The Recession’s Over, But Schools Aren’t Feeling the Recovery

New data suggests education spending remains below pre-recession levels in most states. View charts and maps showing trends for each state.
by | June 3, 2015

While funding levels for many public school districts declined in recent years, some have experienced far more severe cuts than others.

The recession played out differently across states, and lawmakers also pursued different strategies to address the resulting revenue shortfalls. Updated data released by the U.S. Census Bureau this week shows how the nation’s elementary and secondary public school systems have fared, providing detailed revenue and spending data up through fiscal 2013.

Per pupil spending climbed in all but 14 states between fiscal years 2012 and 2013. Most didn’t experience significant changes, although spending did drop by nearly 8 percent in Louisiana and climbed about 6 percent in Utah.

Taking a closer look at data going back several years, however, suggests that districts in most states have not fully recovered from the effects of the recession. Total per pupil spending is still down in roughly two-thirds of states when fiscal 2013 figures are compared with 2008 and adjusted for inflation.

In Georgia, per pupil public education spending has dipped year after year, declining 15 percent since 2008 -- more than any other state. Other states with large cuts -- Arizona, California and Florida -- sustained major losses from the bursting of the housing bubble.

Income tax cuts in Arizona and other states meant reduced state funding for school budgets. Elsewhere, California voters in 2012 passed a tax hike, leaning heavily on wealthy taxpayers, that helped public schools and universities stave off cuts.

“Some states responded to the crisis with a balanced approach that included spending cuts and revenue increases,” said the Center on Budget and Policy Priorities’ Michael Leachman. “Other states responded with just a spending cut.”

Inflation-adjusted per pupil spending figures show how some states are headed in opposite directions. (Changes depend somewhat on the year selected as the starting point.)

SOURCE: Governing calculations of per pupil current spending data published in U.S. Census Bureau Annual Survey of School Systems. Figures adjusted using CPI-U and are shown in 2013 dollars.

State and local budgets have continued to recover. But even now, school funding for most districts has not returned to pre-recession amounts, at least at the state level. The Center on Budget and Policy Priorities reviewed state budgets for fiscal 2015, finding declines in per pupil inflation-adjusted funding for at least 30 states since 2008.

Just how much districts spend varies widely across states. According to the Census data, New York spent $19,818 per student in fiscal 2013, more than any other state. Alaska, New Jersey and the District of Columbia reported similarly high totals. On the opposite end of the spectrum were states like Utah ($6,555/student), Idaho ($6,791/student) and Arizona ($7,208/student).

When broken down by enrollment, smaller school systems tend to spend more. Districts with fewer than 3,000 students spent $12,370 per student in fiscal 2013 compared to the national tally of $10,700 per student.

This map shows fiscal 2013 spending per pupil, with states shaded darker reporting higher amounts:

 

Several factors explain the vast disparities in spending. Lawmakers prioritize education differently, of course, and states with higher totals are mostly found in the northeastern U.S., where the cost of living is higher than it is out West.

It also has a lot to do with how states and their districts report data. Marguerite Roza, a Georgetown University researcher, said she’s noticed huge variability in how states categorize expenditures in the survey. States may omit funding for charter schools, for instance, and most don’t account for the majority of pension costs. If all pension costs and debts are considered, actual amounts would be much higher than what’s reflected in the reported Census figures.

How school funding fluctuated in recent years can also be traced back to differences in how costs are funded across local, state and federal revenue streams.

Nationally, the federal government accounts for about 10 percent of public elementary and secondary funding, with the rest split between states and localities. Cost breakdowns for individual school district revenues vary significantly across states. State governments provide more than two-thirds of school funding in Vermont, Hawaii, Arkansas, New Mexico and Alaska, while states like Nebraska and New Hampshire rely more on local sources.

Districts more dependent on local revenues typically rely more on property tax collections. In poorer areas with lower property values, this results in very low funding, so states apply different formulas to help make up the difference. Added state funding often isn’t enough, though, so states where schools rely more on local funding generally tend to have greater inequities across their districts, according to Leachman.

While funding hasn’t shifted much nationally, a few states have experienced noticeable changes in recent years. In Indiana, state revenues accounted for nearly 63 percent of school funding in 2013, up from just 46 percent in 2005. Alaska and North Dakota moved in a similar direction, while Arizona and Minnesota rely more on local revenues than they did in the years leading up to the recession.

Select a state to see how public school revenue sources have changed over time: