California’s education funding has reached a historic high thanks to allocations from both the state and federal governments. According to a report released in November by the Public Policy Institute of California (PPIC), for the 2024-25 academic year, California’s K-12 public schools received a total of $142.4 billion in state, local, and federal funding, with an average expenditure per student exceeding $23,000.
In the previous academic year, California’s K-12 public schools received $134 billion in funding, indicating an increase of over $8 billion for the 2024-25 school year. It is estimated that there will be an additional $7.5 billion increase in funding for the 2025-26 academic year.
Among this funding, approximately 6% comes from the federal government, a proportion that has remained stable in non-recession years. During the COVID-19 pandemic, one-time federal aid amounted to $31 billion. In the 2020-21 academic year, federal allocations accounted for 23% of funding for California’s K-12 public schools, dropping to 11% in the 2021-22 school year.
Since 1990, funding from the state and local governments for education has been around 55-60% and 33%, respectively. In the 2020-21 school year, with the influx of federal relief funds, California’s share temporarily dropped to 51%, the lowest point in 30 years, but has since risen back towards 60%.
In 1998, California voters passed Proposition 98 by a narrow margin of 50.7% to 49.3%. This state law sets minimum annual funding levels for California’s K-14 education system, from kindergarten to community colleges. The funds come from the state’s general fund and property tax revenues, approximately 40% of California’s annual income, supporting projects including K-12 public schools, community colleges, county education offices, state pre-school education programs, and state-level agencies providing direct instructional programs for K-14 education.
At that time, Proposition 98 garnered support from only 10 out of the 58 counties in California, but populous counties like Los Angeles and the Bay Area were among those in favor.
In 2014, California voters passed Proposition 2 with 69.12% approval, which mandated the establishment of a Budget Stabilization Account (BSA). The proposition also required the creation of the “Proposition 98 Reserve” or the Public School System Stabilization Account (PSSSA), funded by the state’s general fund and capital gains tax revenue exceeding 8% of the general fund. These reserves can be tapped into by the governor in the event of a budget emergency to support K-14 education.
For the 2023-24 school year, per-pupil education expenditures in each district in California were approximately $23,000. Expenditures for students from low-income families were $2,400 higher than for those from high-income families, and expenditures for English learners were $1,200 higher than for non-English learners.
In the 2022-23 school year, per-pupil daily operational expenses in California districts, such as staff and instructional materials, amounted to $20,496 (in 2025 USD), around $2,800 higher than the national average of $17,699.
Currently, nearly 80% of education funding is allocated to personnel costs, including rising expenses for healthcare insurance and other benefits, which have a significant impact on educational finances.
Despite California’s significantly higher per-pupil education spending compared to the national average, the state’s educational performance has long been below the national average. In 2024, on the National Assessment of Educational Progress (NAEP) standardized tests, the reading proficiency rates for California’s 4th-grade students were 29% and 35% for math proficiency; for 8th-grade students, reading proficiency was 28% and math was 25%.
California’s situation of high spending and poor performance in education has been a subject of criticism for a long time. Last month, a grassroots movement in California launched the Children’s Educational Opportunity Act (CEO Act) for signatures, with proponents aiming to get the proposal on the ballot for the midterm elections in November 2026.
The CEO Act calls for establishing independent education savings accounts for every child in California, initially funded with $170 million in the first year, with the account following the child to their enrolled school. This way, parents and children can choose the most suitable school, and educational funds can be effectively utilized for the children’s benefit.