Finance and Funding

More than half a century ago Adlai Stevenson said, “The most American thing about America is the free common school system.” The public school system in the United States is free only in the sense that all students have a right to attend. According to the National Center for Education Statistics (NCES), it cost an average of just over $6,500 per student to keep public elementary and high schools (known in the education community as “el-hi”) operating in academic year 1998–99. Overall the revenues raised for that school year totaled over $347 billion.

These revenues came from the federal government, state governments, and local government. (Local government includes individual towns as well as larger municipalities and county governments.) The bulk of that money (nearly half) came from the states. The federal government contributed only 7.1 percent of the revenues. That may seem low, but in fact the federal government has historically contributed only a small portion of public education funds.

Funding for education has always been a contentious issue. Some people believe that education funding should be much higher than it is to ensure that students get the best education they can with the best resources and the most motivated teachers. Others believe that educational expenses should be kept in check so that schools will focus on teaching students instead of adding educational “bells and whistles” that do little to provide real educational value. What constitutes bells and whistles, of course, makes the debate more challenging. In the early and mid 1980s many education experts argued that computers in the classroom were a waste of tax dollars. By the mid 1990s it was clear that computers were in the classroom to stay, a necessary and essential element in the education process.

Still, there are many other issues for people to debate. For example, does increased funding increase student achievement? How long should school equipment last before it is replaced? Do school districts need to fund extracurricular activities, such as athletic teams? The issue of school vouchers (discussed in detail in a separate entry) has raised enormous questions in some communities. The idea of allowing parents to earmark some of their tax dollars for private schooling has generated much controversy. Clearly, taking money away from the public schools puts them at a greater financial disadvantage than they already are. Yet it does children little good to know that the public school they attend is in the first year of a turnaround that may last several more years. Regardless of the many controversies surrounding public education funding, it remains vitally important and guarantees that all children in the United States have access to school.


Inside Finance and Funding