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K-12 Education – Unsustainable California: The Top 10 Issues Facing the Golden State

John St. John / Flickr

In Brief

California’s K-12 schools face relatively low and unstable in-classroom funding, poor student performance, and massive potential cuts in the near future.


Approximately 83% of Californians consider the quality of education to be at least somewhat of a problem for California schools. California’s K-12 schools educate over 6.2 million children, representing nearly one-eighth of the nation’s students. Therefore, many of the nation’s wide scale educational goals are heavily influenced by the performance of the state’s K-12 education system.

California’s schools face a series of unique challenges. Compared to other states, California’s student population has larger shares of English learners (23.2%, highest in the nation) and students that come from low-income families (54.1%, higher than the national average), indicating relatively high levels of need. While the state dedicates the largest share of its budget to fund education, its per-pupil spending levels still ranks among the nation’s lowest. Likewise, California lags behind the rest of the nation in terms of the number of educational staff and student performance.

It is essential for California to provide adequate resources to K-12 education to help foster successful future generations. However, California’s schools rely on low unstable funding, furthered threatened by rising retirement costs and the expiration of temporary tax increases. Relatedly, schools are understaffed, especially considering the number of high-needs students. Given these circumstances, it may come as no surprise that California performs below the national standards. The recently acted Local Control Funding Formula attempts to tackles these entrenched challenges.

California’s Low and Unstable K-12 Funding Levels

The economic recession hit California’s K-12 districts particularly hard. From 2007-08 to 2011-12, state funding to K-12 fell 19%. Prior to the recession, California per-pupil spending was $10,687 (inflation-adjusted), which ranked 25th in the nation. After cuts incurred during the recession, California’s per-pupil spending dropped to $9,892, 39th in the nation. This amount is amount is $2,000 lower than the U.S. average (Figure 6a) . Other studies have shown that after adjusting for varied costs of living among states, California’s per-pupil spending levels are even lower.

Figure 6a: Per-Pupil Education Spending 1987-2014 (Inflation-Adjusted 2014 Dollars) Figure 6a: Per-Pupil Education Spending 1987-2014 (Inflation-Adjusted 2014 Dollars)

While California’s per-pupil spending lags behind the national average, the state contributes a large share of its budget to K-12. Approximately 28% of state-only funds are spent towards K-12 education, which is the 12th highest budget share in the nation. However, these funds must be spread across a relatively high number of students. Approximately 16.5% of the state’s population are K-12 students, the 8th highest portion in the nation.

California’s school districts rely heavily on state, rather than local, funds, a system unlike many other states. In fiscal year 2012-13, the state provided approximately 80% of school district revenue. Ever since the passage of Proposition 13 (1978), which capped property taxes, the state has provided the majority share of school district funding. Proposition 98 (1988) guarantees that schools and community colleges receive a minimum of about 40 cents of every state General Fund dollar, which means that that minimum funding levels rises in high-revenue years, but fall in low-revenue years.

In addition, California voters approved Proposition 30, a personal income and sales tax increase that has substantially boosted state K-12 funding in recent years. In 2012-13 Prop 30 revenues accounted for 11% of school district revenue. It is important to note that Prop 30 is only a temporary tax increase that is set to expire in 2019 and that school districts will begin facing significantly higher costs associated with teachers’ pensions during the interim.

Figure 6b: California School District Revenue by Source (2012-2013) Figure 6b: California School District Revenue by Source (2012-2013)

The funding shortfall of the California State Teacher’s Retirement Benefit System (CalSTRS) presents a looming threat to future school district budgets. CalSTRSnow has a $74 billion dollar funding shortfall and requires significantly higher contributions. California’s 2014-15 May Revised budget set forth a $238 billion funding plan to pay down CalSTRS’s debt over next 32 years (Figure 6c). Of the $238 billion, school districts will pay the vast majority – $170 billion, or an average of $5.3 billion extra a year.

Figure 6c: CalSTRS Contribution Increase 2014-15 to 2045-46 Figure 6c: CalSTRS Contribution Increase 2014-15 to 2045-46

Squeezing these contributions into already tight school district budgets may prove to be difficult. $5.3 billion is triple the amount that school districts spent on books and supplies in 2013 and is nearly equal to the amount of revenues that schools received from Prop 30. School districts already spend 20% of their budgets on employee benefits. To meet full contribution increases, that portion would likely rise significantly The expiration of Prop 30 coupled with substantial pension contribution increases is likely to cause significant strain on future school district budgets.

