For homeowners, the battle to collect insurance money after the Eaton and Palisades fires has exacerbated a grueling recovery that's far from over. Some fire survivors have had to scramble for other sources of funding to try to rebuild. Others have gone into debt while bouncing between rental housing, as they wrangled with State Farm and other insurers over coverage.
Why now: State Farm is California's top home insurer, and many customers around Los Angeles started to get checks in November after L.A. County announced it was investigating complaints about how the company had handled claims from last January's wildfires, says Joy Chen, executive director of the Eaton Fire Survivors Network.
The background: The insurance industry says it has been dealing with years of rising disaster costs that have forced companies to raise premiums and to limit coverage in some high-risk areas. And the cost of disasters is increasing in part because climate change fuels more-intense storms, floods and wildfires that damage and destroy property.
Read on ... to learn what fire survivors are dealing with and about how this issue is cropping up in other states.
Nine months had passed since a wildfire destroyed Mark Johnson's southern California home, and he was still waiting for State Farm to pay his claim. Desperate for a resolution, Johnson asked the insurer in October to negotiate a settlement so his family could rebuild.
"I was on the verge of leaving money on the table," Johnson recalls, "just to get some kind of assurance of what we could move forward with."
Then, just before Thanksgiving, a State Farm representative told him the money was on its way.
"Needless to say, it was a huge relief," Johnson says, fighting back tears.
Johnson isn't alone. State Farm is California's top home insurer, and many customers around Los Angeles started to get checks in November after L.A. County announced it was investigating complaints about how the company had handled claims from last January's wildfires, says Joy Chen, executive director of the Eaton Fire Survivors Network.
For homeowners, the battle to collect insurance money after the Eaton and Palisades fires has exacerbated a grueling recovery that's far from over. As Johnson's case with State Farm languished, he had to scramble for other sources of funding to try to rebuild. Other fire survivors have gone into debt while bouncing between rental housing, as they wrangled with State Farm and other insurers over coverage.
The struggle Los Angeles residents have faced with insurers mirrors what's happening in communities around the United States. Years of rising premiums, due in part to threats from climate change, have added to the frustration with insurance companies.
"This is a national issue," Rep. John Garamendi, a California Democrat, told reporters recently. He added, "the first commandment of the insurance industry is to pay as little, as late as possible."
Asked about its handling of insurance claims, State Farm sent NPR a statement from its website that says the company takes every claim seriously and tries to provide customers with appropriate coverage.
"The rebuilding process [in Los Angeles] is underway, but frustration with the pace is understandable," David Sampson, chief executive of American Property Casualty Insurance Association, an industry group, said in a statement to NPR. "Insurers have paid tens of billions of dollars to policyholders impacted by the fires, and that process continues."
Insurers face 'staggering' costs from LA fires
The Eaton and Palisades fires destroyed more than 16,000 structures around Los Angeles. They rank as the most expensive blazes ever globally, with $40 billion of insured losses, according to Swiss Re Institute, the research arm of reinsurance company Swiss Re.
Soon after the fires were extinguished, homeowners started to complain about how insurance companies were responding to the disaster.
"The price tag is so staggering for the insurers here that they are bringing strategies to try to limit the pain" they experience financially, says Amy Bach, executive director of United Policyholders, a national consumer advocate. "But it's nothing new under the sun what we're seeing."
In November, the Los Angeles County counsel opened an investigation of State Farm following reports from residents that the company delayed, underpaid and denied valid insurance claims. The county counsel's office declined to comment on the state of the investigation.
State Farm said in a statement on its website that the investigation is a distraction from its efforts to help fire victims recover.
Chen of the Eaton Fire Survivors Network says State Farm's alleged behavior was devastating for its customers.
"Around February or March, I realized that whether a family was recovering or not depended largely on which insurance company they were with, which was shocking," Chen says. "These are all people who have been paying [their] insurance premiums faithfully for 20 or 30 years, but only some of them were getting the benefits."
The Eaton and Palisades fires destroyed more than 16,000 structures around Los Angeles.
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Ryan Kellman
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The fight for insurance money has been especially hard for homeowners whose houses survived the fires but were contaminated with lead and other toxins from the smoke, according to survivors and consumer advocates.
