This report focuses on estimating the costs for California school districts to meet state-set achievement goals and how these costs differ across districts with different student characteristics. The study uses an econometric cost function approach to estimate base costs and marginal costs associated with poverty, English learners, and special education. The findings are compared with cost studies in other states and used to analyze whether the current school finance system appropriately accounts for cost differentials across districts.

The report explores the impact of teacher sorting, or the tendency for high-achieving students to be assigned to more effective teachers, on student achievement. It finds that teacher sorting has a significant positive effect on student achievement in both math and English language arts. The effects are particularly strong for students who start out low-achieving. The report argues that policies aimed at reducing teacher sorting, such as random assignment of students to teachers, may be counterproductive for student achievement.