Legislative Analyst's Office, December 2002
California's Economy and
Budget in Perspective
2002 Cal Facts
Part 1: K-12
K-12 School Revenues
- Proposition 98 is the
shorthand term for the state's constitutional minimum funding requirement for K-14 education. This annual spending guarantee is met
from two revenue sources: state aid and local property taxes.
- The state will provide 57 percent of all K-12 school revenue
in 2002-03, while local government sources (property taxes and
other local income) will contribute 31 percent. The federal government will provide
- The state lottery provides less than 2 percent of total
school revenues, around $138 per pupil.
K-12 School Spending
- School "revenue
limits"consisting of state funds and local property taxesare
general purpose funds that support basic school operations. School
districts also receive lottery revenues that they can use for general
purposes. General purpose funds account for 58 percent of all
school expenditures. Lottery revenues alone account for less
than 2 percent of all school expenditures.
- Most of the remaining school expenditures are for
so-called "categorical" programssuch as special education,
compensatory education, and class size reduction. These funds constitute
38 percent of school spending.
- Over the past decade, general purpose funds have declined as
a percentage of overall school funding.
The Typical Cost of a California School
- In a typical K-12
school, classroom services account for almost two-thirds of all
costs. Half of all K-12 costs are for teachers, with an
additional 13 percent for instructional
aides, books, and supplies.
- Other school site activities account for over one-third of
all K-12 costs. These costs consist of operations and
maintenance, administrators and clerical support, instructional
support (such as reading specialists), and pupil support (such as nurses).
- Administration, which consists of district administration,
county oversight, and state services, accounts for 6 percent of all
Growth in K-12 Enrollment Will Slow Significantly
- Total public K-12 enrollment
is projected to increase by 1 percent in 2002-03, bringing
enrollment to 6.1 million students. Over the next ten years, K-12
enrollment growth will continue to slow and actually decline beginning in
- Each 1 percent increase in K-12 enrollment requires an
increase of approximately $430 million (General Fund) to maintain
annual K-12 expenditures per pupil.
- Despite the general downward trend in enrollment
growth, significant variation is expected to occur across counties.
For example, between 2002-03 and 2011-12, Los Angeles'
enrollment is expected to decline by 82,000 students (a 5 percent
decline) whereas Riverside's enrollment is expected to increase by
69,000 students (a 20 percent increase).
Proposition 98 and the Fiscal Impact Of Recent Over-Appropriations
- Since appropriations above
the Proposition 98 minimum guarantee (often called
"over-appropriations") are locked into the base for the next fiscal
year, over-appropriations of Proposition 98 are permanent
- The state over-appropriated in each year shown in the
figure. The over-appropriation for any year includes the impact of
both prior-year and current-year over-appropriations.
- The cumulative impact of over-appropriations between
1997-98 and 2002-03 results in an annual spending level for K-14
education that is $10.5 billion higher than it would have been if the state
had appropriated at the minimum guarantee each year.
Proficiency Levels Low in English Language
Arts and Matha
- In 2002, 33 percent of all
K-12 students met the California proficiency standards for
English language arts and 35 percent met proficiency standards in math.
- Large achievement gaps exist between
economically disadvantaged students and other students. Similar gaps exist
for English language learners and special education students.
- These test resultsalong with other student assessmentsare used
to compute each school's Academic Performance Index score
and performance growth targets. Fifty-three percent of schools
met performance growth targets in 2002.
Spending on Child Care Programs Has
General Fund and Federal Funds
- Funding for child care
programs has increased rapidly in recent years, rising from $880 million
in 1996-97 to $3.1 billion in 2002-03.
- The increase in spending is primarily due to legislative
actions to expand (1) state preschool, (2) after school
programs, (3) child care for current and former CalWORKs families,
and (4) other child care programs. Approximately $1.1 billion of
the $2.1 billion expansion from 1996-97 through 2002-03 has
been funded with federal funds for child care.
- The state currently provides child care slots for
approximately 566,000 children. These programs primarily serve
low-income families at little or no cost.
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