Financial Information

School funding rules in the US are largely determined at the State level. 

In California, operational costs for TK-12 public schools are managed primarily through the Local Control Funding Formula (LCFF), with some additional sources from local, State, and Federal sources (e.g., Special Education).  Facilities construction is managed through separate funds based largely on local bond measures.

California’s LCFF determines public school funding largely based on local property tax revenues and student attendance and demographics (e.g., supplemental funding for English Learners and students living in low-income households).  

Each year, the Governor and Legislature agree on a State budget that specifies minimum required spending amounts per student based on State Proposition 98 and annual Cost of Living Adjustments (COLAs) for school districts (i.e., across all school district expenditures from employee salaries/wages and benefits to books/supplies to utilities/specialized services).

 School districts generating property tax revenues above these annually-determined minimum required spending amounts (often referred to as ‘Community-Funded’ or ‘Basic Aid’ districts) receive the bulk of these taxes, while ‘State/LCFF-Funded Districts’ are supplemented by the State to the minimum levels. 

From one year to the next, ‘Community-Funded/Basic Aid’ school districts’ LCFF funding levels increase by actual changes in property tax revenues, while that for ‘State/LCFF-Funded’ districts increase by that year’s COLA. In other words, ‘Community-Funded/Basic Aid’ districts may receive more or less of an increase than the LCFF COLA, depending on actual property tax revenue changes.

Additional allocations by the State and other sources, typically restricted to specific uses (e.g., after-school programs), are also typically appropriated as part of the annual State budgeting cycle.

Largely as a result of Statewide property tax rule changes per Proposition 13, California’s State revenues rely heavily on high-income earners and capital gains income taxes, and thus these funding levels are highly volatile year-to-year. 

Pandemic- and climate-related economic impacts (e.g., stock market surge and drops during and post-pandemic, tax filing deadline changes due to heavy storms in 2023, etc.) have also contributed significant additional volatility over the past few years. 

The California Department of Education (CDE) recommends that school districts maintain 15-17% (or around two months’ expenditures) of their annual expenditures in reserves.  This is crucial in helping school districts to maintain a high bond rating and to protect from fluctuations in property tax revenue receipt timing and general budgetary uncertainties due to changing economic conditions and costs, particularly in high cost-of-living regions (e.g., SSFUSD 9% reserves, Pacifica SD 13% reserves, Jefferson UHSD 17% reserves, San Mateo UHSD 18% reserves/committed).  In 2020, the CUSD Governing Board approved an aspirational policyin line with CDE recommendations.

Due to California public school funding formulas, school districts within California regions with particularly high costs of living (e.g., Bay Area, San Diego area) receivedramatically different funding levels, in directions opposite to student need. 

The reasons for this are two-fold:

• First, there is no adjustment for geographic differences in costs of living through the State’s funding formula (LCFF). In other words, because minimum spending levels are the same for districts across the state, regardless of geographic differences in costs of living, school districts like Cabrillo Unified are only eligible for the same funding supplements as districts in lower-cost areas such as Humboldt or Kern Counties.
   
• Second, real estate property values, and thus property tax revenues, are overall high in the Bay Area relative to most other parts of California, yet they vary widely amongst our communities (e.g., Woodside and Pescadero). These property tax revenue differences, as well as other resource and need differences (e.g., parcel tax revenues, student demographics), etc. also vary greatly.

Just added this Feb 15, 2024

According to an analysis by the San Mateo County Office of Education, Cabrillo USD remains among the lowest-funded districts in San Mateo County (SMC), at around $15K per student in 2023, despite our relatively high need demographics (40%) and unified grade level composition (TK-12). 
Specifically, Cabrillo USD receives:

• Less funding per student than any other unified school district in SMC
• Less funding per student than all but three other school districts including any grade level
• Only two-thirds the average funding per student across SMC ($23K per student), and
• Only one-third the average funding per student for some of our most wealthy neighbors - in other words, neighbors receiving three times our funding per student (e.g., Woodside Elementary at $42K per student).

 Of note, with around 2700 students, Cabrillo USD would receive more than $21M additional funding per year if we received the average funding per student across SMC (i.e., an additional $8K per student per year), or an increase of over 50% actual levels.

According to Policy Analysis for California Education, ‘California school funding (even before COVID-19) was insufficient to meet educational goals and address the needs of students, particularly given the state’s high cost of living.’  Further, ‘California has been spending less than the national average on K-12 education for decades. …When adjusted for regional cost differences using the most recent Comparable Wage Index data, California ($10,867) spends well below the national average ($13,301) and less than many demographically similar states.’