California education finance timeline
Fall 2012
Serrano vs. Priest
This case, adjudicated between 1976 and 1978, primarily addressed disparate levels of funding for schools from local property taxes. Ultimately the state Supreme Court found that the disparities violated students’ equal protection rights under the U.S. Constitution; the remedy provided varying levels of funding based on school district size and type. This case still drives many of the funding and finance decisions made today.
Proposition 13
Voters approved Proposition 13 in 1978 after enduring years of ever-increasing property taxes. It generally rolled back tax rates and allowed them to increase annually by no more than 2 percent until a property is sold. This significantly changed how schools were financed, shifting funding away from local property taxes to a much greater reliance on the state. This greatly increased the state’s role in education, and over time it’s resulted in decreased spending for schools overall.
Hughes-Hart Educational Reform Act
The Legislature enacted Senate Bill 813 in 1983 in hopes of focusing the school funding system more on student achievement. Major changes included: linking additional revenues to increased instructional time—both a longer school day and a 180-day school year; defining graduation requirements; and improved teacher quality.
Proposition 98
In 1988, largely in response to the way Proposition 13 impacted school funding, voters added Proposition 98 to the state constitution. It specifies a dedicated amount of state funding for schools—a minimum “floor” that has often been misleadingly portrayed as “full funding” for education.
Proposition 111
Enacted in 1990, it refined Proposition 98’s minimum funding calculations through a system of tests that compare general fund revenue and personal income. It also provides that when funding drops below the prime “Test 2” level, it is to be restored through a “maintenance factor.” The effects have been apparent in year-over-year decreases in the guarantee over the last few years.
Assembly Bill 825
After many attempts to address the myriad categorical education programs that had been created by the Legislature over time, in 2004 AB 825 consolidated 22 categorical programs into six block grants. Districts were required to spend the money on the same general purposes as the programs that had been consolidated into the block grants.
“Getting Down to Facts”
In 2007 this collection of research reports looked at a variety of education funding and reform issues. The basic message was that California had a “complex and irrational finance system” based on revenue limit funding from the 1970s and overlapping categorical programs. These reports came out just as the state began its descent into the “Great Recession,” upending Gov. Arnold Schwarzenegger’s planned “year of education” and instead precipitating years of deep cuts.
Categorical flexibility
In 2009, with the state facing one of its biggest funding crises ever, the Legislature allowed greater discretion for districts coping with state budget cuts by making approximately 40 categorical programs flexible—after 20 percent of the categoricals’ funding was cut. This flexibility remains in place through the 2014-15 school year.
—Dennis Meyers, ( dmeyers@csba.org ) is CSBA’s assistant executive director of Governmental Relations.