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)

PDF

• Download/View the PDF containing this indicator and corresponding tables and figures. (1906 KB)

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)

Remaking Memphis: Charters, Choice, and Experimentation

Array of strategies aims to transform Tennessee's largest district

By Jaclyn Zubrzycki via Ed Week 

Memphis, Tenn.

With a growing charter school sector, a new state-run district with plans to expand, and a reconfigured central office, Memphis is poised to become the next national center for New Orleans-style school governance.
Even as a commission spent the past two years planning for the largest school district merger in the nation's history—the former Memphis city district and an adjacent suburban system became the unified 140,000-student, 222-school Shelby County district on July 1—the landscape of governance within the legacy city school system was changing rapidly to favor parental choice and more autonomous schools.
The changes underway here include:
• A rapidly expanding array of charter schools. Home to just three charter schools 10 years ago, Memphis now has 41 charters, and more are on the way, including schools that will be part of some of the nation's best-known charter networks.
• A growing Achievement School District. The nation's second state-run school district, Tennessee's Achievement School District oversees 12 schools in the city and plans to run more than 50, most of them within Memphis, over the next five years.
• An "Innovation Zone." Created by the district as the analogue to the state-run district, the Innovation Zone, or I-Zone, encompasses 13 schools that have budget and hiring autonomy.
As a model for the Memphis efforts, district, charter, and state leaders are looking down the Mississippi River to New Orleans, where the state-run Recovery School District has converted most of the public schools in the city to charter status. The goal is to create a "system of schools rather than a school system," said Bradley Leon, the new chief innovation officer for the Shelby County district.

Eight-year-old Laniah Bowdery, front, waits with her classmates to perform at a reading assembly at Lowrance Elementary School in Memphis. Lowrance won state recognition this year for improving its students' reading and math scores.

—Timothy Ivy for Education Week

"Our belief is that Memphis is poised to be either the first or among the first major urban centers to fully and deeply transform public education for all kids—in our case, without having had to suffer a hurricane to get there," said Barbara Hyde, the president of the Hyde Family Foundations, a philanthropy in Memphis that funds some of the efforts.
She referred to Hurricane Katrina, whose destructive path in 2005 opened the way for an accelerated remake of the New Orleans school system, where more than 80 percent of students now attend charter schools.
"We have an unprecedented alignment of human-capital partners, a pipeline of talent, demonstrated high-performing school models, and a pipeline of new charter schools coming into the city," Ms. Hyde said.

Setting the Scene

State and local policy changes over the past few years have cleared the way for some of the shifts in Memphis and helped draw the interest of charter operators around the country.
Then-Gov. Phil Bredesen, a Democrat, signed Tennessee's First to the Top Act into law in 2010, which created the Achievement School District. The same year, Tennessee received a federal Race to the Top grant that included funds for the ASD. A separate 2011 state law opened enrollment in charter schools to all students and removed the cap on the number of schools.
"The policy context in the state, with no cap on charters, no collective bargaining, and one of the best authorizers in the country [the ASD] means some of the best [charter operators] are saying, I want to come to Memphis," said Chris Barbic, the executive director of the ASD.

Teachers in the Shelby County district also work in an altered policy environment: Collective bargaining was repealed in 2011; a 2013 state law requires teachers and principals to mutually agree on whether or not a teacher would work at a given school; and Tennessee teachers' evaluations are now tied to their students' scores on the state exams. The merged district has also moved away from seniority-based hiring.
Those changes have made the city fertile ground for the expansion of alternative-certification programs like Teach for America and Teach Memphis, according to Athena Turner, the executive director of Teach for America in Memphis.
Benjamin Fenton, the founder of New Leaders, a New York City-based group that trains aspiring principals and consults on school and district leadership, said the district's focus on school-level leadership, and philanthropic investment from local and national foundations, had brought his organization to the city in 2004 and opened the doors for others since.
The state also sent a signal by hiring Mr. Barbic, the founder of the Houston-based YES Prep charter network, to oversee the Achievement School District schools.

