California pays for its public K–12 schools with a mix of state General Fund dollars, local property taxes, federal money, and a handful of smaller local sources. Understanding how California schools are funded starts with one formula: the Local Control Funding Formula, which channels roughly four out of every five dollars of state and local revenue to the state’s roughly 1,000 school districts and charter schools. Federal funding adds about six percent in a normal year, and voter-approved parcel taxes, general obligation bonds, developer fees, and lottery revenue round out the picture.
The Local Control Funding Formula
The Local Control Funding Formula, or LCFF, has been the state’s main K–12 funding pipeline since 2013, when it replaced dozens of separate categorical funding streams with a single needs-based formula.1Policy Analysis for California Education. Toward a Grand Vision: Early Implementation of Californias Local Control Funding Formula In 2024–25, more than $54 billion moved through it.
The formula sets a per-student target for every district, then funds that target through a combination of state General Fund dollars and local property tax revenue. For most districts, the state fills whatever gap remains after property taxes are counted.
Base Grants by Grade
The base grant is a per-student amount that changes with grade level, reflecting the different costs of teaching different ages. For 2025–26, after a 2.30 percent cost-of-living adjustment, the adjusted rates districts actually receive are:2California Department of Education. Funding Rates and Information, Fiscal Year 2025-26
- Transitional kindergarten through third grade: $11,323 per student, including a 10.4 percent adjustment for smaller class sizes
- Grades 4–6: $10,411 per student
- Grades 7–8: $10,719 per student
- Grades 9–12: $12,746 per student, including a 2.6 percent adjustment for career and technical education costs
The cost-of-living adjustment is reset each budget cycle, so the exact dollar amounts move year to year.
Extra Money for High-Need Students
On top of the base grant, three groups of students generate additional funding: English learners, students from low-income families, and foster youth. A student who falls into more than one category is counted only once, which is why budget documents call them “unduplicated pupils.”
Each unduplicated student brings a supplemental grant equal to 20 percent of the adjusted base grant. Districts where unduplicated students exceed 55 percent of enrollment also receive a concentration grant, set since 2021–22 at 65 percent of the adjusted base grant for every unduplicated student above that 55 percent threshold.3California Legislative Information. California Education Code EDC 42238.02
Supplemental and concentration dollars are not free-floating. Districts must spend them on services that increase or improve support for the students who generated the funding, and they document that spending in the accountability plan described below.
How Attendance Turns Into Dollars
LCFF funding follows Average Daily Attendance (ADA), not enrollment. A district that enrolls 10,000 students but averages 9,200 present each day is funded at 9,200. Chronic absenteeism, in other words, directly cuts a district’s revenue.4Legislative Analyst’s Office. Assessing a Shift to Enrollment-Based School Funding
To soften post-pandemic attendance declines, the state added a three-year rolling average in 2022–23. Districts are funded on whichever is highest: current-year ADA, prior-year ADA, or the three-year average. In 2024–25, about half of all districts were funded using the rolling average, which credited them with roughly 120,000 more ADA statewide than current-year attendance alone would have. Charter schools do not get this cushion; they are funded on current-year ADA only.4Legislative Analyst’s Office. Assessing a Shift to Enrollment-Based School Funding
The Proposition 98 Guarantee
The state’s General Fund contribution is not left entirely to the legislature’s discretion. Proposition 98, a constitutional amendment California voters approved in 1988, sets a minimum annual funding level for K–12 schools and community colleges, met through a combination of General Fund revenue and local property taxes.5Justia Law. California Constitution Article XVI – Public Finance – Section 8
The guarantee is calculated each year by comparing three constitutional formulas, or “tests,” that factor in General Fund revenue, student attendance, and changes in per capita personal income. Which test controls depends on how the economy is performing.6Legislative Analyst’s Office. The 2026-27 Budget – Proposition 98 Guarantee and K-12 Spending Plan When state revenues grow, school funding grows with them; when revenues fall, the guarantee sets a floor. Under the Governor’s 2026–27 budget proposal, total Proposition 98 funding would reach $20,512 per student.
Local Property Taxes and Basic Aid Districts
Local property taxes are not a bonus on top of the LCFF. County-collected property tax revenue is counted directly toward each district’s LCFF target, and the state fills the rest. When property values rise and a district collects more, the state sends less. The total does not change.
