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Higher Education in California: Performance Budgeting

By Hans Johnson, Patrick Murphy, Margaret Weston, Kevin Cook

As California begins to reinvest in public higher education after several years of budget cuts, it could opt to tie funding more closely with outcomes—for example, the number of students educated or degrees awarded. This approach, known as performance-based funding, has the potential to incentivize investment by the state’s higher education systems in areas that further state priorities. Drawing on California’s minimal experience with performance-based funding and the approaches other states have pursued, this report raises four important questions for the state to consider if it wants to link funding for higher education with outcomes without compromising on either quality or equity.

Report

Higher Education in California: Institutional Costs

By Hans Johnson, Patrick Murphy, Margaret Weston, Kevin Cook

Over the past 20 years, in-state tuition at both the University of California (UC) and the California State University (CSU) has more than tripled. These tuition increases have led many to believe that spending in the state’s public higher education systems is out of control. However, a closer look reveals that institutional expenditures in the two systems—including faculty salaries and benefits, the largest budget category—have not increased significantly. Our evaluation of both revenues and expenditures shows that recent tuition increases have been driven by dramatic reductions in state subsidies to UC and CSU. In the past, General Fund contributions covered the majority of educational costs. Today, students (often with help from federal, state, institutional, and private grants) pay most of these costs through tuition and associated fees. Better budget data could help policymakers monitor costs and align higher education funding with state goals. But it is clear that tuition at California’s public universities has risen much more rapidly than the cost of providing higher education.

Report

Understanding the Effects of School Funding

By Julien Lafortune

Funding for California’s K–12 public schools has reached record highs, but gaps in student outcomes remain. Understanding the benefits of additional funds, and how to distribute those funds, are key concerns for policymakers. This report offers insights from a robust body of research on the extent to which higher spending improves outcomes.

Report

Targeted K–12 Funding and Student Outcomes

By Julien Lafortune

As students return to the classroom, record-high funding through the Local Control Funding Formula (LCFF) will help California districts address gaps after a year of remote learning. In this report, we examine school and district spending against trends in student outcomes to offer insight into whether the LCFF is meeting its goal of improving equity in education.

blog post

Funding Increase for Community Colleges

By Kevin Cook

Community colleges get the bulk of higher education funds in the governor’s budget, which includes a new formula for dispersing the money.

Report

Examining the Reach of Targeted School Funding

By Julien Lafortune, Joseph Herrera, Niu Gao

Under California’s ten-year-old funding formula, districts with higher shares of high-need students receive additional dollars on top of base funding. Districts have flexibility around spending these funds, but when money is not fully directed to the intended students and schools, the impact on achievement gaps is diluted.

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