A Proof Point

Mr. Barbic said that Shelby County's schools would prove the benefits of school choice, both for families and for teachers, enabling them to choose the best school from a range of operators. He said he imagines district-run Memphis-area schools and the ASD working together in "co-opetition"—friendly competition—to improve.
Dorsey Hopson II, the district's new superintendent, is equally enthusiastic about the potential for dramatic change. "If we could give all of our schools the autonomy that the I-Zone has and the ASD has and the charter schools have—I think it'd be a recipe for success," he said.
Meanwhile, the merger of the Memphis and Shelby County districts opened up opportunities for conversations about just how the central office should be structured. Some 300 out of 1,000 central-office jobs were cut in the resulting reorganization, according to Mr. Hopson.
"When [the merger] started, initially it felt like a mess. But it turned out to be an extraordinary opportunity to throw everything up in the air and look at how to create a whole new system," said Ms. Hyde.
The changes are not uncontroversial, though.
Standing Together for Strong Community Schools, a nonprofit group in the state, views the state-run district and the growing charter sector as a move away from local control. Its members protest what their website describes as "well-funded special interests intent on dismantling our school systems, diverting public money from public schools, and limiting the voice of Tennessee citizens in shaping education policy through our local elected school boards."
The ASD and the district's I-Zone share the goal of raising the 69 Memphis schools that ranked in the state's bottom 5 percent on state standardized tests into the top 25 percent of schools, and both began taking charge of schools last school year after receiving an infusion of money from the state.
The ASD functions as an authorizer for six schools in the city and operates an additional six Memphis schools as "achievement schools," which are run as though they were a separate charter-management organization within the ASD. The achievement schools took over a feeder pattern of schools in Frayser, a particularly troubled area of the city.
Each school in the achievement district is required to accept all students who had previously been zoned to the school. The rule means charter operators must prove that they can show strong results without "creaming" students, or somehow enrolling an easier-to-teach group of students than the regular public schools do.

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Where Are These Schools Located?

Use the Google Map below to explore the Memphis school district, including its I-Zone schools, as well as the area's charter and achievement schools. (Map by Doris Nhan) (map not included see original posting via Ed Week)

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Innovation Zone

Prominent national charter operators, including YES Prep and the Oakland, Calif.-based Aspire, plan to open schools within the ASD in the next few years.
Mr. Barbic said he anticipates that by 2016, the ASD will run as many as 53 schools—most of them in Memphis—and serve as many as 19,000 students.
The 13 schools in the district's I-Zone are granted some of the same budget and hiring autonomy as a charter school or a school in the ASD. Once a school becomes part of the I-Zone, every teacher must reapply for his or her job. Some schools in the zone have an extended school day, and principals can select which interventions they'd like to use in their schools.
Antonio Burt, who is in his second year as the principal of Ford Road Elementary School, in the Westwood community, said the flexibility allowed him to blend various strategies he'd learned in New Leaders trainings and from colleagues around the country.
His school has an extended school day and a schedule that changes every few weeks to allow for longer blocks of instruction. "The I-Zone helped us maneuver around some red tape," Mr. Burt said.
Despite the longer workday and an atmosphere Mr. Burt proudly described as competitive, the school lost just two teachers last year and was recognized as among the state's most-improved schools.
While the state-run district can technically take over any school in the bottom 5 percent, Mr. Barbic said the ASD hosted community meetings and worked with the regular school district to determine which schools should be taken over.
Superintendent Hopson said that the regular district had been able to keep some schools under its own authority.
"Whenever we've said, hey, for community reasons or historic reasons, we would like to run these schools, and put these schools in our I-Zone, the response has always been, well, show me what your plan is," he said.
The I-Zone schools showed some of the highest gains on reading and math tests in the state last year, higher than both the rest of the district and the ASD. Helping parents navigate the mix of choices in the district is challenging, however.

