School Budgets during Difficult Economic Times

8-4d School budgets during difficult Economic times

The economic downturn that began with the Great Recession in 2008 forced school officials to face funding challenges that had been unprecedented for several generations. Most local school boards grappled with reduced funding from both the state and local levels. The reliance on property taxes at the local level made it difficult to project when the decline in those revenues would turn around because home property values remained low for several years. State revenues, which rely on sales and personal income taxes, have remained flat in spite of a recovering economy.52

The lingering fiscal stress on school districts requires that they find additional funding streams or cut spending; there is much greater likelihood the latter will be the only option for most local boards of education, and national data shows that spending for instruction decreased by 3.3 percent and total support services decreased by 2.5 percent from 2011 to 2012. Raising existing tax rates or implementing new taxes does not seem to be an option in the current political climate. The option left to school districts is to reduce spending. Terms such as “efficient spending,” “downsizing,” and “enhanced productivity” are being used to advise school boards concerning how to balance their school district budgets.53

States and local school systems continue to take action to reduce spending despite some recent improvements in overall state revenues. The most current analysis of school finance data reveals the impact of the nation’s economic circumstance on school funding: ● Per-pupil expenditures were less in thirty-five states in 2014 than they were before the recession in 2008. ● At least fifteen states provided less per-pupil funding to local school districts in 2014 than 2013. Most states did see a modest increase in tax revenues during this same time period. ● In states where funding was increased, the increase did not make up for cuts in previous years. New Mexico, for example, increased school funding by $72 per pupil from 2013 to 2014, but it had cut spending by $946 per pupil the previous five years. Thirty-eight percent of impacted districts reduced extracurricular programs and activities. ● As of August 2013, a total of 324,000 jobs had been eliminated by local school districts since 2008. During this time period, school enrollment increased by approximately three quarters of a million students. ● In at least fourteen states, per-pupil expenditures are 10 percent or more below 2008 levels. Oklahoma and Alabama have cut per-pupil funding by more than 20 percent over the same time frame.54

While state revenues have risen in the recent past, they have still not reached levels established prior to the recession. With state legislatures reluctant to raise new revenue streams—taxes—it seems schools will continue to be asked to do more with less.

52“Cutting to the Bone: At a Glance,” The Center for Public Education (October 7, 2010) at www

.centerforpubliceducation.org/Main-Menu/Public-education/Cutting-to-the-bone

-At-a-glance (February 11, 2015); and Center on Education Policy, Summary of Two Reports by the Center on Education Policy (Washington, DC: Center on Education Policy February, 2012). 53Michael J. Petrilli and Margerite Roza, Stretching the School Dollar: A Brief for State Policy Makers (Washington, DC: Thomas B. Fordham Institute, January 2011); and Allie Bidwell, “How States are Spending Money in Education,” US News & World Report (January 29, 2015). 54James W. Guthrie and Elizabeth A. Ettema, “Public Schools and Money,” Education Next, (Fall 2012), pp. 19–23; Michael Leachman and Chris Mai, “Most States Funding Schools Less Than Before the Recession,” The Center on Budget and Policy Priorities (May 20, 2014) at www.cbpp .org/cms/index.cfm?fa=view&id=4011; and Emma Brown, “Nation’s Per-Pupil Funding Fell for Second Consecutive Year in 2012,” The Washington Post (January 29, 2015).