"With total loss, it's a very clear-cut, 'OK, we either rebuild or we sell. And if we rebuild, it's this. And if we sell, it's that.' And we do not have any paths to take," says Krista Copelan, whose Altadena home suffered smoke damage and lead contamination in the fires. "It's 100% trying to figure it out, fighting every step of the way, having no clear-cut answers."
Until about Thanksgiving, Andrew Wessels says State Farm resisted replacing his family's personal belongings, like clothes and bedding, that had been contaminated with lead, insisting the items could be cleaned instead. As the one-year anniversary of the fires approached, Wessels still didn't know how much State Farm would pay to remediate lead contamination in his Altadena house. To get rid of all the toxic ash, Wessels says floorboards need to be pulled up and walls torn down.
"We're here almost a year later, and we haven't taken one step forward," Wessels said in December.
As they've waited, Wessels, his wife and two young children have moved a dozen times, and the family has taken on tens of thousands of dollars in debt.
A lot of families are in similar situations. In Altadena, 65% of residents are still in temporary housing, according to a report this month from Department of Angels, a nonprofit that was set up to help victims of last year's fires. In Pacific Palisades, the number is even higher, with nearly three-quarters of residents still displaced.
As the recovery has dragged on, the toll on residents has grown, according to the Department of Angels report. Around half of respondents said they have depleted much or all of their savings. And about the same share said they worry about their mental health.
"I think everyone has been overwhelmed and drained for, literally, the past 11 months," Copelan, a State Farm customer, said in December.
'They're trying to make it difficult'
More than a thousand miles east, in Oklahoma, State Farm faces separate allegations that it has shortchanged policyholders. Oklahoma Attorney General Gentner Drummond, a Republican, recently accused the insurer of running a scheme to deny and minimize payments for roof damage from hail and wind.
"Oklahomans are paying rising homeowners insurance premiums yet receiving less protection in return, as State Farm simultaneously pursues additional rate increases while allegedly escalating its claims denials and underpayments practices," Drummond wrote in a December court filing.
Drummond's complaint is part of a growing wave of frustration with insurers nationwide as rising premiums strain household budgets.
In Texas, Democratic state Rep. Mihaela Plesa recently told reporters that homeowners who are struggling to pay for insurance in her district near Dallas routinely have their claims denied.
"That's not insurance, that's extraction," Plesa said. "That's a system that's designed to pull maximum dollars out of Texas pockets and providing minimum protection when disaster strikes."
And in southwest Florida, Jessica Gatewood, a Realtor, told NPR that home insurance feels like "a scam."
"You pay into it for, like, 30 years, 40 years, and then you have to make a claim, and they don't want to pay you what you actually need," Gatewood says.
The insurance industry says it has been dealing with years of rising disaster costs that have forced companies to raise premiums and to limit coverage in some high-risk areas.
The cost of disasters is increasing in part because climate change fuels more-intense storms, floods and wildfires that damage and destroy property. Additionally, people continue to move to coastal regions vulnerable to hurricanes and to forested areas prone to wildfires. That means more property is in harm's way. Then, when homes get damaged or destroyed, inflation has made it more expensive to rebuild.
Robert Gordon, a senior vice president at American Property Casualty Insurance Association, the industry group, says Florida and other states have also been plagued by cases of what Gordon described as insurance "fraud" related to alleged roof damage from storms, which he says have contributed to rising costs.
Construction workers build a home in the Palisades fire zone on the one-year anniversary of the fires.
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Allen J. Schaben
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Los Angeles Times via Getty Images
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In California, Mark Johnson hopes to move into his rebuilt Altadena home by fall. Reflecting on his ordeal with State Farm, part of him wonders if the insurer was just overwhelmed by the scale of the disaster. But he can't shake the feeling that all of the delays he faced were intentional.
"They're just trying to push you away," Johnson says. "They're trying to make it difficult for you so that you won't ask for much, so you'll be happy with whatever you get."
The Inner City Youth Orchestra performs at the Skirball Center to honor Martin Luther King, Jr.
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Courtesy Skirball Center
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In this edition:
MLK Day celebrations, a nature-inspired photography show in Venice, bring your book to the park, make chopsticks in East L.A. and more of the best things to do this weekend.
Highlights:
An afternoon of poetry, music and art honoring the legacy of Dr. Martin Luther King, Jr. await you at the Blu’ Arts gallery in Long Beach.
