fund—increasing reserves to $13.8 billion—that will help protect higher education from recession-related cuts during the next economic downturn.

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