Bill Fischel has written a series of articles evaluating the connection between the Serrano decision and Proposition 13. The state does allocate property taxes in California and Proposition 98 requires a certain amount of money to go to schools. Things get tricky because the state has a history of taking money that had gone to local governments (cities and counties) and reallocating it when they run into trouble. They did this with property taxes, funding when they cut the vehicle license fee and took some sales tax revenues to help balance the budget earlier this decade.