K-12 Spending in Most States Still Far Below Pre-Recession Levels, Report Says

By Daarel Burnette II — November 29, 2017 3 min read
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K-12 spending in a number of states is still far below pre-Recession levels, according to an analysis released Wednesday by the Center on Budget and Policy Priorities, a progressive think-tank.

And those spending cuts have started to have a lasting impact on the quality of education students receive, said Michael Leachman, the organization’s director of state fiscal research who conducted the research. Classrooms are filled to the brink, he said, teachers have taken pay cuts, and academic results have lagged.

State political leaders should leverage new taxes on its citizens or find new revenue sources, said Leachman.

“The health of this nation’s economy, and the quality of life will depend crucially on the intellectual capacity of our people,” Leachman said on a conference call with reporters. “If we neglect our schools, we diminish our future.”

Experts in general say states’ school spending is being squeezed by pension and Medicaid costs, declines in capital, sales and commodity tax revenue, and a series of tax cuts in a handful of especially conservative states.

The report is being released as school funding battles continue in some states. Oklahoma’s legislature will soon enter a third special session to debate how to fill a $250 million budget deficit. Kansas and Washington legislatures are scrambling to pacify their supreme courts, which for years have demanded increased school spending. And an unusually high number of states next year plan to debate whether to scrap and replace their school funding formulas.

More than 36 governors and three quarters of states’ legislators are up for re-election next year. They will have much more flexibility to shape their states’ education policy under the Every Student Succeeds Act. Several state chiefs say recent budget cuts have suppressed their abilities to innovate under the law in the coming years.

The CBPP used a series of census data reports between 2008 and 2015 and analyzed states’ most recent budget reports to compare this year’s school spending amounts with spending amounts before the Great Recession between 2007 and 2009.

In its 17-page report, the think tank found that overall K-12 spending in at least 29 states is still less than what it was before the housing industry collapsed in 2007, which resulted in a wave of revenue cuts to school districts leading to massive layoffs and the shuttering of K-12 programs.

While housing values have somewhat rebounded in some areas, people aren’t spending at the levels they used to, and websites such as Amazon continue to siphon off a large portion of sales tax revenue.

In at least 12 states, the organization said, school spending cuts were especially alarming. Those states—Alabama, Arizona, Idaho, Kansas, Kentucky, Michigan, Mississippi, North Carolina, Oklahoma, Texas, Utah and West Virginia—have cut their state K-12 spending by more than 7 percent.

“Let’s be clear,” Leachman said. “State level cuts have real and damaging consequences for local school districts.”

There were some bright spots. School spending in North Dakota is almost double the amount it was before the recession, the organization found, though the fall in oil prices has led to some more recent cuts. And school spending is up 30 percent over that same period in Illinois. That state this year replaced its funding formula so that the state shoulders more school costs than local governments.

Last week, the National Association of State Budget Officers said state spending on education in 2017 was up 4 percent from the last fiscal year.

“K-12 is one of the last areas states want to cut,” Brian Sigritz, the association’s director of state fiscal studies, told Education Week.

Next year, states will be required to parse out school-by-school spending, a level of detail not known to many district superintendents. The hidden inequities of spending between schools within districts could flare up more school funding battles both in courts and in the political arena.

Read the full report here.

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A version of this news article first appeared in the State EdWatch blog.