K thru 12 Education
Change in Total K-12 Funding

  • 2007-08 $12 million
  • 2008-09 $1,470 million
The May Revision to the Governor's Budget projects total revenue for K-12 education programs in 2008-09 to be $71 billion ($41.7 billion General Fund). Of this amount, $67 billion is state, federal and local property tax funding accounted for in the State Budget. This reflects an increase of $1.5 billion ($1.7 billion General Fund) over the Governor's Budget. More notable funding changes are described below.


ATTENDANCE
 As a result of a steady decline in birth rates throughout the 1990s, attendance growth in public schools is declining (see Figure K12-02). For the 2007-08, K-12 average daily attendance (ADA) is estimated to be 5,947,000, a decrease of 6,400 from the 2006-07 fiscal year. For 2008-09, the Administration estimates K-12 ADA will decrease by an additional 31,000 to 5,916,000. However, both of these projections are higher than the Governor's Budget ADA estimates of 5,923,000 for 2007-08 and 5,892,000 for 2008-09, reflecting increases of 24,000 and 23,000, respectively.


PER-PUPIL SPENDING
 Total per-pupil expenditures from all sources are projected to be $11,997 in 2007-08 and $12,000 in 2008-09, including funds provided for prior year settle-up obligations. 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 include the following:

  • ADA - The May Revision proposes an $85.3 million net increase in 2008-09 to reflect the increase in ADA from the Governor's Budget projection. The majority of this amount consists of a $92.6 million increase in school district and county office of education revenue limit apportionments (general purpose funding for schools) partially offset by $7.3 million in reductions to categorical programs. Due to an increase in the attendance estimate for 2007-08, there also is a $50.5 million increase in revenue limit apportionments included in the May Revision for that year.
  • Local Property Tax Adjustments - The May Revision reflects General Fund increases of $179.1 million in school district and county office of education revenue limit and special education apportionments in 2007-08 and $521.3 million in 2008-09, related to school district and county office of education property tax revenues. In general, decreases in local property tax revenues increase the amount of state General Fund costs for revenue limit apportionments.
  • School District Revenue Limits - $780 million in workload adjustments for 2008-09 school district revenue limits are included in the figures above related to ADA and Property Tax Adjustments. These adjustments include a $142 million increase related to higher ADA, a $519.4 million increase related to lower estimates of property taxes, a $93.4 million increase to reflect a six-fold increase in unemployment insurance rates, and a $25.3 million increase for adjustments in PERS contribution rates. The May Revision also reflects workload increases for 2007-08 totaling $218.3 million including a $34.6 million net increase related higher ADA, which is significantly offset by lower projections of declining enrollment cost, as well as an increase of $183.7 million for lower than expected local property tax revenues.

PROPOSITION 98 GUARANTEE
 The 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 (SCA1) was adopted to allow for a third funding test in low revenue 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).

For fiscal year 2006-07, the Proposition 98 Guarantee was $55.2 billion, of which the General Fund share was $41.4 billion. Local property taxes covered the balance.

At the time of the Governor's Budget, 2007-08 Proposition 98 appropriations exceeded the minimum guarantee. During the Special Session called by the Governor to address the budget shortfall, the Administration and the Legislature reduced 2007 Budget Act appropriations by $506.8 million by reducing programs that were not projected to fully expend their appropriations and by replacing ongoing funding with one-time savings from prior year appropriations. As a result of these actions, Proposition 98 General Fund appropriations for 2007-08 are now $41.8 billion, which is $802.1 million higher than the minimum Proposition 98 Guarantee. Total Proposition 98 funding for 2007-08 is $56.6 billion.

The Proposition 98 Guarantee for 2008-09 is projected to grow to $56.8 billion of which $41.4 billion would be from the General Fund. As part of the budget-balancing reductions, the Governor's Budget proposed to suspend Proposition 98 and reduce Proposition 98 General Fund to $39.6 billion. However, consistent with the priority the Administration has placed on education funding and its continuing efforts to improve the state's education system, the May Revision proposes to restore $1.8 billion General Fund thereby increasing Proposition 98 General Fund in 2008-09 to the minimum Proposition 98 Guarantee level, with no suspension.
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CHAPTER HIGHLIGHTS for K thru 12 Education Back to Top

image of black pointing arrowChange in Total K-12 Funding
 Adjustments to the Budget Balancing Reductions
 Other Budget Adjustments
PRINTABLE BUDGET DOCUMENTS Back to Top
Revised Budget Summary - K thru 12 Education (pdf * - 256K) -
Provides the entire K thru 12 Education Chapter in pdf format.
ADDITIONAL INFORMATION Back to Top
Revised Budget Detail - K thru 12 Education
Displays Revised Budget Detail information for K thru 12 Education.

Proposed Budget Summary - K thru 12 Education (January 2008)
Displays Proposed Budget Summary information for K thru 12 Education.