Summary of the Legislation, Proposition 98 (1988)
Based on Wikipedia, California Proposition 98 requires a minimum percentage of the state budget to be spent on K-12 education. Prop 98 guarantees an annual increase in education in the California budget.[1] Prop 98, also called the “Classroom Instructional Improvement and Accountability Act,” amended the California Constitution to mandate a minimum level of education spending based on three tests. Test one, used only for 1988 to 1989, requires spending on education to make up 39% of the state budget. Test 2, used in years of strong economic growth, requires spending on education to equal the previous years spending plus per capita growth and student enrollment adjustment. Test 3, used in years of weak economic growth guarantees prior years spending plus adjustment for enrollment growth, increases for any changes in per capita general fund revenues, and an increase by 0.5 percent in state general funds.
Voters approved Proposition 98 in 1988. Based on EdSource (2006), when voters approved Proposition 98 as an amendment to the California Constitution, they sought to guarantee public schools and community colleges a level of funding that would at least keep pace with growth in student population and the personal income of Californians and at best increase the amount schools receive. The calculation of the Proposition 98 minimum is based on the principle that K-14 education should receive at least the same amount as it did the previous year, adjusted for changes in enrollment and per capita personal income. The constitution allows state officials to temporarily reduce education funding below the minimum guarantee under two conditions. One is when state General Fund revenues grow less than personal income; the other is when two-thirds of the Legislature votes to suspend the guarantee for a given year. In both cases, the amount saved in that year must begin to be restored to the minimum guarantee level in the next year that state General Fund revenues grow faster than personal income. The Legislature always has the option of funding K-14 education above the minimum guarantee. When it does so, however, it also raises the base amount from which the guarantee is to be calculated the following year.
Relevance on Education
Since 1988, Proposition 98 has been constitutionally governing the amount of funding provided to public schools and community colleges in California. According to Kapphahn (2017), Proposition 98, a measure on the November 1988 ballot, was intended to increase state funding for schools. The proponents of Proposition 98 argued that school funding at the time was too low and associated state budget decisions too political. Approved by 51 percent of voters, Proposition 98 added certain constitutional provisions setting forth rules for calculating a minimum annual funding level for K–14 education.
According to PPIC (2020), Proposition 98 has shifted state higher education funding toward the community colleges. Proposition 98 (enacted in 1988) requires that a minimum share of the state budget be allocated to K–14 education; community colleges usually receive around 11% of this funding. Before the passage of Proposition 98, each higher education system received a roughly equal percentage of state funding. By 2015–16, the UC and CSU systems were sharing about 40% of the state funding, while 60% was allocated to the community colleges.
Discussion on Equity
Education should be financed and operated equitably, but this cannot and should not be done with complete equality, because of the many differences in the abilities and needs of students and districts (Brimley, Verstegen, & Garfield, 2012, p. 53). Emphasis on excellence has resulted in differences of opinion about equity. Some believe additional resources should be targeted to guarantee quality. Those who espouse excellence as a priority see the main goals of financing education to be the attainment of excellence. Others feel that states have yet to reach fiscal equity and that the priority still rests there. Still others call for both an equality of a quality education for all children and youths (Brimley, Verstegen, & Garfield, 2012, p. 55).
According to PPIC (2020), after Proposition 13 passed in 1978, the state’s community colleges—which unlike UC and CSU relied partly on property taxes—saw a sharp reduction in their share of state and local support. Ten years later, voters passed Proposition 98, which guaranteed K–12 schools and community colleges a minimum percentage of the General Fund and property tax revenue. Proposition 98 guarantees that K–12 schools and the community colleges get about 40% of these allocations—and about a tenth of that share goes to the community colleges. Some have argued that Proposition 98 acts as a funding ceiling for K–12 schools and community colleges, but it also serves as a floor.
UC and CSU lack the same funding protection. While many budget areas outside of higher education are at least partially protected by dedicated funding streams, court orders, or matching federal funds, UC and CSU are vulnerable when state revenues decline. The universities have faced disproportionately large cuts in their general fund allocations during times of economic hardship. From this vantage point, a funding floor—even one that doubles as a ceiling—is preferable to a funding drop-off.
The three higher education systems also receive indirect forms of state support such as Cal Grants, fee waivers, and middle-class scholarships. Grant aid has increased for students at all institutions of higher education in California. Our best estimates suggest that community college students receive slightly more of these state funds (41% of the total in 2011‒12), than UC students (40%) and much more than CSU students (18%).
The debate over higher education funding could benefit from a clearer understanding of how the pie is divided. But the most important issue for the state’s young people is that the pie is not keeping pace with demand. Our four-year colleges have record numbers of applicants and the shares of students who are academically qualified to attend them have increased. The future prosperity of Californians and their state depends on access to higher education. To address these issues, policymakers need to focus on improving vocational programs and pathways from community colleges to four-year colleges and improving access and enrollment at UC and CSU.
References
Brimley, V.R., Verstegen, D. A. & Garfield R.R. (2012). Financing education in a climate of change (12th edition). Pearson Education Inc.
EdSource. (2006). Proposition 98 guarantees a minimum level of funding for public schools. In EdSource. EdSource.
1988 California Proposition 98. (2020).In Wikipedia. Retrieved from https://en.wikipedia.org/wiki/1988_California_Proposition_98
Kapphahn, K. (2017, January 18). A historical review of Proposition 98. LAO. Retrieved from https://lao.ca.gov/Publications/Report/3526
Proposition 98. (2020). Public Policy Institute of California. Retrieved from
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