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Recessionary cuts in public education restored by 2015-16

That's important because recent studies find that higher school spending produces higher student achievement

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Proof Points

In a December 2018 report, the U.S. Department of Education quietly noted an important milestone for the nation’s 50 million children who attend public schools: spending by state and local governments, on average, was strong enough during the 2015-16 school year to return annual per-student spending to what it had been before 2008-9 recession and even grew above the pre-recession peak.

According to the government’s report, education spending rose for the third straight year in 2015-16 to $11,841 per student in kindergarten through 12th grades. (For some states, prekindergarten is included in these spending calculations.) That’s a 2.9 percent increase from the previous 2014-15 school year, following an increase of 3.2 percent from 2013-14. A small upswing in education spending first began in 2013-14 after cuts of $600 per student.

The last time the country spent this much on each child was in the previous peak year of 2008-09, when the per-pupil total reached $10,591 per student. Adjusting for inflation, that’s the equivalent of $11,699 per student in 2016 dollars. So, this 2015-16 spending represents a 1 percent real improvement over that previous high point. More details can be found in this blog post by the National Center for Education Statistics.

These national numbers are just averages. Some states spent more than double what other states spent. While many states increased financing for schools, others did not.  In a few states, such as Kansas and Oklahoma, education spending remained lower than it was before the recession, after adjusting for inflation.

“There is more spread across states in state and local funding than ever before,” wrote Marguerite Roza, the director of the Edunomics Lab, a research center at Georgetown University, in an e-mail.  “While the national averages tell one story, that story may not apply to some states.”

Related: While the rest of the world invests more in education, the U.S. spends less

New York led the nation with an average of $22,231 per student, followed by the District of Columbia, Connecticut and New Jersey. Utah was at the bottom with $7,006 spent on each child’s education. Cost-of-living differences explain some of this variation but some states chose to invest a lot more in education than others.

Some states made big decisions to spend more as their regional economies improved. California raised school funding by more than 16 percent to $11,420 per student over the two years from 2013-14 to 2015-16. Washington state, Hawaii and New York also pumped considerably more money into their schools.  Meanwhile, other states continued to cut. Alaska, whose state revenues depend on the price of oil, made deep 6.5 percent cuts to its schools during this period. But Alaska still spent $17,510 per student, making it the sixth highest in the nation. That’s even more than Massachusetts, the top performing state in the country academically.

There are plenty of examples of jurisdictions that spend less but produce higher test scores. It’s easy to point to an affluent suburban community, such as Overland Park outside of Kansas City, that produces higher test scores than a low-income city, such as Newark, New Jersey, which spends a lot more. That disparity raises an old debate over the importance of the amount of education spending.

Research conducted after 1990 makes the case that spending more tends to lead to higher student achievement. In a December 2018 draft paper, “Does school spending matter? A new literature on an old question,” distributed by the National Bureau of Economic Research, Kirabo Jackson, an economist at Northwestern University, surveyed 13 newer studies and noted that 12 of them found that students benefited when schools spent more resources on their schooling.

One reason these studies are more consistently finding that more money is better is because they’re not comparing different states or districts against each other but tracking changes in funding within districts over time. For example, court cases mandated that some states redistribute funds more equitably so that rich towns don’t fund their schools at much higher levels than poor schools. More funding led to greater gains, especially for low-income students in Connecticut, Michigan and other states. Another 2018 study by Jackson found that recessionary budget cuts led to lower test scores. The greater the budget cuts, the more test scores dropped.

Related: The gap between rich and poor schools grew 44 percent over a decade

To be sure, some districts and states spend their money more effectively than others. Jackson argues that scholars should refocus their research not on whether money matters but on which kinds of spending matter the most.

It’s unclear if the recent increases in school funding during the economic recovery will necessarily lead to gains in student achievement again.

Georgetown’s Roza points out that many schools haven’t able to increase teacher salaries very much. That matters because good salaries can attract and retain effective teachers.

“Part of the problem appears to be that benefits costs and debt costs (e.g. for pension debt) are consuming much of that growth so there isn’t much there for raises, or other new investments for that matter,” commented Roza. She predicts that U.S. schools may once again be heading into budget cuts if the economy turns south next year and that, she added, will “make any future dip in state funding even more painful.”

This story about school funding was written by Jill Barshay and produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.

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Jill Barshay

Jill Barshay is a staff writer and editor who writes the weekly “Proof Points” column about education research and data. She taught algebra to ninth… See Archive

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