- California’s K-12 funding reached a record ~$142.4B in 2024-25, driven by large state increases as federal aid returns to normal levels.
- Under the LCFF, districts spend about $23K per pupil and direct additional dollars to higher-need students such as low-income students and English learners.
- Rising staffing and pension costs, along with projected enrollment declines and attendance-based funding penalties, threaten district budgets despite higher funding.
- PPIC outlines costly reform options—like switching to enrollment-based funding and adding regional cost and need adjustments—that would shift billions across districts.
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1. Funding Growth and Composition
California’s K-12 public schools are enjoying their highest overall funding levels in history. Total funding (state, local, federal) rose from an estimated $134 billion in 2023-24 to about $142.4 billion in 2024-25. State funding in particular has surged nearly 50% since 2019-20, equivalent to a 22% increase after adjusting for inflation. However, federal contributions—while critical during pandemic years—now fall back to historic norms, providing around 6% of total funding in typical years, down from 23% in 2020-21.
2. Equity Through Targeted Funding
The LCFF, introduced in 2013-14, continues to channel extra resources toward districts serving English Learners, low-income, and foster youth students. In 2023-24, spending averaged about $23,000 per pupil, with significant per-pupil differentials favoring higher-need students—approximately $2,400 more for low-income students and $1,200 more for English Learners. Additional analyses find high-poverty districts outspend their low-poverty counterparts by nearly $3,500 per student; school- and individual-level gaps are smaller but still measurable.
3. Per Pupil Spending and Cost Pressures
California’s per pupil spending on current operations in 2022-23 was about $20,496 (2025 dollars), significantly above the U.S. average ($17,699). Yet once adjusted for labor costs and regional variation, California ranks much lower among states—dropping from 16th to 31st. Moreover, about 80% of current school spending is on staffing; rising labor costs—especially pensions—and benefit obligations have eaten into gains; pension liabilities alone consumed roughly 25% of the funding growth from 2013-14 to 2019-20.
4. Emerging Risks: Enrollment, Attendance, and Policy Shifts
Enrollment in California’s K-12 system is projected to decline by nearly 10% by 2033-34, to around 5.25 million students. This decline, combined with funding mechanisms tied to average daily attendance (ADA) rather than total enrollment, creates financial headwinds for districts, especially those with high absenteeism. Governor Newsom’s 2025-26 budget provides $137.8 billion in total TK-12 funding ($25,155 per pupil), with cost-of-living adjustments (COLAs), preschool/TK expansions, and free meal programs supported; but many districts warn that the standard COLA (~2.3%) does not adequately cover rising fixed costs, which often increase by 4-5% annually without program expansion.
5. Policy Options and Trade-Offs
PPIC’s policy brief (December 2025) models several adjustments to address these fiscal challenges: switching from ADA- to enrollment-based funding (cost ≈ $3.8 billion), instituting regional cost adjustments for teacher wages ($2.5 billion), and offering duplicated funding for students with multiple high-need classifications (≈ $1.7 billion). Each change would shift billions among districts; for example, those with very high absenteeism or lower local revenue would gain the most from enrollment-based or need-weighted changes. Yet any reform must balance equity goals, budget capacity, and political feasibility.
Supporting Notes
- 2024-25 total funding for California K-12 public schools (state, local, federal) estimated at $142.4 billion; $134 billion in 2023-24.
- State funding between 2019-20 and 2024-25 increased nearly 50% overall; 22% after inflation adjustment.
- Federal share usually ~6%; spiked to 23% in 2020-21, 11% in 2021-22.
- California currently spends about $20,496 per pupil for operations vs. U.S. average $17,699 (2025 dollars) in 2022-23.
- California is 16th in raw per-pupil spending among states, drops to 31st when adjusting for labor costs.
- In 2023-24, per-pupil spending ~$23,000, with low-income students receiving ~$2,400 more, ELs ~$1,200 more.
- About 80% of current spending goes to staffing; pension contribution increases accounted for 25% of funding growth pre-pandemic.
- Enrollment projected to decline nearly 10% by 2033-34, to ~5.25 million students.
- Budget Act 2025-26 provides $137.8 billion total TK-12 funding ($25,155 per pupil), and Prop-98 funding for TK-12 set at $101.6 billion ($18,534 per pupil).
- PPIC reforms modeled: enrollment-based funding (~$3.8 billion), regional cost adjustment ($2.5 billion), duplicating funding for students in multiple high-need groups (~$1.7 billion).