An Overview of the 2015 State of the States

In February 2015 a large group of scholars, researchers, and practitioners interested in P-20 finance issues gathered in St. Louis, Missouri for the National Education Finance Academy’s annual conference to discuss, among multiple topics, the state of P-20 finance in all 50 states. There were 35 states represented in the roundtable session and representatives of 30 of those states submitted their manuscripts to the Journal of Education Finance for publication. This is the third year that JEF has published the State of the States manuscripts as a service to those interested in trends around P-20 finance and the 28 states represents the highest number of states included in the report to date. However, it is the intention to have all 50 states represented by 2016 and individuals interested in representing currently unrepresented states should contact Drs. Weiler and Hartman.

Presenters at the 2015 National Education Finance Academy’s State of the States Roundtable session were directed to address the following topics:

1. 1. Funding priorities/trends for P-12 and/or higher education

2. 2. Changes to the funding formula for P-12 and/or higher education

3. 3. Pressing issues affecting P-12 and/or higher education funding

4. 4. Exclusive to P-12: Diverting funds from public school districts

5. 5. Exclusive to Higher Education: Trends in state funding for public institutions

The following information summarizes some of the more prevalent trends observed in the 28 submissions.

Economic recovery

A vast majority of the states represented in the State of the States session report a stronger state economy, an increase in the overall state budget, and an increase in state aid for P-20 education. However, this positive indicator deserves additional analysis. For example, two states (Colorado and North Carolina) reported that the recovery is resulting in per pupil expenditure figures that are approximating, but still below the FY 2008–2009 funding levels (when the Great Recession hit). Given the fact that both Colorado and North Carolina have seen increases in student enrollment figures since FY 2008–2009, the per pupil expenditure (PPE) is still below pre-recession levels. In addition, there are three states that are reporting declining budgets—Illinois, Louisiana, and Wisconsin. And another two states—Kentucky and South Carolina—that report state budgets that have not increased from FY 2014–2015 to FY 2015–2016. All of these data suggest that economic recovery following the Great Recession is complicated and is impacting states differently.

Allocation of budget increases

Those states that are experiencing growth in state budgets are allocating these new dollars in a number of noteworthy areas. These expenditure trends include:

• • Addressing the needs of low income learners: California, Florida, Nevada, and Wyoming were four states that reported funding programs to aid low income students and their families.

• • Vouchers: California, Florida, Montana, Nevada, North Carolina, and Wisconsin all reported a voucher program that allowed students to take public dollars and apply them to private school tuition. In addition, it appears South Carolina’s elected officials are discussing a similar program.

• • Expansion of Pre-Kindergarten Programs: California, Montana, and Nevada all reported using public dollars to expand existing state-sponsored early childhood learning opportunities.

• • State Retirement Programs: Alabama, Kentucky, Michigan, New Jersey, Pennsylvania, and Virginia all report efforts to provide the state retirement system with additional financial support to ensure that these programs remain solvent. This appears to be an interesting trend since other states took similar steps in recent years as a result of the Great Recession and merits additional examination.

• • Geographically Isolated Learners: Kentucky, Nebraska, and Wyoming are examining ways to better serve geographically isolated or rural students. One option being explored in Wyoming is distance learning.

Other observations

There are a few other items that were reported that deserve mention. These include:

• • Eight states (Alabama, Colorado, Illinois, New York, North Carolina, Pennsylvania, Texas, and Wyoming) report a growing charter school movement.

• • Quite a few states are currently involved in some sort of litigation related to financial issues.

• • In Georgia, Nevada, New York, and Wisconsin the state legislature has authorized state...