Passage of Proposition 13 and the California Supreme Court’s Serrano decision made California the first state to change from a locally funded to a centralized, state school finance system. The attraction of such a system to policymakers and school reformers was its assumed capacity to create a rational system of school finance—a system attuned to concepts of both vertical and horizontal equity. On the other hand, centralization created a new politics of school finance, as the decision-making arena shifted from local districts to the state legislature. Access to decision-making, mobilization of political coalitions and newly legitimated interests comprise the new political mix. This chapter examines how the new politics affects issues of ethnicity, manifested as tensions between urban, suburban and rural school districts. Demographic shifts threaten old political coalitions. This chapter examines the tensions in that change.
In 1979, with voter enactment of Proposition 13 1 , California created a state school finance system. In spite of the disruptions caused by the measure’s fiscal restrictions, many—particularly advocates of school finance equalization reform—hailed the move toward full state assumption of school finance as a move toward greater equity. Certainly, the measure accelerated implementation of the California Supreme Court’s Serrano2 mandate to equalize spending among the state’s 1043 school districts to within $100 of one another. California voters accomplished, albeit unwittingly, what the legislature, at best, could have accomplished only over a prolonged period. 3 (Elmore & McLaughlin 1982)
The allure of a centralized, state school finance system is the promise of a more equitable school finance scheme. Issues that are difficult to address in locally fragmented and diverse funding systems can be addressed, hypothetically at least, more rationally in centralized, state-funded systems. The textbook version of an ideal school finance system is one that balances horizontal and vertical equity interests. Such state school funding plans reduce overall fiscal disparities among the majority of students, while attending to the special learning needs of others. This policy ideal should be more easily attainable when funding is centralized.
Like nearly all states, California’s prior school finance scheme relied principally on local property taxes. While advocates of such a system tout its virtues for local control, critics point to finance inequities as the price of such control. Had the state legislature been willing and capable, politically, of addressing issues of funding inequalities among districts, Serrano would not have been necessary, but Serrano in California and similar lawsuits in other states exist because the political system is not adroit at redistributive politics. Politicians are most successful when they have a growing revenue base. School finance politics prior to Proposition 13 was born of tensions between high and low wealth districts. The legislature’s response was to encourage equalization through