The new report illustrates how much trouble California is having in reversing the high school dropout rate, especially for certain minority groups.
Overall, the statewide dropout rate went up to nearly 22 percent. Among Latino students, the numbers are worse. They inched up to about 27 percent and among African-Americans, almost 37 percent.
The outgoing superintendent of public schools partially blames the $21 billion in state funding cuts over three years for the rise.
"We have seen the largest disinvestment in public education we've seen in generations, clearly that's not helping us address the dropout rate," Jack O'Connell said.
High school senior Eddie George thought about dropping out at one time because of the pressure to do well but he says classes were also too boring.
"They don't have a lot of equipment at school, not a lot of sports going on; they focus more on your education," George said.
But the mayor of one of California's biggest cities says budget cuts are not the only factor contributing to the dismal numbers. He points the finger at the powerful teachers' union.
At an education forum, Antonio Villaraigosa, who once worked for the teachers' union, said some California schools have become "dropout factories" for minorities and called union leadership an "unwavering roadblock" to reform that could help turn the dropout rate around.
"They are the most powerful defenders of a status quo that's not working for our kids," Villaraigosa said.
The teachers union fired back.
"You've got to stop doing this finger-pointing, this blame game," Calif. Teachers Association President David Sanchez said. "Let's start talking about real solutions for solving and working together to provide the best possible education for our children."
The dropout report also noted the graduation rate went up to slightly more than 70 percent.
With thousands of kids opting to get a GED or moving out of state, that decreases the total number of students, making it possible for both the graduation and dropout rates to increase.