Vice President for State Fiscal Policy
Protests by teachers and others helped drive substantial school funding increases over the last year in Arizona, North Carolina, Oklahoma, and West Virginia, four states that had cut school “formula” funding — the main state revenue source for schools — the most over the last decade. Still, formula funding remains well below 2008 levels in these states, as we explain in a new paper.
In the spring of 2018, teachers and other school employees in several states walked out to protest low pay and other funding shortages. Most of the states involved are among those that had cut their formula funding the most since the 2007-08 school year, when the Great Recession hit. Last year, teachers struck or protested in other ways in five of the 12 states that cut formula funding particularly deeply after the last recession — Arizona, Kentucky, North Carolina, Oklahoma, and West Virginia.
Of those five states, all but Kentucky boosted formula funding last year, at least partly in response to the protests. The funding boosts were substantial, especially in Oklahoma, where lawmakers increased formula funding per student by 19 percent, after adjusting for inflation. Arizona, North Carolina, and West Virginia boosted funding from 3 to 9 percent per student, after inflation. But in Kentucky, where teachers were mainly protesting cuts to teacher pensions, per-student formula funding remained about flat in inflation-adjusted terms.
In the coming years, however, policymakers may reverse the increases in three of the four states in question unless those states take additional steps to boost school funding. Arizona, North Carolina, and Oklahoma used revenue sources that may prove unsustainable, leaving them vulnerable to funding reversals. And thus far in 2019, leading policymakers in these states haven’t proposed new revenues for school investments.
Most of the other seven states that cut their school formula funding especially deeply over the last decade also boosted their school funding last year (though typically by less than most of the states with protests). Two states, Mississippi and Texas, cut their funding further, with Texas cutting especially deeply (see chart). (In Texas, formula funding shrinks automatically when local government school funding increases.)
Overall, more than half of states have now increased total per-student funding compared to a decade ago. As of 2016, the latest year for which we have comprehensive data, 26 states were providing more total state and local funding per student than before the recession, after inflation. Since state and local revenues generally have continued to expand since 2016, the number of states whose school funding finally has recovered from the recession has likely continued to grow.
Furthermore, some states have made new investments that, research suggests, will likely boost student outcomes and, in turn, likely strengthen those state economies over time relative to their neighbors. States where funding remains depressed may fall behind their peers unless they raise sustainable additional revenue and invest it wisely in their schools.