What better time to start woodworking than just ahead of the Lunar New Year with this chopstick-making workshop at Allied Woodshop in East L.A., led by Ali Chen?
This whole week has been summer in January, so keep the sunny vibes going and bring your book, a blanket and a donation for Project Angel Food to the L.A. Historic Park for the first Park Pages, a new monthly group read and hang. The Fleuria indie book truck will be there, along with plenty of fellow sun-loving bookworms.
The sounds of theInner City Youth Orchestra of L.A. will fill the Skirball Centerto honor the legacy of Dr. Martin Luther King, Jr. at this free concert. The group is the largest Black-majority orchestra in the nation, with more than 100 musicians and choir singers total.
The big news in L.A. food-land this week is the $1500 price tag for Copenhagen restaurant Noma’s upcoming residency here in L.A. In this economy? I think I’d rather fly to Copenhagen. Nonetheless, if you’re lucky (and flush!) enough to snag a reservation, please report back.
While that did not make any of our staffers' resolution lists, Senior Marketing Manager Patricia Tumang has some food goals of her own, including getting a coffee at Quat LA, trying some dipping ramen for lunch at Tsuke Artisan Noodle in Pasadena and getting a basturma sandwich at III Mass Bakery & Deli in Glendale (new). Much more reasonable (and probably just as tasty!).
On the music calendar this weekend, our friends at Licorice Pizza recommend new-school SoCal punks Together Pangea at the Teragram on Friday, old-school SoCal punks Black Flag at the Roxy, or Beastie Boys associate Mix Master Mike at the Venice West. Saturday, there’s the big iHeartRadio ALTer EGO show at the Forum with Green Day, Cage The Elephant, Good Charlotte, Sublime, Twenty One Pilots, Gigi Perez, Myles Smith and Almost Monday. Nikka Costa is at the Venice West, or head to Riverside to see legendary teen idol Shaun Cassidy at the Fox Performing Arts Center. Plus, a treat on both Saturday and Sunday: Jeff Goldblum & The Mildred Snitzer Orchestra will be playing the Troubadour, with a 4 p.m. matinee on Saturday for those of us who like to be in bed early!
Through Sunday, February 8 Arcane Space 324 Sunset Ave., Venice COST: FREE; MORE INFO
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Morleigh Steinberg
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Arcane Space
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The small gallery Arcane Space in Venice punches above its weight, with top-tier shows and a winding venue that lets out to a very cool, neighborhoody patio in the back. Choreographer and artist Morleigh Steinberg owns and operates the gallery, which has hosted inspiring new artists and group shows lately, but this time she’s showing her own work. Steinberg’s mesmerizing nature photos are printed on silver mylar substrate and show her adopted Ireland (she’s married to U2 guitarist The Edge) in a new — and possibly even more emerald — light that you can imagine.
I’m Not a Comedian, I’m Lenny Bruce
Sunday, January 18, 2 p.m. La Mirada Theatre 14900 La Mirada Blvd., La Mirada COST: FROM $19.80; MORE INFO
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Freedom of speech is in the news daily, and no one championed the right to say what you want in a more direct way than comedian Lenny Bruce. Directed by Tony Award-winning actor Joe Mantegna, this one-man show (written by and starring Ronnie Marmo) combines Bruce’s classic comedy bits with biographical insight.
DTLB Live
Saturday, January 17, 4 p.m. to 8 p.m. Promenade N. between Broadway and 3rd Street, Long Beach COST: FREE; MORE INFO
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Courtesy Downtown Long Beach Alliance
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Usher in the new year with the Big Butter Jazz Band as the Downtown Long Beach Alliance kicks off the first DTLB Live!, a new recurring monthly event series bringing live music, crafts and family-friendly activities to the Promenade every third Saturday of each month. There will also be live swing dancers, a maker’s market with local vendors, food, drink and much more.
NFL Playoffs & Mimosas
Saturday, January 17, 12 p.m. to 3 p.m. Chulita 533 Rose Ave., Venice COST: FREE; MORE INFO
Watch the playoffs, drink a mimosa, soak up some sun on the patio — what could be better? There will also be tunes from DJ El Cizzle, and bottomless mimosas are $35.
