California bill aims to make school funding more equitable

As Bay Area schools face multimillion dollar budget deficits and the Trump administration has threatened to withhold federal education dollars, a new bill from a South Bay Democrat aims to level the playing field and stabilize school funding in California.

Introduced by Senator Dave Cortese, who represents Silicon Valley, Senate Bill 743 would establish an education endowment using money from the state’s general fund to close the gaps in funding among school districts. The endowment would only be funded in years when there is a budget surplus and it’s not yet clear how much money would go into it.

“It’s a bill that will fix longstanding inequalities in California’s public schools,” Cortese said Friday. “For too long, where a child lives has determined how much funding the school receives.”

Palo Alto Unified, for instance, received around $22,500 per student in the 2022-23 school year, compared to Milpitas Unified, which got about $10,500.

The proposed bill comes at a pivotal moment in education in California. Districts across the Bay Area face budget deficits ranging from $20 million to $113 million and have turned to school closures and layoffs to plug holes.

Franklin-McKinley School District in San Jose recently became the latest to announce school closures and layoffs when the school board voted to close three schools in an attempt to repair a $22.9 million budget shortfall earlier this year.

Others, like Oakland Unified, Hayward Unified, Fremont Unified, Dublin Unified and West Contra Costa Unified are considering layoffs or job reductions to tackle budget shortfalls and prepare for a decrease in federal funding.

President Donald Trump has also called for the dismantling of the U.S. Education Department, which provides about $8 billion in funding for California K-12 schools. The Trump administration threatened on Thursday to withhold federal funds from K-12 public schools unless state education leaders confirmed the elimination of diversity, equity and inclusion programs.

Cortese’s bill would bolster school districts that primarily rely on state funds and typically receive less overall funding than districts in areas supported by higher property taxes.

In school districts like Palo Alto Unified and Santa Clara Unified, property tax revenue is relatively high, so those school districts receive minimal state funds and get to pocket the property tax revenue. Districts can use those funds to pay for music, art and other programs some nearby districts can’t afford. But in less affluent districts, property tax revenue is relatively low, so funding from the state makes up a more significant portion of the district’s budget.

Although all California schools receive some funding from local property taxes, the introduction of Proposition 13 changed how schools rely on them, explained Ken Kapphahn from the Legislative Analyst’s Office – a nonpartisan fiscal and policy state agency that advises the California Legislature. Prior to Prop 13’s enactment in 1978, every local school district set their own property tax rates, which meant schools relied heavily on local property tax revenue. But Prop 13 capped property taxes, limiting the funds schools receive.

The upshot? The total amount of money each district receives per student can vary greatly.

Cortese said that discrepancy creates inequalities among school districts and exacerbates existing disadvantages students in lower economic areas face.

Glenn Vander Zee, the superintendent of East Side Union High School District in San Jose, said that under the current funding formula, his district receives significantly less funding per student than districts just a 20-minute drive away.

“While our students are asked to learn the same state standards, utilize the same approved textbooks and meet the same entrance requirements for all students to the University of California system, they are not currently supported the same,” Vander Zee said Thursday.

SB 743 would aim to close that gap. It would put a ballot measure before voters seeking a constitutional amendment protecting an education endowment as well as spelling out some of the details on how exactly the money would be distributed.

Getting the bill signed into law could be an uphill battle, however. 

“My sense is that given the many demands in the state budget this year, this bill is an attempt to establish a principle that could be pursued in the future but that is unlikely to pass this year,” said Thad Kousser, a political science professor at UC San Diego.

While the Howard Jarvis Taxpayers Association has not yet taken a stance on the bill, the anti-tax organization expressed concern over any potential taxpayer impact an increase to education funding could have.

“Education spending is at record levels as we understand it,” said Susan Shelley the organization’s vice president of communications. “California is in a budget emergency…and that puts pressure on the state to potentially look at tax increases, which the people of California cannot afford. Affordability is a huge issue in this state, so anything that leans in the direction of greater demands on the taxpayers is going to be a problem.”

The California Teachers Association also said it has not yet taken a stance on the bill.

Cortese’s bill is slated to head to the Senate Education Committee on Wednesday.

Cortese acknowledged that any bill with an “appropriation tag” will likely face hurdles in the state legislature. But he said more funding for school districts will only help students by providing additional resources to schools to boost test scores, provide a more rigorous curriculum and improve graduation rates.

“This bill is about fairness (and) opportunity. Giving every student the resources they need to succeed is long overdue,” Cortese said. “No child should be at a disadvantage simply because of where their parents chose to live.”