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Independent, objective, nonpartisan research
Fact Sheet · May 2022

Financing California’s Public Schools

Julien Lafortune and Joseph Herrera

Supported with funding from the Stuart Foundation and the Dirk and Charlene Kabcenell Foundation

One-time pandemic funds from the federal government contributed to record funding levels.

  • In 2021–22, state, local, and federal funding for California K–12 public schools is estimated at roughly $136 billion, compared to roughly $135 billion in 2020–21 (estimates as of May 2022).
  • The federal government allocated $23.2 billion in one-time relief aid in 2020–21 and another $10.9 billion in 2021–22; in total, federal funds accounted for 23% of K–12 funding in 2020–21 and 12% in 2021–22.
  • In most non-recession years, the federal share of school funding is only around 6% to 9%.

The majority of funding for California K–12 schools is provided by the state.

  • Since 1990, the state share of school funding typically has hovered between 54% and 61%, with the local share between 32% and 36%. This share varies across school districts.
  • The state share was lower in 2020 (51%) than at any point in at least 30 years.
  • In 2020–21 and 2021–22, the state also invested over $5 billion in one-time COVID-19 recovery funds.

California spends slightly more per student than other states. . .

  • In the 2018–19 school year, spending per student on current operations (e.g., staff, materials) was $14,913 (in 2021$), roughly $1,000 more than the average for students in the rest of the nation ($13,831 per student).
  • California spent less than three of the five next most populous states: less than Illinois and Pennsylvania, and far less per student than the top-spending state in 2018–19, New York ($26,828). California spent more than Texas and Florida, which both spent nearly $10,000 per pupil in 2018–19.

. . . after funding lagged behind most other states for nearly two decades.

  • California ranks 19th in spending per student among states, including D.C. Before the recovery from the Great Recession, California’s rank had varied between 25th and 35th since the mid-1980s.
  • Adjusting for differences in labor costs across states, California’s rank drops to 35th.
  • During recessions, California’s K–12 spending typically falls more than other states—but rises more quickly during economic recoveries.

California’s school funding formula allocates additional funding to higher-need students.

  • The Local Control Funding Formula (LCFF), passed in 2013–14 and fully implemented in 2018–19, gives districts additional funding based on their share of high-need students (low-income, English Learner, and/or foster youth); districts also have greater spending flexibility under LCFF than in the prior formula.
  • LCFF generates a funding target for each district; the state funds what is not covered by local revenue. Roughly 15% of districts are “basic aid”—their local revenue exceeds the target, and they retain these extra local funds.
  • Under LCFF, 2020–21 per pupil current spending is higher for low-income than higher-income students (by $1,265), for EL than non-ELs (by $500), and higher for Black and Latino than white students (by $1,278 and $1,185, respectively).

Despite record funding levels, fiscal challenges remain.

  • California’s K–12 student enrollment has been declining, largely due to falling birth rates and net migration. Since COVID-19, drops in enrollment have been larger than expected—especially in Kindergarten and Grade 1. Most districts and counties will grapple with the fiscal challenges of downsizing over the next decade.
  • Increases in personnel costs—such as rising health and benefit costs—can have an outsized impact: roughly 80% of current spending on K–12 students is for staffing (teachers, support staff, etc.). Notably, rising pension contributions absorbed about 25% of the K–12 spending increase from 2013–14 to 2019–20.
  • Estimates suggest districts will need at least $7.4 billion in additional state funding for modernization needs through 2025. School facility funding is primarily funded locally, with the state School Facility Program (SFP) providing some support. In part due to a requirement for local matching funds, on average, SFP funding for modernization slightly worsens gaps by district property wealth, student income, and student race.
Sources

Topics

COVID-19 K–12 Education Poverty & Inequality
Public Policy Institute of California