Education Spending Below Pre-Recession Levels in Most States

Last Updated: September 30, 2013

This article appeared in the September 2013 Rural Policy Matters.

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Spending on public education in at least 34 states is lower in 2013–14 than it was in 2008, according to a report released this month by the non-partisan Center on Budget and Policy Priorities (CBPP). The report, “Most States Funding Schools Less Than Before Recession” also found that at least thirteen states have cut state funding by more than 10% and that at least 15 states are providing less per pupil funding this year than last, despite generally increasing tax revenues. By contrast, thirteen states have increased funding for schools. Four states were not included in the report for reasons related to data collection.

The CBPP report attributes these funding reductions primarily to fallout from the recession, specifically observing that revenues in most states, while growing modestly, have not rebounded to pre-recession levels. Further, federal emergency aid to states and schools has expired; inflation and higher prices for certain goods have driven up the cost of maintaining similar levels of service and quality; and most states have been reluctant to balance budget cuts with mechanisms to generate new revenue.

Spending Cuts and Rural Schools, An RPM Perspective

The CBPP report found that the largest percentage cuts were in Oklahoma, which reduced state funding by 22.8%, totaling $810 per pupil. Alabama cut spending by 20.1% overall, trailing only Oklahoma in percentage cuts. Alabama’s per pupil cuts, however, were the nation’s largest at $1,242 per pupil. Arizona had the third largest percentage cuts at 17.2%, totaling $629 per student.

RPM observes that several of the states with the deepest cuts are states with high percentages of rural students, rural low-income students, and rural minority students and that these states had relatively low spending levels before the cuts began taking effect.

According to Why Rural Matters, 2011–2012 (WRM), 31.3% of students in Oklahoma, 39.7% of students in Alabama, and 17.7% of students in Arizona attended a rural school in the 2008–09 school year. That same year, 57.3% of Oklahoma’s rural students lived in poverty, the 5th highest percentage in the nation. In Alabama, 52.3% of rural students lived in poverty, the 9th highest percentage in the country. In Arizona 48.7% of rural students lived in poverty. All three states also have high percentages of rural minority students, 37.6% in Oklahoma (11th highest), 25.8% in Alabama (17th highest), and 55.5% in Arizona (3rd highest).

All three states had low levels of spending before recessionary cuts began taking effect. According to the U.S. Census Bureau's report, Public Education Finances 2008, (Table 8, page 8), Oklahoma spent only $7,685 per student in the 2007–08 school year, the fourth lowest per pupil expenditure in the nation. That same year, Alabama spent $9,103 per pupil, 18th lowest, and Arizona spent $7,608, third lowest. The national average expenditure was $10,259. It should be noted that these figures average both state and local expenditures. Districts with low local wealth, including most rural districts, generally spend below the state average.

Serious Consequences for Education Cuts

Most States Funding Schools Less Than Before Recession” argues that significant cuts to education spending have serious short and long-term consequences for the economy as well as for students. The cuts have forced an unprecedented elimination of 324,000 education jobs nationally, despite a national enrollment increase of about 775,000 K–12 students. Many states and districts have also reduced pay for teachers and others remaining in the education work force and cancelled or scaled back a variety of contracts. The report asserts that the reduction of jobs, pay, and contract activity have dampened overall economic activity and the recovery.

Education cuts have also had a direct impact on students, with long-term effects likely. Many states have increased class size, particularly problematic for young children and low-income students. States have also cut back on expanded learning time and teacher recruitment and support programs. Of the 40 states that offer pre-K programs, the CBPP report found that 27 states had cut funding and 16 had reduced the number of children served. RPM notes that high quality pre-K programs provide a variety of benefits, especially for low-income children, including helping to reduce achievement gaps and improving chances of graduation.

The CBPP report asserts that savings from the cuts may result in diminished economic growth in the long term by weakening schools and opportunities for a well-educated workforce. “At a time when the nation is trying to produce workers with the skills to master new technologies and adapt to the complexities of a global economy, large cuts in funding for basic education undermine a crucial building block for future prosperity,” the report concludes.

You can read the full report, “Most States Funding Schools Less Than Before the Recession” at


Read more from the September 2013 Rural Policy Matters.