Sufficient state funding is key to education and schools.

Most states provide less support per student for elementary and secondary schools — in some cases, much less — than before the Great Recession, our survey of state budget documents over the last three months finds. Worse, some states are still cutting eight years after the recession took hold. Our country’s future depends crucially on the quality of its schools, yet rather than raising K-12 funding to support proven reforms such as hiring and retaining excellent teachers, reducing class sizes, and expanding access to high-quality early education, many states have headed in the opposite direction. These cuts weaken schools’ capacity to develop the intelligence and creativity of the next generation of workers and entrepreneurs.

Our survey, the most up-to-date data available on state and local funding for schools, indicates that, after adjusting for inflation:

At least 31 states provided less state funding per student in the 2014 school year (that is, the school year ending in 2014) than in the 2008 school year, before the recession took hold.  In at least 15 states, the cuts exceeded 10 percent.

In at least 18 states, local government funding per student fell over the same period.  In at least 27 states, local funding rose, but those increases rarely made up for cuts in state support.  Total local funding nationally ― for the states where comparable data exist ― declined between 2008 and 2014, adding to the damage from state funding cuts.

While data on total school funding in the current school year (2016) is not yet available, at least 25 states are still providing less “general” or “formula” funding ― the primary form of state funding for schools ― per student than in 2008.  In seven states, the cuts exceed 10 percent.

Most states raised “general” funding per student slightly this year, but 12 states imposed new cuts, even as the national economy continues to improve.  Some of these states, including Oklahoma, Arizona, and Wisconsin, already were among the deepest-cutting states since the recession hit. 

As common sense suggests, money matters for educational outcomes.  For instance, poor children who attend better-funded schools are more likely to complete high school and have higher earnings and lower poverty rates in adulthood.

States cut funding for K-12 education — and a range of other areas, including higher education, health care, and human services — as a result of the 2007-09 recession, which sharply reduced state revenue.  Emergency fiscal aid from the federal government helped prevent even deeper cuts but ran out before the economy recovered, and states chose to address their budget shortfalls disproportionately through spending cuts rather than a more balanced mix of service cuts and revenue increases.  Some states have worsened their revenue shortfalls by cutting taxes.

Restoring school funding should be an urgent priority.  Steep state-level K-12 spending cuts have serious consequences.

Weakening a key funding source for school districts.  Some 46 percent of K-12 spending nationally comes from state funds (the share varies by state).[2]  Cuts at the state level force local school districts to scale back educational services, raise more local revenue to cover the gap, or both.  And because property values fell sharply after the recession hit, it’s been particularly difficult for local school districts to raise significant additional revenue through local property taxes without raising tax rates, a politically challenging task even in good times.

Slowing the economy’s recovery from the recession.  School districts began cutting teachers and other employees in mid-2008 when the first round of budget cuts took effect, federal employment data show.  By mid-2012, local school districts had cut 351,000 jobs.  Since then they’ve restored some of the jobs but still are down 297,000 jobs compared with 2008.[3]  These job losses reduced the purchasing power of workers’ families, weakening overall economic consumption and thus slowing the recovery.

Impeding reforms widely acknowledged to boost student achievement.  Many states and school districts have identified as a priority reforms that would prepare children better for the future, such as improving teacher quality, reducing class sizes, and increasing student learning time.  Deep funding cuts hamper their ability to implement many of these reforms.  For example, while the number of public K-12 teachers and other school workers has fallen by 297,000 since 2008, the number of students has risen by about 804,000.  At a time when producing workers with high-level technical and analytical skills is increasingly important to a country’s prosperity, large cuts in funding for basic education could cause lasting harm.

These trends are very concerning to the country’s future prospects.  The health of the nation’s economy and our quality of life will depend crucially on the creativity and intellectual capacity of our people.  If we neglect our schools, we diminish our future.