Building Pressure: Modeling the Fiscal Future of California K-12 School Facilities
Author: Jain, Liz S.
Date: 2016-00-00
Type: Reports - Research
Subjects: Elementary Secondary Education,Educational Facilities,Financial Support,State Aid,Facility Requirements,Public Schools,Equal Education,Government Role,State Government,State Policy,State Programs

Public school districts across California, particularly those in low-wealth areas, experience significant funding shortfalls for their facilities. Industry benchmarks suggest the state's K-12 school districts should spend nearly $18 billion a year to maintain their inventory, ensure buildings are up-to-date, and to build new spaces to handle enrollment growth. Actual spending often falls far below this level. For example, school districts spent just $12 billion on such needs in 2013. With this study, the UC Berkeley's Center for Cities + Schools aims to inform voters and to provide broad guidance for policymakers regarding the relative merits of various long-term state funding approaches for public K-12 school facilities. Based on California's historical experience, the scale of current needs for K-12 infrastructure investment, and examples from other states, the authors identify four policy scenarios applicable in the Golden State's current political climate: (1) Scenario 1: No State Support; (2) Scenario 2: State Competitive Grant Matching Program; (3) Scenario 3: Small State Role Targeted to High-Need Districts; and (4) Scenario 4: Equity-Focused State Grant Formula. The authors then estimate available facility funding resources for each of the state's more than 1,000 school districts under each scenario. They assess the relative potential impacts in terms of achieving adequacy (ensuring sufficient investment in all school buildings), equity (ensuring access to full facilities funding for all districts), and affordability (limiting state costs, complexity, and legal concerns) for the four scenarios. Several key findings emerge from the analysis: (1) State programs can reduce--but probably not entirely eliminate--unmet school facilities needs in California. Under alternate scenarios those needs are reduced from $7 billion/yr to $4.9 billion/yr; (2) The November 2016 statewide measure (Scenario 2) addresses immediate needs and reduces the level of unmet needs compared to no state action at all (Scenario 1). Such state support would be clearly preferable to funding construction and modernization entirely at the local level in terms of short-run adequacy, statewide equity, and long-term risks to school districts, particularly given current constraints on local revenue generation. Compared to other funding scenarios, though, Scenario 2 does not generate the most adequate, equitable or cost-effective outcomes; and (3) Programs with a limited but targeted state role and greater flexibility around local facilities spending (Scenario 3) can improve overall adequacy at a lower cost to the state. Meanwhile, a larger program equalizing resources on an annual basis (Scenario 4) better achieves adequacy and most reduces disparities between high- and low-wealth districts, but is costlier to state taxpayers. A Methods Appendix is included.