Park Pages
Sunday, January 18, 11 a.m. to 3 p.m. L.A. Historic Park 1245 N. Spring Street, Downtown L.A. COST: FREE; MORE INFO
This whole week has been summer in January, so keep the sunny vibes going and bring your book, a blanket and a donation for Project Angel Food to the L.A. Historic Park for the first Park Pages, a new monthly group read and hang. The Fleuria indie book truck will be there, along with plenty of fellow sun-loving bookworms.
About Last Night
Saturday, January 17, 8 p.m. Three Clubs 1123 Vine Street, Hollywood COST: $23.10; MORE INFO
If you thought your dates were bad, just wait until you hear the unhinged horror stories of some of your fellow single Angelenos at About Last Night. The regular storytelling showcase features locals getting up on stage and sharing their funniest, most outrageous dating stories.
Chopstick-Making Workshop
Saturday, January 17, 2 p.m. to 5 p.m. Allied Woodshop 4160 Whiteside Street, East L.A. COST: $160, MORE INFO
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More than one of our LAist staffers had “go to a woodworking workshop” on their 2026 L.A. resolutions list. What better time to start than just ahead of the Lunar New Year with this chopstick-making workshop at Allied Woodshop in East L.A., led by Ali Chen?
Greatest Story Ever Told with Guillermo del Toro
Academy Museum 6067 Wilshire Blvd., Miracle Mile COST: $5; MORE INFO
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MGM
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This is for my fellow film nerds and our reason d’etre for living in L.A. The Academy Museum (for only $5!) hosts this screening of a 4K restoration of 1965’s The Greatest Story Ever Told, plus a lecture from Guillermo del Toro talking about George Stevens’ career on the film’s 60th anniversary.
MLK Celebration: Dream @ Blu’
Sunday, January 18, 2 p.m. to 7 p.m. Blu' Arts & Wellness Gallery 580 Pine Ave., Long Beach COST: FREE, DONATIONS WELCOME; MORE INFO
An afternoon of poetry, music and art honoring the legacy of Dr. Martin Luther King, Jr. awaits you at the Blu’ Arts gallery in Long Beach. The day features acoustic jazz and spoken word poetry curated and hosted by Tommy Domino, an author, poet and teacher. Plus, enjoy the gallery’s work by current artists-in-residence, Shelton Gillis, Mohammed Mubarak and Wan Jean the Artist.
MLK Day Concert
Saturday, January 17, 7:30 p.m. Skirball Cultural Center 2701 N. Sepulveda Blvd., West L.A. COST: FREE; MORE INFO
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Courtesy Skirball Center
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The sounds of the Inner City Youth Orchestra of L.A. will fill the Skirball Center to honor the legacy of Dr. Martin Luther King, Jr. at this free concert. The group is the largest Black-majority orchestra in the nation, with more than 100 musicians and choir singers total.
Jam Session Friday, January 16, 7 p.m. to 10 p.m. SteepLA 970 N. Broadway, Ste. 112, Chinatown COST: FREE; MORE INFO
One of my favorite discoveries of 2025 was the charming SteepLA, a teahouse in a Chinatown plaza that also houses restaurants and art galleries. They are launching jazz jam sessions, starting with one on Friday in their courtyard. Tea cocktails and their after-dark menu will be available.
Monica Bushman
produces arts and culture coverage for LAist's on-demand team. She’s also part of the Imperfect Paradise podcast team.
Published January 15, 2026 5:00 AM
An aerial view of properties cleared of fire debris that burned in the Eaton Fire seen July 7, 2025, in Altadena.
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Mario Tama
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Getty Images
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Topline:
Providing support to the entertainment community is nothing new for the nonprofit Entertainment Community Fund, a sort of safety net for arts and entertainment workers in need. The organization is working to get the word out that financial assistance for entertainment workers impacted by the Palisades and Eaton fires is still available. There are mental health resources, too, including support groups.
The context: The Entertainment Community Fund (formerly The Actors Fund) provides a wide range of services (many of them free) like classes on things like building “parallel” or “sideline” careers to supplement income.
But over the past couple of years, the fund's western regional director says, "We have seen significant increases in the number of people who are coming to our career center to consider transitioning to other careers. And that is definitely a change.”
Read on ... for more about the help available.
$8.63 million in emergency grants sent to 562 families.
