California Code, Education Code - EDC § 41060

(a) The enactment of Article XIII A of the California Constitution by the voters of California at the June 6, 1978, primary election severely reduced the property taxing authority of local school districts.  The California Legislature has replaced that local property taxing authority with state revenues derived from state taxing authority.  It is the intent of the Legislature that local property tax revenues replaced by state funds are to continue to be considered local effort for purposes of federal grants pursuant to Public Law 81-874.

(b) For purposes of computing federal grants pursuant to Public Law 81-874 which requires a local tax effort or maintenance of effort, the fiscal year 1977-78 shall be used as a base year.  The percentage of local effort for fiscal year 1977-78 shall be calculated as follows: