It's time to modify Proposition 98 education funding
In his 1911 reforms, progressive Gov. Hiram Johnson intended referendums and recalls to “place in the hands of the people the means by which they may protect themselves” from government. But there was one flaw: the government itself abusing the system to mandate spending — “ballot-box budgeting.”
The most disruptive of these was Proposition 98 from 1998, passed by just 51% of voters. Using a complicated formula, itself made more complicated by Proposition 111 in 1990, it mandated about 40% of general-fund spending must go to K-14 education. The Legislature, by twothirds vote, can suspend it, but has done so only during severe budget crunches in fiscal years 2004-05 and 2010-11.
There's a big problem now. As Teri Sforza reported in the Register, school enrollment in California is “plunging.” In the Los Angeles area, including Orange and Ventura counties, it's down 15% the past decade, and “new projections by the Public Policy Institute of California say it will plunge another 15% by 2031. That's a devastating 30% drop.”
The reasons are people leaving the state, declining birth rates and an exodus from public schools to private and homeschools, especially during the COVID-19 lockdowns.
Yet Prop. 98 still stands at the head of the class. No wonder, in his January budget proposal for fiscal year 2023-24, Gov. Gavin Newsom boasted spending was “the highest ever … $23,723 per pupil.” His May revision did not include a new number. But my calculations peg it at $23,483. For a class of 25, that's $587,075.
As the number of students declines, will that high number just keep going up? Kenneth Kapphahn, principal fiscal and policy analyst at Legislative Analyst's Office, explained to me there are three Prop. 98 formulas, depending on circumstances. Test 1 requires minimum general-fund spending to schools, currently 38.2%, “regardless of student attendance.”
But when student attendance is growing, the other two formulas can kick in, and “sometimes require the state to provide schools a larger share of funding. But when attendance is declining, that Test 1 formula in Proposition 98 still requires the state to provide that minimum share.”
He said statewide school attendance this year is 9 percent below the pre-COVID level of 2019-20. Even as general-fund spending has increased more than 40%. “That combination of lower attendance and higher revenue has increased Proposition 98 funding per student by almost 50 percent over the past three years.”
Well, they were warned. In the Orange County Register's editorial just before the 1988 election, we wrote Prop. 98 was “a rip-off, shamelessly so,” by the California Teachers Association union, and that “a special interest that has been getting a progressively larger share of the taxpayer's dollar and producing little or nothing of value wants to guarantee that it will get progressively more and more.”
I talked about this with Lance Izumi, my main source on education issues for three decades and the senior director of education studies at the Pacific Research Institute. In 1988, he served as a speechwriter with Republican Gov. George Deukmejian. Izumi said the Iron Duke opposed Prop. 98 because it “reduced budget flexibility and instead set aside a part of the budget that was set in stone – you couldn't touch it.”
Today, he added, the results are abysmal. “We're certainly not getting any bang for the buck. For 8th grade mathematics, you have less than a quarter of students who are proficient. The large increases in spending under Newsom's tenure certainly haven't produced the achievement levels promised by people who said higher spending would bring better outcomes.”
Can this be changed? What happens when $30,000 per pupil is being spent? Or $50,000? With equally pathetic results?
Newsom spent his first term in office throwing money at the unions to keep them happy, while imposing excessive lockdowns, especially on schools. Now he's obviously ogling the Oval Office. Even that evanescent $100 billion surplus didn't lead to reforms.
Yet fewer students means fewer parents of students who can be swayed to vote for the CTA's agenda. And more of those parents are demanding real reforms, such as Arizona's universal school choice. Something has to give.