That’s how much financial assistance the Entertainment Community Fund has provided to performing arts and entertainment industry workers since fires broke out in Southern California in January last year. And the organization still is distributing grants, with the knowledge that needs are likely to increase soon.
”We know that the trajectory of the recovery process with homeowners and their insurances is that they will often pay some portion or all of a rent expense while people are displaced from their homes,” says Keith McNutt, the ECF’s Western Regional director. “That usually only lasts nine months to a year, and we're of course coming up on that year.”
Why entertainment workers?
Providing support to the entertainment community is nothing new for the nonprofit Entertainment Community Fund (formerly known as The Actors Fund), a national organization that’s been around since 1882 and is a sort of safety net for arts and entertainment workers in any kind of need or crisis. They also have built some of their own affordable housing.
A significant portion of their work, McNutt says, is making people aware that help is available and also that it’s OK to access it.
“It’s hard for any professional person in their craft to ask for help from anyone,” McNutt says. “But literally, we were created 140 years ago for exactly that reason. Because people work hard in this industry, but the industry doesn't provide regular income, regular benefits, [...] predictability, a standard career ladder.”
On top of the normal unpredictability factors of a career in the performing arts, there’s also the fact that the past five years have been “such a brutal onslaught of crises,” as McNutt describes it, from the COVID-19 pandemic to the WGA and SAG-AFTRA strikes in 2023 to the January 2025 fires, “that people have not had time to recover.”
What help is available?
The Entertainment Community Fund’s staff of social workers, career counselors and health insurance counselors provides a wide range of services (many of them free), like classes on things like building “parallel” or “sideline” careers to supplement income and support groups (including some specifically designed for people impacted by the 2025 fires).
Some services, like emergency financial assistance, require a more formal application to show that a recipient does in fact work professionally in performing arts or entertainment.
From ‘parallel’ careers to career changes
For a long time, McNutt says, he heard from arts professionals who saw their non-arts-related day jobs (ECF calls them “parallel” or “sideline” jobs) as sort of betrayal of their art, but “ our message has always been, ‘No, no, no [...] that's what helps you stay in your creative craft.’”
Over the past couple of years, though, with hardships compounding and ”profound shifts in the amount of employment, particularly in television and film,” McNutt has seen something different.
“We have seen significant increases in the number of people who are coming to our career center to consider transitioning to other careers," he says. "And that is definitely a change.”
And even for those cases and questions like, “How do you apply for a job that's not in the industry when you've never worked outside the industry?” McNutt says that's "something we can help people with.”
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LA landlord asks renters’ star signs. Is it legal?
David Wagner
covers housing in Southern California, a place where the lack of affordable housing contributes to homelessness.
Published January 15, 2026 5:00 AM
Dave Goldstein stands at the gate to one of his properties, a 1930s Streamline Moderne building in Hancock Park where John F. Kennedy once lived.
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David Wagner/LAist
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Topline:
When it comes to renters, Scorpios are “particular,” Libras are “gold,” and Aquariuses “can't make up their mind.” That’s according to Dave Goldstein, the Los Angeles landlord behind the company Art Deco Apartments.
The approach: For years, Goldstein has asked prospective tenants to tell him their astrological sign as part of the application process. He said he doesn’t care about credit scores, and he loves tenants with pets. He knows his approach to tenant screening is unusual. But when it comes to picking the right renters for his century-old, tastefully appointed buildings, he said it works.
The law: But is asking a tenant about their astrological sign legal? Housing rights attorneys told LAist they’re not aware of any laws or court rulings that explicitly ban landlords from screening tenants based on their birth month. But they said the question is still legally precarious.
Read on… to learn why, according to Goldstein, Leos make great tenants.
When it comes to renters, Scorpios are “particular,” Libras are “gold,” and Aquariuses “can't make up their mind.” That’s according to Dave Goldstein, the Los Angeles landlord behind the company Art Deco Apartments.
For years, Goldstein has asked prospective tenants to tell him their astrological sign as part of the application process. He said he doesn’t care about credit scores, and he loves tenants with pets. He knows his approach to tenant screening is unusual. But when it comes to picking the right renters for his century-old, tastefully appointed buildings, he said it works.
