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The Incredible Shrinking State Dollars for K-12 Schools

Posted: Dec 14, 2011

State funding for California’s K-12 public schools has fallen by $7 billion since the onset of the recession. The state now spends $1,000 less per student than it did in 2007-2008.

“There has been a very large reduction in revenues that determine Prop 98, California's formula for calculating minimum school funding,” said Jonathan Kaplan, senior policy analyst with the California Budget Project, a nonpartisan group that monitors fiscal and policy issues.

Per student spending is now close to the 1989-90 level, after adjusting for inflation. “We are basically at a similar level of funding than we were at 20 years ago,” Kaplan said.

Prop 98, or the Classroom Instructional Improvement and Accountability Act, was passed by voters in 1988. It requires the state to spend a minimum percentage of its budget on K-12 and community college education. It is by far the largest source of dollars schools receive.

In good times, the Act provided ever-increasing funds that grew each year with the economy and number of students. But with the rapid drop in tax revenues following the onset of the recession, funding on K-12 plummeted from $50.3 billion in the 2007-2008 school year to $43 billion in 2008-2009, where it has remained static.

Schools See a 6 Percent Reduction Per Student

Local school districts have offset the deep cuts in state funding through a mix of strategies, from tapping to one-time only federal stimulus dollars to deferring unpaid programs to the following year’s budget, a practice known as deferral.

The state began significantly relying on deferrals in 2008-09, when the state delayed $3 billion in payments to the next fiscal year to balance the budget. The state has continued to rely on payment deferrals to achieve budget savings by increasing deferrals in the last years. For the 2011-12, the state will be deferring $9.5 billion in K-12 payments.

“It doesn’t mean that programs necessarily went down by the same amount because districts are borrowing and using federal dollars to supplement them,” explains Jennifer Kuhn, director of K-12 education with the Legislative Analyst’s Office (LAO).

Thanks to the promised dollars from deferrals, as well as federal stimulus money, Quality Education Investment Act (QEIA) and other state funds, Kuhn found the actual drop per pupil funding was about $500.

“We have funding down 6 percent in 2011-2012 from the 2007-2008 level on a per pupil per program basis,” said Kuhn. The results are visible in increased class sizes, shortened school year, and teacher furloughs.

Mid-Year Budget Risk: The Triggers

All this, of course, is before mid-year trigger cuts. Governor Jerry Brown announced yesterday that K-12 school districts will face another $79.6 million reduction in general funding, along with a $248 million elimination of school bus funding.

Though the mid-year cuts was not as dramatic as many predicted for this year, the budget future on education remains uncertain. The budget shortfall for 2012-2013 could reach $13 billion unless voters pass one of numerous revenue proposals on the November 2012 ballot.

“If none of them is adopted, then presumably that 13 billion will come largely from cuts,” said Kuhn. “Education will bear some portion of that reduction."

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