United States General Accounting Office

GAO Report to Congressional Requesters

September 1995 SCHOOL FINANCE

Trends in U.S.

Education Spending

GAO/HEHS-95-235

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-259607 

September 15, 1995

The Honorable Jeff Bingaman

The Honorable Christopher Dodd

The Honorable Paul Simon

United States Senate

Education spending is an important part of the U.S. economy and

traditionally has been the largest state expenditure. In school year 1993-94,

expenditures in all elementary and secondary schools totaled an estimated

4.5 percent of the gross domestic product, or $285 billion.1

 Yet education,

like many other budgetary items, faces tight fiscal constraints at federal,

state, and local levels, while pressures for public funds are increasing.

As we reported last year,2

 our nation’s school-age population became

increasingly poor, racially and ethnically diverse, and at risk of school

failure during the 1980s.3

 Schools have been addressing some needs of

at-risk children through a variety of compensatory education and

education reform efforts. Demands on funds authorized by the Elementary

and Secondary Education Act (ESEA)—the federal government’s primary

funding source for addressing those needs—have increased due to higher

numbers of at-risk children.4

 However, while states and localities face hard

budget choices, the federal government may also be reducing future

spending.

Successfully educating at-risk populations depends, in part, upon adequate

and equitable funding.5

 For this reason, you asked us to examine the

1

Includes public and private elementary and secondary schools.

2

School-Age Children: Poverty and Diversity Challenge Schools Nationwide (GAO/HEHS-94-132, Apr.

29, 1994).

3

School-age children are children aged 5 to 17 living in families. Families are defined as households in

which one or more people are related. We chose this population because it is the same population

used in the Elementary and Secondary Education Act’s (ESEA) Title 1 allocation formula.

4

We also reported on the poor condition of many of America’s school facilities. For more information,

see School Facilities: Condition of America’s Schools (GAO/HEHS-95-61, Feb. 1, 1995) and School

Facilities: America’s Schools Not Designed or Equipped for the 21st Century (GAO/HEHS-95-95, Apr. 4,

1995).

5

Proponents of greater financial support for education would argue that the need for resources has

increased in recent years due to (1) an increased number of at-risk children; (2) local, state, and

federal support for higher academic standards related to education reform; and (3) a need for adequate

facilities with greater technological capability to support education reform. Opponents of greater

financial support for education would argue that increases in educational productivity have not

followed previous increases in funding for education. However, both sides agree that looking at how

funds are spent, as well as the overall level of education spending, is important.

Page 1 GAO/HEHS-95-235 U.S. Education Spending
B-259607 

current status and trends in public education spending. Specifically, you

asked us to answer the following questions:

• What are the current expenditure levels for education and how have they

changed over time?

• What roles do local, state, and federal governments play in financing

education in the United States, and how have these roles changed over

time?

• How do states differ in their capacity to provide resources for education

and their relative tax effort?

To answer these questions, we examined national and state trends in

education spending and revenues using data from the Department of

Education’s National Center for Education Statistics (NCES) and other

sources. In addition, we developed measures of states’ ability and

willingness to raise revenues for education and examined trends using

data from the Department of the Treasury. (See app. I for details.)

Several aspects of our analysis should be noted. First, all trend analyses

comparing finance data for several years are in constant dollars. In

addition, when reporting state trend data, we provided information on the

50 states; we did not include the District of Columbia. Second, data in this

report represent varying time spans because we used the most recent

actual and estimated NCES data. However, where possible, trend data in the

report start in the 1960s to show long-term trends since ESEA’s passage,

which marked the beginning of a major federal role in education. Third,

although we present some answers to the third research question you

asked us to address, a separate report will discuss how individual states

approach education funding, including the legal, budgetary, and legislative

barriers they face.

We conducted our work between October 1994 and September 1995 in

accordance with generally accepted government auditing standards.

Results in Brief Since 1980, total real expenditures (that is, expenditures in constant

dollars) in public elementary and secondary schools have increased, while

the average national per pupil expenditure increased then stabilized after

1989. From the 1979-80 school year to the 1992-93 school year, total public

expenditures for elementary and secondary education increased by 40

percent to $254.4 billion. In addition, since 1990, public school enrollments

began to increase after a decade of decline in the 1980s, when public

Page 2 GAO/HEHS-95-235 U.S. Education Spending
B-259607 

school enrollment decreased to a low of 39.2 million children in the school

year 1984-85. This upward trend is expected to continue, with public

school enrollment increasing by 11 percent between school years 1993-94

and 2000-01 to about 48.3 million.

Moreover, the number of poor children is also increasing at a high rate.

The cost of educating these and other at-risk children is generally higher

than the cost of educating children not at risk. However, since 1989, after

years of increase the average per pupil expenditure6

 for elementary and

secondary education has leveled off. In school year 1992-93, the current

average per pupil expenditure was $5,296.

Such leveling off is due, in part, to a leveling off in the states’ share of

education funding. Beginning in the 1970s, the overall trend was for states

to assume a greater and greater share of education funding until their

share peaked at 49.7 percent in school year 1986-87. By school year

1989-90, it had decreased to 47.3 percent. By school year 1992-93, state and

local shares of total education spending were roughly equal, estimated at

45.6 percent ($113 billion) and 47.4 percent ($118 billion), respectively.

In looking at trends in competition for state revenues, we found that

education’s share of state budgets decreased between fiscal years 1987

and 1994, while Medicaid, which provides medical care for the poor, and

corrections, which builds and operates prisons, increased their shares.

The portion of state budgets designated for elementary and secondary

education decreased by about 11 percent, while Medicaid’s share

increased sharply by 90 percent and corrections’ by 10 percent.

In addition, while states’ ability to raise revenues for education grew more

quickly from 1982 to 1992 than overall ability to raise revenues, states’

willingness to raise revenues for education grew more slowly than

willingness to raise revenues for overall spending. The ability of states to

raise taxes and revenues on the basis of taxable resources (fiscal capacity)

and each state’s willingness to tax those resources (fiscal effort) vary

widely. States also differ in ability and willingness to raise revenues for

education and for overall government services.

State and local governments feel pressure from different sources,

including growing numbers of students—especially at-risk

students—those who want to improve America’s schools through

6

This is the current average per pupil expenditure—that is, total expenditure, excluding capital outlay

and interest on debt.

Page 3 GAO/HEHS-95-235 U.S. Education Spending
B-259607 

education reform, and state court challenges to school funding to increase

education spending in less wealthy school districts. Education is losing its

dominance of state budgets as it competes with other public services, such

as Medicaid and corrections, for public funds.

Background America’s elementary and secondary schools are funded primarily by state

and local revenue sources. State revenues derive primarily from general

sales, personal income, and corporate taxes. Localities raise revenues

primarily through property taxes and, to a lesser extent, local sales and

income taxes. Federal aid to education has historically been provided to

supplement state and local funds for students with the greatest needs.

State school finance programs are meant to meet the educational needs of

children, while considering budget priorities in each state. Finance

programs vary in complexity as well as in the amount spent per pupil.

Some of this variation in per pupil expenditures is accounted for by

differences in the cost of educational services, the property wealth of the

state, the amount the state is willing to spend for education, or the funding

formula used by the state. In some states, this variation has led to lawsuits

challenging funding formulas.

Total Expenditures

Have Increased Since

1979-80

From 1979-80 to 1992-93, total real expenditures for public elementary and

secondary education increased by 40 percent to $254.4 billion. Total

expenditures have generally increased since the 1960s, except for a slight

decline between 1977 and 1980. Between 1989-90 and 1992-93,

expenditures increased by 6 percent, similar to the rate of increase in

public school enrollment during this time. This increase in total

expenditures contrasts with the levels in the 1970s, when the totals

remained somewhat level until increasing to approximately $189 billion in

1977-78 (see fig. 1).

Page 4 GAO/HEHS-95-235 U.S. Education Spending
B-259607 

Figure 1: Both Total Expenditures and Public School Enrollment Levels Increased During the 1990s (in Constant 1993

Dollars)

Total Expenditures (in Billions)

0

50

100

150

200

250

300

1963-64

1965-66

1967-68

1969-70

1971-72

1973-74

1975-76

1977-78

1979-80

1981-82

1983-84

1985-86

1987-88

1989-90

1991-92

0

10

20

30

40

50

60

Public School Enrollment


Total Expenditures

Years

Public School Enrollment (in Millions)

Source: NCES.

Page 5 GAO/HEHS-95-235 U.S. Education Spending
B-259607 

Public School Enrollment

Has Grown Since 1990 and

Is Expected to Grow More

in the Future

Since 1990, enrollment has begun growing after generally leveling off in

the 1980s. In 1980-81, public school enrollment was 40.9 million; it

declined to a low of 39.2 million in 1984-85. Thereafter, public school

enrollment began growing slowly and in 1989-90 reached 40.5 million.

