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Spending Roadblock: Base School Funding On Costs And Needs, Not Failed Formulas

By Heather Rose, research fellow, Public Policy Institute of California
This opinion article appeared in the Riverside Press-Enterprise on February 19, 2005

It may seem obvious that school funding should reflect prices, budgets, student needs and academic performance goals, but this has not been California's practice in recent years. In response to a series of court decisions and state ballot initiatives, the current school finance system allocates revenue according to formulas based on past budgets and a complicated array of programs.

Since 1988, Prop. 98 has determined California spending on K-12 education and community colleges. In its simplest terms, Prop. 98 has sought to maintain per pupil spending at its 1986-87 level with adjustments for growth in real per capita income.

However, what appeared to be a simplification and a guarantee of adequate school funding has proven to be neither. Although Prop. 98 appears simple on the surface, it includes many details that are extremely difficult to understand, much less implement. A series of contingencies, most of them added to adjust to difficult economic times, make its budget provisions virtually incomprehensible. Furthermore -- and perhaps most importantly -- Prop. 98 did not provide the stable or more generous funding its proponents had intended.

Prop. 98 passed in 1988. Even though spending per pupil essentially matched the levels required by the proposition during the 1990s, spending per pupil in California actually declined relative to spending per pupil in the rest of the United States.

Two factors help explain this: During the first half of the 1990s, California experienced a more severe decline in state and local revenue per pupil than other states, and during the second half of the decade, California experienced a much larger rise in the number of students per capita. By 1999-2000, California schools were spending 9 percent less per pupil relative to the rest of the United States. Because of the higher cost of resources in California, lower per-pupil spending translated into significantly fewer tangible resources such as teachers, counselors, and librarians.

What if Prop. 98 had never passed? Given the high priority that California voters place on education, it is hard to believe the Legislature would have allocated even less to schools with or without the requirements of the measure -- making the spending guarantee largely irrelevant.

The problem with Prop. 98 is that it has focused the Legislature's attention on satisfying complicated mandates and distracted it from the fundamental question: What resources are necessary for students to meet the state's academic standards?

Recent legislation indicates that policy-makers are willing to consider new approaches to funding education. In September 2002, AB 2217 called for the creation of a Quality Education Commission charged with developing a quality education model -- essentially lists of school resources needed for the "vast majority" of California's students to meet the state's academic standards.

Designing such a model is a formidable but worthy task.

The greatest challenge in determining what adequate school funding should be is the lack of clear, scientific evidence about the effect school resources really have on student achievement.

We should rely on the opinions of experts, those with experience in the trenches, to provide a reasonable picture of the resources a well-functioning school requires.

Ideally, the model would not be a prescription of how every school should look.

Rather, it would provide a concrete picture of how a particular funding level would translate into an actual school -- much the way a model home provides an idea of what a certain budget can afford in a new housing development.

Given a series of models and their likelihood of achieving student success, the commission, the Legislature and the public could judge the relative costs and benefits of each. There may be disagreement about whether the additional costs of a particular model justify the increase in expected student success, but a quality education model could help clarify the decision-making process.

In the end, the decision is a value judgment made by the Legislature as it sets the budget for public school education.

If passed, the governor's reorganization proposal would eliminate the Quality Education Commission. If this elimination occurs, the commission's purpose should not be lost.

Reassessing how much California ought to spend on schools based on a quality education model could help establish a target for public school revenue that would serve as an alternative to the Prop. 98 guarantee.

This alternative would be based on real resources and costs, instead of an extrapolation of past revenue levels and an impossibly complex formula.

Prop. 98 has allowed the state to fund education on autopilot, without addressing the question of what schools need to get the job done.

The time has come to address that question.


School Budgets and Student Achievement in California: The Principal's Perspective

High Expectations, Modest Means: The Challenge Facing California's Public Schools

School Finance and California’s Master Plan for Education