Public School Revenue Sources

(Last Updated: May 2015)

From school years 2001–02 through 2011–12, total elementary and secondary public school revenues increased from $553 billion to $620 billion (in constant 2013–14 dollars). During the most recent period from 2010–11 through 2011–12, total revenues for public elementary and secondary schools decreased by about $22 billion, or more than 3 percent.

From school years 2001–02 through 2011–12, total elementary and secondary public school revenues increased from $553 billion to $620 billion (in constant 2013–14 dollars), a 12 percent increase, adjusting for inflation using the Consumer Price Index (CPI). This increase was accompanied by a 4 percent increase in total elementary and secondary public school enrollment, from 48 million students in 2001–02 to 50 million students in 2011–12. Federal revenues increased 89 percent from 2001–02 to 2009–10 (from $44 billion to $82 billion), but decreased by 3 percent from 2009–10 to 2010–11 (from $82 billion to $80 billion). These revenues then decreased by another 22 percent, to $63 billion in 2011–12. From 2001–02 through 2011–12, local revenues increased by 17 percent, to $277 billion in 2011–12. State revenues fluctuated between $272 billion and $314 billion during this period, and they were 3 percent higher in 2011–12 than in 2001–02 ($280 billion vs. $272 billion). During this period, federal revenues peaked in 2009–10 at $82 billion, while local revenues peaked in 2008–09 at $284 billion and state revenues peaked in 2007–08 at $314 billion.

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Figure 1. Revenues for public elementary and secondary schools, by revenue source: School years 2001–02 through 2011–12

NOTE: Revenues are in constant 2013–14 dollars, adjusted using the Consumer Price Index (CPI).
SOURCE: U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), "National Public Education Financial Survey," 2001–02 through 2011–12. See Digest of Education Statistics 2014, table 235.10.

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The percentage of total revenues for public elementary and secondary education that came from federal sources was 8 percent in school year 2001–02 and 10 percent in 2011–12. Between school years 2001–02 and 2011–12, the percentage coming from local sources fluctuated between 43 and 45 percent, accounting for 45 percent of total revenues in 2011–12. The percentage of total revenues from state sources decreased from 49 percent in school year 2001–02 to a low of 43 percent in school year 2009–10. The percentage of revenues from state sources was higher in 2011–12 (45 percent) than in 2009–10 (43 percent).

More recently, from school years 2010–11 through 2011–12, total revenues for public elementary and secondary schools decreased by about $22 billion in constant 2013–14 dollars (3 percent). During this period, federal revenue declined by $17 billion (22 percent) and state revenue declined by $3 billion (1 percent). Local revenues declined by $1.6 billion (1 percent), reflecting a $2.1 billion decrease in revenues from local property taxes, a $0.7 billion increase in other local public revenues, and a $0.2 billion decrease in private revenues (consisting of receipts from school lunches, student activities, and other fees from students). Other local public revenues were the only source that increased from 2010–11 through 2011–12.

In school year 2011–12, there were significant variations across the states in the percentages of public school revenues coming from state, local, and federal sources of revenue. In 20 states, at least half of education revenues came from state governments, while in 16 states and the District of Columbia at least half came from local revenues. In the remaining 14 states, no single revenue source made up more than half of education revenues: Arizona, Colorado, Georgia, Iowa, Louisiana, Mississippi, Montana, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Texas, and Wisconsin.

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Figure 2. State revenues for public elementary and secondary schools as a percentage of total public school revenues,
by state: School year 2011

NOTE: All 50 states and the District of Columbia are included in the U.S. average, even though the District of Columbia does not receive any state revenue. The District of Columbia and Hawaii have only one school district each; therefore, neither is comparable to the other states. Categorizations are based on unrounded percentages. Excludes revenues for state education agencies.
SOURCE: U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), "National Public Education Financial Survey," 2011–12. See Digest of Education Statistics 2014, table 235.20.

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In school year 2011–12, the percentages of public school revenues coming from state sources were highest in Vermont and Hawaii (88 and 85 percent, respectively), and lowest in South Dakota and Nebraska (31 percent each). The percentage of revenues coming from federal sources was highest in Mississippi (18 percent), followed by Louisiana and South Dakota (17 percent each); the percentage was lowest in Connecticut and New Jersey (5 percent each), followed by Maryland (6 percent). Among all states, the percentage of revenues coming from local sources was highest in Nebraska and Illinois (60 percent each), and lowest in Vermont and Hawaii (4 and 2 percent, respectively). Most of the revenues for the District of Columbia (90 percent) were from local sources; the remaining 10 percent of revenues were from federal sources.

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Figure 3. Property tax revenues for public elementary and secondary schools as a percentage of total public school revenues, by state: School year 2011–12

NOTE: All 50 states and the District of Columbia are included in the U.S. average. The District of Columbia and Hawaii have only one school district each; therefore, neither is comparable to the other states. Categorizations are based on unrounded percentages.
SOURCE: U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), "National Public Education Financial Survey," 2011–12. See Digest of Education Statistics 2014, table 235.20.