“It gives me an idea of their personality,” Goldstein told LAist outside The Mauretania, a well preserved example of 1930s Streamline Moderne architecture in Hancock Park.
“I mean, it's impersonal to just get an application,” he said. “You're going to get buildings that aren't that good. You're going to get impersonal people that don't care about anything.”
The question might be helpful to Goldstein, but some housing rights experts say it could be pushing the boundaries of what’s legal.
Why Leos make good tenants
While he hasn’t blacklisted any particular star sign, Goldstein said in his experience, people with certain signs are easier to deal with as tenants.
“If they say that they're a Leo, I go, ‘Great,’” he said. “‘I can't wait to rent to you. You're your own boss. I don't have to do nothing. You'll change every light bulb. You'll never call us.’”
Goldstein also likes to ask tenants where they grew up and the color of their car. He said people are sometimes surprised by the questions, but they tend to like his approach.
“They just can't believe it, because they're used to just texting a management company,” he said. “They're not used to personal service.”
The Mauretania, a 1930s apartment building with distinctive curved windows looking out on the street, is one of the properties Dave Goldstein owns through Art Deco Apartments.
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Housing rights lawyers weigh in
But is asking a tenant about their astrological sign legal? Housing rights attorneys told LAist they’re not aware of any laws or court rulings that explicitly ban landlords from screening tenants based on their birth month. But they said the question is still legally precarious.
“There's not a specific law against it,” said Rodney Leggett, director of litigation at the L.A.-based Housing Rights Center. “But because of the seemingly arbitrary nature of asking somebody about their astrological sign, it could potentially violate the [California Unruh Civil Rights Act].”
The law bans businesses from discriminating against people based on personal characteristics including sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status or sexual orientation.
It does not specifically mention astrology. But lawyers said depending on how businesses treat people with different signs, an argument could be made that they’re being discriminated against for no legitimate business reason based on a personal characteristic they can’t control.
“Astrological signs are not a traditional ‘protected characteristic’ in most anti-discrimination laws,” said Alisa Randell, a managing attorney with the legal aid organization Public Counsel. “But we do have this expansive law in California that is not limited to the categories that are laid out… So I think this is dicey for him.”
Goldstein said he has tenants of all astrological signs, and he plans to keep asking applicants about their birth charts.
“I don't know if it's legal to ask about it or not,” he said. “But it's fun to. And I know they're not going to lie about it.”
Mariana Dale
explores and explains the forces that shape how and what kids learn from kindergarten to high school.
Published January 15, 2026 5:00 AM
California funds schools based on average daily attendance — how many students show up for class each day. California students miss school at a higher rate than before the pandemic.
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Topline:
Gov. Gavin Newsom has proposed record levels of public funding for K-12 schools, but in several Southern California school districts declining enrollment and rising costs may still lead to cuts next school year.
The backstory: California law guarantees TK-12 schools and community colleges a minimum level of funding each year, usually about 40% of the state’s general fund, which is largely made up of personal, income and sales tax revenue. Revenue is higher than expected, but there’s no guarantee the funding will last.
By the numbers: The budget proposal allocates $20,427 of state funding per student, the highest-ever level, according to Newsom. There are also several other pots of money for specific purposes, including $1 billion for community schools, a one-time $2.8 billion grant and $757 million to support learning recovery related to the COVID-19 pandemic.
Why it’s complicated: “There's an increase in per pupil funding, but I wouldn't be fooled into thinking that those numbers indicate that schools really have more money to work with than in previous years,” said California School Boards Association spokesperson Troy Flint. The organization represents almost 1,000 districts and county offices of education statewide. Flint said declining enrollment combined with rising teacher salaries, un-funded state mandates and other increased costs are squeezing local school districts.
What's next: Local school districts will begin crafting their own budgets based on the governor’s proposal. Newsom will present a revised spending plan in May and California lawmakers have until June 15 to pass the state’s budget.
Gov. Gavin Newsom has proposed record levels of public funding for K-12 schools, but in several Southern California school districts declining enrollment and rising costs may still lead to cuts next school year.
The budget proposal allocates $125.5 billion, the highest-ever level, according to Newsom. That’s $20,427 per student.
“There's an increase in per pupil funding, but I wouldn't be fooled into thinking that those numbers indicate that schools really have more money to work with than in previous years,” said California School Boards Association spokesperson Troy Flint. The organization represents almost 1,000 districts and county offices of education statewide.
