A key problem with discussions concerning a proposed state budget is that historical perspective is often lost. The proposed budget may be compared to the budget in the current fiscal year, but beyond that, comparisons with budgets from even a few years ago are rarely made. The following talking points attempt to fill that void by examining how spending has increased over the years.

The Budget in General

While budget figures are often given in aggregates, in many ways it is more instructive to see how the budget has grown based on per capita growth. It is argued by some that total aggregate spending increases over the years, but that’s only because California’s population has increased as well. In other words, as the argument goes, state general fund spending has increased to keep up with population increases. However, whether in current or real dollars, general fund spending has increased at a higher rate than population growth. The per capita spending figures show this.

Based on general fund spending, per capita spending in current dollars has skyrocketed over the years.

In the first year of George Deukmejian’s administration, 1983-84, per-capita general fund spending was $903.

• In 1990-91, Deukmejian’s last year, per-capita spending had increased to $1313.
• In 1998-99, Pete Wilson’s last year, per-capita spending had increased to $1721.
• In 1999-00, Gray Davis’ first year, per-capita spending increased to $1945.
• In 2000-01, per-capita spending increased to $2305.
• In the proposed 2001-02 budget, per-capita spending dipped slightly to $2250.

Thus,

• from 1983-84 to 2000-01, current dollar per-capita spending increased by 155.3 percent;
• from 1990-91 to 2000-01, current dollar per-capita spending increased by 75.5 percent;
• from 1998-99 to 2000-01, current dollar per-capita spending increased by 33.9 percent;
• from 1999-00 to 2000-01, current dollar per-capita spending increased by 18.5 percent.

In 2000-01 inflation-adjusted dollars, per-capita general fund spending has increased.

• Using the U.S. Consumer Price Index inflation factor, real per-capita general fund spending in 1983-84 was $1535.
• In 1990-91, real per-capita spending increased to $1693.
• In 1998-99, real per-capita spending increased to $1807.
• In 1999-00, real per-capita spending increased to $1991.
• With 2000-01 as the base year, per-capita spending was $2305.

Thus, from 1983-84 to 2000-01, real per-capita general fund spending increased by 50.2 percent.

• From 1990-91 to 2000-01, real per-capita spending increased by 36.1 percent.
• From 1998-99 to 2000-01, real per-capita spending increased by 27.6 percent.
• From 1999-00 to 2000-01, real per-capita spending increased by 15.8 percent.

As these figures indicate, the state is increasing its spending per California resident at an alarming rate. These increases are over and above that needed to keep pace with population growth. If spending were kept to population growth increases, then the level of general fund spending would be much lower.

Education

It is worthwhile to look at education spending on a per-pupil basis. Many of the per-pupil figures quoted in the press only take into consideration Prop. 98 spending, i.e., state general fund spending plus local property tax spending. Of course, total K-12 funding includes other state funds (e.g., state lottery dollars) and federal funds. The Legislative Analyst’s Office acknowledges that “A more comprehensive measure of per-pupil spending is total funding from all sources.”

The most recent seven-year trend in total K-12 per-pupil spending shows the following:

• In 1995-96 total K-12 per-pupil spending was $5992.
• In 1996-97, it rose to $6567.
• In 1997-98, it rose to $7074.
• In 1998-99, it rose to $7299.
• In 1999-00, it rose to $8147.
• In 2000-01, it rose to $8746.
• Based on Davis’s proposed January budget, 2001-02 total K-12 per-pupil spending will rise to $9173.

The seven-year percentage increase trend using unadjusted current dollars shows the following:

• From 1995-96 to 2001-02, total K-12 per-pupil spending increased by 53 percent. From 1996-97 to 2001-02, per-pupil spending increased by 39.7 percent.
• From 1997-98 to 2001-02, per-pupil spending increased by 29.7 percent.
• From 1998-99 to 2001-02, per-pupil spending increased by 25.7 percent.
• From 1999-00 to 2001-02, per-pupil spending increased by 12.6 percent.
• From 2000-01 to 2001-02, per-pupil spending increased by 4.8 percent.

In 2000-01 inflation-adjusted dollars, total K-12 per-pupil spending has increased.

• Using the U.S. Consumers Price Index inflation factor, real total K-12 per-pupil spending in 1995-96 was $6721.
• In 1996-97, it had increased to $7158.
• In 1997-98, it had increased to $7569.
• In 1998-99, it had increased to $7689. In 1999-00, it had increased to $8344.
• With 2000-01 as the base year, real total K-12 per-pupil spending was $8746.

Thus,

• from 1995-96 to 2000-01, real total K-12 per-pupil spending increased by 30.1 percent;
• from 1996-97 to 2000-01, it increased by 22.2 percent;
• from 1997-98 to 2000-01, it increased by 15.5 percent;
• from 1998-99 to 2000-01, it increased by 13.7 percent;
• from 1999-00 to 2000-01, it increased by 4.8 percent.

Although per-pupil spending has increased substantially from just a few years ago, has student achievement kept pace? While real total K-12 per-pupil spending may have increased by more than 30 percent from 1995-95 to 2000-01, no indicator shows that students have improved their achievement in the classroom by that amount. No wonder, then, that researchers have found little correlation between education spending and student performance.

Lance Izumi is a Senior Fellow in California Studies at the California-based Pacific Research Institute for Public Policy. He can be reached via email at lizumi@pacificresearch.org.