From 1989-90 to 1992-93, public school enrollment increased by 6 percent,

to 42.8 million. By the school year 2000-01, this enrollment is projected to

increase to 48.3 million (see fig. 1).7

In addition, the number of at-risk children in all categories has increased

since 1980. Between 1980 and 1990, the number of poor school-age

children increased by about 6 percent to 7.6 million, while the overall

school-age population declined.8

 The numbers of other types of at-risk

students, such as those with limited English proficiency (LEP), immigrants,

and students needing special education, have all increased at similar or

higher rates (see app. II, table II.2). We also examined data on all children

under age 18, school age and nonschool age, because they provide a more

comprehensive measure of the number of children expected to enroll in

school currently and in the future. From 1980 to 1993, the number of poor

children under age 18 in families increased by 35 percent, from

11.1 million to 15 million (see app. II, fig. II.4).

The growth in these at-risk populations has increased the demand for

specialized classroom services. Regular classroom services increasingly

include special education for the physically and mentally challenged,

compensatory education for the economically disadvantaged, and

language services for LEP students. In addition, many schools will have to

address the needs of other at-risk students, such as children who change

schools frequently9

 and are, therefore, more likely to be low achievers and

have other difficulties such as health and nutrition problems.

Because of the additional services associated with educating poor and

other at-risk students, many schools face elevated cost requirements and

must find ways to stretch current funding levels to pay for these services.

This is more difficult in areas with high concentrations of poverty because

such areas are frequently limited in their ability to raise revenues. This

limitation is partially offset, in many states, by federal and state

categorical education programs.

7

Projections of Education Statistics to 2005, NCES, U.S. Department of Education

(NCES-95-169)(Washington, D.C.: Jan. 1995).

8

School-Age Children: Poverty and Diversity Challenge Schools Nationwide.

9

Elementary School Children: Many Change Schools Frequently, Harming Their Education

(GAO/HEHS-94-45, Feb. 4, 1994).

Page 6 GAO/HEHS-95-235 U.S. Education Spending
B-259607 

Per Pupil Expenditures

Have Recently Leveled Off

After decades of increase (with one plateau in the late 1970s), per pupil

expenditures for elementary and secondary education leveled off

beginning in 1989-90, increasing less than 1 percent, on average, each year

until 1992-93 (see app. III, fig. III.1). This leveling off of per pupil

expenditures is due, in part, to the increased number of children who

enrolled in our nation’s schools since 1990 and the effects of the 1990-91

recession. Before the 1990s, education spending—measured as current per

pupil expenditures—rose steadily. Data going back to the 1960s show a

rapid increase in expenditures—up 69 percent for the decade, with a

slower rate of increase in the 1970s—35 percent—and a similar increase in

the 1980s—33 percent.10

For the nation, the average total per pupil expenditure for 1992-93, using

fall enrollment as a measure, was $5,296, although per pupil expenditures

vary throughout the United States. In 1992-93, per pupil expenditures for

the states ranged from $3,700 to $10,100 (see app. III, table III.2). From

1981-82 to 1992-93, on average, most states’ per pupil expenditure

increased between 25 and 50 percent (see app. III, fig. III.2).

Per pupil expenditures may vary substantially within a state. For example,

in Texas, some school districts spent more than twice as much on total

operating expenditures per pupil than others. While districts at the low

end, the 5th percentile, spent $3,650 per pupil, high-spending districts, at

the 95th percentile, spent $7,928 per pupil in 1993-94. These differences

may exist, in part, however, because of geographic cost-of-living

differences and differences in pupil needs.

State Share for

Education Spending

Leveled Off

The previously increasing state share of education spending leveled off

beginning in 1989-90 (see fig. 2). Since the early 1970s, the states had

provided an increasingly larger share of education spending. In 1969-70,

the state share was 39.9 percent, and it increased by 17 percent to 46.8

percent in 1979-80. In 1986-87, the state share had peaked at 49.7 percent.

By 1990, the state share had decreased to 47.3 percent. In 1992-93, the

state and local shares were roughly equal, with localities contributing a

slightly larger share (47.4 percent or $118 billion) than states (45.6 percent

or $113 billion). Some states’ shares declined further.

10Declining enrollments in the 1970s and 1980s may have contributed to increases in per pupil

expenditures.

Page 7 GAO/HEHS-95-235 U.S. Education Spending
B-259607 

Figure 2: Local, State, and Federal Shares of Education Spending

Percent

0

10

20

30

40

50

60

1963-64

1969-70

1974-75

1979-80

1984-85

1989-90

1992-93

Year

Federal Share

State Share

Local Share

Source: NCES.

Although localities had historically been the major contributors for

education revenues, states began playing a larger role in funding education

in the 1970s and 1980s. During this time, states sought to reduce the fiscal

disparities among districts and became more involved in education reform

efforts.

Localities’ share decreased by 17 percent from 52.1 percent in 1969-70 to

43.4 percent in 1979-80. During the 1980s, the localities’ share leveled off. It

rose slightly from 1988-89 to 1992-93—from 46 to 47.4 percent.

Page 8 GAO/HEHS-95-235 U.S. Education Spending
B-259607 

During the 1970s, the federal share also began to rise, largely as a result of

the increased number of programs for at-risk children. In 1969-70, the

federal share was 8 percent, increasing to 9.8 percent in 1979-80.

Thereafter, during the 1980s, the federal share decreased and reached a

low of 6.1 percent in 1989-90. In 1992-93, the federal share increased to 6.9

percent or $17 billion.

State, local, and federal shares for education spending vary by state. In

1991-92, state contributions ranged from a high of 73.8 percent in New

Mexico to a low of 8.5 percent in New Hampshire, where citizens regard

education as a local responsibility.11 Most states contribute between 30

and 70 percent. Local contributions range from 14 to 88 percent, and the

federal contributions per state range from 3 to 17 percent (see app. IV,

table IV.2).

Elementary and Secondary

Education’s Share of State

Budgets Decreased

Between fiscal years 1987 and 1994, the relative share of elementary and

secondary education spending in state budgets12 decreased by 11 percent.

In fiscal year 1987, education accounted for 22.8 percent of total state

spending but decreased to 20.3 percent by fiscal year 1994 (see app. V, fig.

V.1). This decrease in the percent of states’ budgets spent for education

occurred, in part, because of increased spending for Medicaid13 and

corrections (see fig. 3). State shares for education and other government

services declined because of relatively weak economic growth as well as

the budget effects of state and federal mandates.14

11Hawaii contributes 90.3 percent, but the state differs from the others because it is the school district,

funding and operating all public schools.

12State budgets include general and other state, federal, and bond funds. Trends were generally similar

when considering changes in shares of the general fund alone.

13The federal government provides a large portion of the funds for Medicaid.

14State and Local Finances: Some Jurisdictions Confronted by Short- and Long-Term Problems

(GAO/HEHS-94-1, Oct. 6, 1993).

Page 9 GAO/HEHS-95-235 U.S. Education Spending
B-259607 

Figure 3: Education’s Share of State

Budgets Decreased, While

Corrections’ and Medicaid’s Shares

Increased, Fiscal Years 1987-1994

Percent Change

-20

-10

0

10

20

30

40

50

60

70

80

90

100

Elementary and Secondary Education

Higher Education

Cash Assistance

Medicaid

Corrections

Transportation

All Other Expenditures

State Expenditures

Source: National Association of State Budget Officers.

State education needs compete for funds with other state services, and

relative budget shares have shifted since fiscal year 1987. Between fiscal

years 1987 and 1994, Medicaid’s share of states’ budgets increased sharply

by 90 percent, from 10.2 to 19.4 percent. In addition, corrections’ share

increased by 10 percent, from 3 to 3.3 percent. Meanwhile, elementary and

secondary education’s and higher education’s shares decreased by

11 percent and 15 percent, respectively. In fiscal year 1990, Medicaid

surpassed higher education as the second largest state program; in fiscal

year 1994, Medicaid was nearly equal to elementary’s and secondary’s

share of 20.3 percent (see fig. V.1). Medicaid spending, which provides

medical care for the poor and is mandated by the federal government and

administered by states, has been absorbing the bulk of additional revenue

generated in many states. Twenty-four states experienced double-digit

growth in total Medicaid spending between fiscal years 1993 and 1994.

Page 10 GAO/HEHS-95-235 U.S. Education Spending
B-259607 

Increased corrections spending is due, in part, to court orders imposed on

states requiring the relief of overcrowded prisons or improved prison

conditions as well as to an increased number of prisoners.

States’ Ability and

Willingness to Raise

Revenues Vary Widely

We developed a measure of a state’s ability15 to raise taxes and revenue

based on taxable resources, accounting for differences among states in

purchasing power and population (see app. I). In 1992, states with high

ability to raise revenue were usually resource rich, had populations with

high incomes and high property values, or had large tourist industries. The

seven states that have very high ability to raise revenue overall—that is,

115 percent or more of the U.S. average—are Alaska, Connecticut,

Delaware, Hawaii, Massachusetts, New Jersey, and New York. Those with

very low ability to raise revenue overall—that is, below 85 percent of the

U.S. average—are Alabama, Arizona, Arkansas, Idaho, Kentucky,

Mississippi, Montana, New Mexico, Oklahoma, South Carolina, Utah, and

West Virginia. (See app. VI and figs. VI.1 and VI.2.)

