School Funding

California School Funding is Inadequate

Despite being the 5th largest economy in the world and having the largest GDP of any state, California has some of the lowest per-pupil funding in the country.

Moraga is Among the Lowest-Funded Districts in the State

Many people think that because of our high property values, we have well-funded schools. But that isn’t the case. Moraga is actually one of the lowest-funded districts in the state. Even with generous local support, per-pupil funding in Moraga is significantly lower than in some of our neighboring districts.

Local support, including your MEF donations, accounts for about 25% of the budgets at both the Moraga School District and Campolindo High School. In similar communities that don’t have this type of support, the quality of education declines, families that can afford it send their children to private school, enrollment declines, public schools begin to close, and the public schools that are left have even fewer resources. This cycle affects not only the lives of the student population but also the vibrancy of the community and the stability of the home values.

But because of the foresight of parents who founded the Moraga Education Foundation in 1981 and your ongoing support, Moraga public schools can create possibilities for every student, every day!

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Moraga Has Relatively High Property Values - Don’t Property Taxes Pay for Public Schools?

In the 1960s, California schools were funded by local property taxes, and California was among the top five states in per-pupil funding. But because property values varied among communities, school funding was unequal and this system was ruled unconstitutional (Serrano v. Priest). The state was ordered to equalize funding.
In 1978, Proposition 13 passed. Prop 13 caps property tax rates at 1% of the assessed value of a home, and homes are only reassessed when they are sold. Therefore, while two houses might have the same value, their assessed values could be significantly different, and their owners could be paying vastly different amounts of property tax. The immediate effect of Prop 13 was a loss of between $4 and $5 Billion in tax revenue.
Most School Funding in California Comes from Income Taxes

The graph above shows the effect of the Serrano Priest decision and Prop 13 on school funding sources in California. After 1971, the trend was that more school funding came from the state (income taxes) rather than local sources (property taxes). Once Prop 13 was passed in 1978, their positions completely flip-flopped, and since then, the vast majority of funding for California schools comes from state income taxes.
Income Taxes are a Volatile Source of School Funding

Today, local property taxes only account for about 22% of school funding in California. State income taxes make up the bulk of the funding. But income tax revenue is dependent on many external factors and is notoriously volatile, so school funding levels are unpredictable from year to year. This makes it hard for school districts to invest in new programs when they are unsure what their funding levels will be in years to come.
Private Local Support Provides a Reliable Source of Funding

Shortly after Prop 13 was passed, Moraga schools experienced devastating cuts, and in 1981, a group of parents founded the Moraga Education Foundation to rescue programming. Consistent local support since 1981 has ensured that our public schools are among the best in the state, despite their inadequate funding.
Why Is There So Much Variation in How Districts are Funded Within the State?

In 2013, the state of California instituted the Local Control Funding Formula (LCFF) to determine how funding would be allocated among districts. All districts receive a base grant, and then those districts with a higher concentration of foster youth, English Language Learners, and students who qualify for the Free and Reduced Lunch Program receive supplemental funding. LCFF creates more equity for districts with great numbers of “high need” students, but the base level of education funding remains inadequate for all students.

Why Do Cities Like Palo Alto and Hillsborough Receive More Funding When They Have Similiar Populations to Moraga?

Palo Alto and Hillsborough are “Basic Aid” districts. Property tax revenue in Basic Aid districts exceeds what the states allocate to them under LCFF, and they are able to keep the excess. The Moraga School District is a “Revenue Limit” district, meaning Moraga does not generate enough property taxes to fully fund schools on its own and is supplemented with state income tax revenue. The Acalanes Union High School District (which includes Campolindo High School) is a Basic Aid district, but it barely qualifies, so the excess is not much more than what the district is entitled to under LCFF. This short video explains more about the role our property taxes play in school funding.