Four takeaways from the U.S. Census Bureau’s latest school finance data

As public schools grapple with historic challenges—enrollment losses, learning recovery, fiscal cliffs, and others—it’s critical to examine the funding trends that will shape the future of K-12 budgets. With federal data from the 2022 school year now available, policymakers can better grasp how the COVID-19 pandemic affected public school budgets and what might lie ahead. Here are four key takeaways from the U.S. Census Bureau’s latest school finance data.

Public education funding is up by 34% per student in the last two decades.

Public education funding hit record levels in 2022, continuing its upward trajectory. Between 2002 and 2022, inflation-adjusted K-12 revenue increased by 34.2%, going from $14,088 per student to $18,911 per student. All states saw positive growth, including ten states with 50% or more increases. In 2022, the top spending states were New York ($35,902), New Jersey ($29,019), Connecticut ($28,363), Vermont ($27,338), and Pennsylvania ($24,917). Table 1 shows the inflation-adjusted revenue figures for all states.

Table 1: Inflation-Adjusted Revenue Per Student Growth (2002-2022)

Growth Rank	2022 Rank	State	2002	2022	Growth
		United States	$14,088	$18,911	34.2%
1	1	New York	$19,791	$35,902	81.4%
2	7	Illinois	$14,309	$23,043	61.0%
3	9	New Hampshire	$14,184	$22,738	60.3%
4	11	California	$13,671	$21,748	59.1%
5	5	Pennsylvania	$15,824	$24,917	57.5%
6	17	Washington	$12,909	$20,309	57.3%
7	4	Vermont	$17,402	$27,338	57.1%
8	20	North Dakota	$12,049	$18,869	56.6%
9	23	Louisiana	$11,413	$17,770	55.7%
10	3	Connecticut	$18,809	$28,363	50.8%
11	32	Kentucky	$11,175	$16,243	45.4%
12	18	Oregon	$13,622	$19,329	41.9%
13	2	New Jersey	$20,794	$29,019	39.6%
14	16	Maine	$14,822	$20,563	38.7%
15	8	Rhode Island	$16,435	$22,760	38.5%
16	14	Maryland	$15,495	$21,216	36.9%
17	10	Wyoming	$16,337	$22,102	35.3%
18	43	Tennessee	$10,159	$13,628	34.1%
19	48	Mississippi	$9,732	$13,049	34.1%
20	26	New Mexico	$12,538	$16,765	33.7%
21	12	Delaware	$16,330	$21,713	33.0%
22	28	Colorado	$12,411	$16,477	32.8%
23	6	Massachusetts	$18,367	$24,274	32.2%
24	35	Montana	$12,114	$15,805	30.5%
25	13	Alaska	$16,397	$21,311	30.0%
26	25	South Carolina	$13,196	$17,110	29.7%
27	41	Arkansas	$11,051	$14,268	29.1%
28	40	Alabama	$11,173	$14,300	28.0%
29	21	Minnesota	$14,713	$18,807	27.8%
30	15	Hawaii	$16,208	$20,584	27.0%
31	27	Virginia	$13,296	$16,732	25.8%
32	39	Nevada	$11,480	$14,376	25.2%
33	34	Kansas	$12,845	$15,927	24.0%
34	31	Iowa	$13,173	$16,331	24.0%
35	49	Utah	$9,435	$11,623	23.2%
36	36	Missouri	$12,828	$15,758	22.8%
37	42	South Dakota	$11,546	$14,173	22.8%
38	19	Michigan	$15,915	$19,318	21.4%
39	22	Ohio	$15,356	$18,334	19.4%
40	30	Nebraska	$13,752	$16,353	18.9%
41	33	West Virginia	$13,539	$15,947	17.8%
42	45	Arizona	$11,350	$13,360	17.7%
43	47	Oklahoma	$11,116	$13,081	17.7%
44	29	Georgia	$14,035	$16,401	16.9%
45	38	Texas	$12,577	$14,696	16.8%
46	44	North Carolina	$11,846	$13,448	13.5%
47	46	Florida	$11,737	$13,275	13.1%
48	24	Wisconsin	$15,446	$17,289	11.9%
49	50	Idaho	$10,434	$11,540	10.6%
50	37	Indiana	$14,378	$15,397	7.1%

Federal dollars have driven K-12 funding growth since the start of COVID-19.

Policy decisions during the COVID-19 pandemic had major school finance implications, so it’s important to consider funding trends since 2020. Nationwide, inflation-adjusted education funding grew by 7.4% per student between 2020 and 2022—about $1,300 per student. During this time, Louisiana (17.9%), California (17.2%), and Kentucky (16.5%) had the highest growth, with only Alaska, Delaware, and Kansas seeing declines, as shown in Figure 1.

But nearly all the $1,300 per student funding increase since the pandemic’s start—$1,245 per student—was due to a temporary spike in federal dollars. Congress sent $190 billion in K-12 relief aid to states through three separate packages, and all states saw substantial gains in federal funding that ranged from $457 per student (Kansas) to $1,650 per student (Kentucky). In total, federal funding growth exceeded $1,000 per student in 42 states. Table 2 includes federal funding growth data across states.

Figure 1: Inflation-Adjusted Funding Growth Per Student Since the Start of the COVID-19 Pandemic (2020-2022)

Inflation has erased gains in state and local education funding since 2020.