Changing Landscape

Greg Thompson, the executive director of the Tennessee Charter School Center, which incubates and advocates for charter schools, said his organization was working on a website that would help parents understand what schools are available to them.
But Beverly Goliday, who has six grandchildren in the district, said that at this particular moment, "it is very complicated to find a school."
Although the expansion of the charter schools in other districts, including Philadelphia, has led some district leaders to raise concerns, Mr. Hopson is optimistic.
"Obviously, as more charters come online, enrollment in the district's going to go down," he said. "But the main focus or issue should be on making sure we have as many good schools as possible."
He said there were still some details to work out: For instance, he said, state funding should change to reflect the district's expenses in administering charter schools.
Still, the pace of change isn't slowing anytime soon, both because of the expansion of the ASD and the I-Zone and because of a forthcoming wrinkle in the merger: Six suburban districts in the area are expected to vote to create their own school boards and separate from the merged system this fall.
With that prospect looming, the merged Shelby County district does not yet know whether it will have 80,000, 100,000, or 140,000 students in the next school year. That uncertainty "keeps us on our toes," Mr. Hopson said.

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Coverage of leadership, expanded learning time, and arts learning is supported in part by a grant from The Wallace Foundation, at www.wallacefoundation.org. Education Week retains sole editorial control over the content of this coverage.

Vol. 33, Issue 07, Pages 1,18-19

State of Tennessee: Individuals With Disabilities Act (IDEA)

The Individuals with Disabilities Education Act (IDEA) is a law ensuring services to children with disabilities throughout the nation. IDEA governs how states and public agencies provide early intervention, special education and related services to more than 6.5 million eligible infants, toddlers, children and youth with disabilities.

Infants and toddlers with disabilities (birth-2) and their families receive early intervention services under IDEA Part C. Children and youth (ages 3-21) receive special education and related services under IDEA Part B.

State of Tennessee IDEA

National IDEA

Washington State Lawmakers Clash on K-12 Funding

Article via: May 12, 2015 - Education Week Andrew Ujifusa

Washington state lawmakers are struggling in a special session to agree on a strategy to pay for basic education. But as they try to build a system that bridges deep partisan divides over tax policy, they must also resolve to what extent greater state aid for K-12 will lead to reduced financial and political clout for local districts and union leaders.

Looming over the process that began April 28 is the state supreme court, which held the state in contempt last year over its failure to satisfy a 2012 decision that ordered legislators to reform and increase K-12 spending by 2018. Lawmakers must make significant strides toward meeting that mandate this year, or face court sanctions.

As states like Washington look at how to overhaul their funding formulas to smooth out inequities, there's a corresponding tension between state officials and local K-12 leaders about the strings that come along with greater support for some districts.

"What the districts really want is the increased commitment without increased control. But that's not going to happen," said Michael Griffith, the senior school finance analyst for the Denver-based Education Commission of the States. "Now I hear it constantly [from state lawmakers]: We're willing to spend more money, but we want to know what we're going to get for our money."

Broader debates about the proper relationship between the sources of school funding and authority over K-12 have been in the spotlight nationally since at least the 1973 U.S. Supreme Court ruling in San Antonio Independent School District v. Rodriguez. In that case, the court held that using local property taxes as a basis for financing schools was not unconstitutional.

The political landscape in Washington state is sufficiently complex that as lawmakers there push their own solutions and resist those from the other party, "we have Democrats complaining about Republicans raising taxes," said Frank Ordway, the chief lobbyist for the League of Education Voters. The Seattle-base group supports full-day kindergarten and charter schools.

Trends and Roadblocks

Recently, states in general have shown limited appetite for pushing school funding burdens onto their local districts.

From 1991 to 2011, on average, the percentage of total spending on public schools coming from local tax sources dropped by 5 percentage points, according to Jennifer Schiess, an associate partner at Bellwether Education Partners, a consulting firm based in Washington, D.C.

"The general trend over the last 20 years or so has been reduced reliance on local taxes in school funding—but it's not a dramatic trend," said Ms. Schiess in an email, citing data from the National Center for Education Statistics.

That doesn't mean the shift is easy in individual states. An Illinois bill introduced during the state's previous legislative session by Democratic Sen. Andy Manar would have altered the influence of property taxes by redistributing funds from wealthy to poor districts. But that bill has so far failed to pass, and it faces an uncertain future in this session.

And officials in Pennsylvania, faced with huge funding gaps between rich and poor districts because of property-tax disparities, are trying to craft a new funding system that might dramatically affect some districts' budgets, creating clear winners and losers in local school financing that could instantly divide lawmakers.

There, as in Washington state, any tax hike to pay for Democratic Gov. Tom Wolf's proposed spending increase for K-12 must first pass muster with GOP lawmakers.

