Proposed initiative addresses financial literacy in CA schools

Proposed ballot initiative seeks to require a personal finance course for California high school graduates with the hope of improving the next generation’s financial management, knowledge

Initiative 23-0022, “Adds One-Semester Personal Finance Course to High School Graduation Requirements,” seeks to require California public schools to start offering a one-semester personal finance class to students during the 2026-27 school year. (David Fuentes on AdobeStock)
Serena Bettis
Published December 3, 2023  • 
12:00 pm

SACRAMENTO – An initiative that is working its way toward the November 2024 state ballot would require all public high school students to take a personal finance class in order to graduate.

The initiative — identified as Initiative 23-0022, “Adds One-Semester Personal Finance Course to High School Graduation Requirements” — has been cleared for circulation and will need to gather more than half a million signatures by May 7, 2024, to qualify for the ballot. Palo Alto-based nonprofit Next Gen Personal Finance (NGPF) and its related campaign organization Californians for Financial Education are behind the initiative. 

“California students are behind when it comes to learning these essential skills so they can thrive in the future,” NGPF Co-founder Tim Ranzetta said.

According to the initiative summary posted by the California Attorney General’s office on Nov. 9, the initiative will require California public schools, including charter schools, to begin offering a one-semester personal finance class to students during the 2026-27 school year. The graduation requirement will then kick in with the class of 2030. 

Some schools — like Visalia Unified School District (VUSD) and Dinuba Unified School District (DUSD) locally — already offer personal finance courses. This cuts down on the financial impact the initiative will have on some local districts, as it does not create specific requirements for the course content that would require districts to alter existing classes. 

“VUSD is aware of measure 23-0022 and is in a unique situation to move swiftly, as we currently offer a personal finance course that is aligned with the measure,” Cristina Gutierrez, VUSD public information officer, said.

This course is meant to be required in addition to the one-semester economics course that students must also take. Students would be able to fulfill the requirement by completing either a new course approved by the school’s governing body, or an existing course approved for the University of California A-G requirements.

Ranzetta said he recognized they should “walk before we run” with the policy, which is why the first part of the requirement is to add a personal finance elective to school course offerings before implementing the graduation requirement. 

A report from the Legislative Analyst’s Office said the fiscal impact this measure could have may reach “in the high tens of millions of dollars annually in the first few years and then likely decline over time.” These costs could be related to curriculum development, a district’s need for additional teachers or additional teacher training and the cost of instructional materials. The total cost of implementation would ultimately depend on the needs and processes of individual schools and districts, the report said.

Why require personal finance? 

Ranzetta began NGPF with co-founder Jessica Endlich in 2014 after seeing how interested students were in a personal finance course he was teaching in East Palo Alto, he said. That experience showed Ranzetta not only the need students had for the course, but the ripple effect it had on their families as parents also started to reach out to him with questions about budgeting and investing. 

The initiative does suggest types of content the personal finance class should include, but the course curriculum would be developed and approved locally. Suggested topics include lessons on budgeting, investing, managing credit, understanding taxes and various types of credit, paying for college or planning for other post-high school paths. 

“That sort of information should be universally known, and so this just presents a great opportunity to do that,” Ranzetta said.

Ranzetta said that the course should be required — not just offered as an elective — because “oftentimes high school students don’t know what they don’t know.” 

The students inclined to take the elective would likely already have some financial knowledge or interest in finance, which leaves out the students who would benefit from being required to take the course, Ranzetta said. Further, Ranzetta said students benefit more from a dedicated personal finance course than from personal finance content being worked into required economics courses. 

NGPF is built around “Mission 2030,” which is its goal to have personal finance course requirements for all high schoolers across the country by 2030 to “improve the financial capability of the next generation,” Ranzetta said. 

The organization offers educators access to free personal finance class curriculum for middle and high schoolers and is tracking the number of states that guarantee a standalone personal finance course for all high school students. Since 2019, the number of states that require personal finance courses has grown from six to 23, according to NGPF. 

California gets an “F” in financial literacy

A report released Dec. 1 from the Center for Financial Literacy at Champlain College in Vermont gave California an “F” for high school financial literacy. According to its 2023 Report Card on High School Financial Literacy, the class of 2023 received an “F” and the center projects an “F” for the class of 2028 because there is currently no pending legislation that would change the state’s grade. 

“Under the education laws and regulations in California, a student could graduate without ever being taught substantive personal finance concepts in high school,” the Center for Financial Literacy report said in its fact sheet on California. 

Ranzetta said NGPF’s own research has also shown that fewer than 1% of the approximately 450,000 students who graduate from California high schools each year are required to take a personal finance course. 

Bills introduced to the California State Legislature in recent years have entertained the idea to add this requirement, but have not made it very far. Most recently, Assemblymember Kevin McCarty, D-Sacramento, introduced Assembly Bill (AB) 984 in February, but it died in committee after it was edited to not require a stand alone course and instead add personal finance content to the required economics course.

The failure of efforts to add a personal finance course requirement in the state legislature are what drove NGPF to sponsor an initiative, Ranzetta said. 

Citizen-led state initiatives qualify for the ballot by getting 546,651 signatures from registered California voters — 5% of the total number of votes cast for the office of the governor in the most recent gubernatorial election. 

Ranzetta said the organization is off to a great start with gathering signatures and is encouraged that they will get it qualified for the ballot. He said they anticipate hitting the 25% signature threshold by early January. 

“Before going down this path, we conducted some initial polling, and that initial polling was so positive that we decided to move forward,” Ranzetta said. “The polling was 78% in support of requiring a semester-long personal finance course, with 13% opposed.”

Serena Bettis
General Assignment Reporter