Recent Cuts to Education Funding Reduce Local Schools’ General Purpose Dollars

In response to sizeable budget shortfalls, lawmakers have repeatedly cut state spending in recent years. These cuts included substantial reductions to California public school general purpose dollars – revenue limits – and funding earmarked for specific school programs, often referred to as categoricals. Cuts to general purpose dollars are significant because they represent the largest source of school revenue and they can be used to support any program.

Yesterday, we released a fact sheet that estimates the local impact of reductions to public school general purpose dollars between 2007-08 and 2009-10 for school districts across the state. Statewide, general purpose funding was cut by $3.5 billion (10.5 percent) during that period, a reduction of $645 per student. Although the fact sheet excludes cuts other than those to schools’ general purpose funding, it helps illustrate the depth of recent cuts. How have schools responded to reduced funding? Recent statewide surveys indicate that schools used multiple approaches to cut costs. For example, many school districts shortened their school year and increased class sizes, while others eliminated arts and music programs.

While Governor Brown’s May Revision would increase 2011-12 K-12 Proposition 98 funding by $2.7 billion, almost all of the additional dollars would be used to reverse delays in payments to schools, so-called “deferrals.” Reversing deferrals provides previously delayed funding on time, but does not increase total resources available to schools. Moreover, even with the increased funds, 2011-12 K-12 Proposition 98 funding remains $3.8 billion (7.5 percent) lower than the amount provided to schools in 2007-08, which means schools will have to manage with less for at least one more school year.

—Jonathan Kaplan