1. Invest in Students

Even with much-needed recent spending increases, California’s overall investment in students remains abysmally low when compared with what is needed. This poses a real threat to the state’s future economic success and the well-being of all residents.

In the past six years, the state has restored funding to 2008 levels, rebounding from the severe cuts imposed during the Great Recession. This was achieved by reaching a target funding level set by the legislature when the LCFF was first adopted in 2013 and schools were still reeling from the impact of the earlier cuts. However, California’s schools should not by any measure be regarded as “fully funded.” A chasm remains between current funding levels and what is needed to ensure success for all students – or even to bring the state to the national average per-student spending levels. As the California Budget and Policy Center has noted, “Achieving this LCFF funding goal was never intended to mean that an adequate level of financial support needed to deliver a quality education for California’s K-12 students had been provided.”

A new study sheds even more light on the actual funding need. In “What Does It Cost To Educate California’s Students? A Professional Judgment Approach,” conducted as part of the Getting Down to Facts II project, researchers concluded that California would have needed to spend an additional $25.6 billion—over a third more than 2016-17 funding levels—to ensure all students have an opportunity to meet the state’s educational goals.

Alarmingly, in the face of this need, California school districts face mounting fiscal pressures right now that threaten to destabilize budgets and force reductions in services to students. This situation is being called a “Silent Recession.” As the research organization WestEd notes, examples of these fiscal pressures include: “reduced funding due to declining enrollment; the costs of upkeep and renovations for aging school facilities; increasing special education program costs; increasing employee health care costs; and the costs associated with recruiting, retaining, and training teachers, including ensuring competitive wages. And, for many California school districts, the most daunting fiscal pressure is the rising cost of employee pensions, totaling a $1-billion increase over the previous year in costs to districts statewide in the 2017-18 school year alone.”

Finally, it’s important to re-affirm: Funding matters. A recent study by the Learning Policy Institute reviewed a wide body of research on the role of money in determining school quality and found that:

“Improvements in the adequacy and equity of per-pupil spending are positively associated with improved student outcomes. While there are other factors that moderate the influence of funding on student outcomes, such as how that money is spent, the association of higher spending with better student outcomes holds true, on average, in numerous large-scale studies across multiple contexts. The size of this effect is larger in some studies than in others, and, in some cases, additional funding appears to matter more for some students than for others—in particular, students from low-income families who have access to fewer resources outside of school. Clearly, money must be spent wisely to yield benefits. But, on balance, in direct tests of the relationship between financial resources and student outcomes, money matters.”

The Legislature and Governor should:

• Develop and meet new targets to increase the state’s investment in public education to the top ten among states in per pupil spending by 2025. According to the California Budget and Policy Center, California ranked 41^st in per pupil spending among states in the last state-to-state comparison. Top-spending states spend more than $20,000 per student. That’s at least 40 percent more than California spends. And, according to The 74, six of the eight highest spending states ranked among the top ten for overall school quality in Education Week’s “2017 Quality Counts” state-by-state report cards. California’s ambitious vision for excellent and equitable public education demands much more than a below-average investment. Achieving full and equitable funding will require bold, sustained action and a multi-pronged, multi-year approach.

California districts and schools require necessary funding to:

• Provide adequate staffing, programs and support to maximize every student’s educational experience. For example, due to current funding levels, California provides fewer teachers, librarians, counselors, and administrators per student than nearly any other state. These educators and professionals are essential to the quality instruction and supports necessary for student success.
• Advance educational equity for all students. California students exemplify the rich racial, ethnic and linguistic diversity of our nation. Many students also enter school with significant need: Six-in-10 students are from low-income families; 1-in-5 are learning English; and 1-in-10 have a disability affecting their learning. Full funding is needed so that schools can address the unique needs of each student, including providing additional services, programs, and resources based on those needs, and to eliminate opportunity gaps.

Increased investment is also essential to:

• Build the capacity of local educators, including school and district leaders, to engage in professional learning and to focus on continuous improvement to meet the needs of all students;
• Expand and support opportunities for parents, families, students, educators and communities to activate their voices and contribute to advancing a shared vision of student and school success; and
• Support the shift to an accountability and continuous improvement approach at the local, regional and state levels that emphasizes collective responsibility for improving results through effective use of data, collaborative planning, evidence-based strategies, capacity building and sharing/adopting promising practices.

In addition, the Legislature and Governor should:

• Continue to allocate funding through the Local Control Funding Formula, which targets additional resources based on student needs and emphasizes local flexibility. The creation of any separate new programs with separate funding streams and additional compliance requirements, (what were previously known as categorical programs), should be avoided because they take critical resources away from the core funding formula.
• Revise the state’s plan for addressing unfunded liabilities[1] in state pension benefits to ease the financial impact on local school districts. Competitive salaries and benefits are essential for California to attract and compensate teachers and staff for their service to schoolchildren. Unfortunately, projected shortfalls in the state’s two major pension systems—CalSTRS and CalPERS—pose a risk to the long-term solvency of these systems, putting educators’ retirements in jeopardy and creating a disincentive to become a teacher. The legislature and governor attempted to address this situation in 2014 by mandating that employees and employers (in this case school districts) each contribute a larger share to the pension system. The increase for districts is steepest—from 8.25 percent to 19.1 percent over seven years—and districts must cover these rising obligations using general operating funds allocated to them through the LCFF. This places enormous strain on already limited school district budgets. Therefore, the legislature and governor should revise plans for stabilizing these pension systems to relieve fiscal pressure on school districts, while maintaining the promise of a solvent retirement program for the next generation of California educators and staff.
• Take steps to ensure the state contributes its sufficient, timely, and equitable share to meet existing and future school facilities construction and modernization needs. Funding for school facilities in California is a shared state and local responsibility. Allocations from the State’s School Facility Program come from statewide general obligation bonds approved by California voters. They’re intended to provide grants to school districts that cover half the cost of new construction projects and a larger share for modernization. In November 2016, California voters authorized $7 billion in new state general obligation bonds for K-12 public school facilities. This commitment, however, does not address the identified need throughout the state. According to a Public Policy Institute of California brief, 70 percent of the state’s 10,000-plus schools and more than 300,000 classrooms are more than 25 years old. By 2022, schools statewide are projected to need about $117 billion for facilities. About 69 percent of that amount is needed for school maintenance and modernization—updating science labs and adding computers, for example. It is also estimated in a new Getting Down to Facts II research brief that California school districts need to spend between $3.1 billion and $4.1 billion annually just to maintain their existing facilities.
• Explore broader tax reform to ensure ongoing, stable and fair revenue sources that allow the state to meet targets for increased investment in public education and other vital services. A comprehensive review of the state’s entire tax structure should be undertaken now leading to reforms that will maximize fairness, provide for greater stability and less volatility among various revenue sources (i.e.—personal income taxes, capital gains, sales, property, etc.) and bring the structure up-to-date with the state’s changing economy. This review and subsequent reform will help ensure ongoing and sustainable revenues to meet and exceed targets for the increased investment in public education that California needs.

The State Board of Education (SBE), Department of Education (CDE), and/or other state entities should:

• Develop and support planning tools and systems that strengthen districts’ abilities to spend funds wisely and efficiently.
• Continue to streamline and consolidate processes to support districts in producing budgets that are easy-to-understand, aligned to educational priorities, and meet the needs of parents, families, educators, staff and local communities, so they can be informed and engaged partners.

[1] A pension system has an unfunded liability when its assets (investments and other holdings) are insufficient to cover its liabilities (the future cost of pension benefits that employees have earned to date). Source: LAO, https://lao.ca.gov/Publications/Report/3873