We also examined each state’s ability to raise revenue for kindergarten to

twelfth grade education using a cost-adjusted measure of total taxable

resources per child enrolled in public schools. Six of the seven states with

very high ability to raise revenue overall also had very high ability to raise

revenue for education (115 percent or more of the U.S. average):

Connecticut, Delaware, Hawaii, Massachusetts, New Jersey, and New

York. Eight states had very low ability to raise revenue for education (less

than 85 percent of the U.S. average): Arizona, Arkansas, Idaho, Mississippi,

Montana, New Mexico, Utah, and West Virginia. (See app. VI, fig. VI.2 and

table VI.1.) These 8 states are among the 12 with very low ability to raise

revenue overall.

States, however, vary in their willingness to raise revenue, which we

measured as actual state revenue relative to the state’s ability to raise

revenue. Some states tax heavily because their citizens have a strong

preference for public services; other states tax lightly, reflecting a

preference for a smaller public sector.16 States with very high willingness

to raise revenue for education include Alaska, Maine, Michigan, Montana,

New Jersey, Oregon, Vermont, West Virginia, Wisconsin, and Wyoming.

States with very low willingness to raise revenue, according to our

15Our measures of states’ ability and willingness to raise revenues account for the revenues available

to, or raised by, localities as well as states.

16RTS 1991: State Revenue Capacity and Effort, Advisory Commission on Intergovernmental Relations

(Washington, D.C.: Sept. 1993).

Page 11 GAO/HEHS-95-235 U.S. Education Spending
B-259607 

measure, for education include Alabama, Delaware, Hawaii, Nevada, and

Tennessee. (See app. VI, figs. VI.3 and VI.4.)

Conclusions Recent trends in U.S. education finance reveal the leveling off of per pupil

spending for education combined with increasing enrollment in public

elementary and secondary schools. Meanwhile, the schools face an

increasing number of at-risk children whose education costs may be

generally greater than average. Moreover, education’s share of state

budgets has declined, and federal education funding faces tight fiscal

constraints. If these trends continue, America may be less able to

adequately provide educational services for many of our school-age

children or make necessary improvements in the educational system.

Agency Comments Officials from the Department of Education’s National Center for

Education Statistics and education finance experts reviewed a draft of this

report and provided us with technical comments, which we incorporated

as appropriate.

We are sending copies of this report to appropriate House and Senate

committees and other interested parties. Please call Eleanor L. Johnson on

(202) 512-7209 if you or your staff have any questions. Major contributors

to this report are listed in appendix VII.

Linda G. Morra

Director, Education and

 Employment Issues

Page 12 GAO/HEHS-95-235 U.S. Education Spending
Page 13 GAO/HEHS-95-235 U.S. Education Spending
Contents

Letter 1

Appendix I 

Scope and

Methodology

18

Education Spending Trends 18

Measures of Ability and Willingness to Raise Revenue 18

Appendix II 

Data—School-Age

Population

Characteristics

23

Appendix III 

Data—Expenditures

33

Appendix IV 

Data—Federal, State,

and Local Revenue

Shares

42

Appendix V 

Data—Education

Share of State Budget

45

Appendix VI 

Data—Ability and

Willingness to Raise

Revenue

47

Appendix VII 

GAO Contacts and

Acknowledgments

55

Page 14 GAO/HEHS-95-235 U.S. Education Spending
Contents

Tables Table II.1: Public School Enrollment Levels, 1980-81 to 2000-01 25

Table II.2: Numbers of Various Types of At-Risk Children in 1980

and 1990

25

Table II.3: Changes in Public School Enrollment by State

Between 1980 and 1993

27

Table II.4: Percent Change in Number of Poor School-Age

Children, 1980-90, and 1990 School-Age Poverty Rates by State

30

Table II.5: Numbers of Children under 18 in Families and in Poor

Families in 1980 and 1993

32

Table III.1: Both Total Expenditures and Public School

Enrollment Increased During the 1990s

34

Table III.2: States’ Total per Pupil Expenditures Ranged Between

$3,700 and $10,100 for 1992-93

35

Table III.3: National Current Expenditures per Pupil Enrolled for

1963-64 to 1992-93

36

Table III.4: Within-State Differences Between High-Spending and

Low-Spending School Districts, 1989-1990

37

Table III.5: Data Points for Figure III.2, Percentage of Increase in

per Pupil Expenditures by State

40

Table IV.1: Federal, State, and Local Shares of Total Elementary

and Secondary Education Revenues Between 1963-64 and 1992-93

42

Table IV.2: Federal, State, and Local Contributions by State,

1991-1992

43

Table V.1: Changes in Apportionment of State Budgets From 1987

to 1994

46

Table VI.1: Ability and Willingness to Raise Revenue Overall and

for Education in 1992, by State

52

Table VI.2: Changes in Ability and Willingness to Raise Revenue

Overall and for Education From 1982 to 1992, by State

53

Figures Figure 1: Both Total Expenditures and Public School Enrollment

Levels Increased During the 1990s

5

Figure 2: Local, State, and Federal Shares of Education Spending 8

Figure 3: Education’s Share of State Budgets Decreased, While

Corrections’ and Medicaid’s Shares Increased, Fiscal Years

1987-1994

10

Figure II.1: Enrollment Levels Have Begun to Increase After

Reaching a Low in the Mid 1980s

24

Page 15 GAO/HEHS-95-235 U.S. Education Spending
Contents

Figure II.2: Changes in Enrollment Varied by State, Although

Most Increases Occurred in the Southwestern and Western States

Between 1980 and 1993

26

Figure II.3: Greatest Growth in School-Age Poverty Population

Between 1980 and 1990 Occurred in Southwestern and Western

States

29

Figure II.4: Numbers of Children Under 18 in

Families—Especially Poor Children—Have Increased Between

1980 and 1993

32

Figure III.1: U.S. Average Current per Pupil Expenditures Have

Leveled off Since 1990

35

Figure III.2: Most States’ per Pupil Expenditure Increased by at

Least 25 Percent Between 1981-82 and 1992-93

39

Figure V.1: Apportionment of State Budget Shares in 1987 and

1994

45

Figure VI.1: States’ Ability to Raise Revenue Overall in 1992 48

Figure VI.2: States’ Ability to Raise Revenue for Education in 1992 49

Figure VI.3: States’ Willingness to Raise Revenue Overall in 1992 50

Figure VI.4: States’ Willingness to Raise Revenue for Education in

1992

51

Abbreviations

ACIR Advisory Commission on Intergovernmental Relations

ESEA Elementary and Secondary Education Act

GSP gross state product

LEP limited English proficiency

NCES National Center for Education Statistics

PCPI per capita personal income

TTR total taxable resources

Page 16 GAO/HEHS-95-235 U.S. Education Spending
Page 17 GAO/HEHS-95-235 U.S. Education Spending
Appendix I 

Scope and Methodology

Education Spending

Trends

To determine the national and state trends in education spending, we

analyzed fiscal data from the Department of Education’s National Center

for Education Statistics (NCES). In addition, we reviewed data from the

National Association of State Budget Officers and other published works

by education finance experts. We used the most recent actual and

estimated NCES data; therefore, the time spans of the data in our figures

and tables vary.

When reporting state trend data, we provided information on all 50 states;

we did not include the District of Columbia. When reporting finance data

for a number of years, we provided data in constant dollars for greater

comparability. In cases when NCES data were not in constant dollars, we

used the price index developed by the Department of Commerce’s Bureau

of Economic Analysis for state and local government purchases of goods

and services to make adjustments. When comparing per pupil expenditure

data at the state and national level, we used fall enrollments as the pupil

measure. When we compared federal, state, and local shares of education

revenues, we combined the local share with intermediate and private

funds. Intermediate and private funds included a relatively small amount

from nongovernmental sources, such as gifts and tuition from patrons.

Measures of Ability

and Willingness to

Raise Revenue

We have developed two measures of ability to raise revenue. One, which

we call ability to raise revenue overall, measures the ability of states to

finance public services, accounting for the costs of the services as well as

a rudimentary measure of need for services—total population. The

Advisory Commission on Intergovernmental Relations (ACIR) defines

ability to raise revenue similarly, “as the hypothetical ability of a state and

its local governments to raise revenue to provide public services in the

state relative to the need for those services.”17 We have also developed a

measure of ability to raise revenue that estimates a state’s ability to

finance educational services, which we call ability to raise revenue for

education. This measure accounts for the number of school-age children

and the costs of providing educational services in the state as measured by

average teacher salaries.

Both measures of ability to raise revenue that we have developed use total

taxable resources (TTR) as a component that assesses a state’s ability to

finance services. TTR, defined and compiled by the Department of the

Treasury, is the average of per capita personal income (PCPI) produced in a

state and per capita gross state product (GSP). As noted in an earlier report,

17RTS 1991: State Revenue Capacity and Effort, ACIR (Washington, D.C.: Sept. 1993), p. 5.

