California once had one of the best funded, most envied public education systems in the United States. Now schoolteachers in Los Angeles, who went on strike this week to vent years of frustration, say they struggle with overcrowded classrooms and children whose need for academic support, psychological services and English-language coaching outstrips anything they can provide.

Many schools do not have a full-time nurse or counselor. In many of the poorer neighborhoods – in south LA, or the north-eastern San Fernando Valley – the library opens rarely. Janitorial service has become so spotty that some teachers have resorted to buying their own cleaning supplies and going over their own classrooms with rags and a mop at the end of a long day.

It’s a grim picture, affecting a district of more than half a million students and 31,000 teachers, and one that seems baffling in a state that remains the unquestioned powerhouse of the American economy. California has a greater concentration of billionaires and holders of university doctorates than any place on earth.

Yet it is also a state of vast inequalities and pervasive poverty, particularly in rural areas and in the blighted neighborhoods of its biggest cities. The golden age of the late 1950s and early 1960s, when the state embarked on a program of spending on schools, universities, freeways and other urban infrastructure, feels painfully distant. And the gulf between rich and poor has grown only wider as a result of bitter ideological warfare over schools, taxes and property values.

Ask any public policy expert what single factor contributed most to the decline of California’s schools, and the answer will invariably be the state’s retro version of Brexit: a referendum, passed in 1978 on a wave of populist anger, that was earth-shattering in its impact and has proven enduringly divisive.

Proposition 13 drastically cut and capped property taxes and hobbled the ability of California counties – and, indirectly, the state – to raise money for schools and other key social programs. The initiative, which passed with close to 65% support, was billed as a grassroots tax revolt against a backdrop of high inflation, rising interest rates and a perception of out-of-control public spending. Overnight, the tax revenue available to pay for public schooling was slashed by one-third, forcing the state to step in and make up some – but not all – of the shortfall.

The school system was already in a modest decline – California had fallen from fifth in the country in per-pupil spending in 1965 to 14th – but the decline now accelerated markedly. Within a decade, California was below the national average. It currently ranks 43rd out of 50 states.

“People always come back to Prop 13 because a lot of the other changes since are a result, either direct or indirect, of that vote,” said Jennifer Imazeki, an economist and education specialist at San Diego State University. “It changed the amount of money districts could raise through property taxes and cut revenue dramatically. And the money’s a big part of it.”

School buses in Los Angeles. Photograph: Frederic J Brown/AFP/Getty Images

A history of inequality

There is, however, a second explanation, one that knocks some off the shine off California’s golden reputation as a beacon of educational progressivism in the 1950s and early 1960s: that the school system, like the state itself, has always been beset by racial and economic inequalities and what has changed over time has merely been the severity of the same obstinate underlying problem.

Back in the days when property taxes accounted for more than 50% of school funding, counties and neighborhoods with higher property values were able to direct much more money to the local education system. That meant cities had vastly better schools than rural areas, and affluent white suburbs were far ahead of black and Latino neighborhoods many of which, at the time, were still subject to curfew laws and other forms of de facto racial segregation.

It soon became clear that Prop 13 was wreaking havoc not just on education but on the whole system of state governance

The problem got so bad that the California supreme court, in a series of rulings in the early 1970s, declared the uneven funding to be unconstitutional and ordered the state to make up the difference. Prop 13 was, in many ways, a reaction to those rulings.

“People, particularly in affluent districts, said, ‘If I can’t buy better education than my neighbors, why am I paying all these property taxes?’” Imazeki explained.

It soon became clear that Prop 13 was wreaking havoc not just on education but on the whole system of state governance. It meant, for example, that overall tax revenue was now more dependent on economic cycles of boom and bust, so social programs established in years of plenty were always at risk of getting slashed again when the lean times returned.

Still, much like the Brexit vote, Prop 13 was deemed untouchable, a “third rail” of California politics that elected representatives approached at their peril. That helps explain how the global trend towards greater inequality, which began right around the time of Prop 13’s passage, has been deeper and more pernicious in California than almost anywhere else.

Not all affluent areas maintained good public schools after Prop 13. In San Francisco, for example, a crucial number of richer families lost faith and sent their children to private school instead. Many other affluent communities, though, found workarounds to maintain quality, whether that was cities funding local schools directly, or persuading voters to approve a schools-directed “parcel tax” – in essence, a voluntary property tax of a few hundred dollars per home.

In Beverly Hills, infamously, the high school played host for years to an oil rig next to its baseball diamond and used the royalties to fund the entire district.

The inequalities are felt not only district to district, but often within districts, based on the local population. In Los Angeles, the second-largest school jurisdiction in the country after New York, the gamut runs from sun-kissed Palisades High, nestled among mansions overlooking the Pacific, to Manual Arts High in a benighted corner of South LA, where so many students qualify for free lunch the line is often too long to get them all fed before lunch break is over.

Some teachers in LA have resorted to buying their own cleaning supplies. Photograph: Ringo Chiu/Zuma Wire/Rex/Shutterstock

Those variations modify the overall picture, but hardly sweeten it. According to one recently published study, funding for California schools falls 38% short of where it should be to meet needs defined by the state itself. Poorer students benefit from additional state and federal grant money, but their needs are also higher and the shortfall reaches as high as 47% at the bottom end of the socio-economic pile.

Likewise, according to another recent study, while richer California students are keeping up with their peers in learning to read, lower-income students are as much as one grade behind the national average.

What is the solution?

“The problem,” Imazeki said, “is there is no silver bullet.” One silver lining to the labor dispute in Los Angeles is that the teachers’ union and the district do not disagree on the underlying problems, only on where the money to address them is supposed to come from. (By Friday they were talking again, raising hopes of a swift end to the strike.) Another silver lining is that high school graduation rates, test scores, and school funding have all been moving modestly upwards over the lifetime of the economic boom that has followed the 2008 recession.

Researchers point to two potentially promising areas. One is to use schools in poorer neighborhoods as hubs for social services provided to the population as a whole. That way, children can get their needs met where they are spending the majority of their time, and the community as a whole can become more invested in what goes on at school because more people will see it on a regular basis.

The other is to focus on early-childhood education, so students without the benefit of educated parents or encouragement at home can come into kindergarten better equipped to thrive. Gavin Newsom, California’s newly inaugurated governor, says this is a priority for him too.

Then there is a movement to roll back at least part of Prop 13. A measure due to appear on the California ballot in 2020 would close loopholes and lift some of the caps on corporate property taxes. Its backers say this could generate an extra $4.5bn for schools each year, and another $6.5bn that would flow into county and city coffers and might contribute more to education in other ways.

That, though, may not be quite the panacea it seems to be. One of the more positive education reforms of recent years has been to give local school districts more control over spending and classroom management. The danger, if more property tax money starts flowing to local communities, is that the problem of unequal spending that caused the state supreme court to intervene 45 years ago might re-emerge.

“Loosening Prop 13 could mean more money for local schools, but it will also mean more money from the state to equalize that funding,” Imazeki said. Whether the state has that money and is willing to spend it are open questions likely to form the political battleground of the future.