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New Census Data Show Persistent State School Funding Cuts

Update, July 26:  We’ve corrected the number of states where state and local funding exceeded pre-recession levels in 2016.

A significant share of states are providing much less school funding than they were a decade ago, according to new data from the Census Bureau that we supplemented with our own look at state budget documents.

Together, state and local government school funding across the nation has finally recovered from the last recession, which took hold during the 2008 school year.  In the 2016 school year, state and local funding per student was just $5 below 2008 levels — essentially where it had been.  State and local funding in 26 states exceeded pre-recession levels in 2016, the first year since the recession when most states reached that threshold.

While combined state and local funding in 2016 was nearly back to pre-recession levels nationally, state funding was down $166 per student while local funding was up $161 (see chart).  The shift from state to local funding raises equity concerns.  Local funding relies heavily on local property taxes.  Because school districts in neighborhoods with high property values find it much easier to raise adequate revenue than districts where property values are low, a shift toward more local funding can exacerbate school funding inequities.  States can offset local inequities using school funding formulas that provide more funds to lower-income school districts.  Some states have formulas that accomplish this goal; others do not, according to an analysis by the Education Law Center and Rutgers University’s Graduate School of Education.

K-12 Funding Fell Sharply After Recession Hit

Further, while state and local school funding had largely recovered nationally by 2016, combined funding in a significant share of states remained far below pre-recession levels in inflation-adjusted terms.  Arizona, the deepest-cutting state, was providing 23.4 percent per student less than in 2008; Florida was providing 22.9 percent less; and North Carolina, Nevada, Georgia, Alabama, Idaho, and Oklahoma were all providing over 10 percent less.

While some of these deepest-cutting states have improved their school funding somewhat since 2016, there’s little evidence that most of these states have made marked gains in the last couple of years.  As of the current 2018 school year, at least 12 states have cut “general” or “formula” funding — the main form of state support for elementary and secondary schools — by 7 percent or more per student over the last decade, according to our survey of state budget documents.  Most of these states have cut income taxes over the last decade, making it particularly hard for them to raise revenue needed for their schools.

Steep funding cuts make it hard for states to improve teacher quality, reduce class sizes, extend learning time, and enact other reforms that, research indicates, improve student outcomes.  States that have imposed these deep cuts are weakening our shared future.