K thru 12 Education
Change in Total K-12 Funding

  • 2006-07 $172 million
  • 2007-08 $297 million
The May Revision to the Governor's Budget includes $66.6 billion ($41.4 billion General Fund and $25.2 billion other funds) for K-12 education programs in 2007-08. This reflects an increase of $297.5 million ($855.8 million General Fund increase offset by a $558.3 billion other funds decrease) over the 2007-08 Governor's Budget. More notable funding changes are further described below.

As a result of a steady decline in birth rates throughout the 1990s, attendance growth in public schools is also declining (see Figure K12-01). For the current year, K-12 average daily attendance (ADA) is estimated to be 5,960,000, a decrease of 5,000 or 0.09 percent from the 2005-06 fiscal year. For the budget year, the Administration estimates K-12 ADA will decrease at a greater rate than projected in the Governor's Budget. The May Revision projects a decline of 28,000 ADA or 0.48 percent, compared to the 23,000 or 0.39 percent decline projected in the Governor's Budget. As a result, ADA for 2007-08 is now projected to be 5,932,000.


PER-PUPIL SPENDING
 Total per-pupil expenditures from all sources are projected to be $11,225 in 2006-07 and $11,562 in 2007-08, including funds provided for prior year settle-up obligations (see Figure K12-02). This is an indicator of the relative level of spending in California for support of K-12 education programs and not the actual level of funding allocated to each school for a pupil.


MAJOR WORKLOAD ADJUSTMENTS
 Major workload adjustments for 2007-08 include the following:

  • Cost-of-Living Adjustment (COLA) Increases - The May Revision proposes a $226.8 million increase to fund an increase in the statutory COLA: $160.8 million for revenue limits, $17.8 million for special education, $7.5 million for child care programs, $9 million for class size reduction, and $31.7 million for various categorical programs. The COLA increases to 4.53 percent from the 4.04 percent adjustment included in the Governor's Budget.
  • ADA - The May Revision proposes a $293.3 million net reduction in 2007-08 to reflect the decline in ADA from the Governor's Budget projection. The majority of this amount consists of a $285.6 million reduction in school district and county office of education revenue limit apportionments (general purpose funding for schools). Due to an increase in the attendance estimate for 2006-07, there is a $41.2 million increase in revenue limit apportionments included in the May Revision for that year.
  • Special Education - The May Revision provides a Proposition 98 General Fund increase of $35.9 million and a Federal Fund increase of $7.6 million over amounts proposed in the Governor's Budget. These changes include adjustments for revised figures for local property tax and ADA growth.
The major policy adjustments included in the Budget are discussed in Program Enhancements and Other Budget Adjustments.


PROPOSITION 98 GUARANTEE
 A voter-approved constitutional amendment, Proposition 98, guarantees minimum funding levels for K-12 schools and community colleges. The guarantee, which went into effect in the 1988-89 fiscal year, determines funding levels according to a multitude of factors, including the level of funding in 1986-87, General Fund revenues, per capita personal income, and school attendance growth or decline.

Proposition 98 originally mandated funding at the greater of two calculations or Tests (Test 1 or Test 2). In 1990, Proposition 111 was adopted to allow for a third funding test in low revenue growth years. As a result, three calculations or Tests determine funding for school districts and community colleges (K-14). The calculation or Test that is used depends on how the economy and General Fund revenues grow from year to year (see Figure K12-03).

For fiscal year 2005-06, Proposition 98 funding was $53.3 billion (this number reflects the guarantee level as recalculated pursuant to the Proposition 98 Settlement Agreement), of which the General Fund share was $39.7 billion or 74.5 percent. Local property taxes covered the balance. The 2006-07 Proposition 98 funding is estimated to be $55.4 billion, a 3.9 percent increase over 2005-06. The General Fund share in 2006-07 is $41.2 billion or 74.4 percent. These funding levels reflect the higher attendance estimates and the cost of apportionments for that year.

Proposition 98 funding for 2007-08 is proposed at $57.6 billion, a four percent increase over the Governor's Budget estimate. The General Fund comprises approximately 72.7 percent, or $41.9 billion of total proposed Proposition 98 funding. The totals include funding for K-12, community colleges and other state agencies that serve students. K-12 Proposition 98 per-pupil expenditures in the May Revision are $8,681 in 2007-08, up from $8,569 in the Governor's Budget.


HOME-TO-SCHOOL TRANSPORTATION
 The Governor's Budget proposed to shift the fund source for the $627 million Home-to-School Transportation program from Proposition 98 General Fund to the Public Transportation Account (PTA). In April, the Administration issued a revised proposal for Home-to-School Transportation. The revised proposal will continue to result in General Fund savings of $627 million. However, instead of shifting Home-to-School Transportation out of the Proposition 98 guarantee and funding it with PTA moneys, the PTA will reimburse the General Fund for the cost of the Home-to-School Transportation program.

To achieve additional General Fund savings, the May Revision proposes:

  • To increase the 2007-08 reimbursement from the PTA for Home-to-School Transportation by $3 million to reflect the increase in the COLA for the program and to reflect $2.6 million in transportation costs for the State Special Schools.
  • Reimburse the General Fund for $200 million in 2006-07 Home-to-School Transportation expenditures.
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CHAPTER HIGHLIGHTS for K thru 12 Education Back to Top

image of black pointing arrowChange in Total K-12 Funding
 Program Enhancements and Other Budget Adjustments
PRINTABLE BUDGET DOCUMENTS Back to Top
Revised Budget Summary - K thru 12 Education (pdf * - 53K) -
Provides the entire K thru 12 Education Chapter in pdf format.
ADDITIONAL INFORMATION Back to Top
Revised Budget Detail - K thru 12 Education
Displays Revised Budget Detail information for K thru 12 Education.

Proposed Budget Summary - K thru 12 Education (January 2007)
Displays Proposed Budget Summary information for K thru 12 Education.