The 2018-19 Budget

K-12 Education in Context

In this post, we answer many questions legislators and others commonly ask about K-12 education in California. We begin by providing information on the main components of California’s public school system. We then review the state’s K-12 accountability system. Lastly, we explain the basics of school finance in California.

California’s Public School System

Below, we describe California’s students, teachers and staff, local education agencies (LEAs), and state education agencies.

Students

California Has More Than 6 Million Public K-12 Students. In 2016‑17, California’s public schools enrolled 6.2 million students, representing 12 percent of all public school students in the nation. About two-thirds of these students were in grades kindergarten through eight, with one-third attending high school. From the mid-2000s through 2013‑14, K-12 attendance remained essentially flat. Since 2014‑15, attendance has declined slightly each year.

Almost Six in Ten California Students Are Identified as Low Income. In 2016‑17, 58 percent of California’s public school students were eligible to receive a free or reduced price school meal under a large federal nutrition program. States frequently use this eligibility measure as an indicator of a student coming from a low-income family. Qualifying students come from families earning no more than 185 percent of the federal poverty level. In 2016‑17, this level equated to $45,000 for a family of four. California’s rate of free or reduced price meal eligibility is above the nationwide rate of 52 percent.

About Half of California Students Are Hispanic. As Figure 1 shows, the ethnic make-up of California’s students differs notably from the nation. Whereas about half of California’s students are of Hispanic origin and about one-quarter are white, in the United States those shares are flipped. Differences exist among other ethnic groups too, with Asian students comprising a larger share of students in California than the nation (12 percent and 5 percent, respectively), and black students comprising a smaller share (6 percent in California compared to 16 percent nationwide).

About One-Fifth of California Students Are English Learners. Students are classified as English learners based on a home language survey and their performance on a test of English proficiency. In 2016‑17, 21 percent (1.3 million) of California students were classified as English learners—a higher proportion than in any other state. Three out of every ten English learners in the nation attend school in California. Even more California students—almost 2.7 million students overall—speak a primary language other than English at home, but almost half of these students are considered fluent in English. California students come from families speaking over 65 different home languages, although the vast majority (78 percent) speak Spanish, with Vietnamese the next most common language (3 percent).

About One in Ten California Students Are Identified as Having a Disability Affecting Their Education. In 2016‑17, about 754,000 California students (12 percent) were identified with a disability affecting their education. Pursuant to federal law, schools must provide these students with special education services. California identifies a slightly smaller proportion of students for special education than the rest of the nation (13 percent). Specific learning disabilities such as dyslexia are the most common diagnoses requiring special education services (affecting 5 percent of the state’s K-12 students), followed by speech and language impairments (affecting 3 percent of California’s students). Although autism remains a relatively rare diagnosis (affecting 1.7 percent of California’s students), the number of students diagnosed with this disability has increased notably (from 14,000 children in 2000‑01 to 105,000 in 2016‑17).

Staffing

California Has Almost 300,000 Teachers. In 2016‑17, about 296,000 full-time-equivalent teachers were employed in California’s public school system. Roughly three-quarters of teachers are women, similar to the share in other states. Compared to the student population, teachers are more likely to be white (66 percent of teachers compared to 24 percent of students) and less likely to be Hispanic (21 percent of teachers compared to 55 percent of students). Over the past five years, the state’s teacher workforce has increased at an average annual rate of 1.5 percent per year.

Teacher Salaries Vary Across the State, Are Higher on Average Than Other States. In California, the state requires most LEAs to set teacher salary levels through collective bargaining. As Figure 2 shows, teacher salaries vary widely across the state, with salaries generally higher in urbanized areas than rural areas. In 2016‑17, the average teacher salary was $79,100—34 percent higher than the national average. California consistently ranks among the top states for teacher salary, along with Connecticut, New York, New Jersey, and Massachusetts.

California Has Highest Student-to-Teacher Ratio in Nation. Though California’s teachers tend to be better paid than the rest of the nation, the state has comparatively fewer of them. Over the five-year period from 2010 through 2014, the national average student-to-teacher ratio hovered at 16. California’s ratio was notably higher throughout this period, but it has been declining steadily since 2011‑12. In 2016‑17, California’s student-to-teacher ratio was 20.4.

California Has 306,000 Other School Staff. In addition to teachers, schools employed 306,000 full-time-equivalent staff in various administrative and support positions in 2016‑17. This number includes 26,000 principals, assistant principals, and other school administrators (equating to about 1 school manager for every 11 teachers). It also includes 29,000 pupil services personnel (primarily counselors, psychologists, and speech pathologists). Similar to teachers, both administrators and pupil services personnel must hold a state credential. The remaining 251,000 employees work in positions that do not require a credential. These employees—known as classified staff—include clerical workers, janitors, teacher aides, and bus drivers.

