The Effects of State Control on School Finance in California

Across the United States, funding for education has shown tremendous growth since World War II. After taking inflation and student enrollment increases into account, spending for our nation's schools increased by 67 percent in the 1960s, 35 percent in the 1970s, and 30 percent in the 1980s. In California, real spending per pupil for education grew 13 percent between 1980–81 and 1990–91.

Why, in the wealthiest state in the nation, has the growth in spending for schools lagged behind other states? There are a number of plausible explanations including the taxpayer revolt of the late 1970s; the fierce competition for funds to pay for a variety of public services across the state; the changing demographics of the state's population, particularly its children; and voter preferences for other services. One Sacramento lobbyist says, "At one time, Californians had a Cadillac school system and drove Chevrolets, but today have elected to drive Cadillacs and accept a Chevrolet school system."

Although the reasons for California's inability to keep up with national spending trends are deep and complex, many of the causes are rooted in the design of the state tax system and the resulting school finance structure. The purpose of this policy brief is to describe the forces that have.conspired to retard the growth in spending for California's schools over the last two decades.