Silent Recession: Why California School Districts Are Underwater Despite Increases in Funding

By Kelsey Krausen, Jason Willis

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Description

Despite projected increases in state and local funding, California school districts face financial pressures that threaten to destabilize their budgets and force reductions in student services. This paper, written by Kelsey Krausen and Jason Willis of the Comprehensive School Assistance Program at WestEd, describes the fiscal pressures that districts face and outlines the implications in an effort to bring this issue, the silent recession, to light. The paper features sections on:

  • Fiscal challenges
  • Implications of the silent recession
  • Strategies for the future

Although California’s education funding formula provides revenues that grow incrementally each year, these increases are not based on the actual growth in the costs of operating a school. Consequently, some districts are experiencing cost increases that outpace revenue increases.

This dynamic requires districts to find new strategies to prioritize their spending, and may lead to employee and program reductions as rising costs effectively “crowd out” other investments. This paper presents a conceptual framework for district leaders to use in considering the tradeoffs and choices they may need to make.