January 1995

Legislative Analyst's Office
CALIFORNIA'S SCHOOL
FINANCE SYSTEM

School Finance Has Been Shaped By a Number of
Landmark Events Over the Past 20 Years

The following charts describe four landmark events.

The following chart shows how the Proposition 98 minimum funding levels are calculated in more detail. Proposition 98 governs around 80 percent of school funding.

Proposition 98 Cash Spending Has Exceeded Minimum Required

For the past several years, K-14 cash spending has actually exceeded the minimum required under Proposition 98. "Cash spending" includes off-budget loans that have been provided by the Legislature to avoid spending reductions in districts. Specifically:

In total, Proposition 98 spending will be $24.7 billion in 1994-95. The K-12 portion is $22.1 billion, or $4,198 per pupil. The level of per-pupil spending has held at around $4,200 since 1991-92.

General-Purpose Funding Represents Around Three-Quarters of
K-12 Funding Under Proposition 98

General-purpose funding is estimated at $16.9 billion in 1994-95, around half from the General Fund and half from local property tax revenues. Most general-purpose funding is provided through the revenue limit system.

CATEGORICAL PROGRAMS

Categorical Programs Fund Special Services
and Services for Particular Target Groups

Depending on how programs are counted, there are 40 to 60 separately funded categorical programs. Special education is the largest single program.

Categorical Funding Represents Around One-Quarter of School Funding from State and Local Sources

The proportion of funding allocated to categorical programs increased significantly between 1977-78 and 1982-83, increased slightly between 1982-83 and 1987-88, and has decreased slightly since 1987-88.

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