Basic Obligations, More Revenue

The Washington state high court's 2012 ruling in McCleary v. State of Washington said that the state had fallen short of providing adequate resources for basic education. The court specifically called on lawmakers to meet prior commitments to fund class-size reductions in grades K-3, to provide full-day kindergarten, and to increase support for transportation needs and schools' materials and operating costs. Lawmakers increased basic K-12 spending by $982 million in the state's 2013-15 budget, but it did not satisfy the court.

The special session is set to last 30 days, although Gov. Jay Inslee, a Democrat, can extend it. The state uses biennial budgets. Complicating the matter is that control of the legislature is split, with Democrats holding the House of Representatives and Republicans the Senate.

Washington currently has no tax on personal income or capital gains, and Democrats, including Gov. Inslee, want to change that in order to resolve the school funding fight.

The House Democrats' budget plan, released in March, includes a new 5 percent tax on capital gains as part of a blueprint for increasing K-12 spending by $3.2 billion for the 2015-17 biennial budget. Of that amount, $1.4 billion would be earmarked for K-3 class-size reduction and other obligations under McCleary. Gov. Inslee also proposed a new capital gains tax of 7 percent in his 2015-17 budget.
State Rep. Ross Hunter, a Democrat and the lead budget writer in the House, stressed in an April 30 hearing that he is more narrowly focused on adequate funding for basic K-12 education as called for in the McCleary ruling, and not on broader issues in play like setting basic teacher salaries at the state level.

"I view our need to comply with the state constitution as the state funding basic education. I don't think the court is requiring us, nor do I think it's a good idea, to limit communities from providing additional services," Mr. Hunter said.

The Democrats' plan also includes a cost-of-living pay increase for K-12 teachers, to the tune of $154 million, and would pick up a share of local school employees' health-care costs.

'Fundamentally Inequitable'

But Republicans who run the state Senate and want no part of a new tax on capital gains or income are exploring a change to the relationship between existing local and state taxes designated for schools, in order to meet the state's K-12 obligations to all districts.
In part, their budget proposal relies on $3 billion in estimated additional revenue generated from the state's existing tax system over the 2015-17 budget period. About $1.3 billion of that funding would go toward satisfying the McCleary ruling.
Republican Sen. Bruce Dammeier argued that state lawmakers must no longer shove 30 percent or more of the funding responsibility for schools onto districts, since in such a system, wealthy districts and local unions drive up teacher pay in their districts, while teacher salaries elsewhere fall far behind.
Mr. Dammeier's plan for changing local levies is technically revenue-neutral. But it would increase the state's common schools levy while simultaneously lowering state property taxes, and moving what the senator says would be $1.5 billion in new revenue for the state into the K-12 budget. Roughly 40 percent of districts, many of them relatively wealthy, would effectively experience a tax hike in Mr. Dammeier's plan.
And he said that requiring basic teacher compensation to be set at the state level, with possible enhancements for teachers in certain areas with high costs of living, would help lawmakers fulfill their obligation to fund basic education that includes fair and reasonable teacher salaries.
"Our system is fundamentally inequitable right now," Mr. Dammeier said. "Our students' education is not supposed to be dependent on their zip code."
But the 86,000-member Washington Education Association has decried plans to set teacher compensation at the state level, calling it an attack on local control of schools.

Getting the Votes

Any plan to satisfy McCleary and fix school funding should ensure a net revenue increase, but also shore up the state's control over basic education funding, such as changes to how local property taxes work, according to state Superintendent of Public Instruction Randy Dorn.
Mr. Dorn has his own plan to satisfy McCleary that would create $2.2 billion in new spending.

"I'm not promoting one or the other," he said of the competing House and Senate tax plans. "I'm just happy if we can get new revenue."

Yet Mr. Dorn's plan would also ask the court to extend the deadline for meeting the requirements of the McCleary ruling to 2021. And Mr. Ordway of the League of Education Voters cautioned that the court will likely not tolerate anything less than "specific and real" commitments in any budget deal.
"Neither one of them really want to do the things that are hard for their party politically," Mr. Ordway said.

Vol. 34, Issue 30, Pages 1,20-21