California’s economy has remained resilient, with strong state revenues driven by personal income, corporate, and sales taxes.
Because public schools, including ĢƵ schools, are funded primarily through the state budget, strong state revenues should translate into stronger support for schools. If the state is flush, why are many Los Angeles schools hurting for funds in 2026?
The reality is more complex. Geographically-based enrollment declines, unfunded state mandates, and overall cost increases have created significant financial pressure for many Los Angeles schools.
How Much of California’s Budget Goes to Education?
Though there is a statewide fiduciary commitment to funding education, the precise amount varies each year.
Since the passage of Proposition 98 in 1988, California has guaranteed a minimum level of funding for K–12 schools and community colleges, typically accounting for roughly 40% of the state budget. Because the funding amount is determined by a percentage of total revenue instead of a set number, California schools directly benefit from more resources when the state is flush with higher tax income. And when there is less cash coming in, schools immediately receive a smaller amount.
How Does CA State Funding Work?
Through California’s Local Control Funding Formula (LCFF), the state distributes baseline funding for all students, and then additional supplemental funds for special circumstances such as students from low-income communities, in foster care, experiencing homelessness, and English-Language Learners.
California is a leader in national educational policy reform. The LCFF provides school districts with local control of their general funds. This program has been praised for allowing flexibility in helping distribution match actual local needs.
However, sometimes state budgets do not precisely align with the requirements that legislators have put in place. At the same time, schools are increasingly expected to implement new programs, reporting requirements, and student support without always receiving dedicated funding to fully sustain them. In practice, districts are often required to absorb these additional responsibilities within existing funding structures, stretching already limited resources even further.
Why are Los Angeles Schools at a Disadvantage?
Enrollment is one of the main factors in school funding. A significant portion of school funding is tied to Average Daily Attendance (ADA), meaning schools receive funding based on how many students are consistently attending. Across the state, the average “per-student” allocation is $20,427 per student, the highest ever. However, enrollment is determined by average daily attendance. In Los Angeles, both total enrollment and daily average attendance have had major decreases in the past 7 years.
Schools across the country experienced sharp enrollment declines following the COVID-19 pandemic, and many districts have still not returned to pre-pandemic attendance levels. Chronic absenteeism has direct negative effects on school funding.
In Los Angeles, several local factors have compounded these challenges. More than 50,000 people have moved out of the county, the largest city population decline in the US, according to 2024-2025 US Census numbers. The Los Angeles fires displaced many families, and disruptions to the entertainment industry have caused ripple effects in the total population. And many families are cautious about sending students to schools due to immigration enforcement.
When attendance declines, schools receive less funding, regardless of whether operational costs remain the same or continue to rise. In addition to reduced enrollment, Los Angeles remains one of the most expensive regions in the country, increasing the cost of staffing, facilities, transportation, and student support services. It’s in the top 2% most expensive cities in the country, and the top 11% in the state.
The ĢƵ Foundation exists to help close the gap between public funding and what scholars truly need to thrive. Through philanthropy, advocacy, and partnership, the Foundation works to ensure that ĢƵ scholars continue to receive an excellent college-preparatory education, regardless of broader funding challenges facing public schools.
Sources:
The ĢƵ
Understanding California’s Budget and its Impact on Schools
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