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FUNDING CUTS: New Report Finds Most States Have Cut School Funding Since Recession

Despite recent improvements in the national economy, most states provide less money for elementary and secondary schools today than they did before the Great Recession, according to a report from the Center on Budget and Policy Priorities (CBPP). The report, Most States Have Cut School Funding, and Some Continue Cutting, finds that after adjusting for inflation, thirty-one states provided less K–12 funding per student during School Year (SY) 2013–14, than in SY 2007–08, before the recession hit. Furthermore, in eighteen states, local government K–12 funding also decreased during the same time period.

“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,” the report notes. “These cuts weaken schools’ capacity to develop the intelligence and creativity of the next generation of workers and entrepreneurs.”

Data on total state and local government K–12 funding is not yet available for SY 2015–16, the report notes. However, the CBPP report analyzes current school year data on state “general formula funding,” the primary state K–12 funding source. Twenty-five states provided less general formula funding during the current school year than they did in SY 2007–08, according to the report. Oklahoma and Alabama experienced the greatest cuts, decreasing general formula funding by 24.2 percent and 17.3 percent, respectively, during the past eight years, according to the report. (The CBPP report excludes California, Hawaii, Indiana, and Kansas from the prerecession and postrecession trend analyses because of insufficient state data and changes in state funding formulas that prevent accurate comparisons.)

More recently, between SY 2014–15 and SY 2015–16, thirty-five states increased their general formula funding per student; but only four states—Colorado, Montana, Tennessee, and Vermont—increased funding enough to compensate for cuts from previous years, according to CBPP. (In fourteen of those thirty-five states, per-student general formula funding already exceeded prerecession levels as of last school year, the report notes.) Twelve states, though, cut their general formula funding between last year and the current school year. (The report excludes California, Hawaii, and Kansas from this portion of the analysis because of insufficient state data.)

Approximately 46 percent of K–12 spending across the nation comes from state funding, although the exact shares vary by state. Consequently, “[c]uts at the state level force local school districts to scale back educational services, raise more local revenue to cover the gap, or both,” the report says.

During the recession, local property values fell significantly, decreasing the revenue local school districts could raise through property taxes, the primary local funding source for schools. The decline in local revenue, combined with cuts in state funding, put even greater financial strain on local school districts, the report says. At the same time, federal funding for high-poverty schools (known as Title I) and federal support for students with disabilities also declined during this time. After adjusting for inflation, Title I funding declined 11 percent between 2010 and 2015, while federal funding for special education declined 9 percent. On average, local districts provide 45 percent of the revenue necessary for their K–12 schools, while the federal government provides about 9 percent.

Most States Have Cut School Funding, and Some Continue Cutting is available at http://www.cbpp.org/research/state-budget-and-tax/most-states-have-cut-school-funding-and-some-continue-cutting.

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