California’s K-12 Spending Exceeds $20,000 Per Pupil

“It’s not enough. We’re still 41st in the nation in per pupil funding. Something needs to change. We need to have an honest conversation about how we fund our schools at a state and local level,”
–  Governor Gavin Newsom, State of the State Address, February 12, 2020

It should come as no surprise that Governor Newsom would call for more education spending, but is he right to say that California is 41st in per pupil funding? It turns out the answer to that question is complicated.

The place to start would be the readily available data on California’s per pupil spending. The most recent compilation from Ed Week is for 2019, reporting the California average at $12,143 per pupil. This places California in 20th place among the states, which puts it in the front half of the pack.

To the uninitiated, $12,143 seems like a lot. In a classroom with 30 students, that would equate to over $300,000. If you hired an absolutely first rate teacher at the very competitive rate of $150,000 per year in pay and benefits, for a ten month school year you would still have $15,000 per month for other expenses. Isn’t that enough to rent a classroom, buy books, and share costs for a few administrative staff?

Perhaps this explains why charter schools now attract 10 percent of California’s K-12 students. $10,000 per year per student – or $12,143 per year per student, as the case may be – is enough to build an effective educational business model.

This amount, around $12,000 per year per pupil, gets batted around a lot in the media. A Google search on the sum $12,143, paired with search terms “per pupil in California” yields first page citations in Patch, Times of San Diego, Orange County Register, Governing, and others including the prestigious Public Policy Institute of California. But even proponents of increasing spending per pupil acknowledge this number is low.

As the Larry Sand documents in a recent California Policy Center article, “After a six-day teacher strike in January 2019, the district and union settled on a contract that many questioned. Now, a year later, LAUSD officials admit to spending $18,788 per student. But in a mid-January interview with EdSource, school superintendent Austin Beutner indicated that the district gets just $16,402 from the state to educate each child.”

So what is the number? How much are California’s taxpayers spending per pupil? According to LAUSD itself, that district spends $18,788 per student.

The Ed Week compilation included the following clarification: “Captures factors such as teacher and staff salaries, classroom spending, and administration, but not construction or other capital [expenditures].”

What else may be not included in this number?

To get at this, state government experts were contacted at the California Dept. of Education, the California Dept. of Finance, and Ed Data, which is “a partnership of the California Department of Education, EdSource, and the Fiscal Crisis and Management Assistance Team/California School Information Services (FCMAT/CSIS).”

Speaking and corresponding with these experts raised as many questions as it answered. But here’s a basic formula that ought to lead to a calculation of per pupil education spending:

For the most recent available historical data, start with $72.4 billion in spending in 2017-18, an amount that is found on the Ed Data home page on their “Financial Data” tab:

This figure needs to be adjusted as follows:
– deduct pre-school, adult education, and community college spending,
– add the state’s annual CalSTRS contribution,
– add debt service on school bonds (or instead, add capital spending, but a lot of debt funds go into operating budgets (or “deferred maintenance” budgets) so not sure which to pick – it should be one or the other),
– deduct from student headcount all charter school attendees,
– deduct from total revenue all funds directed to charter schools,
– verify that $72.4 billion was the entire gross amount of incoming funds.

Only a few of these amounts are readily available. Official sources did offer much. For example, it is known that roughly 10 percent of all K-12 students are enrolled in charter schools, but determining what amount of total taxpayer funding goes into charter schools is not generally known, despite the unrelenting attacks by teachers unions that claim diverting funds to charter schools is the cause of their financial challenges.

Another known variable is how much the state contributed to CalSTRS, $2.8 billion, which can be found on the CalSTRS website in their 2019-20 Annual Budget (page 47). Expect that amount to increase in the coming years as CalSTRS attempts to dig out of an unfunded liability now totaling $73.7 billion (page 24).

Turning from historical data, which is three years behind, Governor Newsom’s 2020-21 budget claims “K-12 Education Spending per Pupil” will be $17,964. This is based on “ongoing per-pupil expenditures of Prop. 98 funds of $12,600 in 2020-21,” as well as additional per-pupil expenditures of $5,364 from other sources.

Not explicit in the Governor’s Budget Report on K-12 Education, but impossible to refute if the inputs they’re providing on pages 68-69 are correct, is that California’s taxpayers will be spending a total of $119.8 billion on the 6.7 million K-12 students. And it is reasonable to assume this does not include the CalSTRS contribution from the state. It is also reasonable to assume this doesn’t include capital spending. How much is that?

If you hired an absolutely first rate teacher at the very competitive rate of $150,000 per year in pay and benefits, for a ten month school year you would still have $15,000 per month for other expenses. Isn’t that enough to rent a classroom, buy books, and share costs for a few administrative staff?

The best compiled information on capital spending, at least via bond financings, can be found on Ballotpedia’s “School Bond Elections in California” page, which reports on local and state school bond elections. According to their data, over the decade from 2010 through 2019, $76.7 billion in local school bonds were approved by voters, along with the $9.0 billion Prop. 51, approved by voters statewide in 2016. And then there are the older bonds, still outstanding. According to Ballotpedia, “from 1996 to 2006, California voters approved about $109 billion in school construction bonds at the state and local level.”

This yields impressive totals, especially when taking into account interest expense. A bond earning 5 percent, paid down over 30 years, will require total payments, interest and principle, of nearly double that much.  Figure that California’s taxpayers are currently paying at least $15 billion per year to finance currently outstanding school bonds, with more on the way.

Pulling this all together offers an interesting counterpoint to the popular $12,143 per student meme that’s making the rounds. In reality, total spending, adding Prop. 98 funds and other funds from the governor’s budget, along with the state’s CalSTRS payment and payment on school bond debt, can be estimated to be around $137.6 billion, which equates to $20,642 per pupil.

One must truly wonder what charter schools could do if they had access to all that money. They don’t, and proving that would go a long way towards debunking the narrative that charter schools are the cause of financial problems for traditional public schools. It would also, of course, document a reality that is inconvenient for advocates of ever higher K-12 education spending: spending for traditional public schools, once charter school allocations and enrollments are deducted from the calculation, are even greater than $20,642 per pupil.

Does it make sense to spend even more on our K-12 public school students, when there may be other reasons for the problems? What about restoring discipline in public schools, instead of applying racial quotas to how many students can be suspended or expelled? What about reforming union work rules such as were attempted in the Vergara case, rules governing tenure, layoff and dismissal criteria, so great teachers could be fairly compensated, good teachers could be retained, and poor teachers could be fired?

For that matter, why is there no discussion anymore about just issuing school vouchers, which would solve California’s public education challenges overnight?

Heck, what about solving the real fiscal challenge facing California’s public schools, by making teachers eligible for Social Security instead of pensions, and just rolling all of the CalSTRS assets into the Social Security fund?

Or what about outlawing the teachers unions, who have turned public education into their own private monopoly?

California’s voters should ask themselves: If you had to educate K-12 students, having them in your charge 180 days per year, how well could you do it if you were paid over $20,000 per year, per student?