California School Finance Expenditures

Expenditures

The Goods and Services Districts Pay For
The Activities Districts Undertake
How California Compares

While the state government in California largely determines how much revenue school districts receive, decisions about how to spend those funds are made at the local level. In making these decisions, local districts have to comply with the provisions of collective bargaining agreements with their employee unions and with state and federal regulations related to categorical programs.

The Goods and Services Districts Pay For
School expenditures statewide can be analyzed from a variety of perspectives. One way to think about expenditures is based on the various goods and services they buy. When the state does this in its financial accounting system it uses "object code" categories. On average, the portions for various district operating expenditures are as follows:

As these data indicate, the average school district in California spends about 86% of its operating budget on personnel. This includes salaries and benefits for teachers, administrators, and other staff. Typically, about two-thirds of personnel expenditures are for teachers, but this can vary substantially from one district to another.

Operating expenditures represent about 97% of general fund expenditures for the average California school district. The balance is used for expenditures such as capital outlay for buildings and other durable goods; transfers to other agencies for a variety of services, including the instruction of some students; and debt service payments.

The Activities Districts Undertake
Another way to think about school district expenditures is to consider the various activities they support.

Certainly classroom instruction is at the heart of the enterprise, but not all expenditures can or should go to pay for teachers, teachers' aides, and books. Nurses, counselors, and other staff provide pupil services. Schools need some administrative staff to help support instruction and to operate the school. Custodial and maintenance staff keep the buildings clean and repaired. Most schools also depend on district office personnel, including the superintendent, for a variety of general administrative services.

The state’s financial accounting system uses "function codes" to identify these expenditures by activity. Again based on data for the average California school district, the portions of district expenditures used for these various activities are typically as follows:

California's Education Data Partnership website provides the most recent available information about these state-level averages. It also provides comprehensive financial statements for every county office of education and school district, plus an easy-to-use way to compare districts based on their revenues and expenditures.

See Ed-Data website

How California Compares
When it comes to education expenditures, people often compare California to other states. In part, this is to try to determine whether the state’s public school system is adequately funded and how well its funds are used. Three basic questions provide a robust answer.

How much does California spend per pupil and how does that compare to other states?
For almost three decades, this state's expenditures per pupil have trailed the national average. The precise amount varies from year to year, depending on a variety of economic factors and policy decisions among the 50 states. Since 1994–95, the state's expenditures have ranged from 84% to 96% of the U.S. average, depending on the year.

Does California spend its education funds similarly to other states?
The National Center for Education Statistics provides data on the types of activities for which each state uses its funds. These are grouped similarly to the activities noted above, although there are some differences.

Using these data, it is clear that California's expenditure patterns are similar in almost all respects to what happens nationally. The exceptions are a smaller proportion of operating expenditures for central administration and student transportation; and a larger portion of total expenditures devoted to capital projects (largely facilities).

What does California get for its money?
Data show that the number of personnel California schools are able to hire is substantially lower than is true in most of the country. According to a 2001–02 estimate by the American Federation of Teachers (AFT), California had the fifth highest cost of living among the states. Its average teacher salaries are also consistently near the top. While comparable data for other school employees are not readily available, it is safe to assume that the relationships would be similar.

The combination of below average per-pupil expenditures, similar expenditure patterns, and above-average salaries results in some of the lowest ratios of staff to students in the country. On average, California school districts have about three-fourths as many adults available—and three-fourths as many teachers—as is true on average in the U.S. The numbers of school site administrators, district administrators, counselors, and librarians have historically been even lower.