The Educational Freedom Act is tax and revenue neutral. The existing formulas for funding education in the State of California will remain the same. Taxes will not be increased, nor will the schools’ share of tax revenues be changed. The provisions of Proposition 98 will remain intact. Proposition 98, passed by voters in 1988, essentially earmarked a minimum of 40% of state tax revenues for “education.” The estimated revenue generated by Proposition 98 for FY 2019-20 is $80.7 billion. On a per pupil basis, the State spends approximately $12,000 per pupil per year. The state also provides additional revenues to school districts in the form of grants generated either by the state or the federal government. These additional cash flows total approximately $16 billion. Under the governor’s budget for FY 2019-20, the total projected spending on California public education is approximately $96.7 billion. which represents an average K-12 per pupil spending of $14,000.
It should be noted that because Proposition 98 ties educational revenues to tax revenues, any increase in tax revenues results in automatic increases in educational spending. Because of an expanding economy, spending on education has exploded.
In its current form, the Educational Freedom Act will only reallocate Proposition 98 funds, even though the amount of the individual scholarship will represent, in practice, less than is actually being spent per pupil by the state. Students at public schools, therefore, will continue to receive far more money per capita than students attending private or parochial schools using scholarship funds provided under the Educational Freedom Act.