Education Is Back on Short Rations : After Four Years of Increase, a Backward Slide

Financing California’s public education system is complex, difficult and expensive. This school year the system--which includes 1,000 districts, nearly 4.5 million students and 200,000 teachers--will receive $15.3 billion in general fund revenues, including $395 million from the state lottery.

The school finance situation was at its worst in 1983, when state Supt. of Public Instruction Bill Honig, the Legislature and Gov. George Deukmejian joined together to enact a far-reaching education reform bill along with large funding increases.

During the past four years, state school funding has increased nearly $1 billion each year, a substantial rise. Revenues per pupil, after adjusting for inflation, have increased almost 15%. And--according to several studies conducted by Policy Analysis for California Education (PACE), a consortium of USC, Stanford and UC Berkeley--the strategy of providing funding increases and linking them to reform is working: The state has increased its relative school funding position, test scores are rising, students are enrolled in tougher academic classes, school days and years are longer, standards are higher and requirements are stiffer.

Yet even today California does not spend that much per child when compared with other leading states. In 1985-86, according to the state Department of Education, California spent just $3,608 per child, compared with a national average of $3,723. In New York the figure was $5,710; in New Jersey, $5,536; in Connecticut, $4,888, and in Massachusetts, $4,642. In 1984 California ranked 47th in the country in terms of state and local revenues for public schools as a percentage of personal income.

So, while California school funding has increased during the past four years, difficult fiscal challenges lie ahead. First, the state needs to continue to improve the quality of education. Second, the state must fund the growth of enrollment that is rising at about 100,000 students per year. Third, students increasingly are from low-income and minority communities, requiring additional help in order to do well in school. Finally, inflation must be funded so that real resources for schools do not erode.

How do these education realities translate into dollar figures for the 1987-88 school year? First, enrollment growth is specifically estimated to be 97,885 students, which will require $270 million in new funds. The statutory cost-of-living adjustment, now estimated to be 2.2%, would cost another $318 million. These two figures total $588 million.

But this total ignores dollars for significant teacher salary increases (which would require another $300 million to $400 million), for continued increases in education quality and for extra services for the rising number of low-income and minority students. And the $588-million total must be increased by $66 million for a legally required funding increase for special education. So the minimum total needed just to keep the education system fiscally even without significant teacher salary increases is $654 million, and $1 billion if teacher salaries are to rise.

Excluding the California lottery, the governor has proposed to increase state education spending for current operating purposes by $216 million. To this will be added education’s share of increased local property-tax revenues, estimated to be $281 million, for a total education funding rise of $497 million--short of what is needed to stay even.

The estimated $98-million increase in lottery funds arguably should not be part of these figures, since by law they cannot fund enrollment growth or inflation. The governor’s budget handles the shortfall by proposing essentially no teacher salary increase and by delaying the cost-of-living adjustment for half a year, giving school districts just a 1.1% increase.

It is clearer then why there is so much controversy surrounding the budget proposals:

First, the proposed budget falls short of what is needed to stay even and threatens continued improvements in the quality of education.

Second, the governor has proposed several reallocations of education dollars within the budget. He wants to cut $91 million from state programs to help low-achieving students from poor families, $19.3 million from a state remedial-reading program, $43.3 million from aid to urban districts with concentrations of needy, at-risk students, and $22.2 million from the program for gifted and talented students. He proposes to “spread” those funds across all first-grade students in the state by reducing class size by six students over two years. While reducing class size should be a major state goal (the state now has the second-largest class sizes of all states in the country), doing it by eliminating or reducing these programs is hardly fair and probably inefficient.

Third, the governor has invoked the spending limit as necessarily restricting the state’s ability to increase spending on any function. The Gann limit restricts state appropriation increases to a combination of inflation and total population growth. But there is substantial ambiguity surrounding the limit and its related legislation. Some state expenditures are subject to the limit; others, like court mandates, are not. Education has court mandates for special education, desegregation, students who are not proficient in English, and school finance equalization. It could be argued that expenditures for these functions should be excluded from the Gann limit, thus increasing by at least $1 billion the state appropriation increases. Such adjustments, however, could have political constraints.

The education reforms initiated in 1983 must continue if California is to maintain its vibrant economy and national leadership positions. The momentum can keep going only if we have strong political leadership in Sacramento and more money for the schools.