School enrollment keeps going down. Here's what that means for LAUSD funding

There’s a constant tension in California public schools.

Education spending is one of the largest chunks of the state’s budget, yet schools often are strapped for money to cover basic needs, including teacher pay and repairs.

The COVID-19 pandemic, uncertain state revenue, settlements from decades-old sex abuse cases and now Trump administration cuts to education funding have made it more challenging for schools to plan and budget for student needs.

Fewer students are enrolling at schools throughout the state, particularly in areas with high costs of living like Los Angeles, which means a future with even less money.

Advocates are working to ensure the resources that remain benefit students who need the most support.

“Every kid deserves to have the same quality education,” said GPSN Executive Vice President Ana Teresa Dahan. “The promise of a public education is to lead thriving adult lives, and so we can't be pitting communities or students or schools against each other in a time where there might be less resources.”

The education-focused nonprofit published a report Thursday, finding that while increased funding generally follows higher-need students, there are some exceptions.

 ”Everyone assumes that every kid gets an allocation from the state and that kids' money follows them into the classroom,” Dahan said. “That's not what happens at LAUSD.”

It’s a complicated system, so we’ve styled this story like an FAQ with the goal of helping you better understand and get involved in shaping your school’s funding.

How do my tax dollars get to local schools?

The majority of LAUSD’s funding comes from the state. The district also receives federal dollars for specific purposes, including to support low-income students and those with disabilities.

Money for K-12 schools makes up the second-largest chunk of funding in California’s general fund. In the 2025-2026 budget, that equates to about $18,671 per student. The actual amount of funding per student varies based on a variety of factors, including student demographics, local funding source and the size of the school.

Broadly speaking, here’s how it works: California distributes money to schools based on their average daily attendance — how many students show up for class each day.

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 can LAUSD schools spend money?

The money doesn’t go directly to schools. The district distributes it based on several factors.

First and foremost, staffing. The number of students at a school determines how many teachers, administrators, counselors and other employees are assigned to each school. This number is determined by California education law and contracts with the district’s employee unions.

This is called non-discretionary funding because schools cannot use this money for anything other than the specific purpose for which it is allocated.

Non-discretionary funding accounts for about 80% of any school's given budget, the GPSN report found.

“ It's very rare that the principal has a significant source of discretionary dollars,” Dahan said. “But when they do … they should be working with the school community to figure out what the need is at that school site.”

Discretionary funding, on the other hand, is more flexible. A school might decide to pay for classroom supplies, field trips, a counselor or staff to support students' reading or math development.

There may be a school-site council of parents, staff and students that weighs in on campus spending priorities.

Here are several examples of sources of discretionary funding:

• Student Equity Needs Index (SENI): A $700 million annual fund distributed to schools based on several factors, including academic outcomes, rates of chronic absenteeism and the health and levels of violence in surrounding communities. The LAUSD board created SENI with advocacy groups that wanted more funding to support the neediest students. 
• Black Student Achievement Plan (BSAP): A $125 million fund distributed primarily to schools that serve higher numbers of Black students. The LAUSD board voted to create the BSAP in 2021 with the goal of closing gaps in academic outcomes between Black students and their peers. 
• PTA and booster club fundraising: A 2022 LAist investigation found parents and families collectively raise about $30 million a year for LAUSD schools. The money historically has been concentrated in wealthy Westside neighborhoods and the southwestern San Fernando Valley. 

Why do some schools get more money per student than others?

One of the report's findings was that even schools that serve similar populations can receive vastly different amounts of funding per student.

For example, two elementary schools, one in San Pedro and another in Southeast L.A., with identical SENI rankings (highest need) and similar demographics (majority low-income students of color) had a nearly $23,000 difference in per-pupil funding.

The San Pedro school received about $16,000 per student, while the Southeast L.A. school got $39,000.

Dahan said the explanation is in the number of students. The San Pedro school has about 600 students, while the Southeast L.A. school has 129.

“There's some fixed costs that every school has to have,” Dahan said. “The less number of students you have, the less number of students to share that cost when you try to determine a per-pupil funding.”

More money doesn’t mean students have access to more resources because the money is designated for specific purposes.

Those fixed costs can include the principal, cafeteria and janitorial staff.

GPSN points out that while it costs more to operate smaller schools, they play an important role in bringing food, health care and childcare to their communities.

 ”The question should be how do we make sure all the other schools are getting the same academic results regardless of the dollars,” Dahan said. “The true equity will be in the educational experience, not the dollars that each kid receives.”

What is LAUSD’s financial future?

Here are the trends we’ve noticed over the past few years:

About 408,000 students attended LAUSD this past school year, a more than 40% decline from enrollment two decades ago.

Yet, the district has increased the amount of money it spends as enrollment declines. For example, the district created new programs to support students with federal pandemic relief money that’s now spent. Unlike other districts, LAUSD has not closed schools or laid off large numbers of staff in recent years.

LAUSD has relied on reserves to balance the last two budgets. In June, the board approved a plan that includes the possibility of school closures and layoffs in the next school year.

“There is hardship in the future,” said Superintendent Alberto Carvalho during a September board meeting. “The best way to lead is to lead from the front with full awareness of the sacrifice that lies ahead and the contribution that each one of us can individually make.”

How can families influence LAUSD’s financial decisions?

Dahan, who’s also the mom of two LAUSD students, said the first thing to focus on is your own child’s attendance.

“Not only for their own learning, but I have to understand that that is my financial contribution to the system,” Dahan said. “ The more of us who send our kids to public schools, the more money that will be in public education.”

If you want to dive deeper, here are a few suggestions for getting involved:

• Attend a budget town hall meeting: Throughout October, LAUSD’s board is hosting a series of virtual and in-person meetings to explain the district’s budget process and financial challenges. 
• Look up your school’s spending plan: The district’s budget transparency website shows how much money they’ve spent, the number of staff and enrollment in recent years. You can also see the ratio of discretionary to non-discretionary dollars.  ”That gives you a sense of what might be available for the things you think your school needs,” Dahan said. You can also see how your school’s budget compares to that of nearby campuses. 
• Join a school-site council meeting: This group of parents, community members, staff and students creates a plan for meeting academic goals. The council is required by California law at schools that receive certain types of federal and state funding.
• Contact your school board member: The board is ultimately responsible for adopting a district-wide budget each year. Find your representative below. 

Note: GPSN is a recent financial supporter of LAist. Like other funders, it has no influence on coverage.