Page 18 GAO/HEHS-95-235 U.S. Education Spending
Appendix I 

Scope and Methodology

“GSP measures all income produced within a state, whether received by

residents, nonresidents, or retained by business corporations.”18 TTR is a

more comprehensive indicator of taxable resources than PCPI alone, in

part, because it also considers income produced in a state but received by

nonresidents.19 The Congress has included TTR in the allocation formula

for the Alcohol, Drug Abuse, and Mental Health Block Grant.

We have also developed two measures of willingness to raise revenue: an

overall measure and one for education. Willingness to raise revenue

overall can be determined by comparing a state’s actual revenue with its

capacity to raise revenue. Willingness to raise revenue for education is

determined similarly but focuses on spending for kindergarten to twelfth

grade public education alone rather than all public services. For each of

our “willingness measures,” as well as our two “ability measures,” we have

developed an index by comparing the state figure to that of the whole

nation. The following describes each of these indexes.

Ability to Raise Revenue

Overall

Our index of ability to raise revenue overall has two components. The first

component is TTR per capita for a state divided by TTR per capita for the

nation. This provides an index of nominal ability to raise revenue. Our

second component, a cost index or purchasing power adjustment,

provides a common measurement for states with greatly varying costs.

This cost index is based on the work of Department of the Treasury

analysts. Robert Rafuse developed a state level labor-input-cost index for

1986 based on the mean annual earnings of males 45 to 54 years old who

worked 40 or more weeks per year, accounting for seven different levels of

education.20 This work was later replicated by Kiran Duwadi for 1990.21

Dividing the first component, an index of nominal ability to raise revenue

18State and Local Finances: Some Jurisdictions Confronted by Short- and Long-Term Problems

(GAO/HRD-94-1, Oct. 6, 1993), p. 102.

19Mike Springer, Estimating Total Taxable Resources, memorandum, Department of the Treasury

(Washington, D.C.: July 22, 1991).

20See Robert W. Rafuse, Jr., Representative Expenditures: Addressing the Neglected Dimension of

Fiscal Capacity, ACIR (Washington, D.C.: Dec. 1990). On the basis of information provided by Rafuse

on the percent of males aged 45 to 54 in each of seven education groups, we developed a similar set of

cost estimates for 1979.

21Robert W. Rafuse, Jr., “Memorandum for Participants in Brainstorming Session On Estimation of

Representative Expenditures,” Department of the Treasury (Washington, D.C.: Nov. 9, 1992).

Page 19 GAO/HEHS-95-235 U.S. Education Spending
Appendix I 

Scope and Methodology

by the cost index results in a cost-adjusted measure of ability to raise

revenue overall.22

Ability to Raise Revenue

for Education

Our index for ability to raise revenue for education parallels that for ability

to raise revenue overall. Again, the index has two components. The first is

TTR per school-age child in the state divided by that for the nation. The

second component is a cost index based on average teacher salaries for

each state, adjusted for average levels of teacher experience for each

state. Using a methodology developed by F. Howard Nelson along with

information on teacher experience from the Department of Education’s

1990-91 Schools and Staffing Survey, we found that teacher salaries

increase about 2.33 percent, on average for the nation, for each year of

teacher experience.

We then adjusted average teacher salaries for each state, a measure of the

costs of providing educational services in each state, to account for

differences among states in average levels of teacher experience. For

example, we found that the average teacher salary in Oklahoma for

1991-92 was $26,514 and that the average number of years of teaching

experience was 12.9, about 2.2 years below the national average of 15.1

years. If Oklahoma were to be able to attract teachers with comparable

years of experience as the nation as a whole, it would cost the state, we

estimate, an additional $618 for each year of teaching experience or about

$1,359 for 2.2 years. Therefore, we estimate that the experience-adjusted

average teacher salary for Oklahoma would be about $27,873, still well

below the average for the nation, $34,213. Consequently, while our

measure of the cost of educational services in Oklahoma is still low, it

does account for Oklahoma’s costs being somewhat higher were it to have

levels of teaching experience comparable to the U.S. average.

To illustrate how the index of ability to raise revenue for education was

developed, consider again the example of Oklahoma. Oklahoma has a

relatively low TTR per school-age child, about 73 percent of the U.S.

average, or $104,693 per child compared with $143,178 per child for the

United States. This stems from two factors: (1) relatively low TTR and

(2) relatively high proportions of school-age children. While Oklahoma’s

nominal ability to raise revenue for education is low, its cost of providing

22In Representative Expenditures: Addressing the Neglected Dimension of Fiscal Capacity, Robert

Rafuse calculates that 50 percent of all direct expenditures relate to employee compensation costs.

Since the costs of employee compensation vary by state (for example, they are higher in New York

State than in Mississippi), we cost adjusted 50 percent of expenditures. Other expenditures, such as

for equipment, are less likely to vary by state because national markets exist for such items.

Page 20 GAO/HEHS-95-235 U.S. Education Spending
Appendix I 

Scope and Methodology

educational services, that is, adjusted average teacher salaries, is also low,

at about 81 percent of the U.S. average. When we applied a cost

adjustment to reflect the purchasing power in each state, we calculated an

index of .86, which reflects Oklahoma’s ability to raise revenue for

education—less than the average for the nation as a whole of 1.00.23

Willingness to Raise

Revenue Overall

Our index of willingness to raise revenue overall is based on a state’s total

state and local revenue divided by the state’s TTR. This number is divided

by total state and local revenue in the nation (or all states), divided by the

nation’s TTR, to provide an index. For example, if the index is 1.10, then we

know that the state’s willingness to raise revenue overall is 10 percent

greater than that for the whole nation. Conversely, if the state’s index of

willingness to raise revenue is .90, then the state’s willingness to raise

revenue overall is only 90 percent of that for the whole nation.

Willingness to Raise

Revenue for Education

Similarly, our index of willingness to raise revenue for education is based

on actual state and local revenue for kindergarten to twelfth grade public

education divided by the state’s TTR. As an example, the index of

willingness to raise revenue for education for Wyoming was 1.31 for

1991-92, substantially over the 1.00 index for the nation. Adjusting the two

measures of willingness to raise revenue for differences in purchasing

power by state is not necessary because such measures would be in both

the numerator and denominator and therefore would cancel each other

out.

Changes in Ability and

Willingness to Raise

Revenue for Education and

Overall From 1981-82 to

1991-92

We also examined changes in the levels of ability to raise revenue and

willingness to raise revenue over time—from 1981-82 to 1991-92. For this

analysis we determined the measures as described above, except that we

did not put the measures in index form—that is, relative to the U.S.

average. When we examined the change for the nation as a whole, we

determined that ability to raise revenue for education, a measure of the

nation’s revenue base per child, was $143,178 in 1991-92. The nation’s

ability to raise revenue for education in 1981-82 in unadjusted and

therefore noncomparable 1981-82 dollars was $77,412.

23States face different levels of purchasing power for teacher compensation, that is, it costs more to

attract teachers to work in some states than others. Personnel-related costs make up 84.8 percent of

current expenditures and 75.5 percent of total expenditures. To account for cost differences in

personnel-related costs, we cost adjusted 75.5 percent of our measure of ability to raise revenue. See

Stephen M. Barro, Cost-of-Education Differentials Across the States, Department of Education, NCES,

Working Paper No. 94-05 (Washington, D.C.: July 1994), pp. 29-30.

Page 21 GAO/HEHS-95-235 U.S. Education Spending
Appendix I 

Scope and Methodology

To provide comparability, we adjusted each total used in the two

measures of ability to raise revenue, for education and overall, so that they

would each be in 1987 dollars, using a deflator developed by the

Department of Commerce’s Bureau of Economic Analysis. This deflator

was developed specifically for state and local government purchases of

goods and services. After the figures were adjusted, we found that the

nation’s ability to raise revenue for education had increased 26.6 percent

from 1981-82 to 1991-92, from $94,752 to $119,915. We conducted similar

analyses to determine changes over time in the measure of ability to raise

revenue overall. We also determined changes over time in our two

measures of willingness to raise revenue, for education and overall.

Page 22 GAO/HEHS-95-235 U.S. Education Spending
Appendix II 

Data—School-Age Population

Characteristics

This appendix provides additional data on the increase in public school

levels as well as the number of at-risk students. Following are the tables

and figures presented in this appendix in order of appearance.

• Figure II.1 shows public school enrollment levels from 1980 projected to

the year 2000.

• Table II.1 presents the data points for figure II.1.

• Table II.2 shows the growth in specific at-risk populations of children

(poor, special education, limited English proficient, and immigrant), 1980

to 1990.

• Figure II.2 shows changes in enrollment by state.

• Table II.3 presents the data points for figure II.2.

• Figure II.3 shows changes in numbers of children in poverty by state.

• Table II.4 presents the data points for figure II.3.

• Figure II.4 compares the percent change among all children under 18 and

poor children under 18, 1980 to 1993. We chose the under-18 age group to

provide a more comprehensive measure of the number of children who

are, or will soon be, attending school.

• Table II.5 presents the data points for figure II.4.

