stateandlocalfinance.org recent changes in education finance kim rueben urban institute...
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Stateandlocalfinance.org
Recent Changes in Education FinanceKim Rueben
Urban [email protected]
GRA 8/4/2014
Stateandlocalfinance.org2
Outline
• Overall trends in K-12 finance• Changes since 2000• Who should decide funding options?• Case study: California
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Background• Spending per pupil has been growing over time• In part because states have taken a larger role in education
finance to improve equity in resources and to improve educational outcomes across districts
• Increased state role usually financed through increased state taxes such as income and sales taxes
• Lowering reliance on the property tax for schools• Long-run trend has changed somewhat recently during the
last two recessions– Shift back to property taxes in 2002-2003– Larger federal role with ARRA
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1969-70
1971-72
1973-74
1975-76
1977-78
1979-80
1981-82
1983-84
1985-86
1987-88
1989-90
1991-92
1993-94
1995-96
1997-98
1999-2000
2001-02
2003-04
2005-06
2007-08
2009-100
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Local Per Pupil ($) (2011 Dollars)State Per Pupil ($) (2011 dollars)Federal Per Pupil ($) (2011 Dollars)
School Year
$ /
Pupi
l (20
11)
5
Per Pupil Spending (2011)
6
Changing spending per pupil increased since 2000
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But more variation since the Great Recession
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Is California Harbinger for Country?• Why California? – Large state with diverse population– Lots of children– A lot of recent activity– I know it
• California Education Finance– Limited local revenue– A lot of state funding and rules– Complicated because of 40 years of lawsuits and ballot
initiatives• Information from Weston/PPIC
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School Finance System is Complex
Total K-12 Revenues$62.3B
Prop 9872%
Revenue Limits52%
Property Taxes19%
General Fund33%
Categoricals20%
Non Prop 9828%
Other State7%
General Fund6%
Special Funds0.2%
Lottery1%
Other Local9%
Federal12%
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2005-2006 Revenues
Source: PPIC
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California’s Old Funding “Formula”
• Base: revenue limits– Each district has unique per-pupil funding amount
based on 1972-73 expenditures– At least 20 adjustments, largely based on history – Separate formulas for charter schools and rural
schools• Supplemental funding: categorical programs– At least 100 other programs– No clear or consistent allocation formula
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Recent activity to help address shortcomings
• Questions of – Adequacy– Equity– Transparency
• New proposals:– New funding formula– Lawsuit questioning tenure and teacher allocation
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Changes adopted during and after recession
• During recession categorical groups combined – school districts given more flexibility (2009)
• Increased funding levels with passage of Proposition (30) temporary tax system– Expected to increase $1800 between 2016-2017 and 2013-14
• Local Control Funding Formula (July 2013) – Weighted student formula– Increase revenues per pupil for disadvantaged students (low-income, ELL,
foster youth)– Additional funds for districts in which more than 55% of students are
disadvantaged • Vergara v. California – questioning state’s teacher tenure, dismissal and
layoff rules. Court found for plaintiffs but in appeal