School Funding Basics

As a result of legislation required by a 1970s lawsuit, the California state legislature determines annually how much money school districts will receive as a base amount for each student enrolled.

Funds are divided into two categories – General Purpose and Categorical. General purpose funds (roughly two-thirds of funding) are nearly equal per pupil throughout the state, regardless of district. Categorical funds are designated for specific programs tied to district demographics, socioeconomics or special needs. Districts with the most need receive more Categorical funding. While the goal of the legislation was laudable — to equalize education funding among economically diverse communities – its consequences have become problematic. Central authority has replaced local decisionmaking which produces inefficiencies. Scarce resources are put into Categorical programs to help under-performing districts while high-performing disctricts are effectively punished for their success.

Since the passage of Proposition 13, which reduced revenue available for education funding, most of the revenue for school funding comes from business and personal income taxes, sales taxes, and some special taxes, not property taxes.

In fact, local property taxes amount to a little less than 23% of all school funding in the state. Because school funding comes from fluctuating sources of revenue, school budgeting is especially difficult. Though Proposition 98 sought to regulate funding, it has not alleviated a “feast or famine” budgeting scenario for most school districts. You can learn more about California school funding at www.edsource.org

Lottery funds account for approximately $132/pupil in K-12. Lottery funds don’t just go to K-12 schools; they support students in all areas of public education including Community Colleges, the University of California, the California State University system, Adult Education, Charter Schools and even the schools at the Department of Corrections and Rehabilitation – Division of Juvenile Justice receive Lottery funds. Our students receive very little from the Lottery.