A recent RAND report showing that California's per-pupil spending lags behind the national average has become a key weapon for education interest groups. Yet, there are problems with the report that should warrant caution.

First, RAND uses comparative data collected by the National Education Association and the National Center for Education Statistics. RAND acknowledges that data collected by these organizations often omit significant spending items: "Comparisons with other states provide a valuable but limited perspective. States may put large investments into activities that are not counted in the NEA data or other data. For example, California has directed substantial funds to professional development for teachers and additional instructional time outside the regular school day. These monies are not included in the NEA data for California or any other state."

The sums involved in these uncounted funds are large. For example, in the current fiscal year, California will spend more than $360 million for instructional programs conducted outside of the regular school day.

Further, for part of the time period used in RAND's study (the years prior to 2000), California alone among the states counted excused absences in its Average Daily Attendance calculations. ADA measures the number of pupils attending school each day averaged over the course of a year. RAND acknowledges that by counting excused absences in its ADA figures, "California's ADA totals are relatively higher than other state's ADA totals."

The result, says RAND, is that "comparisons between California and other states likely overestimates differences in revenues per student."

In addition, there is also the issue of spending versus revenue. RAND observes: "Expenditures can be categorized based on whether they are funded from state, local and/or federal revenues. And, clearly, per-pupil estimates will vary widely depending on the extent to which these sources are included or excluded."

In California, the oft-cited Proposition 98 per-pupil funding figure includes state general fund and local property tax dollars, but excludes other state funds, such as the lottery, and federal money, which accounts for 10 percent of California's education revenues. Thus, in 2004-05, Prop. 98 per-pupil spending will come to $7,012, while education revenues from all state, local and federal sources will total $9,864 per pupil.

Finally, the RAND report says that since the passage of Proposition 13, the 1978 property-tax-limitation measure, California's per-pupil funding "has been consistently at or below the national average." The implicit argument being that California should be at or above the national average and that Proponents 13 is responsible for preventing the achievement of that goal. Proposition 13 opponents have seized on this argument, with the head of the Los Angeles teachers union saying: "We thought Proposition 13 would kill us all at once. It hasn't. It has killed us slowly."

Yet, blaming Prop. 13 is a red herring. According to the Legislative Analyst's Office: "While comparisons to the national average may have illustrative value, the analytic basis for pursuing the national average as a spending goal is unclear. The level of spending necessary for California to provide quality K-12 programs depends on many variables, and may be higher or lower than the national average."

The LAO concludes that California "should be concerned more with how its students perform rather than on how state spending compares with other states."

"Research and experience," says the LAO, "suggest that how we spend available education resources is at least as important as how much we spend on education." Unfortunately, as recent scandals and exposes of state and local education spending have shown, there's significant waste and mismanagement in California education spending.

From 1992-93 to 2002-03, inflation-adjusted total education revenues per pupil in California increased by nearly 29 percent. Rather than faulting Proposition 13 and making irrelevant comparisons to other states, the state's priority should be to reform the way tax dollars are spent to better affect student achievement. As the LAO rightly points out, the state must reform the structures and incentives in the K-12 system "to assure that all educational funding is spent to maximum effect."