Budget & Finance

Revamp California’s School Funding Model, Report Says

By Sean Cavanagh — November 10, 2010 2 min read
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California’s school funding model is nearly “impossible to comprehend,” and should be made more transparent and more focused on helping districts that serve large numbers of students who are the most expensive to educate, a new report argues.

Who are those students? They include, not surprisingly, English-language learners and special needs students, as well as those living in rural areas who have extensive transportation needs, according to the report, published today by the Public Policy Institute of California.

The state’s school funding model was largely shaped by two events, the report explains. The first was a 1971 California Supreme Court decision, Serrano v. Priest, which declared the previous school funding model unconstitutional. The second was the passage of Proposition 13, which reduced the amount of property tax available to schools and muncipalities. The result was that the burden of funding schools shifted largely to the state. Today, the report notes, formulas based on the voter-approved initiative Proposition 98 shape state spending levels on schools.

Today, per-pupil funding for different districts varies greatly and often seems based on arbitrary standards, according the PPIC, a nonpartisan research organization based in San Francisco.

The report also says the state should allocate money using a more equal per-pupil funding rate, which would in turn increase the transparency of the system and make it easier to explain differences across districts. As it now stands, California’s “base revenue limit rates” result in major disparities between schools, the authors argue. For instance, in four Southern California districts within the same ZIP code, per-pupil revenue rates vary between $6,100 and $7,400. “There is no rational basis” for those differences, the authors say.

"[E]conomic recovery, when it comes, will increase state tax revenues, which might mean more money for the schools,” the PPIC explains. “To make the most of any additional funds, California will need to change its complex and inequitable distribution policies.”

For another perspective on how states fund their schools, have a look at study published by the Education Law Center earlier this year. That study examined how “progressive” states are in funding schools—or whether they direct money to students with the greatest needs. California generally ranked middle-to-low, by the study’s various measures.

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A version of this news article first appeared in the State EdWatch blog.