Recent funding increases not enough to offset long-term challenges schools face

Despite record education funding levels, fiscal challenges remain, according to a fact sheet released Sept. 28 by the Public Policy Institute of California.

State K-12 funding increased nearly 50 percent between 2017–18 and 2021–22, and with state, local and federal funding combined, public schools received about $136 billion in 2021–22.

However, much of that aid at the federal level in particular was in the form of one-time aid as schools responded to the COVID-19 pandemic. Federal funds accounted for 23 percent of K-12 funding in 2020–21 and 12 percent in 2021–22, but PPIC researchers noted that in most non-recession years, the federal share is only between 6 and 9 percent.

Yet local educational agencies face longstanding fiscal challenges that will require more than one-time funds or grants.

Among the most significant challenges:

  • Increases in personnel costs — such as rising health and benefit costs — can have an outsized impact on LEA budgets. Approximately 80 percent of current spending on K-12 students is for staffing (teachers, support staff, etc.), and rising pension contributions absorbed about 25 percent of the K-12 spending increase from 2013–14 to 2019–20.
  • Declining student enrollment due to falling birth rates and net migration was exacerbated by the pandemic, which saw larger than expected drops, especially in early grades. LEAs will be grappling with the fiscal challenges of downsizing over the next decade, according to the fact sheet.
  • District will need an estimated $7.4 billion minimum in additional state funding for modernization needs through 2025. “School facility funding is primarily funded locally, with the state School Facility Program (SFP) providing some support. In part due to a requirement for local matching funds, on average, SFP funding for modernization slightly worsens gaps by district property wealth, student income, and student race,” PPIC researchers wrote.

There is some decent news highlighted: After nearly 20 years of California’s per-pupil funding lagging behind most other states, spending is now slightly above the national average. California currently ranks 19th in spending per student among states (including the District of Columbia) — up from its rank of 25th to 35th from the mid-1980s until the recovery from the Great Recession.