Economic Development - Regional Agencies/Organizations

Recession Exerts Pressure on Public School District Budgets


On average, states across the country each spent $9,666 per pupil in 2007, a 5.8 percent increase over 2006, according to data recently released by the U.S. Census Bureau in its report on Public Education Finances.

In 2007, New York spent nearly $15,981 per pupil – higher than any other state. New Jersey ($15,691) and the District of Columbia ($14,324), respectively, had the next highest per-pupil spending, according to the report. At the other end of the spectrum, Utah spent the least per student ($5,683), followed by Idaho ($6,625) and Tennessee ($7,113).

State governments contribute roughly 47 percent of funding for public school districts. Local funding sources comprise roughly 44 percent of the balance, and the remaining 8 percent is derived from federal sources. (See sidebar for more information regarding funding for public school systems.)

While it will be at least a couple of years before we see comparable data for the past and upcoming school years, that trend could well reverse. The economic downturn has had a ripple effect that has trickled down to nearly all aspects of government – federal, state, and local – thereby impacting funding for public school districts around the country.

As Lisa Blumerman, chief of the Census Bureau’s Governments Division states in a recent press release, “Public school systems have to balance income and expenses, just like other publicly run entities.”

As part of the American Recovery and Reinvestment Act signed into law in February, $100 billion in federal funding is being allocated to education. But even with that assistance, local school districts are still feeling the pinch – and they’re feeling it hard.

According to a survey results released by the American Association of School Administrators in late March, “the impact of the economic downturn on schools is widespread and has worsened over the past six months.” Three out of four survey respondents described their districts as “inadequately funded.”

The survey, entitled, “Looking Back, Looking Forward: How the Economic Downturn Continues to Impact School Districts,” asked 859 school administrators from 48 states about how current economic challenges are expected to impact their school budgets for the 2009-10 school year.

In response to the economic downturn, school administrators reported that districts are planning deeper cuts to their budgets for the 2009-10 school year compared to the 2008-09 school year in areas that directly impact student achievement, including increasing class size, reducing academic offerings and eliminating teaching positions, according to the AASA survey.

In a related survey conducted earlier in the year, the AASA found that 38 percent of jobs that districts planned to eliminate were teaching positions, while 33 percent of cuts were classified as support staff, and 17 were in student services staff positions.

The results of this earlier survey were provided to Congress in support of then-proposed funding for education through the Stimulus Act.

Funding Sources for Public School Districts

The U.S. Census Bureau recently released Public Education Finances: 2007. This report includes data about the funding sources for school systems around the country.  States with the highest and lowest percentage of funding for education from federal, state, and local sources are listed below.

Percentage of public school revenues from federal sources

  • Highest: Louisiana (17.6 percent)
  • Lowest: New Jersey (4.0 percent)

Percentage of public school revenues from state sources

  • Highest: Hawaii (89.8 percent)
  • Lowest: Nebraska (31.7 percent)

Percentage of public school revenues from local sources

  • Highest: Illinois (58.9 percent)
  • Lowest: Hawaii (1.6 percent)
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