September 2012 School Cuts FROM PAGE 1


• As a result, school funding remains well below pre-recession levels. Thirty-five states are providing less funding per student than they did five years ago.


• Seventeen states have cut per-student funding by more than 10 percent from 2008 levels.


• Three states — Arizona, Alabama, and Oklahoma — each have reduced per-pupil funding to K-12 schools by more than 20 percent. (These figures, like all the comparisons in this paper, are in inflation-adjusted dollars and focus on the primary form of state aid to local schools.)


As state revenues have improved


with the broader economy over the past year, funding cuts have slowed, and some states have increased their school funding. But state tax collections remain 5 percent below pre-recession levels, and at current growth rates it will take years before state revenues are able to sustain services like K-12 education at normal levels. States will need to raise additional revenues to prevent school cuts from getting worse and to make significant progress in restoring school funding without forcing cuts in other state services.


Restoring school funding should be


an urgent priority. The steep state-level K-12 spending cuts of the last several years have serious consequences for the nation.


• State-level K-12 cuts have large consequences for local school districts. Some 44 percent of total education expenditures in the United States come from state funds (the share varies by state). Cuts at the state level mean that local school districts have to either scale back the educational services they provide, raise more local tax revenue to cover the gap, or both. In particular, cuts in state aid may dis- proportionately affect school districts with high concentrations of children in poverty. 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 and/or with lower levels of taxable wealth. As a result, reductions in “formula” funding may result in particularly deep cuts in general state aid for less-wealthy, higher-need


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districts unless a state goes out of its way to protect them.


• The cuts extended the recession and slowed the recovery. Federal employment data show that school districts began reducing the overall number of teachers and other employees in July 2008, when the first round of budget cuts began taking effect. Since then, schools have been shedding jobs steadily; nationwide, schools have cut jobs in 10 of the last 12 months.


As of July 2012, local school


districts had cut 328,000 jobs nationally compared with 2008. These job losses have reduced the purchasing power of workers’ families, in turn reducing overall consumption in the economy and thus extending the recession and slowing the pace of recovery.


• The cuts counteract and sometimes undermine education reform and more generally hinder the ability of school districts to deliver high-quality education, with long-term negative consequences for the nation’s economic competitiveness. Many states and school districts have undertaken important school reform initiatives to prepare children better for the future, but deep funding cuts hamper their ability to implement many of these reforms, particularly in areas like lengthening the school day and expanding early childhood education. 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 threaten to undermine a crucial building block for future prosperity.


• Local school districts typically have little ability to replace lost state aid on their own. Given the sorry state of many of the nation’s real estate markets, it is difficult for many school districts to raise more money from the property tax without raising rates, and rate increases are often politically very difficult. Property tax collections were actually 2.8 percent lower in the 12-month period ending in March 2012 than they were the previous year, after adjusting for inflation. However, at least some localities are considering, and in some cases enacting, property tax increases — a sign of the challenges that schools face.


States Are Cutting K-12 Education Formulas — the Primary Funding


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The Hampton Roads Messenger 11


Source for Schools State aid is a major source of


funding for K-12 schools. On average, some 44 percent of total education expenditures in the United States come from state funds; the share varies by state. States typically distribute most of this funding through formulas that allocate money to school districts, with some funds often targeted to districts that have higher levels of student need (e.g., more students from low-income families) and less ability to raise funds from local property taxes and other local revenues.


Cuts to state formula funding


often have very large consequences for local school districts. Such cuts mean that local school districts must either scale back the educational services they provide, raise more revenue to cover the gap, or both. In addition to the funding distributed through general aid formulas, states may or may not use separate allocations to fund items such as pupil transportation, contributions to school employee pension plans, and teacher training; some of those allocations also have been cut.


Since 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, reductions in formula funding may result in particularly deep cuts in general state aid for districts with high concentrations of low-income students.


For 48 states, the necessary data


are available to compare state K-12 formula funding in the current school year with funding in earlier years. (The other two states, Indiana and Hawaii, publish education funding data in ways that make it difficult to make accurate historical comparisons. DC is excluded because it is a city that operates a single school district with no distinction between state and local funding). The 48 states included in this analysis are home to 97 percent of the nation’s schoolchildren.


School Funding in 2012-13 Compared with 2007-08


Based on the data available in


these 48 states, cuts to state education formula funding since the start of the recession have been widespread and very deep. This survey finds that, after adjusting for inflation:


• More than two-thirds of states — 35 of the 48 states surveyed — are providing less per-student funding for


K-12 education in the current 2013 fiscal year than they did in fiscal year 2008.


• In more than one-third, or 17 of the 48 states, per-student funding is 10 percent or more below pre-recession levels.


• The three states with the deepest cuts — Arizona, Alabama, and Oklahoma — each have reduced per-student funding by more than 20 percent from pre-recession levels.


• The worst year of the recession for school funding cuts was last year, the 2012 fiscal year, the first year after most emergency federal aid had expired. That year, 34 states cut per-pupil spending. The median cut among these states was 5 percent.


School Funding in 2012-13 Compared with 2011-12


The majority of states cut their


per-pupil school funding in the last year. These cuts generally have been modest, but in many states they come on top of severe cuts in previous years, leaving state funding for schools far behind pre-recession levels.


• In 26 states, per-student funding is lower in the current fiscal year (2013), than it was in the last fiscal year (2012), after adjusting for inflation. Among these states the median cut was $68, or 1.7 percent.


• A number of states increased funding for the current school year, but these increases generally have left per-pupil spending far below pre-recession levels. For example, 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.


These cuts are occurring at a


time when schools face demands from parents, employers, and civic leaders to bring greater numbers of students to higher levels of academic proficiency, in large part because workers will increasingly need higher levels of educational attainment to thrive in the workforce.


Why This Happened States have enacted cuts to funding


for K-12 education — and a range of other areas of spending including


SCHOOL CUTS PAGE 15


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