States Continue to Decrease Education Funding
(09/12/2012)

WASHINGTON — The quest for education funding was already a constant battle before the economic collapse in 2008. The resulting downturn only made the situation worse. As a total sum, funding for elementary and high schools has dropped compared to the previous year in 26 states, many of which already faced budget cuts in the years and months leading up to the financial catastrophe. To make matters worse, 35 states have watched its school funding sink below 2008 levels. The inability to pass tax increases during the downturn, when economic woes at home made such a change unpalatable, meant most state and federal agencies filled their budget gaps primarily by cutting the level of services provided. The financial downturn not only caused the government to take in less revenue, but also made it very unlikely for the funding to be replaced.

In terms of local economies, the downturn occurred in a series of distinct events. Local governments arrived at the first chasm when the federal government found itself short of funding, which caused fear and instability in local economies, along with a cutback in federal support to national programs and departments. The second shock occurred when state governments began to see the results of its citizens losing some sources of federal aid at the same time that states were finding their levels of federal assistance were also dropping precipitously. The third, and hopefully final dip in local economies occurred when county’s and cities realized their economies were struggling due to uncertainty at the higher levels of government. Not only was the private economy struggling, but local governments were receiving less aid at both the state and federal levels.

The stimulus package and other emergency federal aid to school programs helped early on, but by the time the third shock wave hit schools on a local level, most of that federal aid was drying up, leaving schools on their own at the exact moment where the economic downturn was hitting them the hardest. These shock waves also effected the private sector, as each level of government addressed its funding issues, the private sector experienced a downturn because of the lack of certainty in the public sector. Now the hope is that the country has reached the bottom and can start the slow march back to stability, but first lets take a look at where exactly we’ve arrived.

Seventeen states have cut their budgets by more than 10 percent compared to per-student funding levels in 2008. Arizona, Alabama and Oklahoma have faced the largest change, cutting that number by over 20 percent.

Though the rate of new cuts has slowed and some states have begun to swing back in the other direction, actually increasing school funding compared to the prior year.

According to a Center on Budget and Policy Priorities (CBPP) report, decreases in school funding levels “disproportionately affect school districts with high concentrations of children in poverty.” The report explained this is because “states typically distribute general education aid through formulas that target additional funds to school districts with large shares of low-income and other high-need children.” The report argues that these “extra” chunks of funding, intended to give low-income schools a helping hand, are often the first pieces of the budget pie to get cut. The next logical conclusion of that argument is that these low-income areas are now losing teachers and other staff members due to the loss of this funding, which could actually make the economic differences between poor areas and financially stable school districts even greater in the future.

This has led many school districts to pursue property tax increases or fees on the local level to backfill the lack of state and federal funding. Low-income areas seem to once again be at a severe disadvantage in this respect, although property tax increases are relatively difficult to pass anywhere, regardless of income levels. If school funding merely stays stable, students well get less services each year because of these factors.

The CBPP report also pointed out many of the states that increased funding in the last year are still at a much lower level than in 2008.

“Florida increased education funding by $273 per pupil this year. But that was not nearly enough to offset the state’s $569 per-pupil cut over the previous four years. South Carolina increased per-pupil funding by $207 in fiscal year 2013, an increase that pales in comparison to the $746 cut the state made between fiscal years 2008 and 2012,” according to CBPP.

The report also cited a few exceptions, including Alaska and Montana who were able to fall back on their oil and gas reserves, while Maryland was in the process of increasing state aid for schools when the recession hit. With the political heavy lifting already done, the state was able to make saving school funding a priority, and cut elsewhere. The report added that Massachusetts and Iowa seemed to maintain their school funding at a higher level than most states because of a difference in prioritization. These states refused to cut education funding, even as they reduced support for other services.

Decreases in Spending Per Student Compared to 2011

   • Decreased Spending Between One and Two Percent: Colorado, Kentucky, Louisiana, Oklahoma, Missouri, South Dakota, Texas, West Virginia

   • Decreased Spending Between Two and Four Percent: Maine, New Jersey, North Carolina, Ohio, Oregon

   • Decreased Spending by Four Percent or More: Alabama, Alaska, Illinois, Nebraska, Nevada, Washington

Source: Center on Budget and Policy Priorities

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