Limited Personnel

California’s low per-pupil spending is reflected in its low number of teachers. In 2012-13, California had a student-to-teacher ratio of 25-to-1, the highest in the nation and much higher than the 15-to-1 national average. This means that California students experience much larger class sizes (10 students higher), must share resources with more students, and teachers have less time with each student.

Figure 6d: Percent of CA Students with High-Needs Figure 6d: Percent of CA Students with High-Needs

In 1996, the state implemented the Class Size Reduction program for grades K-3, which imposed financial penalties on schools that did not reduce class sizes. However, the state reduced these penalties in 2009, which in conjunction with budget cuts, likely lead to significant increases in class size. Between 2008 and 2013, the student-per-teacher ratio increased from 21-to-1 to 25-to-1.

California also has relatively low numbers of educational support staff, including guidance counselors, librarians, and administrators. In 2011-12, the student-to-librarian ratio was 7,890-to-1 (highest in nation), the student-to-guidance counselor ratio was 818-to-1 (2nd highest in nation), and the student-to-administrator ratio was 389-to-1 (6th highest in the nation).

These relatively low levels of school personnel likely exacerbate the relatively high needs of California’s students. Approximately 23.2% of California students are English learners which is the highest rate in the nation (Figure 6d). Furthermore, 54.1% of all California students qualify for free or reduced lunch (general proxy for measuring students that come from low income families) which is higher than the national average. The students typically have higher educational needs and require additional resources, which California appears to be lacking.

Poor Student Performance

Compared to other states, California students rank poorly on performance measures. Over the last decade, California students have lagged significantly behind national standards. For example, California’s 4th and 8th grade students are in the bottom ten nationwide in both math and reading (Table 6e).

Table 6e-California Ranking on Education Performance Measures

Measurement Type

CA Score/Value

US Score/Value

CA Rank

Math (4th grade, 8th grade)

National Association of Educational Progress

234, 276 


47th, 45th

Reading (4th grade, 8th grade)

National Association of Educational Progress

213, 262 


47th, 42nd

High School Graduation Rate




High School Dropout Rate




UC/CSU Readiness




In addition to low test scores, only 78% of California’s high-school students graduate from high school, (28th highest nationwide) and California’s high school dropout rate is 4.0% (13th highest nationwide). Among those who graduate, only 38% are actually prepared to go to one of California’s public universities.

Figure 6f: CA High School Graduation Rates by Demographic Figure 6f: CA High School Graduation Rates by Demographic

Among the state’s diverse student population, there is a clear educational achievement gap among students with different ethnic and socioeconomic backgrounds. For example, Asian and White students have much higher high school graduation rates than Black and Hispanic students (Figure 6f). Furthermore, low-income students, as measured by qualification for free and reduced lunch, rank well below the student average. Free and reduced lunch measure is far from comprehensive, and recent studies that use more granular measures of income show a widening achievement gap related to poverty. California’s schools have much larger shares of low-income and English learner students than schools in other states, meaning the achievement gap affects a great number of California students. Widening achievement gaps for disadvantaged students have in part motivated shifting resources to the state’s neediest students.

Re-allocating Resources: the Local Control Funding Formula

In 2013, 14, Government Brown signed one of the most notable education finance reforms in the state’s history, the Local Control Funding Formula (LCFF). Under the formula, school districts receive funds based on the proportion of students who are English learners, foster children, or children from low-income families. In this way, school funds will distributed in a more transparent way that aims to better align funding with student needs.

LCFF target funding levels are much higher than what school districts currently receive. If the state fully implemented the LCFF in 2013-14, the state would have needed to spend $18 billion more on K-12 education than it did in 2012-13 (it did not). The state plans to ramp up school funding over the next several years. By 2017-18, the state intends to increase per-pupil funds by $3,410 (still falling short of the LCFF target funding levels).


