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U.S. Census Bureau

States slashing education spending

Thomas C. Frohlich and Alexander E.M. Hess
24/7 Wall St.

State-level K-12 education spending has fallen dramatically in many states since 2008. In that time, 29 states cut per pupil spending, shifting the burden of financing education to local school districts and, in many instances, forcing schools to cut costs and even teachers.

State-level K-12 education spending has fallen dramatically in many states since 2008.

Based on the Center for Budget and Policy Priorities (CBPP) 2014 report, "Most States Funding Schools Less Than Before the Recession," 24/7 Wall St. reviewed the 14 states with at least 10% declines in state general education funding between fiscal year 2008 and fiscal year 2015. In Oklahoma, per pupil spending fell by nearly 24%, the largest decline nationwide. These are the states slashing school spending.

According to Michael Leachman, director of State Fiscal Research at the CBPP, "the Great Recession was very damaging for state finances, and states have varied in their policy responses." State lawmakers needed to decide whether to raise taxes during an economic downturn, or cut school funding. A majority of the states with the largest reductions in school spending have cut income tax rates in recent years. Leachman argued that "at a time when the recession is still causing damage to state finances . . . these states have just made it harder for themselves to recover."

To make matters worse, major federal education aid programs for states have also been drying up since the recession. For example, federal aid for K-12 education for schools with high proportions of low-income families decreased by 10% between 2010 and 2014.

Leachman pointed out that school spending is essentially a long-term investment, especially as jobs continue to require more educated workers. "The jobs of the 21st century are jobs that require a highly educated workforce … and if we are underfunding the education of our children, that's going to hurt our economy and all of us in the long run." Many of the states cutting funding the most are also among those with the poorest educational outcomes.This states in particular are arguably the ones that can least to make these cuts.

Students in six of the 14 states with the largest funding cuts performed worse than students across the nation on math and reading standardized tests. These states also have among the lowest educational attainment rates. While nearly 30% of the nation's adults had completed at least a bachelor's degree last year, 11 states had lower educational attainment rates.

To identify the states slashing education spending the most, 24/7 Wall St. reviewed the CBPP's 2014 report, "Most States Funding Schools Less Than Before the Recession," which analyzed state level general formula funding between fiscal 2008 and the current fiscal year. State formulas typically fund the majority of state-level education expenditures, but do not include all state sources of funding. Frequently, most state fund preschool and teacher retirements outside of these formulas.

In addition to CBPP data on school spending, we reviewed 2013 educational attainment rates from the U.S. Census Bureau's American Community Survey (ACS). We also looked at educational achievement using National Association of Education Progress (NAEP) test scores.

These are the states slashing education spending.

1. Oklahoma

> Pct. chg. per pupil spending (FY08-FY15): -23.6%
> FY15 per pupil spending: $2,769 (3rd lowest)
> Decline in per pupil spending (FY08-FY15): $875 (5th largest)
> Adults with bachelor's degree: 23.8% (8th lowest)

Spending on education in Oklahoma has fallen by 23.6% since fiscal 2008, by far the largest decrease nationwide. The state's education general funding formula allocated just $2,769 per student as of the current fiscal year, lower than all but two states. Like most states slashing education spending, Oklahoma students performed worse on standardized math and reading tests than their peers in most other states. And while nearly 30% of adult Americans had completed at least a bachelor's degree, less than 24% of Oklahoma adults had done so as of last year, one of the lower rates nationwide. While most states increased funding for schools over the past year, per pupil expenditure fell 0.8% in Oklahoma.

2. Alabama

> Pct. chg. per pupil spending (FY08-FY15): -17.8%
> FY15 per pupil spending: $5,199 (18th highest)
> Decline in per pupil spending (FY08-FY15): $1,128 (the largest)
> Adults with bachelor's degree: 23.5% (7th lowest)

In dollar terms, school spending in Alabama has fallen more than in any other state. Alabama spent $1,128 less per student this year than it did in fiscal 2008. While this amounts to a nearly 18% spending cut — second only to Oklahoma — Alabama still spends more per student than the majority of states. In fiscal 2015, school funding totalled $5,199 per student, one of the higher figures nationwide. However, the relatively high expenditure seems to have done little to improve test scores. Alabama school-age children performed worse on the NAEP than students in the vast majority of states.