Page 23 GAO/HEHS-95-235 U.S. Education Spending
Appendix II 

Data—School-Age Population

Characteristics

Figure II.1: Enrollment Levels Have Begun to Increase After Reaching a Low in the Mid 1980s

Number of Children in Thousands

39000

44000

49000

1980 1985 1990 1995 2000

Year

Enrollment

Projected Enrollment

Source: National Center for Education Statistics.

Page 24 GAO/HEHS-95-235 U.S. Education Spending
Appendix II 

Data—School-Age Population

Characteristics

Table II.1: Public School Enrollment

Levels, 1980-81 to 2000-01

Year

Total enrollment

(thousands)

1980-81 40,877

1981-82 40,044

1982-83 39,566

1983-84 39,252

1984-85 39,208

1985-86 39,422

1986-87 39,753

1987-88 40,008

1988-89 40,189

1989-90 40,543

1990-91 41,217

1991-92 42,047

1992-93 42,816

1993-94 estimated 43,353

1994-95 projected 44,237

1995-96 projected 45,037

1996-97 projected 45,960

1997-98 projected 46,797

1998-99 projected 47,403

1999-2000 projected 47,911

2000-2001 projected 48,323

Source: National Center for Education Statistics.

Table II.2: Numbers of Various Types

of At-Risk Children in 1980 and 1990

Student type

School year 1980

(thousands)

School year 1990

(thousands)

Increase over

decade (percent)

Poor school-age 7,200 7,600 6

Special educationa 4,142 4,762 15

Limited English proficient 1,839 2,311 26

Immigrant 1,872 2,320 24

aChildren 0 to 21 years old served in federally supported programs for the disabled.

Page 25 GAO/HEHS-95-235 U.S. Education Spending
Appendix II 

Data—School-Age Population

Characteristics

Figure II.2: Changes in Enrollment Varied by State, Although Most Increases Occurred in the Southwestern and Western

States Between 1980 and 1993

Increase of More Than 10 Percent 

Increase of 5 to 10 Percent 

Increase of Less Than 5 Percent 

Decrease 

Source: National Center for Education Statistics.

Page 26 GAO/HEHS-95-235 U.S. Education Spending
Appendix II 

Data—School-Age Population

Characteristics

Table II.3: Changes in Public School

Enrollment by State Between 1980 and

1993

State Enrollment in 1980 Enrollment in 1993

Percent change in

enrollment

between 1980 and

1993

Alabama 758,721 730,509 –3.72

Alaska 86,514 125,564 45.14

Arizona 513,790 669,459 30.30

Arkansas 447,700 450,672 0.66

California 4,076,421 5,285,000 29.65

Colorado 546,033 625,062 14.47

Connecticut 531,459 493,500 –7.14

Delaware 99,403 105,547 6.18

Florida 1,510,225 2,039,385 35.04

Georgia 1,068,737 1,235,304 15.59

Hawaii 165,068 179,876 8.97

Idaho 203,247 236,774 16.50

Illinois 1,983,463 1,886,947 –4.87

Indiana 1,055,589 961,534 –8.91

Iowa 533,857 497,912 –6.73

Kansas 415,291 458,538 10.41

Kentucky 669,798 639,200 –4.57

Louisiana 777,560 799,917 2.88

Maine 222,497 212,245 –4.61

Maryland 750,665 772,638 2.93

Massachusetts 1,021,885 878,734 –14.01

Michigan 1,797,052 1,613,700 –10.20

Minnesota 754,318 807,760 7.08

Mississippi 477,059 503,374 5.52

Missouri 844,648 870,086 3.01

Montana 155,193 162,891 4.96

Nebraska 280,430 284,458 1.44

Nevada 149,481 235,800 57.75

New Hampshire 167,232 182,385 9.06

New Jersey 1,246,008 1,152,205 –7.53

New Mexico 271,198 321,164 18.42

New York 2,871,724 2,746,200 –4.37

North Carolina 1,129,376 1,123,636 –0.51

North Dakota 116,885 118,500 1.38

Ohio 1,957,381 1,812,300 –7.41

Oklahoma 577,807 598,000 3.49

(continued)

Page 27 GAO/HEHS-95-235 U.S. Education Spending
Appendix II 

Data—School-Age Population

Characteristics

State Enrollment in 1980 Enrollment in 1993

Percent change in

enrollment

between 1980 and

1993

Oregon 464,599 516,610 11.19

Pennsylvania 1,909,292 1,745,230 –8.59

Rhode Island 148,956 145,676 –2.20

South Carolina 619,223 636,297 2.76

South Dakota 128,507 151,073 17.56

Tennessee 853,569 857,051 0.41

Texas 2,900,073 3,616,457 24.70

Utah 343,618 468,675 36.39

Vermont 95,815 100,000 4.37

Virginia 1,010,371 1,045,472 3.47

Washington 757,639 916,928 21.02

West Virginia 383,503 313,750 –18.19

Wisconsin 830,247 841,856 1.40

Wyoming 98,305 100,899 2.64

Source: National Center for Education Statistics.

Page 28 GAO/HEHS-95-235 U.S. Education Spending
Appendix II 

Data—School-Age Population

Characteristics

Figure II.3: Greatest Growth in School-Age Poverty Population Between 1980 and 1990 Occurred in Southwestern and

Western States

Over 25 Percent Increase 

0 to 24.99 Percent Increase 

Decrease in School-Age Poverty Population 

Page 29 GAO/HEHS-95-235 U.S. Education Spending
Appendix II 

Data—School-Age Population

Characteristics

Table II.4: Percent Change in Number

of Poor School-Age Children, 1980-90,

and 1990 School-Age Poverty Rates by

State

Number of poor school-age

children

Percent

change

Schoolage

poverty

rate

(percent)

State 1980 1990 1980-1990 1990

Alabama 198,674 178,559 –10.1 23.3

Alaska 10,207 10,910 6.9 9.6

Arizona 90,072 136,626 51.7 20.3

Arkansas 111,691 107,170 –4.0 23.8

California 651,039 897,104 37.8 17.3

Colorado 63,062 82,083 30.2 13.8

Connecticut 65,610 50,611 –22.9 9.8

Delaware 18,098 12,342 –31.8 11.0

Florida 311,021 344,969 10.9 17.5

Georgia 249,998 229,402 –8.2 18.9

Hawaii 22,721 20,316 –10.6 10.5

Idaho 28,254 32,279 14.2 14.5

Illinois 336,783 328,801 –2.4 15.9

Indiana 130,984 132,837 1.4 12.8

Iowa 64,847 65,378 0.8 12.7

Kansas 49,397 59,578 20.6 12.8

Kentucky 168,030 161,587 –3.8 23.3

Louisiana 221,714 267,555 20.7 30.4

Maine 36,249 26,853 –25.9 12.4

Maryland 104,310 82,612 –20.8 10.5

Massachusetts 140,978 112,691 –20.1 12.2

Michigan 254,479 288,557 13.4 16.7

Minnesota 80,983 93,242 15.1 11.4

Mississippi 180,439 177,895 –1.4 32.7

Missouri 139,765 150,951 8.0 16.3

Montana 21,083 29,340 39.2 18.4

Nebraska 37,105 36,655 –1.2 12.0

Nevada 14,653 23,065 57.4 11.8

New Hampshire 17,314 12,117 –30.0 6.4

New Jersey 202,184 134,371 –33.5 10.8

New Mexico 64,849 82,984 28.0 26.4

New York 626,784 531,845 –15.1 18.1

North Carolina 221,699 180,954 –18.4 16.0

North Dakota 18,941 19,931 5.2 15.9

(continued)

Page 30 GAO/HEHS-95-235 U.S. Education Spending
Appendix II 

Data—School-Age Population

Characteristics

Number of poor school-age

children

Percent

change

Schoolage

poverty

rate

(percent)

State 1980 1990 1980-1990 1990

Ohio 279,040 322,358 15.5 16.2

Oklahoma 92,894 120,018 29.2 19.9

Oregon 55,332 67,926 22.8 13.4

Pennsylvania 310,663 284,692 –8.4 14.5

Rhode Island 23,353 19,306 –17.3 12.4

South Carolina 143,925 131,053 –8.9 20.0

South Dakota 28,336 26,501 –6.5 18.8

Tennessee 194,569 169,437 –12.9 19.5

Texas 573,661 794,774 38.5 23.4

Utah 33,895 49,183 45.1 10.9

Vermont 14,048 10,695 –23.9 10.7

Virginia 158,083 129,565 –18.0 12.5

Washington 84,403 111,198 31.8 12.8

West Virginia 74,934 79,980 6.7 24.1

Wisconsin 96,167 121,585 26.4 13.4

Wyoming 7,515 12,443 65.6 12.7

United States 7,152,784a 7,571,259b 5.9 17.1

aIncludes 27,949 poor children from the District of Columbia.

bIncludes 18,375 poor children from the District of Columbia.

Page 31 GAO/HEHS-95-235 U.S. Education Spending
Appendix II 

Data—School-Age Population

Characteristics

Figure II.4: Numbers of Children Under

18 in Families—Especially Poor

Children—Have Increased Between

1980 and 1993

Percent Change

0

5

10

15

20

25

30

35

All Children

Poor Children

Source: U.S. Department of Commerce, Bureau of the Census, Current Population Survey

Reports.

