A Punishing Decade for School Funding

Public investment in K-12 schools — crucial for communities to thrive and the U.S. economy to offer broad opportunity — has declined dramatically in a number of states over the last decade.  Worse, some of the deepest-cutting states have also cut income tax rates, weakening their main revenue source for supporting schools.

Most states cut school funding after the recession hit, and it took years for states to restore their funding to pre-recession levels.  In 2015, the latest year for which comprehensive spending data are available from the U.S. Census Bureau, 29 states were still providing less total school funding per student than they were in 2008.

In most states, school funding has gradually improved since 2015, but some states that cut very deeply after the recession hit are still providing much less support.  As of the current 2017-18 school year, at least 12 states have cut “general” or “formula” funding — the primary form of state support for elementary and secondary schools — by 7 percent or more per student over the last decade, according to a survey we conducted using state budget documents.  (See Appendix.)  Seven of those 12 — Arizona, Idaho, Kansas, Michigan, Mississippi, North Carolina, and Oklahoma — enacted income tax rate cuts costing tens or hundreds of millions of dollars each year rather than restore education funding.  One of these — Kansas — repealed some of the tax cuts earlier this year and increased school funding, but not enough to restore previous funding levels or satisfy the state’s Supreme Court, which recently ruled that the funding is unconstitutionally inadequate.[1]

Our country’s future depends heavily on the quality of its schools.  Increasing financial support can help K-12 schools implement proven reforms such as hiring and retaining excellent teachers, reducing class sizes, and expanding the availability of high-quality early education.  So it’s problematic that some states have headed sharply in the opposite direction over the last decade. These cuts risk undermining schools’ capacity to develop the intelligence and creativity of the next generation of workers and entrepreneurs.

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