What If Education Money Followed the Student?

California education debates usually begin with a budget. Maybe they should begin with a child.

A school system is ultimately supposed to educate students. Yet funding, staffing, facilities and administration become attached to institutions over decades. Then populations change. Enrollment changes. Families move. New models emerge. The institution has powerful incentives to stay exactly where it is.

So Zesht asked a simple question: what would happen if more education funding followed the individual student? The first surprise is that, in California, a lot of it already does — with two important exceptions.

How the money actually moves

Most state school funding flows through the Local Control Funding Formula. Schools receive a base amount per student in average daily attendance, plus an extra 20% for each English learner, low-income or foster-youth student, and a further “concentration” grant where those students make up more than 55% of enrollment.

The details are where money gets attached to institutions:

• Charter schools are funded on current-year attendance. When a student leaves, the money leaves that year.
• School districts are credited with the highest of current-year attendance, prior-year attendance, or the average of the prior three years. In 2024-25, that cushion credited California districts with about 120,000 more students’ worth of attendance than actually attended.
• “Basic aid” districts — including Beverly Hills Unified and Santa Monica-Malibu Unified in 2023-24 — collect more in local property taxes than the formula would give them. Their core funding doesn’t rise or fall with enrollment at all. Beverly Hills took in about $9,155 per pupil above its formula amount.

So money follows the student into a charter immediately, leaves a district slowly, and barely touches a property-rich district.

Families have already been choosing

Enrollment at schools under the Los Angeles Unified district code, charters included, fell from 639,337 in 2015-16 to 497,105 in 2025-26 — down 22% in ten years. District-operated schools lost about 27% of their students. Charters inside LAUSD’s boundaries lost about 6%. Statewide enrollment fell 8% over the same decade.

Falling birth rates and families leaving expensive Los Angeles explain much of that. But the difference between district-run schools and charters inside the same boundaries is itself information.

The comparison

It isn’t enough to point at Beverly Hills or Irvine and declare that smaller districts win. Those communities differ in income, demographics, parental education, English-learner populations and much else. So here are the numbers side by side, from the California Department of Education’s own files:

Reading and math: CAASPP 2024-25, percent meeting or exceeding standards, all grades tested. Graduation: four-year cohort rate, class of 2025. Chronic absence: 2024-25. Low-income and English learners: 2025-26 enrollment. *Current expense per unit of average daily attendance, 2024-25, published for districts only. Charter-network figures are Zesht calculations summing official school-level counts; networks test different grades (KIPP SoCal has no high schools), so rows are not like-for-like.

What the numbers say — and don’t

• Demographics explain much of the raw gap. About 87% of LAUSD’s district-run students are low-income, compared with 21.5% in Irvine. Comparing their test scores without that context tells you more about family income than school quality.
• Money doesn’t line up with scores. Irvine spent the least per student of the four districts and posted the highest proficiency. Beverly Hills spent the most. LAUSD’s spending partly reflects the extra grants its high-need students bring. That isn’t proof money doesn’t matter; it’s proof that spending alone doesn’t predict results.
• Among similar students, operators differ. Alliance, serving a student body even more low-income than LAUSD’s, beats the district in reading and graduation but trails it in math. Green Dot and KIPP SoCal trail LAUSD in reading.
• Charters aren’t automatically better. Stanford’s CREDO study found California charter students gained about 11 more days of learning per year in reading than matched district peers; the math gain wasn’t statistically significant, and students with disabilities and online-charter students did worse. Critics dispute CREDO’s methods.

The real question is governance

The deeper question isn’t “district or charter.” It’s whether the system responds to the people it serves:

• Does a parent have a meaningful ability to choose another school?
• Can a successful school expand?
• Can an unsuccessful school lose students and funding?
• Can principals adapt to their actual community?
• Or does money primarily preserve the existing structure?

There are real arguments on both sides. District advocates argue large systems bring purchasing power, specialized programs and the capacity to serve difficult populations at scale — and LAUSD does serve higher shares of low-income students and students with disabilities than the comparison districts. They also argue that fast-moving money leaves fixed costs behind. Smaller or more autonomous schools may be more accountable and responsive. Neither claim has been settled by California evidence, and the Legislative Analyst recommends keeping attendance-based funding, partly because it gives schools a reason to fight chronic absence.

The point isn’t to assume decentralization wins. It’s to measure what happens when families have more control — and to change the conclusion if the data don’t support the theory.

A school shouldn’t be successful because it retains its budget. It should retain its budget because families continue to trust it with their children.