California decided 50 years ago that unequal school funding was unfair. Has anything changed?
California has always gone a little rogue. As the richest state in the US, the home of massively influential tech companies, and, perhaps most crucially, the largest domestic producer of Millennials’ two favorite products — avocados and wine — they get to throw their weight around. An example: there is a federal limit on how strict states can make their auto emissions standards — the result of a successful auto industry lobbying effort in the 1970s. It applies to every state… except California. They set up their own, stricter standards three years earlier, and got exempted from the rule. California’s funding regulations for public education followed a similar trend.
Public schools in the United States get money from three sources: on average, they receive 8% from the federal government, 47% from the state government, and 45% from local taxes (usually property taxes). Inevitably, that means that school districts in poorer areas have less money for education. While a school near Boston can pay for a new science lab, a school in rural Arizona has to cancel classes most Fridays so it can pay its electricity bills (and no, that’s not just a COVID-19 thing. It was reported in NPR in 2016, before we were all obligated to homeschool our kids). This is not a new problem: in 1973 the U.S Supreme Court heard a case in which public school students in Texas, whose school building had been condemned, argued that any school-funding system that depends on local property taxes was fundamentally unfair. While the Court found that the system was, indeed, unfair, they determined the federal government couldn’t do anything about it.
California was way ahead of them. It had already settled its own state Supreme Court case (in 1971) that determined that unequal funding was unconstitutional, and ordered schools to equalize district-level funding. Shortly afterward, Proposition 13 was passed, prohibiting all increases in property taxes over the level of inflation, which dramatically reduced local funding available to schools as well. At the moment, local taxes provide less than a third of school budgets. Does that mean California became immune to the educational imbalances plaguing the rest of the country?
To find out, I pulled the most recent, but still pre-pandemic, average ACT scores for every high school in the state. I also gathered data from arguably the best proxy for poverty in schools — the Free and Reduced Lunch Program, which is run by the USDA. Students qualify for free or reduced lunch if their household incomes are below 185% of the poverty line (which calculates to about $44,000 for a family of four). Because students are automatically enrolled if they are enrolled in SNAP (another government food program run by USDA), as well as several other safety-net programs, it’s a more accurate measurement of low-income students than other single sources. One can therefore reasonably assume that it is a decent proxy for the amount of local taxes that a school is receiving as well.
When these two data points are plotted against each other, the pattern is clear:
Schools with greater portions of their students near the poverty line had dramatically lower ACT scores. And based on a simple linear regression, each percentage point of poverty decreased the average ACT score by a tenth of a point. Finally, based on the same model, a given school’s percentage of students near the poverty line accounted for a whopping 72.5% of the variability in ACT scores.
Looking at it from a slightly different angle, my analysis showed that schools with average ACT scores of over 21 (roughly the national average) have statistically significantly less impoverished populations than schools that average below 21. Schools with the higher scores had roughly 38% of students qualify for free and reduced meals, while the lower-scoring schools had over 77% qualify:
Of course, there are multiple factors at play here. Going to school when your budget is tight is stressful. Having to choose between textbooks and a month’s internet is not going to help your ACT score, regardless of how much your school spends on you. And it’s true that Californian schools that cater specifically to those struggling academically have more kids eligible for the meal program:
I should also acknowledge that ACT scores are not a perfect indicator of academic success — in addition, only about 26% of Californian 12th graders take the exam. But the low participation rates actually make these conclusions even more stark — presumably, only high-performing, college-seeking high schoolers bothered to take the exam. The fact that poverty affects even the most ambitious to this degree is alarming.
It’s clear that California didn’t solve its inequality problem. But where to go from here? California’s per-student spending is significantly below the national average. But public budgeting in the state is fraught: the failure of Proposition 15 this November put a damper on any hopes to boost income from commercial property taxes, and Proposition 13, the property-tax restriction implemented in 1978, largely froze inequality in place. (While property tax revenues go to local governments, the increase from Prop 15 would have freed up more state funding to go to education and other social services — local governments in California have been far more reliant on state transfers than elsewhere in the country since 1978). California’s school budgets are increasingly beholden to pension funds — accounting for a fifth of their payroll — because of an aging and retiring teacher population. And the pandemic has caused a fiscal crisis: the Governor announced a budget deficit of $54 billion for 2020. And because the state government’s income comes overwhelmingly from income taxes, the loss of 2020 reported income doesn’t make 2021 look significantly better.
I don’t have a good solution. But whatever money is in the government pot — shouldn’t it be spread around relatively equally? Even within California’s limited property tax system, high-turnover real estate in wealthy areas significantly benefits richer kids. The state’s budget crisis shouldn’t leave kids outside of those areas stranded.
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