Table II.5: Numbers of Children Under

18 in Families and in Poor Families in

1980 and 1993

Number of children under 18 in

families

Change in children under 18 in

families, 1980-93

1980 1993 Number Percent

All children 62,168,000 68,040,000 5,872,000 9.4

Poor children 11,114,000 14,961,000 3,847,000 34.6

Source: U.S. Department of Commerce, Bureau of the Census, Current Population Survey Reports.

Page 32 GAO/HEHS-95-235 U.S. Education Spending
Appendix III 

Data—Expenditures

This appendix provides additional data about total expenditures.

Following are the tables and figures presented in this appendix in order of

appearance.

• Table III.1 presents the data points for figure 1.

• Table III.2 shows the total per pupil expenditures from the perspective of

between-state comparisons.

• Figure III.1 shows national averages of current per pupil expenditures

from 1963-64 to 1992-93.

• Table III.3 presents the data points for figure III.1 and shows the range of

per pupil current expenditures, 1963-64 to 1992-93.

• Table III.4 shows the range in per pupil expenditures within each state for

1989-90, using school districts at the 5th and 95th percentiles.

• Figure III.2 shows the percentage increase in per pupil expenditures by

state between 1981-82 and 1992-93.

• Table III.5 presents the data points for figure III.2.

Page 33 GAO/HEHS-95-235 U.S. Education Spending
Appendix III 

Data—Expenditures

Table III.1: Both Total Expenditures

and Public School Enrollment

Increased During the 1990s (in

Constant 1993 Dollars) Year

Total

expenditures

(dollars in billions)

Public school

enrollment

(thousands)

1963-64 117 41,025

1964-65 127 42,280

1965-66 137 42,068

1966-67 146 43,042

1967-68 155 43,890

1968-69 161 44,903

1969-70 168 45,550

1970-71 173 46,894

1971-72 171 46,071

1972-73 174 45,726

1973-74 177 45,445

1974-75 182 45,073

1975-76 180 44,816

1976-77 177 44,311

1977-78 180 43,577

1978-79 179 42,561

1979-80 182 41,861

1980-81 179 40,877

1981-82 177 40,044

1982-83 177 39,566

1983-84 183 39,252

1984-85 187 39,208

1985-86 195 39,422

1986-87 204 39,753

1987-88 211 40,008

1988-89 226 40,189

1989-90 239 40,543

1990-91 248 41,217

1991-92 253 42,047

1992-93 254 42,816

Source: National Center for Education Statistics.

Page 34 GAO/HEHS-95-235 U.S. Education Spending
Appendix III 

Data—Expenditures

Table III.2: States’ Total per Pupil

Expenditures Ranged Between $3,700

and $10,100 for 1992-93

Per pupil

expenditure range (in

dollars) States

$9,000 and above Alaska, New Jersey, New York

8,000 - 8,999 Connecticut

7,000 - 7,999 Maryland, Michigan, Pennsylvania, Rhode Island,

Vermont, Wisconsin

6,000 - 6,999 Delaware, Florida, Hawaii, Illinois, Maine, Massachusetts,

Minnesota, Nevada, Oregon, Washington, West Virginia,

and Wyoming

5,000 - 5,999 Arizona, California, Colorado, Georgia, Indiana, Iowa,

Kansas, Kentucky, Missouri, Montana, Nebraska, New

Hampshire, North Carolina, Ohio, South Carolina, Texas,

Virginia

4,000 - 4,999 Alabama, Arkansas, Idaho, Louisiana, New Mexico, North

Dakota, Oklahoma, South Dakota, Tennessee

3,000 - 3,999 Mississippi, Utah

Source: National Center for Education Statistics.

Figure III.1: U.S. Average Current per Pupil Expenditures Have Leveled off Since 1990

Constant 1993-94 Dollars

0

1000

2000

3000

4000

5000

1964 1970 1975 1980 1985 1990 1993

Years

Source: National Center for Education Statistics.

Page 35 GAO/HEHS-95-235 U.S. Education Spending
Appendix III 

Data—Expenditures

Table III.3: National Current

Expenditures per Pupil Enrolled for

1963-64 to 1992-93 (in Constant

1993-94 Dollars)

Year

Average per pupil expenditure

(in dollars)

1963-64 2,031

1964-65 2,160

1965-66 2,288

1966-67 2,461

1967-68 2,633

1968-69 2,768

1969-70 2,903

1970-71 3,099

1971-72 3,225

1972-73 3,392

1973-74 3,453

1974-75 3,551

1975-76 3,653

1976-77 3,759

1977-78 3,914

1978-79 3,961

1979-80 3,934

1980-81 3,895

1981-82 3,923

1982-83 4,077

1983-84 4,223

1984-85 4,455

1985-86 4,675

1986-87 4,840

1987-88 4,956

1988-89 5,197

1989-90 5,327

1990-91 5,352

1991-92 5,314

1992-93 5,296

Source: National Center for Education Statistics.

Page 36 GAO/HEHS-95-235 U.S. Education Spending
Appendix III 

Data—Expenditures

Table III.4: Within-State Differences

Between High-Spending and

Low-Spending School Districts,

1989-1990

State

Low-spendinga

districtc per pupil

expenditure

(dollars)

High-spendingb

districtc per pupil

expenditure

(dollars)

Alabama 2,674 3,741

Alaska 6,115 19,155

Arizona 2,704 5,262

Arkansas 2,543 3,705

California 3,669 5,079

Colorado 3,924 5,587

Connecticut 5,523 8,304

Delaware 4,249 5,805

Florida 3,910 5,457

Georgia 3,000 4,322

Hawaii 4,288 4,288d

Idaho 2,441 4,332

Illinois 2,672 4,239

Indiana 3,335 4,980

Iowa 3,593 4,700

Kansas 3,357 5,715

Kentucky 2,509 3,520

Louisiana 2,902 4,463

Maine 3,910 5,473

Maryland 4,532 6,246

Massachusetts 3,807 7,182

Michigan 3,224 5,609

Minnesota 3,729 5,479

Mississippi 2,478 3,596

Missouri 2,803 4,557

Montana 3,579 6,970

Nebraska 3,530 6,048

Nevada 3,691 6,672

New Hampshire 3,604 5,914

New Jersey 5,162 8,462

New Mexico 3,460 6,577

New York 5,439 11,725

North Carolina 3,505 4,925

North Dakota 2,995 5,356

Ohio 3,117 5,606

Oklahoma 2,583 3,972

(continued)

Page 37 GAO/HEHS-95-235 U.S. Education Spending
Appendix III 

Data—Expenditures

State

Low-spendinga

districtc per pupil

expenditure

(dollars)

High-spendingb

districtc per pupil

expenditure

(dollars)

Oregon 3,879 6,078

Pennsylvania 3,794 7,058

Rhode Island 4,953 6,646

South Carolina 3,369 4,852

South Dakota 2,833 5,052

Tennessee 2,268 3,036

Texas 3,035 5,452

Utah 2,381 4,257

Vermont 4,168 6,701

Virginia 3,642 6,058

Washington 3,760 6,144

West Virginia 3,160 4,023

Wisconsin 4,289 6,545

Wyoming 4,464 8,091

Note: Wayne Riddle and Liane White of the Congressional Research Service are currently

updating their analysis of disparities within states with more recent data.

a5th percentile.

b95th percentile.

cData listed are for unified school districts. See the source for additional data on elementary

school districts and secondary school districts.

dHawaii has only one school district.

Source: Wayne Riddle and Liane White, “Variations in Expenditures Per Pupil Among Local

Educational Agencies Within the States,” memorandum, Congressional Research Service,

July 26, 1993.

