States Spent $185 Billion on Education in '90, Report Says

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State education spending reached $185 billion in fiscal 1990 and accounted for slightly less than one-third of all state spending, according to a summary of state finances released by the U.S. Census Bureau.

The figures in the new report show a 7 percent increase in state education spending from 1989 to 1990, matching the revenue growth reported by states.

The results, which cover a fiscal year that ended 15 months ago for most states, look particularly strong when set against more recent state fiscal actions, which have been characterized by budget cutting and school-aid increases that struggled to keep pace with inflation.

Indeed, the report for 1990 charts what many education analysts described as a good year for education. State lawmakers in Kentucky, Nebraska, New Jersey, and Oklahoma launched costly school-reform programs and school aid in many other states saw significant increases.

On the other hand, the bureau's figures also indicate that budgets were showing signs of strain even before the national recession was officially recognized to have begun.

State aid to schools districts rose to $109 billion in fiscal 1990, up from $105 billion the previous year, according to the report. But that 4 percent increase was about half the annual rise seen during the 1980's, and marked an even greater dropoff from the 10 percent jump seen between 1988 and 1989.

Shrinking Budget Buffers

The 1990 budget year also left states with their lowest total surplus in five years.

Slightly more than $53 billion remained as a balance in state coffers last year. In 1985, the balance was nearly $49 billion. The report notes, however, that the older figure was equal to 11 percent of state budgets, while the 1990 surplus had slipped to 8.5 percent of revenues.

Researchers also found that states in 1990:

  • Raised salaries and wages for state employees by an average of 7 percent, for a total payroll of $101 billion.
  • Spent a total of $105 billion for public-welfare programs. . Increased their debt by 8 percent, to a record high of $318 billion.
  • Collected $72 billion from employee-retirement systems, $43 billion from user fees, $27 billion from investment interest, and $9 billion from lotteries.
  • Generated nearly half of their revenue through taxes, which reached about $300 billion nationwide, an increase of about 6 percent over the previous year.

About two-thirds of the tax receipts were generated by individual-income and general-sales taxes, the bureau said.

Per-capita tax collections averaged about $2,500. Tax revenue was about $11,000 per person in Alaska, $4,200 in Wyoming, and $3,900 in Hawaii, but only about $1,800 for each resident in Florida, Missouri, New Hampshire, and Texas. . Spent an average of $2,300 per resident. The rates ranged from more than $8,500 in Alaska to about $1,500 in Texas.

Copies of the report, "State Government Finances: 1990," are $4.75 from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402. Refer to stock number 003-024-07281-5.

Vol. 11, Issue 06, Page 22

Published in Print: October 9, 1991, as States Spent $185 Billion on Education in '90, Report Says
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