Published: January 6, 2005

Finance Snapshots

California

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California provides money for education through several grants and entitlements. The largest, often referred to as “revenue limit funding,” supplies general-purpose aid to school districts, county offices of education, and charter schools. The formula for that aid is a modified foundation formula, in which the foundation level varies from district to district based on several factors. The per-pupil base-revenue limit was first established in the 1970s and has been adjusted each year for inflation. The revenue-limit entitlement is met with both state aid and state-controlled local property taxes. About 60 districts in California have local property taxes that exceed their revenue-limit entitlements and so do not receive any state aid for general-purpose funding. General-purpose aid is adjusted for unemployment insurance, employer-retirement costs for classified employees, and additional support for small schools. California had about 50 categorical programs totaling $10 billion in fiscal 2004. The five largest provided support for class-size reduction, transportation, special education, preschool and child-development programs, and the state’s Targeted Instructional Improvement program. Last fall, though, the state consolidated more than 20 of the categorical programs into six block grants. As the result of a lawsuit settled last summer, Williams v. State, the state also passed legislation to increase school facilities funding.

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Vol. 24, Issue 17, Page 62

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