CA's education system is affected by external factors like shifting demographics, declining economics, and intensifying politics, limiting the traditional routes of local decision-making and property taxation. Although some districts show excellence and commitment, creating and sustaining a statewide education system to meet 21st-century expectations is difficult without a comprehensive reform plan. Political conflict over revenue earmarking and school reform distracts from education improvement. This report describes and analyzes these issues, suggesting a comprehensive set of solutions.

This report discusses the importance of forecasting revenues and expenditures for public sector planning and budgeting. It highlights three characteristics of California's recent experience. First, K-12 funding rose 91% from 1980 to 1989, but real revenue growth was tempered by inflation. Second, California relies more on state revenues for K-12 education than the rest of the US. Third, California's "effort" in raising K-12 revenues in 1986 was lower than the US average, and revenue efforts for both schools and other public functions are below the national average.

The Trust Agreement Project, initiated in September 1987, is a joint effort of 12 California school districts and their teachers' unions. It enables teachers and school management to develop agreements on professional issues beyond the traditional scope of collective bargaining. The agreements cover topics like teacher evaluation and curriculum development, and aim to enhance educational capacity by promoting collective responsibility for educational processes and outcomes. The project appears to be altering decision-making processes and encouraging collaboration between unions and management.

The study examines the Partnership Academies in California, which are designed to reduce high school dropout rates among at-risk students. Academies combine high school curriculum, technical courses, and support from local businesses, with funding based on student outcomes. Survey results indicate that Academy students had a lower dropout rate than comparison group students, were more likely to attend college, and earned higher wages while working and studying. Graduates from both groups reported being fairly satisfied with their high school preparation and achievements since graduation.

This is the fifth edition of Conditions of Education in California. Over time, the content and format have changed in keeping with suggestions made by readers. This publication is based upon compilations and syntheses of information collected by other agencies and individuals. These sources are noted throughout the text. We wish here to express our appreciation to these others upon whose efforts we depend so heavily. Also, PACE undertakes a substantial amount of original data collection and analysis. We make specific mention of this throughout the text.