Are California’s schools really ‘starving’ for revenue?

Whenever you see politicians and special interests throwing statistics around like the cafeteria food in “Animal House,” it’s a better-than-even bet that they’re distorting their respective claims about how we fund schools in California.

Here are some basics about school financing that every taxpayer should know. First, it’s complicated. K-14 schools get funding from a variety of federal, state and local sources.  (K-14 includes community colleges but not the University of California or California State University).

Second, it should be no surprise that California spends more on education than any other state given our population. But we also spend significantly more per student when all sources of revenue are considered.

Third, the biggest slice out of the state’s general fund pie goes to education. This is due in large part to Proposition 98, a constitutional initiative barely approved (50.7%) by voters in 1988. It requires a minimum percentage of the state budget to be spent on K-14 education and has a complex series of “tests” to determine annual increases in spending. Generally speaking, it requires that at least 40% of the state budget to go to K-14 education. The 40% guarantee is ironclad even though enrollment in K-14 has fallen significantly in recent years.

According to its sponsor and biggest funder, the California Teachers Association, Prop. 98 was the panacea to fix all that was wrong with education. The first sentence of the ballot argument in favor of the initiative, signed by CTA’s president, states “Proposition 98 is a well-thought-out plan for California’s schools to once again be among the very best in the nation.”

“What about the Lottery?” is a frequent question taxpayers ask when the topic of school financing comes up. California voters approved the state lottery when they passed Proposition 37 in 1984. Like Prop 98, it was sold as providing a lifeline to schools. The first sentence of the ballot argument support stated that the lottery would “provide hundreds of millions of ADDITIONAL DOLLARS FOR PUBLIC EDUCATION.” While that turned out to be true, the reality is that it provides about one percent of the total revenue for schools.

These voter-approved measures, as well as the tens of billions of dollars approved for school construction bonds, give our schools more money than should be necessary to provide quality education for California’s schoolchildren.

And yet, according to the education establishment, it is not enough. In fact, for them, it is never enough.

Ironically, some advocates for unrestrained taxation now blame Proposition 98, the very measure they fought to enact, for being a “ceiling” not a “floor” for K-14 spending.  As if the 40% guarantee out of the $140 billion general fund isn’t enough!

When pro-tax interests claim that we, the beleaguered taxpayers, are too greedy – and, by the way, we hate kids, too – it is important to respond with a few uncontroverted facts.  First, California has the nation’s highest income tax, highest state sales tax, highest gas tax and highest vehicle taxes in America. Surely we should be able to fund education – one of government’s most important functions – at an adequate level.

Second, don’t tell us that property taxes are inadequate and that Proposition 13 is to blame. California ranks 17th out of 50 states in per capita property tax collections and that doesn’t even include the billions of dollars generated for schools by additional parcel taxes imposed at the local level.  Moreover, speaking of Proposition 13, we are now spending 30% more on a per-student, inflation-adjusted basis than we were in the mid-70’s, just before the passage of Proposition 13 – a time when all agree that schools were top notch. Clearly, the current ills in California’s education system have nothing to do with inadequate property tax dollars.

Third, the notion that California ranks low in per-pupil spending relative to other states does not hold up to serious scrutiny. Those “statistics” don’t include many sources of revenue such as parcel taxes, bond proceeds (building schools is, in fact, education spending) and state bailouts of CalSTRS, the State Teacher Retirement System. The simple fact is that California is above average in per pupil spending according to the U.S. Census.

Finally, the real problem with education in California is the political establishment’s abject unwillingness to adopt even the most modest of reforms including expanded school choice, merit pay for teachers, pension reforms and limiting administrative overhead. What is not a problem is lack of revenue.  Taxpayers are well within their rights to vigorously oppose any local or statewide scheme to impose even higher taxes. The schools just don’t need it.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.