California’s schools have a long way to go. The problems California students face are complex. School funding and personnel are low, compared to nationwide measures and arguably insufficient for the state’s high-need student population. These problems are reflected in students’ poor performance on test scores, low graduation rates, and inadequate college preparation. The Local Control Funding Formula promises to reallocate resources towards schools that need it the most. However, reform efforts will be put at risk with upcoming drains on school budgets, including the expiration of Prop 30 and rising retirement costs.

Works Cited [+ Expand]

“PPIC Statewide Survey: Californians & Education.” Public Policy Institute of California. April 2013. Page 7.
National Center for Education Statistics. Selected Statistics from the Common Core of Data: School Year 2011-12. Table 2.
National Center for Education Statistics. Table 204.20. Number and percentage of public school students participating in programs for English language learners, by state: Selected years, 2002-03 through 2011-12.
Shambaugh, Larisa, Sami Kitmitto, Tom Parrish, et al. “California’s K-12 Education System during a Fiscal Crisis.” American Institutes for Research.Page 1.
“State Expenditure Report (Fiscal 2011-2013 Data).” National Association of State Budget Officers.
United States Census Bureau. Population Estimates. State Totals: Vintage 2012.
National Center for Education Statistics. Selected Statistics from the Common Core of Data: School Year 2011-12. Table 2.
National Education Association. “Rankings of States and Estimates of School Statistics. 2013-14 Rankings and Estimates.” Summary Table K. Estimated Expenditures for Public Schools, 2013-14. Pages 54, 55, and 96.
Kaplan, Jonathan. “Rising to the Challenge: Why Greater Investment in K-12 Education Matters for California’s Students.” California Budget Project. October 2013.
“Proposition 98-How Does it Work?” City College of San Francisco.
California Department of Finance. “Comparative Statement of Expenditures – Schedule 9, 2005-06 to 2014-15.”
California Legislative Analyst’s Office. “Proposition 30: Temporary Taxes to Fund Education. Guaranteed Local Public Safety Funding. Initiative Constitutional Amendment.”
California State Controller’s Office. “Tracking Prop 30. State of California K-12 Education Profile 2012-13.” Accessed April 2014.
Tatum, Adam. “CalSTRS’s Funding Proposal as of May Budget Revision.” California Common Sense.
Blachford, Peter, Paul Bassett, and Penelope Brown. “Examining the effect of class size room engagement and teach-pupil interaction: Differences in relation to pupil prior attainment and primary vs. secondary schools.”
Schanzenbach, D. W. (2014). “Does Class Size Matter? National Education Policy Center Policy Brief.” February 2014.
Leahy, Sarah. “A Survey of Selected Teachers Opinions to the Effects of Class Size on Student Achievement among Middle School Students.” Marygrove College.
National Center for Education Statistics. Table 204.20. Number and percentage of public school students participating in programs for English language learners, by state: Selected years, 2002-03 through 2011-12.
National Center for Education Statistics. Table 204.10. Number and percentage of public school students eligible for free or reduced-price lunch, by state: Selected years, 2000-01 through 2011-12.
Freedberg, Louis. “Class Size Reduction Program Continues to Unravel.” EdSource. May 31st, 2012.
Rankings of States and Estimates of School Statistics. 2009-10 Rankings and Estimates. National Education Association. Page 17. Table C-6.
National Center for Education Statistics. ElSi Table Generator. Accessed May 2014.
National Center for Education Statistics. NAEP State Comparisons. Years 2003 to 2013.
National Center for Education Statistics. Public High School Four-Year On-Time Graduation Rates and Event Dropout Rates: School Years 2010-2011 and 2011-12. First Look. Page 9 and 15.
Associated Press. College-Readiness Not Keeping up In California. NBC Bay Area. April 7. 2014.
Ed Data Expres. State Tables. Accessed May 2014.
Reardon, Sean F. “The Widening Academic Achievement Gap between the Rich and the Poor: New Evidence and Possible Explanations.” Whither Opportunity? Rising Inequality, Schools, and Children’s Life Chances. 2011. Pages. 91–116.
The California Legislative Analyst’s Office. “An Overview of the Local Control Funding Formula.” Updated December 2013.
California Department of Finance. “Governor’s Budget Summary 2014-15.” Page 5.
California Department of Education. “Comparison of Per Pupil Spending Calculations.”

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