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Public School Funding and Making More Out of Less: An Interview With Dr. Michael Kirst

Dr. Michael W. Kirst is Professor Emeritus of Education and Business Administration at Stanford University and the longest-serving President of the California State Board of Education, serving as a member from 1975-1982 (as well as President from 1977 to 1981 and again from 2011-2019). Dr. Kirst received his bachelor’s degree in economics from Dartmouth College, his M.P.A. in government and economics from Harvard University, and his Ph.D. in political economy and government from Harvard. Dr. Kirst is a co-founder of Policy Analysis for California Education (PACE), an education policy think tank, and currently serves on its advisory board.

Léo Corzo-Clark: Proposition 13, commonly referred to as Prop 13, was an amendment to the California Constitution enacted in 1978 that capped property taxes at 1%. Since Prop 13 was passed, school funding in California has decreased significantly, staying below national averages for per pupil spending until recently. Why is this the case?

Dr. Michael Kirst: For context, I was the President of the California State Board of Education in 1978. After Prop 13 funding shifted, it cut the property tax in half. We had a large surplus in the state government and so we were able to bail the school districts out. Not completely, but mostly. Some of the short-term effects were mitigated by that, but in the long run, the lack of funding caught us. We were in the top ten among all 50 states in financing in the 1960s, but by the 1980s we were falling fast and eventually sunk to the bottom ten.

Education financing is best as a three-­legged stool: federal, state, and local. Most of the states that have high expenditures have local components. California doesn’t have a local component, so we’ve cut our tax base into a two-­legged stool.

A second effect of Prop 13 is centralizing. The golden rule is he who has the gold rules. In this case it’s the state who holds that power, and so they got into everything and anything. At one point recently, we had 41 categorical programs. They had all their specifications for what districts had to spend the money on, all created by state legislators’ footnotes and histories through earmarking it for counselors or reading or whatever. Essentially, Prop 13 shifted too much power to the state out of the local. Those are huge effects, and they’re not over. We’ll see where they go in the long run.

LCC: You’re considered the mastermind behind the Local Control Funding Formula (LCFF), a landmark California education law that restores more local control to school districts and provides greater funding for districts serving foster youth, English learners, and low-income students. How should local control be balanced with state control, especially since the former can lead to socioeconomic segregation while the latter can lead to less funding for certain areas?

MK: The LCFF had two big changes for California; one was local control, and the other was a formula that had a new concept of school finance. School finance has always been determined by weighting, where you give higher amounts to low ­income kids. Our conceptual change was a belief that where there are very high concentrations of low­ income pupils, that correlates in California with limited English speakers as well, therefore you need even more money for those concentrations. We put in a formula where when districts had over 55% concentrated poverty, we increased their spending allotment by 50% per pupil 

Now, to local control. California is a behemoth and is very complex. After 40 years, former-Governor Jerry Brown and I became humble about how much we could determine what the local districts should spend their money on. With LCFF, the idea was to take off all these earmarks on certain spending. So, you get out of telling them how to educate children and talk more about, “What are your results?” And if our results aren’t any good on a dashboard of indicators, then we’re going to be offering support and intervention and all that sort of thing. You’re not putting full trust in the local districts, but you’re not trying to tell them how to educate their children. This produced much more balance: let the districts figure out how to spend their money, but hold them accountable for what they produce. 

LCC: Looking back almost a decade into the LCFF, do you think it is doing enough to remedy education funding inequities compared to the old system, which was funded predominantly by local property taxes? 

MK: If you buy into the concentration theory and its effects on education, then I don’t know of a better formula in the United States. I think it’s beyond the ability of the state to control how money is split up by districts, between the central office and the schools. So yes, I’m pretty happy with it. I’m writing a paper about this now for the  Learning Policy Institute out of California, and while writing this paper I asked myself, “What didn’t we do right?” The big thing we didn’t do right was that we never built—on a large scale—the capacity of our teachers and our administrators to teach the complex demanding curriculum we have. So, if you remember that, then you have to ask, “How do you link funding to that?” That’s a state role, so what I’m proposing is that the state should be building the capacity. We can’t rely on the districts to do that, as learned from our experiences with the LCFF. They just didn’t put in enough money in my view.

LCC: Other states still mainly rely on property taxes for school funding, and while this is less equitable, they still have a higher average per pupil funding than California. Do you think that other states should still look toward adopting a funding model like California’s LCFF?

MK: Yes, you’re pointing out the difference between equity and adequacy. With LCFF, we said from the very beginning we’re not addressing adequacy. We will take whatever money the state has and make it equitable. The way other states do it is through a school finance concept called power equalization, which is where the state will set a minimum level of funding, and whatever local property taxes can’t raise then the state will cover the rest to make sure the district meets that minimum level of funding. For example, let’s take my home area, Palo Alto, which is predominantly white affluent, and then across the bay, East Palo Alto, a more low-income minority area. Five percent more on a property tax in Palo Alto will raise twice as much for people as in East Palo Alto. If you have local control, no power equalization, and no state redistribution, then you’re going to have inequity. You need to have a local component, but you need the power equalizing because of the tax base. Other states have that, and I would recommend that on top of what we have as the best formula. 

Because Prop 13 removed our local funding component, instead of power equalization California essentially has full state assumption of financing. Most states have a mixture of state and local financing, so they have to each come up with a formula or equalize their local share. California doesn’t have to worry about it because we take all our local money and drag it into Sacramento. I think we have a better formula, but without that local component, we can’t compete in funding with other states like New York or Connecticut that have big local property taxes. Bottom line is, even as equitable as you make a funding formula, you’re still going to have problems if there’s not enough money to go around in the first place.

LCC: You were designing the LCFF amid No Child Left Behind (NCLB), the controversial federal education law that held schools accountable to standardized test standards and penalized schools that failed to show improvement. As someone who played a key role in developing California’s funding accountability structure, what are your thoughts on NCLB and how it affected the education landscape for states? 

MK: Well, I thought NCLB did ramp up accountability and focused on low achievement. It was good in that it focused on outcomes more, but it was way too prescriptive. It over-controlled education and it was too much of a federal overreach. If California is big and complex, the whole country is even bigger and even more complex; the differences between states are gigantic. As you increase accountability, which NCLB did, you’ve got to equally take up the capacity of educators to meet the higher standards. All NCLB did was push up accountability, but it didn’t do anything much on increasing the ability of our professional teaching force and our principals and administrators. They did not build their capacity, and that is the biggest mistake of the education policy. You’re never better than your teachers and your principals. Yes, you need accountability, but you will never accomplish your goals unless your educators can teach what you want them to teach.

*This interview has been edited for length and clarity.