![]() While Congress has enacted one-time education spending increases in difficult economic times, spending on public education should be considered one of the automatic stabilizers in our economic policy toolkit, designed to automatically increase and thus spur aggregate demand when private spending falls. Increased spending on education could help boost economic recovery. Without increased federal education spending after recessions, school districts would suffer from an even greater decline in funding and even wider gaps between funding flowing to low-poverty and high-poverty districts. Increased federal spending on education after recessions helps mitigate funding shortfalls and inequities. The general, long-standing funding inadequacies and inequities combined with the worsening of these problems during and in the aftermath of recessions have both short- and long-term repercussions that are costly for the students as well as for the country. And even after catching up with pre-recession levels, revenue levels in high-poverty districts lag behind the per-student funding in low-poverty districts. For high-poverty school districts, it took even longer-until 2016–2017-to rebound to their pre-recession revenue levels. After the 2007 onset of the Great Recession, for example, funding fell, and it took until 2015–2016, on average, to return to their pre-recession per-student revenue and spending levels. Funding inadequacies and inequities tend to be aggravated when there is an economic downturn, which typically translates into problems that persist well after recovery is underway. ![]() Those problems are magnified during and after recessions. ![]() Education funding generally is inadequate and inequitable It relies too heavily on state and local resources (particularly property tax revenues) the federal government plays a small and an insufficient role funding levels vary widely across states and high-poverty districts get less funding per student than low-poverty districts. Our current system for funding public schools shortchanges students, particularly low-income students. Such a program would greatly mitigate cuts to public education as budgets are depleted, and also spur aggregate demand to give the economy a needed boost.įollowing are key findings from the report: Furthermore, spending on public education should be retooled as an economic stabilizer, with increases automatically kicking in during recessions. It calls for reforms that would ensure a larger role for the federal government to establish a robust, stable, and consistent school funding plan that channels sufficient additional resources to less affluent students in good times and bad. This report combines new data on funding for states and for districts by school district poverty level, and over time, with evidence documenting the positive impacts of increasing investment in education to make a case for overhauling the school finance system. The recovery in per-student revenues was even slower in high-poverty districts. Following the Great Recession that began in December 2007, per-student education revenues plummeted and did not return to pre-recession levels for about eight years. These challenges are magnified during and after recessions. ![]() And the system is ill-prepared to adapt to unexpected emergencies. Efforts states make to invest in education vary significantly. School districts in general-but especially those in high-poverty areas-are not spending enough to achieve national average test scores, which is an established benchmark for assessing adequacy. Districts in high-poverty areas, which serve larger shares of students of color, get less funding per student than districts in low-poverty areas, which predominantly serve white students, highlighting the system’s inequity. Most analyses of the primary school finance metrics-equity, adequacy, effort, and sufficiency-raise serious questions about whether the existing system is living up to the ideal of providing a sound education equitably to all children at all times. Education funding in the United States relies primarily on state and local resources, with just a tiny share of total revenues allotted by the federal government.
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