Local Education Agencies

School Districts and Charter Schools Provide Most Instruction. The public school system comprises many LEAs. In 2016‑17, 945 school districts and 1,248 charter schools operated in California—typically offering comprehensive educational programs for students in their local areas. In addition, county offices of education (COEs) operate certain types of schools for at-risk students, including students who are incarcerated or have been expelled. Many COEs also operate special education, career technical education, adult education, and preschool programs. California’s public school system also includes seven state-run schools—consisting of three special schools for blind or deaf students and four schools for students incarcerated at state juvenile justice facilities.

Size of California School Districts Varies Dramatically. As Figure 3 shows, California’s 945 school districts vary greatly in size. One-quarter of school districts are very small, serving 300 or fewer students. Another one-third are small, serving between 301 and 2,500 students. Whereas these two sets of districts combined comprise more than half of all districts in California, they account for only 7 percent of all students. At the other extreme, 12 very large districts each serve more than 40,000 students and together educate one-fifth of all students in the state. The number of school districts in each county also varies across the state, with seven counties containing a single district each, and the most populous county (Los Angeles) containing 80 districts.

Charter Schools Are Fast Growing. Charter schools are publicly funded schools that are similar to traditional schools in that they must employ state-certified teachers, teach the same state academic standards, and administer the same state assessments. They differ from district-operated schools, however, in that they are exempt from certain state laws. In exchange for these exemptions, they must adhere to locally developed, approved, and periodically renewed charters. These local charters are intended to give schools more flexibility over the design of their education programs. While the total number of K-12 students declined slightly over the past decade, charter school attendance nearly tripled, growing at an average annual rate of 11 percent. In 2016‑17, charter schools served 580,000 students (10 percent of the statewide total), up from 210,000 students (3 percent of the statewide total) in 2006‑07. In 2016‑17, charter schools ranged in size from 5 students to more than 5,000 students, with an average school size of 473.

COEs Typically Provide Countywide Support Services. In addition to providing some specialized forms of direct student instruction, COEs offer a variety of services to school districts. Many COEs, for example, operate countywide payroll systems and provide professional development for teachers and administrators. COEs also are required to review and approve school districts’ annual budgets, monitor the fiscal health of districts several times per year, and review districts’ strategic academic plans, known as Local Control and Accountability Plans (LCAPs). The COEs also will have a support role in helping school districts that do not meet performance standards, but this system remains in development.

State Education Agencies

California Department of Education (CDE) Administers Education Programs. The department monitors compliance with state education laws and regulations; collects and compiles education data; allocates funding; and provides support to LEAs. The department has an annual budget of around $270 million and about 1,600 employees—rendering it midsized compared with other departments within California state government. More than two-thirds of CDE’s funding comes from federal funds, as many of CDE’s activities are associated with federal programs. The Superintendent of Public Instruction—a nonpartisan position elected by the voters—oversees the department.

A Few Other State Agencies Involved in Major Aspects of K-12 Education. In addition to CDE, the following state entities are involved in major aspects of K-12 education.

• The State Board of Education adopts regulations to implement certain state laws and reviews LEA waiver requests. In recent years, the board’s most significant decisions have related to LCAPs. The board has an annual budget of $2.6 million (state General Fund) and about ten employees.

• The Commission on Teacher Credentialing (CTC) is responsible for accrediting teacher preparation institutions, credentialing teachers, and investigating allegations of teacher misconduct. CTC has an annual budget of around $25 million (special fund) and about 140 employees.

• The Office of Public School Construction (OPSC), an office within the Department of General Services, reviews school facility projects to determine if they qualify for state bond funding. OPSC has an annual budget of around $9 million (bond funding) and about 50 employees.

Some COEs on State Contract to Perform Statewide Functions. In addition to these state entities, the state contracts with some COEs to undertake activities that have statewide benefits. The Fiscal Crisis and Management Assistance Team (affiliated with the Kern COE) provides fiscal advice, management assistance, and other budget-related training to school districts across the state. California School Information Services (also affiliated with the Kern COE) helps LEAs across the state with data management issues. The K-12 High Speed Network (affiliated with the Imperial COE) assists schools with Internet connectivity. The California Collaborative for Educational Excellence (affiliated with the Riverside COE), established by the state in 2013, assists certain LEAs with improving their student outcomes. The state also contracts with the San Joaquin COE to maintain two websites (the California School Dashboard and the School Accountability Report Card) that make school district performance data publicly available. Additionally, the state sometimes competitively bids limited-term contracts with select COEs to administer special initiatives, such as conducting statewide teacher recruitment campaigns and providing statewide training on salient issues.

