State Education Funding Remains a Challenge

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October 20, 2016; Center on Budget and Policy Priorities

For too many states’ public schools, the improving economy doesn’t portend any easing of their funding challenges. Recently compiled data on state funding for the 2016–17 school year continues to illustrate that the harm done to school funding by the 2007-08 Great Recession has not yet ended.

New data compiled by the Center on Budget and Policy Priorities (CBPP) updates an earlier study that tracked school funding through 2014 and showed significant declines in funding for education between 2008 and 2014. The earlier study found that of the 46 states that made data available, 25 were still funding at levels below the 2008 starting point. With state funds providing almost half of public school funding, the difficulties this picture shows are very clear.

Two years of economic growth later, the situation does not seem significantly different. CBPP was able to gather current-year data on state funding from 47 states. Of those, “twenty-three… are providing less general aid per student this year than in 2008. In seven of those 23 states, the cuts are 10 percent or more, and North Carolina’s cut is only slightly smaller, at 9.9 percent.” At the same time, federal funding has not provided a buffer, as it, too, has shrunk in real terms.

When NPQ reported on the study in an earlier nonprofit newswire, we speculated on the reasons for the continuing state funding shortfalls.

The reasons that states have not chosen to restore funding levels vary. In some states, the economy has not yet recovered and their tax revenues remain constrained. For others, other budget needs are seen as more critical, such as Medicaid and underfunded public pension plans. For others, still, it is a matter of political philosophy: Government should be small, taxes low, and efficiencies are there to be found.

For local school districts and charter schools, the impact of the continuing funding challenge is very clear. Local school funding relies heavily on property taxes, which does not make offsetting state and federal declines easy. This is particularly true for districts responsible for overcoming the obstacles faced by poor and minority students.

When a district cannot make up for lost funds, it faces no easy way to fix the problem. It can shift resources from other local priorities, choosing between schools and police, fire, water, and other essential services. It can attempt to shift spending on school infrastructure to direct school operations, risking the health and safety of its students. It can cut staff. At a time of great concern about the effectiveness of our public schools, all of the possible ways to offset decreased funding work against real school improvement. We have seen more than 200,000 teaching positions eliminated since 2008, while those who remain are being asked to teach a student body that has grown by 1.1 million students. More students taught by fewer teachers is not a formula that will result in better schools.

This funding picture also provides more insight into why the fight over charter schools has become so heated. With state funding constrained, the diverting of funds from traditional public schools to charter schools makes the pressure even greater and does not provide new ways to mitigate the impact.

For CBPP, the continued starving of our schools does not bode well on the macro level.

In the long term, the budgetary savings from recent K–12 funding cuts may cost states much more in diminished economic growth. […] At a time when the nation is trying to produce workers with the skills to master new technologies and adapt to the complexities of a global economy, large cuts in funding for basic education undermine a crucial building block for future prosperity.

This translates into great pain for those students for whom the schools cannot meet the responsibility to provide a quality education. It also makes the conversation about school reform strategies moot.—Martin Levine