California Education System

How does funding affect public education in California? This question is important because California once had the best public school system in the country, if not the world. But, in 1978, California voters passed Proposition 13, which reduced property tax revenue by 57% and cut funding for education by half. The state legislature passed bailout legislation to make up for the huge funding shortfalls resulting in overall cuts of 9% to 15%. This drastic decrease in education funding was a major factor in causing California’s schools to fall from first to last place in the nation in terms of student performance.

Background Information


Proposition 13
Proposition 13, passed by 65% of voters in 1978, is a constitutional amendment that reduced property tax rates by 57% and resulted in a dramatic reduction in the amount of local property tax revenue available for cities, counties, and especially for schools. Prop 13 rolled back property assessments to their 1976 values and limited property taxes to 1% of their assessed value. It also limited property valuation to 2% per year unless the property was sold. In addition, Proposition 13 required that all state tax increases be approved by 2/3rds of the legislature and local tax increases also be approved by 2/3rds of the voters. The idea behind Proposition 13 was to help property owners, especially those who had valuable property but lower incomes. Proposition 13 resulted in a cut in local property tax revenue of $6 billion and reduced funding for education by half. In response, the state passed a set of “bailout bills” and, using a $5 billion surplus, replaced much of the funding schools lost but didn’t replace all of it. Overall, schools lost about 15% of their funding in wealthier districts and 9% in lower income districts. Another effect of Proposition 13 was that fiscal control moved from local communities to the state and changed the governance structure of California’s education system. Decision making became centralized and California education changed from a local system to a state system. Before Proposition 13, California’s public school system enjoyed a reputation and ranking as the best educational system in the nation including private schools. But after the proposition’s passage, California’s school system plummeted from the number one spot to last place in the national rankings.

Many people argue that Proposition 13 has been beneficial for older long term property owners because year after year their property tax increase has been capped at 2% a year. The chart below provides statistics from the Howard Jarvis Taxpayers Association on money saved by homeowners:


This seems like a substantial amount of money to save every year but for those who have children, the cost of a private school education far outstrips the savings gained from lower property taxes.



These graphs show that between the years of 2003 and 2006, funding for public education increased slightly. The graphs which show performance and graduation also slightly increase. They almost exactly match the funding graph. This shows that funding has a definite affect on performance.


“Adequate Yearly Progress – 2006 State of California”, Education Data Partnership (EDP), 2006,
“California Education Expenditures”, California Department of Education, 2006,
“The Special Challenge of Proposition 13”, The Merrow Report PBS, 2006,
“Ed Source Online”, Ed Source, 2006,