School Finance

If you think apprenticeship sounds like a relic from centuries past — good enough for Ben Franklin but a no-go in a 21st-century economy — think again, Institute Fellow Robert Lerman explains in a commentary for thestate.com

Education is a key pathway out of poverty, yet schools that primarily serve minority students often fail to provide the educational opportunities available in predominantly white schools. A series of state court cases has addressed one cause of that disparity, the dramatic funding differences that result from reliance on local property taxes to fund schools. This paper examines the success of court-mandated solutions in equalizing spending per pupil across districts serving minority and white students. However, we show that there remains much disparity in other measures of educational quality and outcomes.

Relative to previous recessions, the 2001 recession was short and not very deep. Even so, it had a significant effect on the fiscal condition of state and local governments. This report examined how the recession affected state and local government spending on K-12 education in the three years since the recession. We track the historic pattern at the national level of state and local spending on K-12 education and then turn to a state-level analysis of how K-12 education was affected by the recession, including correlations between local education spending patterns and state patterns.

Education expenditures are one of the largest spending areas for state and local governments, and per–pupil expenditures have been growing over time. We examine trends in state aid for education and overall education spending and decompose the existing drivers behind growing state costs. We then explore how predicted future demographic trends will affect education spending levels, as the percent of the population that is of school age falls. We conclude that there will continue to be a large state role in education funding, but demographic changes may lead to reduced political support for schools in the future.

The existence of local governments will be in jeopardy without a significant change in the way they are financed, David Brunori warns in the new edition of his Urban Institute Press book "Local Tax Policy: A Federalist Perspective."