Accountability

Below, we describe the state’s current academic standards and student assessments. We next review trends in student performance. We then explain how the state supports LEAs identified as underperforming.

Academic Standards

Like Most States, California’s Instruction Is Based on Common Core State Standards. In 2010, at the direction of the Legislature, SBE adopted the Common Core State Standards (with the addition of a few California-specific standards) as the foundation for what students should know and be able to do in English language arts and math. In 2012, the state adopted standards aligned to the Common Core for English Learners. The state adopted aligned standards for English Learners in 2012. Forty two states and the District of Columbia have adopted the Common Core State Standards.

State Is Implementing New Science Standards. California also adopted the nationally developed Next Generation Science Standards (NGSS) in 2013. California was a lead state partner in the development of these new standards. SBE adopted initial guidance on how to teach the new science standards in 2016. Some schools currently are field testing the new guidance and implementing the new science standards, with the plan to have all schools teach the new standards beginning in 2018‑19.

Student Assessments

Federal Law Requires States to Administer Standardized Tests. As a condition of receiving federal education funding, federal law requires states to assess students in English language arts and math in grades 3 through 8 and at least once from grades 10 through 12. In addition, federal law requires states to assess students in science at least once during: (1) grades 3 through 5, (2) grades 6 through 9, and (3) grades 10 through 12. States also are required to assess the English proficiency of English learners each year.

First Exams Aligned to Common Core State Standards Administered in Spring 2015. Although SBE adopted the Common Core State Standards in 2010, schools were not expected to have their instruction aligned with the new standards until 2014‑15. In spring 2015, the state replaced its previous testing program with new assessments aligned to the Common Core standards. The new assessments were developed by the Smarter Balanced Assessment Consortium (SBAC), a group of 17 states, with California a lead member. The SBAC assessments measure proficiency in reading, writing, and mathematics and are administered online using a computer or tablet. As an alternative to the Common Core assessments, students with the most severe disabilities take the California Alternate Assessments (CAAs)—first implemented in 2016‑17.

State Is Developing Several Other Exams. The state is in the final stages of developing the California Science Test (CAST). It plans to field test CAST in 2017‑18, with all districts administering CAST in 2018‑19. The state also recently created the English Language Proficiency Assessments for California (ELPAC). The ELPAC assesses the English proficiency of English learners. Districts are to administer the annual end-of-year ELPAC exams beginning in the spring of 2018 and the diagnostic component of ELPAC beginning in July 2018. The state is in the early stages of developing a Spanish language assessment aligned to the Common Core. Schools could use this optional exam for students receiving instruction in Spanish, English learners enrolled in school for less than 12 months, or other students interested in assessing their proficiency in Spanish.

Student Performance

Performance on New Assessments Improved in 2016, Remained Flat in 2017. In 2017, 49 percent of California students met or exceeded standards in English language arts. This rate was essentially unchanged compared with the 2016 exams but better than the first administration of the exams in 2015—when 44 percent of students met or exceeded standards. Performance on math followed a similar trajectory, with 38 percent of students meeting or exceeding standards in 2017, essentially unchanged from 2016, but higher than 2015 (33 percent).

Large Achievement Gaps Exist. Results on the exams show significant achievement gaps between the scores of low-income and non-low-income students. As Figure 4 shows, 36 percent of low-income students met or exceeded the state standards in eighth grade English language arts, compared with 68 percent of non-low-income students. The gaps are similar at other grade levels and for math.

Outcomes Also Vary by Ethnicity. Results on statewide exams show significant achievement gaps among California’s four largest ethnic groups. These gaps persist even after controlling for income. As Figure 5 shows, low-income black and Hispanic students have lower proficiency rates on eighth grade English language arts exams (25 percent and 33 percent, respectively) than low-income white and Asian students (44 percent and 62 percent, respectively). Similar differences among groups exist in third and eleventh grade.

California Ranks Near the Bottom on National Tests. The federal government administers the National Assessment of Educational Progress every two years. The most recent assessment results (2015) show that California performs near the bottom in reading and math for fourth and eighth grades. The performance of non-low-income students in California (39^th in eighth grade reading) ranks a little bit higher than the performance of low-income students (45^th in eighth grade reading). California’s performance compared to other states has not changed significantly in the past ten years. In addition to having lower performance compared to other states, California has among the largest achievement gaps between low-income and non-low-income students. In fourth grade reading, for example, California’s achievement gap ranked 49^th in the country (that is, 48 states had achievement gaps smaller than California).

Five in Six Students Graduate High School Within Four Years. Of the cohort of students that entered ninth grade in the 2012‑13 school year, 84 percent graduated within four years. Of the same cohort, 10 percent dropped out of school, 6 percent returned to school for a fifth year, and less than 1 percent received either a High School Equivalency Certificate (if they passed the General Educational Development Test) or a special education certificate of completion.

