New Census Data Show Persistent State School Funding Cuts

A significant share of states are providing much less school funding than they were a decade ago, according to new data from the Census Bureau that we supplemented with our own look at state budget documents.

Together, state and local government school funding across the nation has finally recovered from the last recession, which took hold during the 2008 school year.  In the 2016 school year, state and local funding per student was just $5 below 2008 levels — essentially where it had been.  State and local funding in 27 states exceeded pre-recession levels in 2016, the first year since the recession when most states reached that threshold.

While combined state and local funding in 2016 was nearly back to pre-recession levels nationally, state funding was down $166 per student while local funding was up $161 (see chart).  The shift from state to local funding raises equity concerns.  Local funding relies heavily on local property taxes.  

Because school districts in neighborhoods with high property values find it much easier to raise adequate revenue than districts where property values are low, a shift toward more local funding can exacerbate school funding inequities.  States can offset local inequities using school funding formulas that provide more funds to lower-income school districts.  Some states have formulas that accomplish this goal; others do not, according to an analysis by the Education Law Center and Rutgers University’s Graduate School of Education.

Complete report