Education finance: Education Equalization Act: Equalization Reserve Account.

Senator Cortese's proposal to establish an Equalization Reserve Account within California's General Fund aims to address funding disparities between school districts through a new interest-based funding mechanism. The account would generate interest earnings specifically allocated to increase per-pupil funding in non-basic aid school districts - those that have received state funding apportionments in any of the previous three fiscal years.

The bill requires the State Controller to transfer funds from the General Fund to the Equalization Reserve Account during fiscal years when the state's minimum required education funding increases. The transfer amount would match funds allocated to the Public School System Stabilization Account. Interest earned on the account would be reinvested to maintain the principal balance while a portion would be distributed to eligible districts through legislative appropriation.

Implementation depends on voter approval of a constitutional amendment with two key provisions: excluding account transfers and allocations from both minimum education funding calculations and state appropriation limits, and requiring annual legislative allocation of account interest to non-basic aid districts. The bill defines eligible districts as those receiving state funding apportionments through the Local Control Funding Formula in the preceding three fiscal years, distinguishing them from basic aid districts that rely primarily on local property tax revenue.