Publication Date: Friday, May 02,
2003
Budget
crisis forces
new thoughts on school funding
Suggestions range from revising Prop. 13 to completely
overhauling system
by Martin Nobida
Gov. Gray Davis' proposed 2003-04 budget threatens to drastically
change the way California's public schools are financed.
 Some experts, however, say that change is exactly what the state
needs.
"Only 10 people really understand the financing system. It's arcane,
there's no logic to it and it's a real mess," said Michael Kirst,
professor of education policy at Stanford University.
In the midst of an unprecedented state budget crisis, the school
funding system has come under intense scrutiny. Talk of the possibly
devastating effects proposed budget cuts may have on public education
has engendered a rash of suggested remedies -- from quick-fix approaches,
like raising taxes, to a complete overhaul of the system.
The current system's framework evolved in an attempt to provide
equal education throughout California, where hundreds of school
districts were once financed primarily through divergent levels
of local property tax revenues.
In 1976, the state Supreme Court declared such differences illegal.
The courts called on the state to change the system to ensure more
equality. Through a series of legislative acts passed in the late
1970s and early 1980s, the state took greater control of the way
education money was raised and distributed.
It
established "revenue limits," the
amount of general fund taxes districts are allowed to spend per
pupil per year (based on attendance,
rather than enrolment). Most of California's 1,000 school districts
are in communities where local property taxes aren't sufficient
to meet the revenue limit. The state, therefore, makes up the difference.
Districts
that have sufficient local property taxes receive only $120 per
student.
This is "basic aid," or the minimum amount guaranteed
by the constitution. The Palo Alto Unified School District is one
of between 50 and 60 basic-aid districts.
Although Kirst said the state has equalized funds in 95 percent
of its districts, some stark differences remain. Palo Alto, for
example, spends more than $10,000 per student per year, while the
statewide average is closer to $7,000.
Kirst said the system has also failed to meet the state's educational
needs.
"Even at the height of the tech boom in 2000 and 2001, California
ranked 32nd in education funding in the nation," he said. "If you
take into account cost-of-living expenses, its rank was more like
40th."
The current budget crisis is seen by some as a perfect opportunity
to address such lingering issues. Quick-fix approaches like increasing
the alcohol tax and extending the sales tax to include services
are two ideas currently afloat. California's alcohol tax is currently
lower than the national average.
A more dramatic measure being bandied about is a split-roll tax
system, which amounts to a revision of Proposition 13.
Many blame California's inadequate school funding on Prop 13.
Passed in 1978 as a constitutional amendment, it guaranteed residences
and commercial properties would be taxed at only 1 percent of their
assessed value at the time the property was purchased. It was meant
to make housing affordable, but also served to limit the amount
of tax revenue going into education.
A split-roll tax system would keep the tax rate for residential
property the same, but change commercial property tax assessments
to the current market value.
One
of the most drastic approaches considered is a move to a so-called "adequacy-based" approach.
This would involve determining what the state's educational goals
should be, finding out how much it would cost to achieve those
goals, and then going about raising the finances.
The approach would represent a complete overhaul of the current
system, which critics say simply sets a certain amount of funds
for spending, then throws the money at schools and them asks them
to do something with it.
As with all the options, however, it's too early to predict what,
if anything, will happen, Kirst said.
"There has to be a lot more pain before people can move to those
levels," he said. "Right now, the situation is like a storm offshore.
A lot of the problems people are talking about now are only in
anticipation of the pain to come."
Martin Nobida can be e-mailed at mnobida@paweekly.com
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