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In school year 2011–12, local property taxes constituted 81 percent of total local revenues and 36 percent of total revenues for elementary and secondary schools. The percentages of total revenues from local property taxes differed by state. In 2011–12, New Hampshire and Connecticut had the highest percentage of revenues from property taxes, at 55 percent each. Five other states had percentages of revenues from property taxes of 50 percent or more (in descending order): Illinois, New Jersey, Rhode Island, Massachusetts, and Nebraska. Vermont and Hawaii¹ had the lowest percentages of revenues from property taxes (0.1 percent and 0 percent, respectively). In 14 other states, property taxes made up less than 25 percent of education revenues (in descending order): Montana, Delaware, California, Maryland, Indiana, Kentucky, North Carolina, Tennessee, Idaho, Minnesota, Louisiana, Alabama, New Mexico, and Alaska.

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¹ Hawaii has only one school district, which receives no funding from property taxes

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Glossary terms: Consumer Price Index (CPI), Elementary school, Property tax, Public school or institution, Revenue, Secondary school
Data Source:Common Core of Data (CCD)

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Reference Tables

• Table 203.20 (Digest 2013): Enrollment in public elementary and secondary schools, by region, state, and jurisdiction: Selected years, fall 1990 through fall 2023
• Table 235.10 (Digest 2014): Revenues for public elementary and secondary schools, by source of funds: Selected years, 1919-20 through 2011-12
• Table 235.20 (Digest 2014): Revenues for public elementary and secondary schools, by source of funds and state or jurisdiction: 2011-12

Related Indicators

• Public School Expenditures

Previous Versions of This Indicator

• April 2014 - (2332 KB)


• May 2013 - (1936 KB)

CAP brief: A federal loophole that shortchanges poor schools

Article Via: Washington Post, Lyndsey Layton, March 11, 2015.

As Congress debates how to best distribute federal funds to help states educate poor children, a new brief from the Center for American Progress argues that the current program, known as Title 1, has structural flaws that undermine its purpose.

A lot of money is at stake — currently, the federal government sends about $14.6 billion annually to high-poverty K-12 schools nationwide.

Title 1, a central feature of the Elementary and Secondary Education Act of 1965, was designed to level the playing field so that poor children receive the same opportunities as affluent children. Federal lawmakers who created the program didn’t want states to use federal dollars in place of state and local dollars in high-poverty schools; they wanted the federal funds to be used in addition, to provide the kinds of extra programs and services that would help poor children catch up to their wealthier peers.

So they required “comparability” — states and local districts must evenly spread their dollars across schools within a community in order to be eligible for federal Title 1 dollars for their high-poverty schools.

The problem, according to analysts at the Center for American Progress and elsewhere, is that most school districts don’t perform actual school-by-school budget comparisons, instead using average costs that can mask significant variations between schools within a district. What’s more, federal law prohibits districts from using actual expenditures to calculate comparability.

The problem is apparent, the analysts say, when you consider that Title 1 schools tend to be staffed with less-experienced teachers than more affluent schools. More-experienced teachers generally earn higher salaries than newcomers to the field, so districts frequently spend more on teacher salaries in affluent schools than in high-poverty schools.

The Center for American Progress is a left-leaning think tank that is closely associated with the Obama administration. Robert Hanna, Max Marchitello and Catherine Brown at CAP examined data from 95,000 public schools collected by the Education Department during the 2011-2012 school year. They compared how districts fund schools that are eligible for Title I dollars with other schools in their grade span — elementary, middle or high school grades. The trio found “vast disparities throughout the country in how districts spend state and local dollars on Title I schools.”
Among their findings:

• More than 4.5 million low-income students attend inequitably funded Title I schools. In most states, there are tens of thousands of students from low-income households who attend Title I schools that are not funded equitably relative to other schools in their district.
• These inequitably funded schools receive about $1,200 less per student than comparison schools in their districts, on average, but actual amounts vary. In Fort Worth, for example, inequitably funded Title I schools receive about $2,600 less per student. In some districts, the disparities are even wider. In Santa Fe, New Mexico, inequitably funded Title I schools receive about $4,900 less than other schools. If these gaps were closed, inequitably funded schools in Texas would receive an additional $1.6 billion annually, and in New Mexico, they would have an additional $65 million.
• If the federal loophole were closed, high-poverty schools would receive about $8.5 billion in new funds each year, nationwide.

As Congress works on an overdue remake of No Child Left Behind, the most current iteration of the Elementary and Secondary Education Act of 1965, lawmakers ought to close the comparability loophole, the CAP analysts say. States and districts ought to be required to fund their Title 1 schools at the same level as their more affluent schools, based on actual spending, according to CAP.

Education Finance 101