3. Arizona

> Pct. chg. per pupil spending (FY08-FY15): -17.5%
> FY15 per pupil spending: $3,114 (6th lowest)
> Decline in per pupil spending (FY08-FY15): $663 (10th largest)
> Adults with bachelor's degree: 27.4% (22nd lowest)

Arizona is one of only four states where state funding has fallen by more than 15% since fiscal 2008. State general funding for fiscal 2015 totalled just $3,114 per student, less than in all but a handful of states. Like in many states cutting education spending, Arizona students performed poorly on standardized tests — particularly in reading — compared to their peers in other states. In recent years, Arizona legislators have cut corporate and capital gains taxes, which are sources of state revenue and, ultimately, school funding. And with three candidates for governor stating they would either reduce or do away with state income taxes if elected, Arizona education expenditures may continue to decline.

4. Idaho

> Pct. chg. per pupil spending (FY08-FY15): -16.2%
> FY15 per pupil spending: 5,005 (23rd highest)
> Decline in per pupil spending (FY08-FY15): $964 (3rd largest)
> Adults with bachelor's degree: 26.2% (13th lowest)

The 1.5% hike in per pupil spending in the most recent fiscal year was not enough to reverse years of state education spending cuts in Idaho. Between fiscal years 2008 and 2015, Idaho cut spending per pupil by more than 16%, or by $964 after adjusting for inflation. However, K-12 general funding isn't the only education spending measure that's been severely reduced. A recent study by the Idaho Center for Fiscal Policy found that state funding for higher education had fallen from 92.8% of total funding in 1980 to just 53.3% last year. Idaho is also among a minority of states that does not offer public preschool.

5. Wisconsin

> Pct. chg. per pupil spending (FY08-FY15): -14.6% (tied-fifth highest)
> FY15 per pupil spending: $5,028 (22nd highest)
> Decline in per pupil spending (FY08-FY15): $1,014 (2nd largest)
> Adults with bachelor's degree: 27.7% (24th lowest)

Wisconsin is one of only two states where spending per pupil has fallen by more than $1,000 since fiscal 2008. The spending cuts were likely due, in part, to several large tax cuts passed in recent years and the resulting lower state revenue. According to the Wisconsin Budget Project, the legislature cut income taxes last year, which reduced state tax revenue by more than $320 million in both fiscal 2014 and 2015. Still, 91% of Wisconsin adults had completed at least high school last year, one of the higher rates nationwide. The 27.7% of adult residents who had completed at least a bachelor's degree, however, was lower than the national rate of nearly 30% in 2013.

6. Kansas

> Pct. chg. per pupil spending (FY08-FY15): -14.6% (tied-fifth highest)
> FY15 per pupil spending: $5,981 (10th highest)
> Decline in per pupil spending (FY08-FY15): $861 (4th largest)
> Adults with bachelor's degree: 31.1% (16th highest)

While education spending in Kansas has fallen by 14.6% since fiscal 2008, the state still spends more than most states on K-12 education. General school funding totalled $5,981 per pupil as of the current fiscal year, one of the higher figures nationwide. However, Kansas schools are still feeling the cuts. Schools have gained nearly 20,000 students statewide since the recession but have 665 fewer teachers, according to the Kansas Center for Economic Growth. And returning to past spending levels may be difficult, as revenue from income taxes had been declining in recent as a result of income tax rate cuts. According to The New York Times, Kansas collected $700 million less in tax revenue in fiscal 2014 compared to the previous fiscal year. School funding is currently drawn from the state's operating reserves, which are expected to dry up next fiscal year at the latest.

7. North Carolina

> Pct. chg. per pupil spending (FY08-FY15): -14.5%
> FY15 per pupil spending: $5,030 (21st highest)
> Decline in per pupil spending (FY08-FY15): $855 (6th largest)
> Adults with bachelor's degree: 28.4% (23rd highest)

North Carolina cut per pupil spending by 4.7% between the 2014 and 2015 fiscal years, the second largest decline in the nation that year. Since fiscal 2008, North Carolina has cut education spending per pupil by 14.5%. Despite these cuts, North Carolina's general school funding per student still ranked in the top half of states nationwide. Education spending cuts have been a major talking point in the upcoming midterm election campaigns. One ad accused Thom Tillis, Republican candidate for Senator, as having cut $500 million from education as a state legislator — a claim Factcheck.org describes as "outdated and exaggerated."

24/7 WALL ST.: The rest of the 14 states slashing education spending

24/7 Wall St. is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

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