More Students Are Completing Coursework Required for University Eligibility. In 2016, 45 percent of California students graduated high school having completed the coursework required to be eligible for admission to the California State University and University of California. This proportion has been gradually increasing over the last 20 years. In 1996, 35 percent of California high school graduates completed such coursework. (To be eligible for university admission, students also must meet certain grade point average requirements and take college entrance exams.)

LEA Support

California in Midst of Developing a New Accountability System. The past few years the state has been developing a new system for measuring district performance and supporting districts identified as having poor performance. The state recently decided to use outcome data from the School Dashboard to identify school districts in need of support. Districts are flagged when the School Dashboard data reveals poor performance for one or more student subgroups. To measure performance, the state currently looks at test scores, graduation rates, and suspension rates. Beginning next year, the state also will look at chronic absenteeism and the rate of high school graduates prepared for college/career. In fall 2017, a total of 228 districts were identified for support. Of these districts, 164 (72 percent) were flagged solely for poor performance of their students with disabilities.

California in Midst of Aligning Accountability System With New Federal Rules. Whereas the state’s new accountability system flags districts in need of support, the federal Every Student Succeeds Act (2015) requires states to provide extra support to the lowest performing 5 percent of schools.

Underperforming LEAs Are to Receive Extra Support. The state is in the process of determining how to support districts and schools identified as needing support. In developing the system of support, the state is considering the roles of districts, COEs, regional COE hubs, and the California Collaborative for Educational Excellence. Some indications suggest the state might build upon its longstanding Statewide System of School Support, which consists of 11 regional COE hubs providing assistance to LEAs identified with poor performance. Many key decisions regarding this new system likely will be made in 2018.

Finance

Below, we describe how California funds its schools, explain its ranking on measures of per-pupil spending, and describe how districts typically use their funding.

State Is Primary Source of Funding for Schools. In 2017‑18, schools received $93 billion in total funding from all sources. As Figure 6 shows, the largest share of school funding comes from the state, with smaller shares coming from local sources (primarily local property tax revenue) and the federal government. (Revenues from the state lottery account for 1 percent of all revenue.) These proportions differ from many other states, where local property tax revenue covers a much larger share of school funding. Unlike most other states, California’s State Constitution limits local property tax rates.

Per-Pupil Funding Has Risen Notably in Recent Years. Most comparisons of school funding focus on state General Fund and local property tax revenue, the two revenue sources over which the state has the greatest control. The 2017‑18 Budget Act provided schools with $11,067 per student from these sources, an increase of about $2,400 (28 percent) over the level provided five years ago. Adjusted for inflation, per-pupil funding is at its highest level in more than three decades (since the enactment of Proposition 98).

California Per-Pupil Spending Ranks in the Middle Among the States. Based on spending data from 2014‑15 (the most recent year for which national data are available), California ranked 29^th in per-pupil spending among the 50 states and the District of Columbia. Over the past decade, California has ranked as high as 23^rd (in 2007‑08) and as low as 36th (from 2010‑11 through 2012‑13). Because California’s revenues are highly sensitive to changes in the economy, school spending tends to be more sensitive to recessions and recoveries than most other states. Given California has increased school funding significantly since 2014‑15, its ranking likely will increase as new data are released over the next few years. (Some organizations calculate per-pupil spending with adjustments for regional costs. In these rankings, California typically ranks much lower.)

Most School Spending Is for Instruction. As Figure 7 shows, 62 percent of school expenditures in 2015‑16 related to instruction and instructional support—largely paying teacher salaries and benefits. Schools spent 17 percent of their funds on facilities, including land acquisition, construction, and maintenance. Schools spent 11 percent on student services, including school meals, pupil transportation, counseling, and health services. The remaining funds were spent on central administration, including the compensation of district superintendents; central business, legal, and human resource functions; and other expenses, including printing.

State Has Longstanding System for Monitoring Districts’ Fiscal Health. In 1991, the state established a fiscal oversight system requiring COEs to review the financial condition of their school districts at various points during the year. If a COE determines that a district is in fiscal distress, it can undertake additional oversight, such as assigning a fiscal expert or requiring more frequent financial reports from the district. If the district’s financial condition does not improve, the COE can take stronger action, such as rescinding the actions of the district’s governing board. This system generally has been effective, with only eight districts becoming insolvent since 1991. (By comparison, 27 districts became insolvent over the ten years preceding the adoption of the 1991 system.) When a district becomes insolvent and is unable to pay its bills, the state provides an emergency loan so that the district can continue to operate and appoints an administrator to manage the district while it implements a recovery plan.