Elementary and Secondary Education Expenditures

State and Local Backgrounders Homepage

Spending on elementary and secondary education includes the operation, maintenance, and construction of public schools (kindergarten through high school, or “K–12”) and excludes spending on institutions of higher education. It also includes spending on other educational facilities and programs provided through the school system, such as libraries, technical-vocational training, school lunches, and guidance counseling.1

How much do state and local governments spend on elementary and secondary education?

In 2015, state and local governments spent $611 billion, or more than one-fifth of direct general spending, on elementary and secondary education.2 Elementary and secondary education was the single largest source of direct general spending at the state and local level in 2015, and it has been since 1977.

Nearly all (91 percent) of elementary and secondary education spending goes toward operational costs, such as salaries and benefits for public school employees engaged in instruction; administration; guidance counseling; textbooks; and other auxiliary services operated through the school system, such as transportation to schools and lunch programs. More specifically, forty-five percent of total state and local K-12 spending (included in the 91 percent of operational costs) goes toward payroll costs, including salaries and wages. The remaining 9 percent of total K–12 spending is on capital outlays, such as school construction and renovation and some equipment purchases.

How does state spending differ from local spending?

Local governments spend more of their budgets on elementary and secondary education than states. In 2015, 40 percent of local direct general spending went to elementary and secondary education compared with only 0.5 percent of state direct general spending.

K–12 education services are typically delivered to students directly by local school districts (or sometimes other local entities, such as municipalities or townships).3 In 2015, 99 percent of K–12 state and local direct spending occurred at the local level. In 29 states in 2015, 100 percent of state and local K–12 spending occurred at the local level. In only Hawaii, Alaska, Kentucky, and New Jersey did state governments provide over 5 percent of total K–12 spending. (Hawaii is an outlier, however, mainly because the Hawaii State Department of Education operates public schools directly—100 percent of direct educational spending occurred at the state level).

But much local direct spending is financed through state and federal funds. In the 2013–14 school year, the federal government provided 9 percent of total revenues for elementary and secondary education ($54 billion), states provided 46 percent ($292 billion), and local governments 45 percent ($282 billion).

The share of elementary and secondary education revenues coming from state aid 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. This increase has been attributed to 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.

How have elementary and secondary education expenditures changed over time?

In 1977, state and local governments spent $279 billion on elementary and secondary education (in 2015 inflation-adjusted dollars). In 2015, they spent $611 billion, or more than double that amount.

Between 1977 and 2015, however, other state spending grew faster than elementary and secondary education spending. Elementary and secondary education has declined as a percentage of direct state and local expenditures. In 1977, 26 percent of direct general expenditures went to elementary and secondary education compared with 22 percent in 2015.

How and why does spending differ across states?

Differences in per capita and per pupil spending highlight important variation in state spending on K–12 education. Across the US, state and local governments spent $1,904 per capita on elementary and secondary education in 2015.  In 2015, at $3,798 a person, the District of Columbia (DC) spent the most per capita on elementary and secondary education, followed by state and local governments in Alaska ($3,598), Wyoming ($3,279), New York ($3,228), and New Jersey ($2,951).5 State and local governments in Arizona spent the least on elementary and secondary education at $1,134 a person, followed by Idaho ($1,197), Florida ($1,317), North Carolina ($1,339) and Nevada ($1,391).

Data: View and download each state's per capita spending by spending category

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. 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.6

States that spend the least per capita on K–12 education often have the most kids and high enrollment in public schools. For example, a large percentage of Arizona’s population are 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.

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, but it does not provide complete information about policy decisions, class sizes, or labor costs.

Overall, the United States spent $12,099 per pupil in 2015.7 DC ($30,493), New York ($23,214), Wyoming ($20,161), Alaska ($20,140), and New Jersey ($18,980) all topped the list in terms of high per-pupil spending (as they did for per capita). Per pupil spending was lowest in Idaho ($6,772), Utah ($6,851), Arizona ($6,909), and Oklahoma ($8,586).

Interactive Data Tools

School funding: Do poor kids get their fair share?

What everyone should know about their state’s budget

 

Further Reading

A new tool to get under the hood of state and local budget choices
Tracy Gordon, TaxVox (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)

Prepping for the 2018 Legislative Session
Richard Auxier and Erin Huffer (2017)

Prepping for the New Session: End-of-Summer Reading for State Budget Analysts
Norton Francis, Sarah Gault, and Yifan Zhang (2016)

Prepping for the New Session: End-of-Summer Reading for State Budget Analysts
Norton Francis, Tracy Gordon, and Megan Randall (2015)

Governing with Tight Budgets: Long-Term Trends in State Finances
Norton Francis and Frank Sammartino (2015)

State Budgets in the Trump Era
Kim Rueben and Richard Auxier (2017)

Notes

1 Data are from the census expenditure functions E12, F12, G12, and K12. 

2 Direct general spending refers to all direct spending (or spending excluding transfers to other governments) except spending specially enumerated as utility, liquor store, employee-retirement, or insurance trust. Unless otherwise noted, all data are from the US Bureau of the Census, Survey of State and Local Government Finance, 1977–2015, accessed via the Urban-Brookings Tax Policy Center Data Query System, October 11, 2017, http://slfdqs.taxpolicycenter.org. The census recognizes five types of local government in addition to state government: counties, municipalities, townships, special districts (e.g., a water and sewer authority), and school districts. All dates in sections about expenditures reference the fiscal year unless explicitly stated otherwise. 

3 School districts can function as independent government entities or as fiscally dependent agencies of their parent government. For example, New York State is home to a mix of independent and city-dependent school districts. The five largest cities in New York all manage a fiscally dependent school system. New York City, for example, manages a dependent school system under its Department of Education.

4 See Sheila E. Murray, Kim Rueben, and Carol Rosenberg, “State Education Spending: Current Pressures and Future Trends,” National Tax Journal vol. LX no. 2, 325–345. The authors use data from the National Center for Education Statistics.

5 DC is often an outlier because, although it functions as a state and a locality, it most closely resembles a central city in terms of its population and economic activity, much of which comes from nonresidents. Its ranking among states should be interpreted within this context.

6 For an analysis of components of state and local spending using 2012 data, see the Urban Institute’s interactive tool, “What everyone should know about their state’s budget.

7 Calculation from the US Bureau of the Census, Survey of State and Local Government Finance, 1977–2015, accessed via the Urban-Brookings Tax Policy Center Data Query System, October, 2017, http://slfdqs.taxpolicycenter.org; US Department of Education, National Center for Education Statistics, Common Core of Data (CCD), “State Nonfiscal Survey of Public Elementary/Secondary Education,” 1990–91 through 2014–15; and State Public Elementary and Secondary Enrollment Projection Model, 1980 through 2026.