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For
those of you who may not know, Proposition 13 was a statewide initiative
that rolled back property-tax valuations significantly for then-current
property owners. (This has led to huge disparities in tax bills for similar
houses on nearby lots, depending on whether the owner bought the house pre-
or post-Proposition 13; this has caused a lot of interesting socioeconomic
behavior, but that's another story.) Proposition 13 also stipulated that
in the future, local property taxes would be calculated at 1 percent of
the price at which a property last sold, plus an allowance for a 2 percent
per year increase. And, quite obviously, at least for a while, it reduced
the amount of income that state and local governments were able to derive
from property taxes. Then, in 1979, a companion measure, Proposition 4,
the Gann initiative, limited increases in state spending to the rate of
inflation plus the rate of population growth—a double whammy.
But public education got a triple whammy, with the third being the Serrano
decisions. In the original Serrano decision (Serrano v. Priest,
1971), the California Supreme Court ruled that the existing system of public
finance, which was essentially the local property tax, was unconstitutional.
The reasoning was that all children in California had a fundamental right
to equal public education, but if the funds for that education had to come
from the local property-tax base a child living in, say, Baldwin Park could
expect substantially less support than a child living in Beverly Hills.
The good people of Baldwin Park would have to tax themselves at a rate perhaps
10 times higher than the people in Beverly Hills to support the same level
of expenditure in their local school district. Serrano forbade local school
districts, at least as school districts, from spending more per pupil than
the state average. (There are ways around this—some wealthier school
districts have put together private foundations that have by now raised
very substantial sums. No one really knows how much, because not everything
they do has to be reported, but according to a recent study, such foundation
money supplements spending in many districts by as much as 15 percent.)
On the other hand, Serrano also stipulated that the state government
would give the poorer districts as much money as was needed to bring their
per-pupil spending up to the norm. The decision went through the courts
for a while; Serrano II, in 1976, basically required its very rapid
implementation, and by 1982, for all practical purposes, it was in place.
So the widespread belief is that the reduction in tax take from Proposition
13 and its companion measures, plus the Serrano equalization mandate,
led to a dramatic decline in public kindergarten-through-12th-grade education
in California.
In a recent
book called Paradise Lost: California's Experience, America's Future,
Peter Schrag, a long-time editorial-page editor for the Sacramento
Bee, says that "the passage of Proposition 13 serves as a convenient
way of dividing the post—World War II era in California between the
postwar period of optimism, with its huge investment in public infrastructure
and its strong commitment to the development of quality education systems
and other public services, and a generation of declining confidence and
shrinking public services." I think this captures the view shared by a
very large number of people: Proposition 13 is a watershed event that
demarcates a much nicer and more glorious past from a fairly troubling
present and future. With that, let's take a look at the actual data.
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Above: State and local per-pupil spending on public
schools (kindergarden through 12th grade) in California
(red) and the average for the rest of the United States
(black). The arrow marks the passage of Proposition
13 in california; a decline in spending followed immediatetly
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The plot
to the left shows per-pupil spending from 1968 through 1996 in California
(the red line), versus the rest of the United States. (I have converted
all the data here and throughout into constant 1997 dollars. At this point,
I would also like to thank grad student and Excel guru Erik Terreri, who
gave me a great deal of assistance in getting all this data together.)
You can see that there's reason to believe that Schrag is right—the
timing is right on the money. Before 1982, we spent somewhat more, per
pupil, than the rest of the country. After that we tracked the other states
from below for a while, and then we fell dramatically behind in the late
'80s as the recession kicked in. I should mention that the link between
expenditures and student preformance is not very strong.
[For more
thoughts on this topic] I also should mention that by "the
rest of the country," I don't mean the national average. With California
now containing about 12 percent of the country's population, we've got
enough weight to swing the national average around. I mean the average
expenditure of all the states except California and Alaska. Alaska has
a public-finance system that looks a lot more like Saudi Arabia's than
an American state's, so it's not usually included in these kinds of analyses.
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