California's Educational Funding: Tragedy or Equity?

When attempting to determine whether the method and amount of public fund distribution is equitable within any school system, several factors are always considered. In the case of California, which boasts more than 1,000 individual school districts, 8,000 schools, and over six million students, many assert than in ex-ante analysis, the state's school finance system demonstrates sufficient levels of equitability. However, many do not agree.

The foundation system in California specifically guarantees that each individual district will receive funding known as a revenue limit based on a tax rate of one percent of its assessed value. Further, the state is charged with paying each district the difference between its determined entitlement amount and the actual amount raised through property taxes. Although this arrangement does seem good "on paper," there remain significant questions as to whether serious examples and possibilities of inequity exist among certain districts state-wide. Further, the question over the actual levels of equity has been so nagging that even the ACLU felt moved two years ago to file a lawsuit concerning the matter.

Whatever one's opinion on the issue, there remain significant "hard data" facts that seem to point to the possibility of there being something amiss in the system. Chief among these is the strikingly low ranking that California enjoys with regard to its spending per pupil among other national examples.

Of course, the issue that most people focus on when assessing California's school funding issue is the effect and legacy of the infamous Proposition 13 -- legislation that, in effect, according to many, virtually crippled California's educational funding abilities. However, due to many Californians unwillingness to push for improved school funding over property tax relief, it is highly unlikely that any serious reform of the principles will occur in the near future. For this reason, it is important to bite the proverbial bullet, and attempt to assess the system as it is from within, in doing so "tweaking the system" to allow for greater equity for all California schools.

Of course, many are acutely aware of the shocking California budget gap. Of those who worry over the issue, schools definitely weigh in high on the list. This is simply due to the fact that budget gaps eventually translate into less state funds for schools. This means cuts in programs, equipment, facilities, and even teaching staff -- all to the detriment of students of all ages. Of course, the issue here with equity is that those schools in wealthier or more affluent communities are necessarily able to raise the difference between what the state can offer, and what they can come up with themselves. Unfortunately, this problem brings up other problems including issues of financial and racial inequalities. Further, according to Norton Grubb, an education professor at UC Berkeley, "We've become a low-spending, low-resource state, with low levels of learning (Bell, 2004)." said Norton Grubb, an education professor at the University of California in Berkeley.

Although it is clear that there is a problem with the equitability of school funding in the state, it is difficult to assess just what is to be done about it. Again, however, given the fact that Proposition 13 is unlikely to be repealed in the near future, it is essential to make reforms based on what the schools have before them.

Like most aspects of any public funding system, one of the drawbacks of the California school funding system under proposition 13 is its complexity. According to Lisa Snell, the Director of Education and Child Welfare for Reason Foundation:

California's $41 billion education finance system offers schools money through two types of funding streams: "revenue limits" and categorical funds that include 100 different programs. The funding system is complex and results in unequal funding amounts at the student level. In many cases, the amount of money a school district receives depends on how savvy the school district is and the size of its central bureaucracy rather than the needs of individual students. (RPPI, 2004)

Of course, this reality sets up the basis for a real inequality between schools and school districts based on local resources, economic, and even social realities. Although it may seem "simplistic," removing the performance power of the bureaucratic systems as a factor for allocation of funds promises to increase the equitability of distribution to a significantly greater degree. Indeed, perhaps a dose of simplicity is exactly what the system needs.

One way that this can be accomplished is by implementing a system of allocation based on student driven data. This means coming...

-- all based on specifically designed formulae), as well as variable needs (number of special education students enrolled, average numbers of students in ESL programs, greater percentage of lower-income students, etc. (all characteristically resulting in increased funding needs). Again, according to Snell:
This process would make school finance in California simpler, more equitable, and bring significant cost savings by reducing categorical administration costs and central office costs and redirecting some of this savings to increase per-pupil funding allocations in California (RPPI).

Because the public school system in California is one of the leading areas of budget allocation in the state (to the tune of approximately 41 billion) (RPPI), it is all the more pressing to the average Californian tax payer that those funds be more equitably distributed. This is simply due to the fact that, even for those tax payers who do not have children in the system, an inadequate education means higher costs down the line -- especially concerning issues of crime, welfare, and other social ills resulting from lapses in equitable, equal and fair education for all.

Another reform that can function within the current system is to change the way that the funds are distributed to the school districts, themselves. The fact is, because revenues that are destined (based on a non-egalitarian per capita formula) for schools must first be funneled through the bureaucracy of school district "powers that be." Unfortunately, these individuals and groups are free to spend the funds "for the schools" in the district. Thus, those most in touch with the individual school's needs (perhaps the principles, teachers, etc.), are not an important factor in considering fund allocation. Instead "across district" averages are the main consideration in trickling down the funds to each school -- not the most efficient or equitable method by far.

Again, the very complexity of the current system often adds to shocking inequity between schools in the state. For example, Sacramento Bee writers noted, the funding allocation system "is so convoluted and obscure that not even the people who manage school budgets for a living can explain the finance system to taxpayers, who support it (SacBee, 2003)." If, instead of the complex issues that make up the funding allocation decisions today were instead based on concrete student driving data, much of this could be avoided to the benefit of all. For example, instead of allocating funds (as is the present status quo) to support programs, which can be arbitrary, questionable, and not universally of benefit to all student populations, funds should be allocated to support students based on assessed need (again, according to a devised performance and need-based formulae). Consider, for example:

The Los Angeles Unified School District spends only $84 per pupil on textbooks (or 90% of the state average) but spends $107 dollars per student on Supervisors' salaries (which is 191% of the state average and does not include principals or other school level administrators). (RPPI, 2004)

Whereas this kind of fund allocation may have been based on a formula devised in a particular school district, there is no reason to believe that all California school districts serve children for whom supervisor salaries necessarily translates into quality education. In fact, few "ordinary people" would imagine that greater bureaucratic funding at the expense of "trench" funding would ever benefit the student body, regardless of district characteristics. In fact, several studies indicate just the opposite. For example, in William Ouchi's 2003 work, Making Schools Work: A Revolutionary Plan to Get Your Children the Education They Need, the author cites several studies in which it was found that schools run in a more independent and decentralized manner (that is, run on an individualized, student-need driven basis) typically are more efficient financially, as well as more effective academically for their students.

So how then might such a "decentralized" and student-driven funding system be run in "real life?" Is it possible to tie fund allocation directly to student need? According to many in other states it certainly is. In fact, in such school systems as in Washington and Oregon, for example, funding is based on a "weighted student formula" devised by Michael Strembitsky, a school superintendent in Edmonton (RPPI). In simple terms, "The formula attaches school funding to the backs of children and in so doing gives budgetary control to each school principal (RPPI)." Of course, this means that the leader…