Federal funding has driven recent K-12 finance trends. But with federal relief aid expiring later this year, it's critical to examine what's happened with non-federal dollars since the pandemic's start. Table 2 compares growth in federal and non-federal revenue (non-federal dollars include funding from state and local sources). Rampant inflation has eaten into gains in non-federal funding, which comprises the bulk of dollars for public schools across the country.

Between 2020 and 2022, nominal non-federal funding grew by $1,485 per student but only $55 per student after adjusting for inflation. Overall, 20 states saw real increases in non-federal dollars, with five states exceeding $1,000 per student growth (California, New Jersey, Louisiana, New York, and Missouri) and four states exceeding $1,000 per student decline (Texas, Hawaii, Alaska, and Delaware).

For context, between 2018 and 2020, non-federal revenue went up nominally by $1,204 per student, resulting in a $769 increase in real terms. During this time, 43 states increased their inflation-adjusted non-federal funding per student. Had inflation stayed at its pre-pandemic level, non-federal funding would've gone up by roughly $938 per student between 2020 and 2022 rather than the $55 per student observed.

Table 2: Inflation-adjusted Funding Growth Per Student by Source (2020-2022)

Non-Federal Growth Per Student Rank	Federal Growth Per Student Rank	State	Total Growth	Non-Federal Growth Per Student	Federal  Growth Per Student
		United States	$1,300	$55	$1,245
1	7	California	$3,184	$1,691	$1,493
2	30	New Jersey	$2,698	$1,526	$1,172
3	8	Louisiana	$2,694	$1,217	$1,477
4	32	New York	$2,222	$1,057	$1,164
5	33	Missouri	$2,162	$1,021	$1,141
6	41	Oregon	$1,960	$947	$1,012
7	1	Kentucky	$2,304	$655	$1,650
8	28	Arizona	$1,532	$347	$1,185
9	34	Alabama	$1,442	$343	$1,100
10	37	Virginia	$1,386	$298	$1,089
11	40	Rhode Island	$1,302	$284	$1,018
12	42	Maine	$1,287	$280	$1,008
13	4	Michigan	$1,814	$274	$1,540
14	24	Vermont	$1,494	$258	$1,237
15	47	New Mexico	$985	$244	$741
16	13	Tennessee	$1,600	$218	$1,382
17	18	Nevada	$1,490	$186	$1,304
18	6	North Carolina	$1,620	$123	$1,497
19	17	South Carolina	$1,408	$62	$1,346
20	11	Georgia	$1,487	$48	$1,439
21	49	Utah	$631	-$71	$702
22	44	Wisconsin	$830	-$100	$930
23	26	Connecticut	$1,095	-$114	$1,208
24	45	Indiana	$742	-$126	$869
25	48	Colorado	$586	-$129	$714
26	36	Illinois	$905	-$186	$1,091
27	20	Oklahoma	$1,071	-$214	$1,285
28	5	Arkansas	$1,302	-$229	$1,531
29	9	Mississippi	$1,238	-$232	$1,470
30	22	Massachusetts	$951	-$292	$1,242
31	43	New Hampshire	$670	-$293	$963
32	2	Pennsylvania	$1,322	-$302	$1,623
33	35	Idaho	$794	-$303	$1,097
34	21	Wyoming	$852	-$407	$1,259
35	39	Florida	$640	-$407	$1,047
36	38	Iowa	$643	-$444	$1,088
37	14	Washington	$922	-$455	$1,377
38	15	Maryland	$847	-$509	$1,357
39	50	Kansas	-$65	-$521	$457
40	46	Nebraska	$219	-$597	$816
41	29	South Dakota	$569	-$615	$1,183
42	16	Ohio	$724	-$626	$1,350
43	12	Montana	$710	-$725	$1,435
44	31	West Virginia	$421	-$744	$1,165
45	23	Minnesota	$432	-$808	$1,240
46	3	North Dakota	$645	-$975	$1,620
47	27	Texas	$66	-$1,132	$1,198
48	19	Hawaii	$23	-$1,280	$1,302
49	25	Alaska	-$356	-$1,582	$1,226
50	10	Delaware	-$248	-$1,699	$1,452

Eight states have increased K-12 appropriations since 2020 despite substantial enrollment declines.

State funding formulas tie dollars to enrollment, so school districts lose funding when student counts fall. But this doesn't necessarily mean that state K-12 appropriations will also decline. Between 2020 and 2022, eight states increased inflation-adjusted education appropriations despite substantial enrollment losses. Notably, California increased total state funding by 6.6% despite losing 5.2% of its students. Put another way, California's public schools got an additional $3.8 billion even though they served 292,800 fewer students.

The interplay between enrollment, state funding formulas, and state appropriations will be important in the coming years as federal projections show enrollment will continue to fall until at least 2030. It's generally true that public schools lose funding when enrollment drops, but increases in state funding could offset these losses—especially in states that have generous hold harmless that protect against funding losses.

Figure 2:  States with K-12 Enrollment Declines and Inflation-adjusted State Funding Increases (2020-2022)

Conclusion

The U.S. Census Bureau’s latest school finance data illustrate an odd fiscal reality for public schools: despite record funding levels, many will have tight or shrinking budgets in the years ahead as they deal with challenges from things such as inflation, enrollment losses, and the expiration of federal COVID-19 relief aid. State and local policymakers must monitor these trends closely.