Bloomberg News

Most States’ School Funding Tumbles Since Recession, Study Finds

September 12, 2013

More than two-thirds of U.S. states are spending less per child on schools than they were five years ago, a study found, showing how slowly governments are replacing funding that was cut because of the recession.

At least 34 states will devote less on kindergarten through 12th grade on a per-pupil basis during the current school year than in 2008, once inflation is taken into account, according to a report released today by the Washington-based Center on Budget and Policy Priorities, which tracks the impact of government decisions on those with low incomes.

The figures show how public schools haven’t recovered from the 18-month recession that ended in 2009, which led governments to reduce spending when tax revenue dropped. Since 2008, Oklahoma has cut funding the most, by 23 percent, followed by Alabama and Arizona, where per-pupil spending fell 20 percent and 17 percent, respectively.

“The cuts that states made are very, very deep and revenues are coming back slowly -- and there are some states that have made their problems worse by cutting taxes,” said Michael Leachman, an analyst for the center who analyzed the state data. “About a third are still digging deeper, and many of the rest of the states still haven’t dug themselves out.”

School spending this year in 15 states, including Kansas, Georgia and Michigan, won’t keep up with inflation, according to the report.

In dollar terms, Alabama led the decline. Funding there shrank by $1,242 per student since 2008, adjusted for inflation. It was followed by Wisconsin, where the figure slid $1,038, and Kansas, with a $950 cut.

Deficit Pressure

State reductions have been compounded by fiscal stress on the federal and local governments, according to the report. Under pressure to curb the deficit, the federal government reduced a grant program for low-income school districts by 12 percent from 2010 to 2013, once inflation is factored in.

Property taxes, a major revenue source for municipalities, in the first three months of the year were less than in 2009, according to the Census Bureau.

State tax revenue has been on the mend, spurred by the growing economy. State collections rose 8.6 percent during the first three months of the year and have been climbing since 2012, according to the Nelson A. Rockefeller Institute of Government in Albany, New York.

Arturo Perez, a budget analyst for the National Conference of State Legislatures in Denver, said states are putting more money into education, a fact that’s obscured by adjusting for inflation. States are increasing spending this year on public schools by 2.4 percent.

“The Great Recession had a significant impact on programs across the board,” Perez said. “It’s been a long, slow climb out.”

To contact the reporter on this story: William Selway in Washington at wselway@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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