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1984 School Spending Up, Debt Down

By J.r. Sirkin — June 18, 2019 3 min read


Americans spent $133.9 billion on public schools in fiscal 1984, more than 90 percent of it for K-12 education, according to a report by the Bureau of the Census.

Spending by elementary and secondary schools rose 7.1 percent to $119.9 billion, despite a significant reduction in the issuance of long-term obligations, reflecting a decline in school construction.

K-12 spending per pupil averaged $3,067, ranging from a high of $8,314 in Alaska to $1,951 in Idaho.

“You might say that if inflation was 4 percent and spending increased 7 percent, then you have a 3 percent real rise,” said Allen Odden, a professor of education at the University of Southern California.

But given the large amounts of money--estimated at 20 percent of current expenditures--that it would take to reform the nation’s schools and fundamentally improve their performance, a 3 percent increase “ain’t going to do it,” Mr. Odden added.

Federal Share Drops

Although federal aid to schools increased by $500 million to $8.7 billion, the federal share of public-school revenues continued a five-year decline, falling to 6.5 percent, the report states. The federal share peaked at 8.9 percent in 1979-80.

After several years of providing an increased share of general school revenues, state governments, whose share declined in fiscal 1983, again increased their contribution, to 45.4 percent, or $60.5 billion, according to the report. Seven years ago, the states accounted for less than 40 percent of school funds.

According to the report, the local share of school revenues fell for the first year since the late 1970’s, to 48.1 percent, or $62.4 billion--down from 48.3 percent the previous year.

Reports Differ

The Census Bureau’s report differs in several important respects from similar reports compiled by the National Education Association and the Center for Education Statistics, although each relies heavily on state education agencies for the data it uses.

The Census Bureau and the N.E.A. agree that the federal funding role continues to decline. The N.E.A. estimates that the federal share fell to 6.2 percent in fiscal 1985.

But according to an N.E.A. document, “Estimates of School Statistics, 1984-85,” state governments provide about 49 percent of total public-school revenues, making them--not local governments--the largest single source of school funds.

And as states fund education-reform packages that they enacted in recent years, school-finance experts predict that the states’ share of education revenues will continue to rise.

Gap Widens

Local governments have generally increased their share of education costs since 1980, the N.E.A. reports, but the gap between the state and local shares widened in 1985, with local governments contributing less than 45 percent of total school revenues.

According to Steve Gold, a tax expert with the National Conference of State Legislatures, the census data underestimate the contribution that states make to Social Security and teachers’ retirement systems. It also includes financial data for some local community colleges.

As a result, the N.E.A. data more accurately reflect the state-local funding mix for K-12 education than the census data, Mr. Odden said.

Other Findings

Among its other findings, the Bureau of the Census reports that:

  • Salaries, principally for teachers, remain the single largest expense for public-school systems, reaching $81.3 billion--a 6.4 percent increase over 1983--or about 62 percent of all public-school expenditures.
  • Capital spending increased by 1.7 percent to $7.3 billion, although spending for construction fell to $4.2 billion.
  • Financial holdings by independent school systems jumped 12.3 percent to $25.4 billion, including $16.4 billion in cash and deposits and $6.3 billion in securities.
  • Indebtedness fell from $36.7 billion to $36.1 billion, as schools accrued $3.2 billion in long-term debt while retiring $3.7 billion. New issuance of long-term bonds fell by 19 percent.

But changes in debt load vary widely by state, according to the report. Several states, including Alabama, California, Maryland, Massachusetts, Ohio, and Rhode Island, have cut their outstanding debt by 27.5 percent or more, while Alaska, Louisiana, New Mexico, South Carolina, Texas, Utah, and Wyoming have each incurred large debt increases.

Texas, in particular, has accumulated public-school indebtedness far greater than that of any other state, the report states. Of the 42 local governments with the largest educational debt, 15 are in Texas.

A version of this article appeared in the February 19, 1986 edition of Education Week


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