New Data Indicate Lag in State Aid To Public Schools

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The states spent a record $96.9 billion for public elementary, secondary, and higher education in the fiscal year 1981, but the growth in school expenditures over the previous year did not keep pace with the increase in state spending in general, according to reports issued last month by the U.S. Census Bureau and the National Center for Education Statistics (nces).

Altogether, the Census Bureau reported in State Government Finances in 1981, the states took in $310 billion in revenues in fiscal 1981 and spent more than $291 billion--an increase of 11.1 percent over 1980.

But according to the nces report, Estimates of Local Public School System Finances 1980-81, state aid to local public school districts grew by only 5.9 percent, from $44.2 billion in fiscal 1980 to $46.8 billion in fiscal 1981. Local receipts, reflecting the schools' slight shift back to reliance on property taxes and other sources of local revenue, grew by 11.5 percent during the same period.

State contributions accounted for 46.8 percent of all local school revenue, down from 48.1 percent in fiscal 1980. Local sources accounted for 44.1 percent, on average, and federal funds for 8.4 percent. Eighty-six percent of local revenue came from property taxes.

The revenue mix, as in the past, varied substantially from state to state. In general, Southern and Western states made the largest proportional contributions to local schools, while districts in the Northeast and Midwest continued to rely more heavily on local revenue. Federal revenue, as a proportion of total expenditures, ranged from about 17 percent in Mississippi and South Carolina to 2.7 percent in Alaska and 3.4 percent in New Jersey.

Teachers' salaries and per-pupil expenditures also varied widely, with Southeastern states tending to rank low in both categories. The report notes, however, that salaries and expenditures were not adjusted to reflect regional differences in the cost of living. On average, teachers' salaries increased by 7.4 percent; the Consumer Price Index increased by 11.7 percent during the same period. See accompanying Databank.

The National Conference of State Legislatures reported late last month that the fiscal position of many states continues to erode as revenues from income and sales taxes fall short of expected levels. Twenty-one states have been forced to cut budgets that took effect only last July, usually by executive order, according to the legislators' group. Five states are still considering how to deal with projected deficits.

This year, the cuts have not been restricted to the Northeastern and Midwestern regions which were hit hardest by the recession, said Steven D. Gold, director of the conference's intergovernmental finance conference. South Carolina, Alabama, and Idaho are among the states that have made across-the-board cuts in the past few months and all three are states in which school districts depend more heavily than average on state aid.

Copies of the Census Bureau report, State Government Finances in 1981 (Stock No. 003-024-04934-1) are available for $5 from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, or from district offices of the Department of Commerce.

Information on the nces survey is available from the Statistical Information Office, nces, 1001 Presidential Building, 400 Maryland Ave., S.W., Washington, D.C. 20202.--pc

Vol. 02, Issue 09

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