Elementary and Secondary Education Expenditures
Spending on elementary and secondary education includes the operation, maintenance, and construction of public schools (kindergarten through high school, or "K–12") and spending on other educational facilities and programs provided through the school system (e.g., libraries, technical-vocational training, school lunches, guidance counseling, and some adult education). It does not include spending on higher education.1
- How much do state and local governments spend on elementary and secondary education?
- How does state spending differ from local spending and what does the federal government contribute?
- How have elementary and secondary education expenditures changed over time?
- How and why does spending differ across states?
In 2018, state and local governments spent $668 billion, or more than one-fifth (21 percent) of direct general spending, on elementary and secondary education.2 As a share of direct state and local general spending, elementary and secondary education was the second-largest expenditure in 2018, only slightly trailing spending on public welfare (which includes Medicaid). K-12 education spending was the largest expenditure from 1977 to 2015. If federal transfers are excluded (that is, if only own-source funds are counted), elementary and secondary education is still the largest state and local spending item. The federal government spends on both elementary and secondary education and Medicaid, but it provides nearly two-thirds of Medicaid funds while only contributing a fraction of K-12 education dollars in most years (see the section on spending by level of government below).
Nearly all (90 percent) elementary and secondary education spending goes toward operational costs. This includes salaries and benefits for public school employees engaged in instruction, administration, guidance counseling, plus spending on textbooks and other auxiliary services such as transportation and lunch programs. The remaining 10 percent is spent on capital outlays, such as school construction and renovation.
Direct spending on elementary and secondary education is almost entirely done at the local level. In 2018, 99 percent of all direct spending on K-12 education was done by local governments.
The lopsided direct spending occurs because K–12 education services are typically delivered to students directly by local school districts (or sometimes municipalities or townships) and not states.3 In fact, school district spending accounted for nearly 80 percent of all state and local elementary and secondary education in 2017 (the most recent year that we have data for these levels of governments).
As a result, local governments spend a far larger share of their budgets directly on elementary and secondary education than states. In 2018, 40 percent of local direct general spending went to elementary and secondary education compared with less than 1 percent of state direct spending. Only in Alaska, Hawaii, Kentucky, and New Jersey did state governments deliver 5 percent or more of direct K–12 spending in 2018. Hawaii is an outlier because the Hawaii State Department of Education operates public schools and thus 100 percent of its direct educational spending occurred at the state level.
Among local levels of government, elementary and secondary education accounted for roughly 14 percent of both county and city/township budgets in 2017, reflecting school spending from dependent districts, where school districts are part of other local governments. Unsurprisingly, elementary and secondary education accounted for nearly all of school district budgets (91 percent).
However, while localities directly spent nearly all of this money, a majority of it was financed through state and federal funds. In the 2017–18 school year, the federal government provided 8 percent of total revenues for elementary and secondary education ($57 billion), states provided 47 percent ($344 billion), and local governments provided 45 percent ($333 billion).4
Given the decline in state and local tax revenue resulting from the COVID-19 pandemic, and the large amount of federal transfers for K-12 education approved by Congress in both the CARES Act and the American Rescue Plan, these numbers will probably look very different for fiscal years 2020 and 2021. However, it will be a few years until the US Department of Education publishes that data.
More broadly, the share of elementary and secondary education revenues coming from states has increased over time. In 1972, states' share of elementary and secondary education revenues was only 38 percent, but it grew to 49 percent by 1987.5 This increase has been attributed to court decisions, or the threat of court decisions, beginning with the California Supreme Court’s 1972 Serrano v. Priest decision, which mandated states increase equity and adequacy in their education finance systems.
From 1977 to 2018, in 2018 inflation-adjusted dollars, state and local government spending on elementary and secondary education increased from $296 billion to $688 billion, a 132 percent increase. Over the same period, state and local spending on all other expenditures increased nearly 200 percent. Thus, K-12 education spending growth lagged the growth of all other programs over this period. However, much of the increase in other state local expenditures came from the roughly 400 percent increase in public welfare spending, and most of that growth was driven by federal spending increases on Medicaid.
As a share of state and local direct general expenditures, elementary and secondary education has fallen from 26 percent in 1977 to 21 percent in 2018. Again, this change is not the result of lower state and local spending on K-12 education over the period but rather faster growth in public welfare spending, which grew from 13 percent to 22 percent over this period.
Differences in per capita and per pupil spending highlight important variation in spending on K–12 education across states. Nationally, state and local governments spent $2,106 per capita on elementary and secondary education in 2018. At $4,142, the District of Columbia spent the most per capita on elementary and secondary education.6 Among the states, New York ($3,681), Alaska ($3,120), New Jersey ($3,114), Vermont ($2,991), and Wyoming ($2,987) spent the most. State and local governments in Arizona spent the least on elementary and secondary education at $1,191 per person, followed by Idaho ($1,343), Florida ($1,377), Tennessee ($1,492), and North Carolina ($1,495).
Per capita spending is an incomplete metric because it doesn’t provide any information about a state's demographics, policy decisions, administrative procedures, or residents’ choices.
States whose governments spend the most per capita on K–12 education tend to have higher labor costs or employ more teachers per student, but they are not necessarily home to the most students. New York, for example, has relatively few school-age children as a share of total population, but the state has more teachers and staff per student than nearly any other state. It also pays them more, resulting in higher spending despite fewer kids.7
Some states that spend the least per capita on K–12 education have the most kids and high enrollment in public schools. For example, a large percentage of Arizona’s population is school-age children, and many of them are in public schools, but the state has fewer teachers per pupil and lower salaries than other states, translating to low per capita spending. In contrast, Hawaii has relatively few school-age children and low per capita spending but not relatively low per pupil spending because it has more teachers and higher pay than many states.
Thus, per pupil spending can provide a more nuanced picture because it reflects spending on students that are enrolled in the public K–12 educational system. However, it still does not provide complete information about policy decisions, class sizes, or labor costs.
Overall, the United States spent $13,571 per pupil in 2018.8 Among the states, New York spent the most per pupil ($26,621), followed by Vermont ($21,446), New Jersey ($19,763), Connecticut ($18,506), and Wyoming ($18,295). The District of Columbia's per pupil spending was $32,838. The above states also generally had the most per capita spending in 2018. Per pupil spending was lowest in Arizona ($7,470), Idaho ($7,573), Utah ($8,025), Oklahoma ($8,553), and Nevada ($9,772).9
Interactive Data Tools
How COVID-19-Induced Changes to K-12 Enrollment and Poverty Might Affect School Funding
Kristin Blagg, Emily Gutierrez, and Victoria Lee (2021)
Making Sense of State School Funding Policy
Matthew Chingos and Kristin Blagg (2017)
Assessing Fiscal Capacities of States: A Representative Revenue System–Representative Expenditure System Approach, Fiscal Year 2012
Tracy Gordon, Richard Auxier, and John Iselin (2016)