Page 38 GAO/HEHS-95-235 U.S. Education Spending
Appendix III 

Data—Expenditures

Figure III.2: Most States’ per Pupil Expenditure Increased by at Least 25 Percent Between 1981-82 and 1992-93 (in Constant

1992-93 Dollars)

50 Percent Increase or More 

25 to 49.99 Percent Increase 

0 to 24.99 Percent Increase 

Decrease in per Pupil Expenditure 

Page 39 GAO/HEHS-95-235 U.S. Education Spending
Appendix III 

Data—Expenditures

Table III.5: Data Points for Figure III.2,

Percentage of Increase in per Pupil

Expenditures by State

Per pupil expenditure

State

1981-82 (in

constant 1992-93

dollars)a 1992-93

Percent change

between 1981-82

and 1992-93

Alabama 3,032 3,572 18

Alaska 9,598 7,901 –18

Arizona 3,598 4,088 14

Arkansas 2,737 3,859 41

California 4,198 4,614 10

Colorado 4,365 4,766 9

Connecticut 4,836 7,652 58

Delaware 4,583 5,750 25

Florida 3,780 4,876 29

Georgia 2,963 4,368 47

Hawaii 4,137 5,332 29

Idaho 2,874 3,471 21

Illinois 4,056 5,307 31

Indiana 3,295 4,995 52

Iowa 4,296 4,970 16

Kansas 4,034 4,926 22

Kentucky 2,784 4,311 55

Louisiana 3,760 4,010 7

Maine 3,275 5,624 72

Maryland 4,525 6,060 34

Massachusetts 4,469 6,141 37

Michigan 4,793 5,945 24

Minnesota 4,393 5,210 19

Mississippi 2,530 3,159 25

Missouri 3,318 4,318 30

Montana 4,314 4,907 14

Nebraska 4,052 5,064 25

Nevada 3,538 4,645 31

New Hampshire 3,595 5,368 49

New Jersey 5,385 8,770 63

New Mexico 3,826 3,929 3

New York 5,836 7,770 33

North Carolina 3,129 4,426 41

North Dakota 4,138 4,284 4

Ohio 3,634 5,332 47

(continued)

Page 40 GAO/HEHS-95-235 U.S. Education Spending
Appendix III 

Data—Expenditures

Per pupil expenditure

State

1981-82 (in

constant 1992-93

dollars)a 1992-93

Percent change

between 1981-82

and 1992-93

Oklahoma 3,972 4,090 3

Oregon 4,685 5,585 19

Pennsylvania 4,441 6,372 43

Rhode Island 4,355 6,501 49

South Carolina 2,851 4,204 47

South Dakota 3,450 4,109 19

Tennessee 2,811 3,674 31

Texas 3,204 4,270 33

Utah 2,789 2,967 6

Vermont 4,197 6,342 51

Virginia 3,507 5,066 44

Washington 3,892 5,220 34

West Virginia 3,789 5,108 35

Wisconsin 4,217 5,974 42

Wyoming 5,047 5,462 8

Note: Beginning in 1988-89, data reflect new survey collection procedures and may not be

entirely comparable with figures for earlier years.

aBased on an index for state and local government purchases of goods and services prepared by

the Bureau of Economic Analysis, U.S. Department of Commerce. These data do not reflect

differences in inflation rates from state to state.

Source: National Center for Education Statistics.

Page 41 GAO/HEHS-95-235 U.S. Education Spending
Appendix IV 

Data—Federal, State, and Local Revenue

Shares

This appendix provides additional data on the federal, state, and local

shares of education revenues. Following are the tables and figures

presented in this appendix in order of appearance.

• Table IV.1 presents the data points for figure 2.

• Table IV.2 presents the federal, state, and local contributions by state,

1991-1992.

Table IV.1: Federal, State, and Local

Shares of Total Elementary and

Secondary Education Revenues

Between 1963-64 and 1992-93

Shares

Year

Federal

(percent)

State

(percent)

Local

(percent)

1963-64 4.4 39.3 56.3

1965-66 7.9 39.1 53.0

1967-68 8.8 38.5 52.7

1969-70 8.0 39.9 52.1

1970-71 8.4 39.1 52.5

1971-72 8.9 38.3 52.8

1972-73 8.7 40.0 51.3

1973-74 8.5 41.4 50.1

1974-75 9.0 42.2 48.8

1975-76 8.9 44.6 46.5

1976-77 8.8 43.4 47.8

1977-78 9.4 43.0 47.6

1978-79 9.8 45.6 44.6

1979-80 9.8 46.8 43.4

1980-81 9.2 47.4 43.4

1981-82 7.4 47.6 45.0

1982-83 7.1 47.9 45.0

1983-84 6.8 47.8 45.4

1984-85 6.6 48.9 44.4

1985-86 6.7 49.4 43.9

1986-87 6.4 49.7 43.9

1987-88 6.3 49.5 44.1

1988-89 6.2 47.8 46.0

1989-90 6.1 47.3 46.6

1990-91 6.2 47.2 46.7

1991-92 6.6 46.4 47.0

1992-93 6.9 45.6 47.4

Source: National Center for Education Statistics.

Page 42 GAO/HEHS-95-235 U.S. Education Spending
Appendix IV 

Data—Federal, State, and Local Revenue

Shares

Table IV.2: Federal, State, and Local

Contributions by State, 1991-1992

State

Federal

(percent)

State

(percent)

Locala

(percent)

Alabama 11.4 58.8 29.8

Alaska 11.5 68.0 20.5

Arizona 8.8 42.4 48.8

Arkansas 10.8 59.9 29.3

California 7.5 65.9 26.6

Colorado 5.0 42.8 52.3

Connecticut 3.2 40.7 56.0

Delaware 7.6 65.9 26.5

Florida 7.3 48.4 44.3

Georgia 7.7 47.7 44.6

Hawaii 7.5 90.3 2.2

Idaho 8.1 61.8 30.1

Illinois 6.8 28.9 64.2

Indiana 5.3 52.9 41.8

Iowa 5.3 47.3 47.4

Kansas 5.5 42.4 52.1

Kentucky 10.1 67.0 22.9

Louisiana 10.8 54.7 34.4

Maine 5.9 49.8 44.3

Maryland 5.1 38.2 56.7

Massachusetts 5.3 30.7 64.0

Michigan 6.2 26.6 67.2

Minnesota 4.5 51.6 44.0

Mississippi 17.0 53.5 29.5

Missouri 6.4 38.0 55.7

Montana 8.8 41.8 49.3

Nebraska 6.2 34.3 59.5

Nevada 4.2 38.7 57.1

New Hampshire 3.1 8.5 88.4

New Jersey 4.1 42.2 53.7

New Mexico 12.4 73.8 13.8

New York 5.6 40.3 54.1

North Carolina 7.2 64.6 28.2

North Dakota 11.1 44.8 44.1

Ohio 5.9 40.8 53.3

Oklahoma 4.6 62.2 33.2

Oregon 6.4 30.6 63.0

(continued)

Page 43 GAO/HEHS-95-235 U.S. Education Spending
Appendix IV 

Data—Federal, State, and Local Revenue

Shares

State

Federal

(percent)

State

(percent)

Locala

(percent)

Pennsylvania 5.7 41.4 52.8

Rhode Island 6.0 38.5 55.5

South Carolina 9.0 48.3 42.6

South Dakota 11.1 27.0 62.0

Tennessee 10.5 42.2 47.3

Texas 6.6 43.4 50.0

Utah 6.9 57.2 35.8

Vermont 5.1 31.6 63.3

Virginia 5.8 31.1 63.1

Washington 5.7 71.6 22.6

West Virginia 7.6 67.2 25.2

Wisconsin 4.4 39.4 56.2

Wyoming 5.3 52.5 42.2

aIncludes revenues from gifts and tuition and fees from patrons.

Source: National Center for Education Statistics.

Page 44 GAO/HEHS-95-235 U.S. Education Spending
Appendix V 

Data—Education Share of State Budget

This appendix provides additional data on changes in the apportionment

of state budgets. Following are the tables and figures presented in this

appendix in order of appearance.

• Figure V.1 compares the apportionment of state budget shares in 1987 and

1994.

• Table V.1 presents the data points for figures 3 and V.1.

Figure V.1: Apportionment of State

Budget Shares in 1987 and 1994 Percent

0

5

10

15

20

25

30

35

40

Elementaryand Secondary

Education

Higher Education

Cash Assistance

Medicaid

Corrections

Transportation

All Other Expenditures

State Expenditures

1987

1994

Source: 1994 State Expenditure Report, National Association of State Budget Officers, April 1995.

Page 45 GAO/HEHS-95-235 U.S. Education Spending
Appendix V 

Data—Education Share of State Budget

Table V.1: Changes in Apportionment

of State Budgets From 1987 to 1994 Percent of fiscal year

budget

Budget sector 1987 1994

Percent

change

Elementary/ secondary education 22.8 20.3 –11.0

Higher education 12.3 10.5 –14.6

Cash assistance 5.2 4.5 –13.5

Medicaid 10.2 19.4 90.1

Corrections 3.0 3.3 10.0

Transportation 10.6 8.9 –16.0

All other 36.1 33.1 –8.3

Source: 1994 State Expenditure Report, National Association of State Budget Officers, April 1995.

Page 46 GAO/HEHS-95-235 U.S. Education Spending
Appendix VI 

Data—Ability and Willingness to Raise

Revenue

This appendix provides additional data on ability and willingness to raise

revenue overall and for education. Following are the tables and figures

presented in this appendix in order of appearance.

• Figure VI.1 shows ability to raise revenue overall in each state in 1992.

• Figure VI.2 shows ability to raise revenue for education in each state in

1992.

• Figure VI.3 shows willingness to raise revenue overall in 1992.

• Figure VI.4 shows states’ willingness to raise revenue for education in

1992.

• Table VI.1 gives the data points for figures VI.1, VI.2, VI.3, and VI.4. (See

app. I for a description of how these indexes were derived.)

• Table VI.2 provides information on the change in states’ willingness and

ability to raise revenue overall and for education between 1982 and 1992.

