Teachers in the St. Helena Unified School District earn an average of $155,546 per year, according to state data for 2023-24 — making it one of the highest-paying public school districts in California. Only Mountain View-Los Altos Union High in Santa Clara County pays more.
By contrast, teachers in neighboring Napa Valley Unified, the county’s largest district with about 16,000 students, earn an average of $104,358. That figure sits slightly above the state average of $101,084, yet it’s nearly one-third lower than in the 1,100-student St. Helena district.
The disparity underscores how, even within a single county, wealth and housing values can dramatically shape school resources and teacher pay. A new study released this month says such gaps are a direct result of California’s funding formula, a system overhauled in 2013 to make school financing more equitable but that continues to favor a small group of property-rich districts.
Under California’s Local Control Funding Formula, the state sets a target funding amount for each district based on attendance and student demographics, aiming to direct more support to high-need schools. Districts receive this target amount through a combination of local property taxes and state aid.
Most districts depend heavily on state funds because their local property tax revenue isn’t enough to meet the target. But about 140 “basic aid” districts — often located in wealthy areas — generate so much in local property taxes that they exceed the target and get to keep the surplus.
The result, the study says, is a system where basic aid districts can afford to pay teachers significantly more and maintain smaller class sizes, while nearby districts with fewer local tax dollars struggle to compete.
“The state has made a lot of important moves towards more equitable distribution of resources,” said Carrie Hahnel, a co-author of the report. “But one of the things we’ve noticed is that those state policies don’t always translate into equity at the local level. In some parts of the state, there are big differences in resources between districts, and those differences correspond with lines of wealth and housing value.”
A widening gap
Todd Collins, a former school board member of basic aid district Palo Alto Unified and one of the study’s funders, said the divide is growing.
“This is a runaway train,” he said. “In Palo Alto, 10 years ago, our gap with nearby non-basic aid districts like San Jose Unified was about $5,000 per student. Today, it’s about $15,000. If we don’t stop this, the problem will only get harder to deal with.”
He said declining enrollment is worsening the problem. As non-basic aid districts lose students and state funding, property-rich districts see their per-pupil revenue rise.
During his years on the board, Collins said Palo Alto never questioned whether it could afford something, only when to fund it. When he spoke with people in high-need, non-basic aid districts, he said, he realized their situation was the exact opposite: they always had to worry about the budget.
The study, produced by education consultancy Bellwether and the research center PACE, was funded by several education and philanthropic groups, including the Give Forward Foundation, the Bay Area Tutoring Association, the Silicon Valley Education Foundation and the Walton Family Foundation.
Where Napa fits in
Of California’s more than 900 school districts, about 140 are classified as basic aid. These districts serve just over 5% of the state’s TK–12 students and tend to be clustered in counties with high property wealth.
Napa County is one of those regions. Four of its five districts — including St. Helena Unified and Calistoga Joint Unified — qualify as basic aid. Napa Valley Unified is the lone exception, relying primarily on state funding.
In neighboring counties, the pattern is similar: 17 districts in Sonoma County, including Sonoma Valley Unified and Healdsburg Unified, fall into the basic aid category. Marin County has 12, among them Mill Valley Elementary and Tamalpais Union High.
But even within the basic aid group, there’s wide variation. Some districts generate thousands of dollars in excess revenue per pupil, while others just barely qualify and fluctuate between basic aid and state-funded status depending on enrollment and property values.
In Napa County, for example, tiny Pope Valley and Howell Mountain Elementary — with a combined enrollment of fewer than 150 students — technically qualify as basic aid but gain little to no advantage from it.
According to the study, basic aid districts collectively generated $1.3 billion in excess local property tax revenue in 2023–24, an average of $4,776 more per pupil than other districts.
In Napa County, St. Helena Unified spent $37,530 per student last year. Calistoga spent $32,476. Napa Valley Unified, by comparison, spent $16,915 — roughly half as much, per state data.
That gap persists even though Napa Valley Unified serves a far higher percentage of high-need students. One in five of its students are English learners, compared with 12% in St. Helena Unified. Nearly 65% of its students are socioeconomically disadvantaged, compared with 36% in St. Helena.
And the divide keeps widening. While total school funding statewide has grown by 25% over the past five years, excess revenue in basic aid districts has risen by 41%, according to the study.
Because their budgets are not tied to enrollment, basic aid districts often see per-student funding rise when enrollment drops. For districts dependent on state aid, fewer students mean less money, forcing budget cuts and limiting new programs.
For a district like Napa Valley Unified, maintaining stability while investing in new initiatives can feel like a constant balancing act.
Money, teachers and outcomes
Larger budgets often translate into stronger teacher pay and student performance.
The five highest-paying districts in California all fall under the basic aid category, according to a review of data by The Press Democrat.
For state-funded districts, Hahnel said, that creates a revolving-door effect: “Teachers often start their careers in lower-paying districts and then move on to nearby, wealthier ones once they have more experience and more options.”
“Some of the lower paying districts are having to invest more in teacher training and also experiencing greater churn of teachers because they lose those people once they have a little bit more experience and more options,” Hahnel added. “It’s a real hiring and personnel disadvantage for those districts that have less money.”
Cindy Watter, a Napa Valley Unified school board member and former Napa High teacher, said she has seen several educators leave for nearby, wealthier districts.
“These were people who enjoyed working for our district but could not say no to a 25% bump in their pay,” she said.
Still, district spokesperson Julie Bordes said departures remain relatively rare. “NVUSD’s competitive wages and consistent increases, combined with neighboring districts’ smaller size and the geographic isolation of our region, result in relatively few Napa or American Canyon community members leaving NVUSD to pursue opportunities in other school districts,” she said.
While St. Helena saw a slight decline in math scores this year, it continues to outperform state averages across all subjects. Napa Valley Unified, meanwhile, remains below those averages but showed improvement in math, narrowing the gap slightly.
State response and possible fixes
The inequities highlighted by the study have reached the state legislature. In February, Sen. Dave Cortese, D-Silicon Valley, introduced a bill to create a reserve fund for non-basic aid districts in hopes of narrowing per-pupil spending gaps. The Senate passed the measure in June; it’s now under review in the Assembly.
Two decades ago, then-Gov. Gray Davis proposed cutting excess funding from basic aid districts to help close the state deficit. The idea met fierce opposition and failed.
This year’s study suggests other potential fixes: consolidating smaller districts to share resources, expanding interdistrict transfer opportunities, redistributing excess property tax revenue within counties, or increasing state support for property-poor districts.
Each option, researchers note, comes with tradeoffs. Consolidation could reduce costs and spread revenue more evenly but faces steep political opposition. Expanding transfers might increase student access but complicates district planning.
In response to questions about enrollment and funding, St. Helena Unified recently voted to change how it accepts out-of-district students, a move that underscores the flexibility basic-aid districts have compared with those reliant on state aid.
For nearly 15 years, the district participated in California’s “district of choice” program, allowing a limited number of transfer students each year through a lottery system. Starting in 2026-27, it will switch to the Interdistrict Transfer Agreement process, which requires approval from both the home and receiving districts. The change gives St. Helena more discretion over admissions but will not affect current students.
Looking ahead
As enrollment declines statewide and funding gaps continue to widen, the contrast between California’s property-rich and state-funded districts has become more visible and more consequential.
“Despite what I consider the extraordinary unfairness of the situation, I’m very optimistic,” Napa Valley Unified trustee Watter said. “We’re moving forward, and I’m seeing great things ahead.”
For now, though, California’s school funding system continues to produce districts operating on vastly different playing fields separated by little more than a boundary line.