Lingering Effects of the Recession on State Education Funding

A recent report by the Center on Budget and Policy Priorities (CBPP) revealed that education is still feeling the economic sting of the recession. State budgets reflect per pupil expenditures in 35 states are lower than in 2007-2008 when adjusted for inflation, and 14 states have effectively cut funding per student by over 10 percent in the last six years. 

Public education is funded largely at the state level – CBPP estimated 44 percent of education funds come from the state, making school district budgets highly reflexive to their state-level counterparts. According to the report, increasing education costs associated with more students in the system have not been met with state-level efforts to increase revenue. Instead, states typically address budget deficits by spending cuts, leaving programs like k-12 public education underfunded. 

Losing state funding puts school districts in an arduous position, as they have far fewer mechanisms by which to close budget shortfalls. Increases in revenue could come from politically difficult property tax hikes, and spending cuts would dictate shrinking other local services, like the fire department or police force.
At the same time they are dealing with budget shortfalls, states have found themselves under immense pressure from the federal government to reform their education system through the Race to the Top Program, created by the American Recovery and Reinvestment Act of 2009. Race to the Top incentivizes states to undergo comprehensive, and often expensive, education reform including turning around low performing schools and developing and meeting standards for students, teachers and administrators. Race to The Top funds are currently appropriated to 19 states, although a total of 34 states modified education policy to adhere to the federal guidelines.
For states unable to fund public education as it stands, comprehensive reform is a tall task.  A new wave of education research has found that student achievement can be increased by individual attention through tutoring, increased instructional time – through longer school days or voluntary weekend workshops – and ongoing teacher feedback from administrator evaluations to improve instruction. Lengthening school days and hiring more teachers and administrators to enact these or similar measures are pricey. Federal grant funding could cover some of the costs, but part of the burden would inevitably fall on states incapable of funding current education systems.
As CBPP points out, education budget cuts damage state economies in the short-term and long-term. School districts lost 324,000 jobs since 2008, and employment in that sector is just now beginning to recover. Perhaps a more troubling economic consequence lies in the years ahead: students attending schools that were squeezed by spending cuts will be entering the workforce in droves over the next several years – high school freshmen in 2007-08 are now in their early twenties – and a clearer narrative detailing the effects of education cuts will begin to emerge.