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Where’s the money going?

Contact: Nan Gibson (202) 331-5546 or Brian Lustig (202) 331-5530

Education Spending Stagnant in 1990s; as Special-needs Budgets Grow, Share of Spending on ‘Regular’ Education Falls 2%

Greater enrollment, other pressures reduce per-pupil spending in some districts

Washington, D.C. — America’s public schools have been roundly criticized for perceived inefficiency and lack of productivity as critics charge that growing budgets have not translated into improved performance by students. But a new report from the Economic Policy Institute (EPI) finds that per-pupil education spending has stagnated in recent years, and that programs other than general instruction account for an increasing share of school-district expenditures.

Where’s the Money Going? Changes in the Level and Composition of Education Spending, 1991-1996, by EPI research associate Richard Rothstein, shows that recent growth of per-pupil spending has been extremely modest, increasing only 0.7 percent overall during the period studied. Rothstein finds that the share of spending on ‘regular’ education has fallen by 2 percent in the 1990s as special-needs programs have grown.

The report examines shifts in the amount and composition of spending growth in nine representative American school districts between 1991 and 1996. Rothstein finds that regular classroom instruction has continued to fall in priority – a trend districts have found difficult to resist in the face of enrollment growth – resulting in the virtual stagnation of per-pupil spending from 1991 through 1996. The average spending growth of 0.14 percent annually over that period represents a significant slowdown from the 2 percent average yearly growth over the previous two decades.

Some of the report’s key findings:

  • The share of spending on regular education is shrinking: By the 1996 school year, regular education accounted for only 56.8 percent of all school spending, down from 58.5 percent in 1991
  • Special education spending grew to 19 percent of all school spending in 1996, up from 17.8 percent in 1991
  • School lunch and breakfast programs grew to 4.8 percent of total school spending in 1996, compared to 3.3 percent in 1991
  • Bilingual education programs grew to 2.5 percent of total school spending in 1996, up from 1.9 percent in 1991
  • Some districts have had to reduce per-pupil spending on regular students in response to the combined pressures of enrollment growth, inflation, and shifting priorities toward spending on special populations.

To conclude that special education and other special programs have grown at the expense of regular education, Rothstein cautions, is based “not on data but rather on speculation about what would have happened to regular education in the absence of the growth of special programs.” He adds, however, that the pattern of rapid growth of special programs and slow growth in regular education spending is “a phenomenon worthy of policy makers’ attention.”

Where’s the Money Going? follows up on Rothstein’s 1995 report for EPI, Where’s the Money Gone? Changes in the Level and Composition of Education Spending. That report challenged the popular notion that regular education spending had grown dramatically in the quarter-century since the mid-1960s. Rothstein and education consultant Karen Hawley Miles studied funding growth between 1967 and 1991 in the same nine school districts and found that the major share of increased spending over that period went to programs other than traditional school instruction.

The nine school districts studied in both reports as a representative sample are Anne Arundel Co., Md.; Bettendorf, Iowa; Boulder, Colo.; Claiborne Co., Tenn.; East Baton Rouge, La.; Fall River, Mass.; Los Angeles; Middletown, N.Y.; and Spring Branch, Texas.

Richard Rothstein is adjunct professor of public policy at Occidental College and a contributing editor of The American Prospect, as well as an EPI research associate. He is the co-author (with Karen Hawley Miles) of the 1995 EPI report Where’s the Money Gone? Changes in the Level and Composition of Education Spending and was co-editor (with Edith Rasell) of the EPI book School Choice: Examining the Evidence.

EPI gratefully acknowledges the Metropolitan Life Foundation for its support of work in this area.

The Economic Policy Institute is a nonprofit, non-partisan economic think tank based in Washington, D.C. Its founders include economic policy experts Jeff Faux, Lester Thurow, Robert Reich, Robert Kuttner and Ray Marshall.

For more information, contact:
Nan Gibson (202) 331-5546
Brian Lustig (202) 331-5530