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New State, Local Dynamic Emerges in School Funding

Last week I highlighted a report from the Education Law Center showing that as of 2009 there were significant inequities in the way states funded schools, specifically the way they funded low-poverty and high-poverty schools. Now the Public Education Finances report, released last month by the U.S. Census Bureau, looks at how school funding was divided up between Uncle Sam, the states and local officials in fiscal 2010.

What's notable here is that for only the second time since 1977, as the bureau states, that total state funding declined from the prior year (the decline also took place between 2008 and 2009). School revenue from state sources dropped by 6.5 percent from 2009, for a total of $18 billion. You can also see in the report that the total level of local-level funding for education topped total state-level funding, $261 billion to $258 billion.

Federal spending accounted for $74 billion. As recently as fiscal 2009, according to the New America Foundation's Federal Education Budget Project, states funded 47 percent of K-12 spending, compared to 44 percent from local governments.

That funding distribution in which local governments actually carry more of the load than states could create problems in other policy areas.

State education leaders often say they are concerned about the growing role of the federal government in education policy, yet many local governments and school districts could make the same complaints about state policy. At a time when states are in many cases increasingly aggressive about mandating new education policies, could local governments and districts start to argue that it is unfair for them to shoulder the lion's share of the costs but get shut out of many of the state-level policy debates? Perhaps as states' revenues recover, this will be a short-lived phenomenon. After all, the numbers are from 2010, a year that may already feel "old" to reporters and other observers. But tensions between states and their local leaders are always worth watching.

A few other tidbits from the U.S. Census report:

  • Total revenues for public K-12 schools in the U.S. reached $594 million in fiscal 2010.
  • Per-pupil spending in U.S. public schools reached $10,615 in fiscal 2010, more than double the $5,001 figure in 1992.
  • Four states (New Jersey, New York, Vermont and West Virginia) spent $55 or more for every $1,000 of personal income in fiscal 2010.
  • Total school system debt jumped by 1.9 percent from 2009 to 2010, up to $407 billion.
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