School Finance: Fifty Years of Expansion

Abstract

Since 1949-50, per-pupil expenditures in public elementary and secondary schools have more than quadrupled, even after adjusting for inflation. This article discusses some of the reasons. A significant share of the increase is the result of an 86% inflation-adjusted increase in teachers' salaries between 1949-50 and 1971-72, although teachers' salaries have changed little in the following 25 years. The ratio of students to school employees has dropped by half since 1949-50 as a result of declining class sizes and the hiring of more nonteaching school employees, which significantly affects costs. Even maintaining class size at a constant level will cause school budgets to grow at a rate greater than that of inflation because schools must compete in a labor market against other employers who are able to produce more with fewer employees. A substantial part of the increase in per-pupil spending is a result of expansions in services provided by the schools. More expensive, specialized classes for high school students, compensatory education for students from disadvantaged backgrounds, special education and related services for students with disabilities, and desegregation efforts all contribute to higher costs. Efforts to improve funding equity have led to increased expenditures: rather than take funding from wealthier districts, most states prefer to raise the funding available to schools at the bottom and the middle of the scale, increasing total spending. Finally, a share of the total increase must be attributed to the workings of the political system governing schools.