Association for Public Policy Analysis & Management

The typical narrative describing education spending in the second half of the 20^th and beginning of the 21^st centuries is that expenditures for K-12 public schooling have increased precipitously. This work unpacks these frequently touted trends in order to present a more nuanced depiction of how expenditures for public education have been changing in recent decades. A particular focus of this work is on trends related to school district indebtedness—outstanding borrowed monies and spending on interest towards these debts. We use district-level finance data from the US Census, supplemented with measures from the US Department of Education data, Common Core of Data, to look at different categories of education spending and disaggregate trends based on school district characteristics.

Using figures adjusted for inflation, we find that total per pupil expenditures in public school districts increased from just over $10,000 in 1996-97, to just under $13,000 in 2013-14—an increase of 25%. However, looking at aggregate spending disguises variation for different types of expenditures. There was over 25% growth in per pupil spending for instruction from the 1996-97 school year to the 2013-14 school year, from $5,400 to $6,800. Over the same period, per pupil expenditures towards debt interest increased by nearly 70%, from $210 to $360. Debt interest is a small portion of the total expenditures (3% nationally in 2013-14), but represents a proxy for trends in total debt spending, which is not captured in the available school district finance data. The growth in debt interest expenditures aligns with rapid growth in the amount of long-term debt held by districts. Together these trends suggest an increasing reliance on debt among US school districts. In the 2013-14 school year, the total amount of long-term debt held by school districts totaled nearly $8,500 for every public school student in the country—111% more debt per pupil than in 1996-97. In 2013-14, instructional expenditures totaled just over $6,800 per pupil. This was the 12th consecutive year when US school districts had more outstanding long-term debt than was spent on instruction during the school year.

Looking at these aggregate figures highlights national funding trajectories, but masks differences in trends for school districts with differing characteristics. For example, trends for spending on debt interest vary based on the urbanicity of school districts. Debt interest expenditures in suburbs, towns and rural areas increased by between 47% and 53% between 1996-97 and 2013-14. Over the same period, spending on debt interest more than doubled in cities from a total of $210 per pupil across all urban districts in 1996-97 to more than $425 in 2013-14.

While total spending has increased during the study period, looking at different categories of education expenditures reveals that the rate of growth is higher for costs associated with school district indebtedness than for spending on instruction. Further, disaggregating these trends based on school district characteristics, such as urbanicity and school-age poverty rates, demonstrate variation in trends that highlight key differences in how school funding has changed over time.