Most States Spend Less Per Student Now Than Before the Recession

Most states are spending less per student this year than when the recession hit.

Teachers protest state education funding cuts in Los Angeles in 2011. Most states are spending less per student in 2013-14 than when the recession first hit.
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More than two-thirds of states are providing less per-student funding this school year than they did when the recession first hit, according to a report from the Center on Budget and Policy Priorities.

In a report released on Thursday, the center found that at least 34 states are providing less funding per student for the 2013-14 school year than in 2007-08, and that 13 of those states have cut per-student spending by more than 10 percent during that time. Additionally, the left-leaning group found 15 states made reductions to per-student spending in just the last year, despite the fact that many have had increases in tax revenues.

"At a time when states and the nation are trying to produce workers with the skills to master new technologies and adapt to the complexities of a global economy, this decline in state educational investment is cause for concern," the report says.

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And as states make deep cuts in education funding, local school districts are left to fill in the gap. These cuts can lead to job losses that slow the economic recovery from the recession and can sometimes hinder statewide education reforms, the report says.

In order to save money, school districts often lay off teachers, cut salaries for the teachers who remain, and are unable to hire better teachers. Many districts also increase class sizes and scale back on instructional opportunities, such as summer school programs, in order to save money.

But Don Soifer, executive vice president of the Lexington Institute, says the report raises questions about how states will address education reform moving forward.

"Education budgets are tight all over, and policymakers are increasingly mindful of that and looking at education reforms from a cost-benefit perspective," Soifer says. "It's going to be the new reality."

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Oklahoma and Alabama made the deepest cuts since 2008, with each reducing per-student spending by more than 20 percent. The Oklahoma Education Association estimates that the state has cut more than $300 million in education funding since 2009.

Although 30 states increased per-student funding for this school year, the amounts were generally not enough to make up for the cuts that have occurred during the last six years. Alabama, for example, is spending $49 more per student this year than in 2012-13, but overall has cut more than $1,000 per student since 2008, the report says.

Increased costs of state-funded services and a greater reliance on spending cuts than revenue increases have contributed to the sharp decline in state funding for education, the report says.

"Persistently high unemployment and continued low housing values have left people with both less income and purchasing power," the report says. "So states continue to receive less income and sales tax revenue, which are the main sources of revenue states use to fund education and other services."

Although state revenues are beginning to improve, tax revenues remain nearly 3 percent below 2008 levels, according to the report.

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Additionally, many states have faced increased financial pressures in the last few years as federal aid has decreased. Many states used emergency relief from the federal government to alleviate budgetary strains, but after the 2011 fiscal year, most of that aid expired.

"In the long term, the savings from today's cuts may cost states much more in diminished economic growth," the report says. "The deep education spending cuts states have enacted will weaken the future workforce by diminishing the quality of elementary and high schools."

Soifer, whose think tank supports a limited government approach to solving problems, said that as states continue to discuss how to fund education in a sustainable way, many may look to develop different funding models that include performance-based funding (such as the bill signed into law in Arizona this year) or more blended learning models incorporating education technology.