Page 47 GAO/HEHS-95-235 U.S. Education Spending
Appendix VI 

Data—Ability and Willingness to Raise

Revenue

Figure VI.1: States’ Ability to Raise Revenue Overall in 1992

Less Than 85 Percent of U.S. Average 

85 to 94 Percent of U.S. Average 

95 to 104 Percent of U.S. Average 

105 to 114 Percent of U.S. Average 

115 Percent or More of U.S. Average 

Page 48 GAO/HEHS-95-235 U.S. Education Spending
Appendix VI 

Data—Ability and Willingness to Raise

Revenue

Figure VI.2: States’ Ability to Raise Revenue for Education in 1992

Less Than 85 Percent of U.S. Average 

85 to 94 Percent of U.S. Average 

95 to 104 Percent of U.S. Average 

105 to 114 Percent of U.S. Average 

115 Percent or More of U.S. Average 

Page 49 GAO/HEHS-95-235 U.S. Education Spending
Appendix VI 

Data—Ability and Willingness to Raise

Revenue

Figure VI.3: States’ Willingness to Raise Revenue Overall in 1992

Less Than 85 Percent of U.S. Average 

85 to 94 Percent of U.S. Average 

95 to 104 Percent of U.S. Average 

105 to 114 Percent of U.S. Average 

115 Percent or More of U.S. Average 

Page 50 GAO/HEHS-95-235 U.S. Education Spending
Appendix VI 

Data—Ability and Willingness to Raise

Revenue

Figure VI.4: States’ Willingness to Raise Revenue for Education in 1992

Less Than 85 Percent of U.S. Average 

85 to 94 Percent of U.S. Average 

95 to 104 Percent of U.S. Average 

105 to 114 Percent of U.S. Average 

115 Percent or More of U.S. Average 

Page 51 GAO/HEHS-95-235 U.S. Education Spending
Appendix VI 

Data—Ability and Willingness to Raise

Revenue

Table VI.1: Ability and Willingness to

Raise Revenue Overall and for

Education in 1992, by State (Index:

U.S. = 1.00) 

Ability to raise revenue

Willingness to raise

revenue

State Overall Education Overall Education

Alabama 0.81 0.90 0.95 0.81

Alaska 1.55 1.02 2.07 1.27

Arizona 0.84 0.84 1.06 1.07

Arkansas 0.77 0.79 0.91 1.03

California 1.09 0.96 0.99 0.87

Colorado 1.01 0.99 0.98 0.97

Connecticut 1.33 1.23 0.92 1.00

Delaware 1.21 1.39 0.99 0.79

Florida 0.91 1.10 1.03 0.93

Georgia 0.93 0.96 0.92 0.91

Hawaii 1.15 1.24 1.14 0.82

Idaho 0.82 0.76 1.03 1.07

Illinois 1.08 1.08 0.87 0.87

Indiana 0.91 0.89 0.94 1.09

Iowa 0.90 0.97 1.07 1.05

Kansas 0.95 1.00 0.95 1.04

Kentucky 0.83 0.85 0.98 1.01

Louisiana 0.89 0.94 0.97 0.91

Maine 0.87 0.89 1.10 1.30

Maryland 1.09 1.09 0.92 0.97

Massachusetts 1.17 1.35 0.95 0.89

Michigan 0.94 0.85 1.07 1.20

Minnesota 1.03 1.02 1.15 1.08

Mississippi 0.71 0.79 0.97 0.88

Missouri 0.93 1.06 0.82 0.90

Montana 0.80 0.81 1.13 1.31

Nebraska 0.97 1.08 0.99 0.99

Nevada 1.10 1.06 0.88 0.84

New Hampshire 1.03 1.08 0.90 1.00

New Jersey 1.26 1.32 1.01 1.21

New Mexico 0.82 0.82 1.19 1.08

New York 1.19 1.16 1.26 1.12

North Carolina 0.93 1.05 0.89 0.85

North Dakota 0.85 0.97 1.10 1.00

Ohio 0.93 0.99 0.94 1.02

Oklahoma 0.82 0.86 0.99 1.07

(continued)

Page 52 GAO/HEHS-95-235 U.S. Education Spending
Appendix VI 

Data—Ability and Willingness to Raise

Revenue

Ability to raise revenue

Willingness to raise

revenue

State Overall Education Overall Education

Oregon 0.91 0.89 1.14 1.16

Pennsylvania 0.99 1.10 1.00 1.08

Rhode Island 0.97 1.03 0.99 1.03

South Carolina 0.82 0.87 0.97 1.03

South Dakota 0.87 1.01 0.89 0.94

Tennessee 0.89 1.03 0.83 0.68

Texas 0.96 0.86 0.90 1.08

Utah 0.80 0.60 1.06 1.14

Vermont 0.91 0.88 1.14 1.39

Virginia 1.03 1.10 0.90 0.93

Washington 1.05 1.00 1.01 1.03

West Virginia 0.75 0.81 1.05 1.39

Wisconsin 0.94 0.94 1.10 1.19

Wyoming 1.09 0.88 1.18 1.31

Table VI.2: Changes in Ability and

Willingness to Raise Revenue Overall

and for Education From 1982 to 1992,

by State

Percent change in ability

to raise revenue

Percent change in

willingness to raise

revenue

State Overall Education Overall Education

Alabama 26.5 40.5 8.4 26.5

Alaska –18.3 –3.4 –36.2 15.3

Arizona 15.3 21.1 12.8 2.3

Arkansas 21.3 19.7 14.8 20.3

California 15.5 11.7 11.0 32.0

Colorado 10.3 20.8 15.8 0.3

Connecticut 35.5 15.6 18.3 17.2

Delaware 40.7 54.9 0.6 –22.8

Florida 20.9 17.5 30.4 7.1

Georgia 29.2 39.4 4.4 2.3

Hawaii 31.9 57.8 13.2 –6.0

Idaho 22.3 34.1 19.0 5.6

Illinois 22.7 32.0 6.3 –6.1

Indiana 23.3 35.7 18.4 14.7

Iowa 12.6 22.4 14.6 4.0

Kansas 10.8 8.8 9.2 4.7

Kentucky 19.3 24.2 27.5 24.1

Louisiana –3.5 5.4 14.1 43.3

(continued)

Page 53 GAO/HEHS-95-235 U.S. Education Spending
Appendix VI 

Data—Ability and Willingness to Raise

Revenue

Percent change in ability

to raise revenue

Percent change in

willingness to raise

revenue

State Overall Education Overall Education

Maine 29.4 27.5 22.8 22.6

Maryland 29.9 42.5 –4.9 –8.2

Massachusetts 34.3 55.7 6.4 –20.5

Michigan 22.2 44.1 –2.0 –3.6

Minnesota 22.9 32.4 7.3 –14.0

Mississippi 17.7 19.6 7.9 8.7

Missouri 19.4 25.2 17.3 6.9

Montana 1.4 13.6 7.0 13.0

Nebraska 18.7 18.9 10.5 6.5

Nevada 18.1 15.8 0.6 32.3

New Hampshire 29.5 20.4 24.8 6.4

New Jersey 32.7 38.5 19.3 9.8

New Mexico 2.6 23.9 –2.3 1.9

New York 31.0 36.5 8.5 5.4

North Carolina 34.0 53.7 11.0 –1.7

North Dakota –1.0 0.9 8.2 32.2

Ohio 19.7 30.3 15.8 10.8

Oklahoma –7.6 1.1 17.4 29.8

Oregon 22.2 31.4 5.0 –5.4

Pennsylvania 26.2 29.6 14.5 4.7

Rhode Island 29.1 31.1 –4.6 3.1

South Carolina 30.4 42.4 8.6 6.3

South Dakota 24.2 33.4 –5.5 1.9

Tennessee 30.6 48.2 9.0 –13.4

Texas 2.5 4.6 22.7 28.9

Utah 16.2 23.0 3.7 –0.2

Vermont 26.6 5.2 18.7 37.7

Virginia 26.0 37.4 14.3 2.7

Washington 23.9 39.8 10.0 10.7

West Virginia 11.6 33.6 13.6 27.8

Wisconsin 18.6 22.4 6.9 11.1

Wyoming –12.9 –7.3 –11.3 70.2

United States 20.5 26.6 10.8 8.4

Page 54 GAO/HEHS-95-235 U.S. Education Spending
Appendix VII 

GAO Contacts and Acknowledgments

GAO Contacts Eleanor Johnson, Assistant Director, (202) 512-7209

Veronica Scott, Evaluator-in-Charge, (202) 512-7039

Ellen Kehoe Schwartz, Assignment Manager, (202) 512-7052

Staff

Acknowledgments

Jerry Fastrup, Supervisory Economist, and Robert Dinkelmeyer, Senior

Analyst, provided valuable technical advice regarding public finance

issues.

Other

Acknowledgments

This report benefitted greatly from comments from the following

education finance experts: William Fowler, Education Statistician, and

Frank Johnson, Education Statistician, of the Department of Education’s

National Center for Education Statistics; Wayne Riddle, Specialist in

Education Finance, and Liane White, Technical Information Specialist, of

the Congressional Research Service; and Martin Orland, Senior Fellow,

and Carol Cohen, Senior Research Associate, of The Finance Project.

(104794) Page 55 GAO/HEHS-95-235 U.S. Education Spending
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