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School’s Open, But Funding’s Down

As a new school year begins, states are providing less funding per student to elementary and high schools than last year (after adjusting for inflation) in 21 of the 24 states for which these data are available, our new analysis finds.  (See first graph.)  These 24 states include about two-thirds of the nation’s school-age population.


Funding cuts likely are similarly widespread in the states for which these data aren’t yet available.  The 24 states we studied faced budget shortfalls this year that were no worse than the nation as a whole, on average.

In many cases, the cuts for the current fiscal year (2012) come on top of other cuts in state K-12 funding since the recession hit.  As a result, 17 of the 24 states studied are providing less funding per student than they did in 2008.  (See second graph.)  In ten of these states, funding is down more than 10 percent since 2008, and in South Carolina, Arizona, and California, it is down more than 20 percent.

These cuts have serious consequences for students and the broader economy.
  • They slow the economic recovery. Between August 2008 and July 2011, local school districts cut 229,000 jobs in response to funding reductions.  These job losses, and other state spending cuts, have reduced overall consumption and slowed the recovery.
  • They inhibit education reform efforts and damage the nation’s long-term competitiveness. Funding reductions counteract state and local efforts to improve teacher quality, increase student learning time, and boost student achievement in other ways.  At a time when the United States is trying to produce more workers with the skills to master new technologies and adapt to the complexities of a global economy, large cuts in funding for basic education threaten
    to undermine a crucial building block for future prosperity.
  • They leave school districts with few choices for restoring the lost aid. State funding makes up 47 percent of K-12 expenditures nationally.  When school districts face cuts in state funding, they generally must raise additional property tax revenue (an unlikely prospect at a time when property values have
    plummeted), scale back the services they provide, or both.

While the state funding cuts partly reflect the economic downturn, which has depressed state revenues and raised the demand for public services, they also reflect choices by state and federal policymakers.  Most states took a cuts-only approach to closing their budget shortfalls for the current fiscal year, rather than using a more balanced mix of cuts and additional revenues.  And the federal government has failed to extend the emergency education aid it gave states earlier in the downturn, which played a crucial role in limiting the funding cuts to schools across the country.