This report provides a descriptive overview of California school district finances, updating prior analyses in the Getting Down to Facts series. It examines district resources, expenditures, financial health, within-district spending variation, and how California compares to other states. It uses the most recent data available, mostly through the 2024-25 school year.
Resources. Districts in California have reached historically high funding levels, averaging $24,690 per student (as measured by average daily attendance, ADA) in student resources in 2024-25, including revenue and other sources of financing. Adjusted for inflation, this is 75% above pre-LCFF levels and 27% above the last pre-pandemic year and is driven by increases across a range of funding streams. About 68% of district resources are unrestricted in how they can be used.
Expenditures. Mean total spending was $27,866 per ADA in 2024-25. Employee compensation makes up about 77% of student (i.e., K-12 operational) spending. Special education spending has more than doubled since 2004-05 and now represents 20% of all student spending. Real teacher salaries have been essentially flat over two decades, though spending on pensions and healthcare benefits has risen substantially.
Financial Health. District reserves grew substantially during the pandemic, averaging $4,684 per ADA in 2024-25 (roughly 22% of student spending), though that represented a decline of 9% from the prior year peak. Some, typically larger, districts carry significant unfunded retiree healthcare benefit liabilities; the average student attends a district with $4,140 per ADA in such obligations, and 10% of students attend districts with at least $11,660 per ADA in such obligations.
Within-District Spending. Spending varies considerably across schools within districts. Specialized (e.g., special education) schools spend far more per pupil than other schools in the same district, while charter schools spend $3,637 less. Schools with higher shares of LCFF-targeted students spend more, though the magnitude of this is sensitive to how other school characteristics are accounted for.
National Comparisons. After years of below-average spending, California now ranks among the highest-spending states, substantially exceeding the national average in 2022-23. This has been driven by increases in both state and local revenue. However, adjusted for higher labor costs, California spends at approximately the national average.
Looking Ahead. Several risks cloud the financial outlook for California’s schools. Enrollment has fallen nearly 7% since 2016-17, with steeper attendance declines. Temporary federal pandemic aid has expired. In part because of enrollment declines, basic aid districts may grow in number and funding advantage. Proposition 55 tax revenues – contributing roughly 5% of the Prop. 98 funding guarantee – are set to expire in 2030. These pressures could place significant strain on budgets in districts or at the state level in the years ahead, especially given cost pressures associated with special education and employee benefits.