A small group of districts breaks this pattern. About 139 of them, serving roughly 5.5 percent of California’s students, collect enough local property tax to exceed their LCFF target entirely. These “Basic Aid” or community-funded districts keep the surplus, which can amount to thousands of dollars more per student than similar districts receive under LCFF. The state has no mechanism to redirect that excess because it is local tax revenue, not state aid.
Voter-Approved Local Revenue
Communities can also raise money for their schools directly through the ballot. Unlike ordinary property taxes, these dollars sit outside the LCFF target and genuinely add to what a district can spend.
Parcel Taxes
A parcel tax is a flat annual charge on each property inside a district’s boundaries, regardless of the property’s value. Districts use the revenue for operating expenses: supplementing teacher salaries, keeping class sizes small, protecting programs that would otherwise be cut. Under the California Constitution, a parcel tax needs two-thirds voter approval, and many communities try and fail to clear that bar.
General Obligation Bonds
General obligation bonds pay for buildings, renovations, technology, and facility repairs. The debt is repaid through an added property tax on owners within the district. Since voters approved Proposition 39 in 2000, school bonds have needed only 55 percent voter approval instead of two-thirds, provided the district meets accountability requirements including independent financial and performance audits.7Legislative Analyst’s Office. Proposition 39 – School Facilities, 55% Local Vote, Bonds, Taxes, Accountability Requirements
Developer Fees and Lottery Revenue
Two smaller streams round out the local picture. California law lets school districts charge fees on new residential and commercial construction to help pay for the school facilities that new development creates demand for.8California Legislative Information. California Education Code EDC 17620 The State Allocation Board sets maximum rates, which for 2026 are $5.38 per square foot for residential and $0.87 per square foot for commercial or industrial. A district must first complete a justification study connecting the new development to the need for additional school capacity. Unified districts may collect the full amount; districts that are not unified share the total through a fee-sharing agreement.
Lottery revenue is far more visible than it is meaningful. The California Lottery contributes only about one percent of total K–12 funding.9California Department of Education. Lottery – CalEdFacts In 2021–22, lottery payments to K–12 districts totaled roughly $1.65 billion, which sounds large until you spread it across six million students. The money is unrestricted, which gives districts flexibility, but it is nowhere near large enough to close funding gaps.
Federal Funding
In non-recession years, the federal government provides about six percent of California’s total K–12 revenue. That share climbed above 20 percent during the pandemic through one-time relief, but those emergency dollars have largely been spent. Federal money is categorical: it must be used for specific purposes defined by federal law, unlike LCFF funds.
The two largest federal programs are Title I and the Individuals with Disabilities Education Act (IDEA). Title I distributes money based mainly on the number of children from low-income families in a district and pays for supplementary academic support for disadvantaged students. IDEA helps cover the extra costs of educating students with disabilities. Both programs come with detailed compliance requirements that limit how districts use the funds.
The Special Education Funding Gap
Federal IDEA money was originally meant to cover 40 percent of the additional cost of special education. Actual federal contributions have never come close. State dedicated special education funding helps, but the combined federal and state share still falls well short of the real cost. By most estimates, roughly 65 to 70 percent of special education costs in California come out of districts’ general funds, money that would otherwise support all students.
This “encroachment” is one of the biggest budget pressures districts face. A district with a large special education population may see a substantial share of its LCFF base grant effectively redirected to legally mandated special education services. Federal law also imposes a maintenance-of-effort requirement: districts receiving IDEA funds must spend at least as much of their own money on special education as they did the prior year, so the local contribution is hard to reduce even when budgets tighten.
Where to See Your District’s Spending Plan
The LCFF gave districts far more spending flexibility than the old categorical system, and that flexibility comes with an accountability trade-off. Every district must adopt a Local Control and Accountability Plan (LCAP), a three-year blueprint describing how it will use its funding to improve student outcomes.10California Department of Education. Local Control and Accountability Plan (LCAP) – Resources
The LCAP must include a plain-language budget overview for parents, specific goals and actions, and a detailed explanation of how supplemental and concentration grant dollars will be used to increase or improve services for foster youth, English learners, and low-income students. Districts must engage parents, students, and community members in developing the plan, and every adopted LCAP is posted on the district’s website and on the California School Dashboard. To see how your local district is actually spending its money, the LCAP is the single most useful document to read.