K thru 12 Education
Total K-12 Funding

The 2007-08 Budget Act includes $66.8 billion ($41.4 billion General Fund and $25.4 billion other funds) for K-12 education programs in 2007-08. This reflects an increase of $3.5 billion ($1.6 billion General Fund and $1.9 billion other funds) over the 2006-07 revised budget. More notable funding changes are further described below.

As a result of a steady decline in birth rates throughout the 1990s, attendance growth in public schools is also declining (see Figure K12-01). For the current year, K-12 average daily attendance (ADA) is estimated to be 5,960,000, a decrease of 6,000 or 0.09 percent from the 2005-06 fiscal year. For the budget year, the Administration estimates K-12 ADA will decrease at a greater rate. The ADA for 2007-08 is projected to decline by 28,000 ADA or 0.48 percent, to 5,932,000.


PER-PUPIL SPENDING
 Total per-pupil expenditures from all sources are projected to be $11,163 in 2006-07 and $11,541 in 2007-08, including funds provided for prior year settle-up obligations (see Figure K12-02). This is an indicator of the relative level of spending in California for support of K-12 education programs and not the actual level of funding allocated to each school for a pupil.


MAJOR WORKLOAD ADJUSTMENTS
 Major workload adjustments for 2007-08 include the following:

  • Cost-of-Living Adjustment (COLA) Increases - The Budget includes a $2.1 billion increase to fund the 4.53-percent statutory COLA: $1.6 billion for revenue limits; $150.9 million for special education; $69.7 million for child care programs; $58.6 million for class size reduction; and $303 million for various other categorical programs.
  • ADA - The Budget includes an $11 million net reduction in 2007-08 to reflect the decline in ADA. The majority of this amount consists of a $42.1 million reduction in school district and county office of education revenue limit apportionments (general purpose funding for schools). Due to the decrease in the attendance for 2006-07, there is an $89 million decrease in revenue limit apportionments for that year.
  • Special Education - The Budget provides a Proposition 98 General Fund increase of $93.4 million and a Federal Fund increase of $10.9 million. These changes include adjustments for revised figures for local property tax and ADA growth.
The major policy adjustments included in the Budget are discussed in the Program Adjustments section below.


PROPOSITION 98 GUARANTEE
 A voter-approved constitutional amendment, Proposition 98, guarantees minimum funding levels for K-12 schools and community colleges. The guarantee, which went into effect in the 1988-89 fiscal year, determines funding levels according to a multitude of factors, including the level of funding in 1986-87, General Fund revenues, per capita personal income, and school attendance growth or decline.

Proposition 98 originally mandated funding at the greater of two calculations or Tests (Test 1 or Test 2). In 1990, Proposition 111 was adopted to allow for a third funding test in low revenue growth years. As a result, three calculations or ("Tests") determine funding for school districts and community colleges (K-14). The calculation or Test that is used depends on how the economy and General Fund revenues grow from year to year (see Figure K12-03).

The Legislature, noting concerns about the uncertainty of the economy and in particular General Fund revenues, chose to fund the Proposition 98 Guarantee for the 2006-07 fiscal year at a minimum level of $55 billion, which is $411 million lower than the amount proposed in the May Revision. The final Budget Act reflects the budget year impact on the Proposition 98 guarantee as a result of the revised current year minimum Proposition 98 guarantee level. This adjustment results in General Fund savings of $427 million.

Despite the adjustment in the Proposition 98 guarantee, K-14 education spending remains at $57.6 billion from a combination of one-time and ongoing funding. To accomplish this, the Budget Act replaces $429 million in ongoing Proposition 98 General Fund for K-12 Home-to-School Transportation and K-12 School Deferred Maintenance with funding from the Public Transportation Account (PTA) and the Proposition 98 Reversion Account. Specifically, the Budget provides for the following:

  • A $349 million reduction in the Proposition 98 appropriation for K-12 Home-to-School Transportation;
  • An $115.5 million reduction in the Proposition 98 appropriation for the State School Deferred Maintenance Fund;
  • A shift of $250 million from the School Facilities Emergency Repair Account back to the Proposition 98 Reversion Account;
  • An appropriation of $99 million from the PTA for the K-12 Home-to-School Transportation Program;
  • An appropriation of $250 million from the Proposition 98 Reversion Account for the K-12 Home-to-School Transportation Program; and
  • An appropriation of $115.5 million from the Proposition 98 Reversion Account for the State School Deferred Maintenance Fund.
Proposition 98 funding for 2007-08 is proposed at $57.1 billion, a 3.9-percent increase over the 2006-07 funding level. The General Fund comprises $41.5 billion of total proposed Proposition 98 funding. The totals include funding for K-12, community colleges and other state agencies that serve students. K-12 Proposition 98 per-pupil expenditures are $8,564 in 2007-08 (see Figure K12-04).

For fiscal year 2005-06, Proposition 98 funding was $53.3 billion (this number reflects the guarantee level as recalculated pursuant to the Proposition 98 Settlement Agreement), of which the General Fund share was $39.7 billion. Local property taxes covered the balance. The 2006-07 Proposition 98 funding is estimated to be $55 billion, a 3.1-percent increase over 2005-06. The General Fund share in 2006-07 is $40.8 billion. These funding levels reflect the higher attendance estimates and the cost of apportionments for that year.
  image of forward arrow
CHAPTER HIGHLIGHTS for K thru 12 Education Back to Top

image of black pointing arrowTotal K-12 Funding
 Program Adjustments
PRINTABLE BUDGET DOCUMENTS Back to Top
Enacted Budget Summary - K thru 12 Education (pdf * - 42K) -
Provides the entire K thru 12 Education Chapter in pdf format.
ADDITIONAL INFORMATION Back to Top
Enacted Budget Detail - K thru 12 Education
Displays Enacted Budget Detail information for K thru 12 Education.