LAist spoke to Flint and several other school finance experts to understand the financial challenges California districts face as they create their spending plans for next school year.
“In the broader context, yes, we've seen funding nearly double in California over the last decade or so,” said Iwunze Ugo, a research fellow at the Public Policy Institute of California. “But it's… arguably one of the lower funded states around the country.”
How does the state fund school districts?
The majority of the state’s general fund comes from personal income, sales tax and corporation tax revenue.
“That's great when the economy is good and state revenues are growing, and it's trickier when the economy is bad and state revenues are small,” said USC education professor Lawrence Picus.
California law guarantees TK-12 schools and community colleges a minimum level of funding each year, usually about 40% of the state’s general fund. (Property tax is a local revenue source, and considered to be less volatile but with limited growth.)
The state provides a base amount of money multiplied by each student and there is additional funding for every low-income, English-language learner, unhoused or foster youth student in the district. This system is called the Local Control Funding Formula.
How does enrollment affect school funding?
Since California sets funding rates per student, it needs a way to count those students. This is average daily attendance — how many students show up for class each day.
“The intuitive response is, ‘well, if you have declining enrollment, you have fewer students, you should need less money,’” Flint said. “But in practice it doesn't really work that way.”
That’s because a district may lose a few students from each class across several schools each year, which may not justify laying off staff or closing a campus.
California education law blunts the immediate impact of declining enrollment by calculating funding based on the highest of three attendance counts: current year, prior year, or the average of the three most recent years, but over time fewer students means a smaller multiplier for state funding.
Increasing costs
Michael Fine is CEO of Fiscal Crisis and Management Assistance Team (FCMAT), the California agency that supports public schools' financial and business practices. He estimated schools are experiencing an estimated 5-6% cost increase every year.
California provides money toward these increased costs through the Cost of Living Adjustment (COLA). This year’s proposed COLA is a 2.41% increase, less than half the estimated increase districts are experiencing, Fine said.
“At the state, they can say we are fully funding our commitment to TK through 12 education,” Fine said. “But at the local level, it feels like things are constrained. It feels like a pinch or actually a reduction.”
Another factor is the push to increase educators’ salaries in light of California’s high cost of living.
Alix Gallagher studies school finance at Policy Analysis for California (PACE) and said that because revenue is unpredictable, lawmakers often opt to fund short-term initiatives rather than make long-term commitments.
“Whatever positive effects we're seeing [from short-term funding] are not the types of positive effects we might see if our funding was more stable,” Gallagher said.
For example, this year there is $1 billion for community schools, $757 million to support learning recovery related to the COVID-19 pandemic and $22.9 million for schools damaged by the January 2025 wildfires in L.A. County.
The budget also includes a one-time $2.8 billion grant that can be used for a variety of purposes from filling in the funding gap left by declining enrollment to supporting teacher training.
“Many districts will use that to mitigate some of their struggles,” Fine said. “All it does is buy time.”
The federal government also provides some money for education, but it’s also unclear how that funding will change in the second year of the Trump Administration’s second term.
Newsom will present a revised spending plan in May and California lawmakers have until June 15 to pass the state’s budget.
In the meantime, local school districts will begin crafting their own budgets based on the governor’s proposal.
Fine said district administrators and elected school boards will have to manage the financial consequences of declines in enrollment over time.
“They make the hard decisions, their boards make the difficult, hard decisions to make, cuts to services and programs,” Fine said.
How can I monitor my school district’s financial health?
School budget proposals should be presented at public meetings, often the school board, where elected leaders can ask questions and the public can weigh in.
Districts may also create a working group, often called a budget advisory committee, of staff, families, community members and students to come up with a plan to address the district's financial challenges.
One indicator of your school district’s financial health are interim reports due in December and March to the County Offices of Education. These reports show how and whether the district can meet its financial obligations for the current and two following years and are labeled:
Positive, the district can meet its obligations
Qualified, the district may not be able to meet its obligations
Negative, the district cannot meet its obligations without changes
Two of Orange County’s 32 districts filed qualified reports in December— Cypress and Saddleback Valley Unified. LAist has also requested this information from the Los Angeles County Office of Education and will update this article when we hear back.
