• Introduction
• Major Findings
• Footnotes
• Reference

•   share studies and research that are developmental in nature;
•   share results of studies that are on the cutting edge of methodological developments; and
•   participate in discussions of emerging issues of interest to researchers.

The National Public Education Financial Survey (NPEFS) is an annual survey of state financial data that is part of the Common Core of Data (CCD). The NPEFS collects data on revenues and expenditures in grades prekindergarten through 12 in public schools in the 50 states, the District of Columbia, and the outlying territories.

This report presents state-level analyses of revenues and expenditures for the 1997–98 school year. NPEFS finance data form the core of these analyses, but information is supplemented by data on state demographic and fiscal characteristics from the Bureau of the Census and the Bureau of Economic Analysis. While aggregate finance data used in these analyses are complete for all states, missing detailed items of revenue and expenditure were imputed in some states.

Analyses of revenues and expenditures per pupil are presented using both unadjusted and cost-adjusted dollars. Cost adjustments are designed to take into account differences in the cost of education across states. The cost adjustment used in these analyses is the Geographic Cost of Education Index (GCEI) (Chambers 1998). This index reflects how much more or less it costs in different geographic locations to recruit and employ comparable school personnel, as well as the varying costs of nonpersonnel items such as purchased services, supplies and materials, furnishings and equipment, travel, utilities, and facilities.

Total education revenues per pupil averaged $7,067 (in unadjusted dollars) in 1997–98, but the range in revenues per pupil across the 50 states and the District of Columbia was quite substantial—from $10,550 in New Jersey to $4,770 in Mississippi (table A). New Jersey, the state with the highest revenues per pupil, raised 2.2 times the revenue of Mississippi, the lowest revenue state. Cost adjustments reduced the range in revenues per pupil, but New Jersey, the state with the highest revenues per pupil ($9,158), still raised 1.8 times the revenues of Utah, the state with the lowest revenues per pupil ($4,998) (table B).¹

Although federal, state, and local revenues per pupil all varied across the 50 states, revenues per pupil from state sources showed the largest range between the highest and lowest revenue states and federal revenues per pupil the smallest. In unadjusted dollars, state revenues per pupil in Hawaii ($6,009) were nearly 10 times higher than state revenues in New Hampshire ($633) (table A). Local revenues per pupil were almost seven times higher in New Jersey ($5,972) than in New Mexico ($857), and federal revenues per pupil were over four times higher in Alaska ($1,133) than in New Hampshire ($258). In cost-adjusted dollars, the ratios between the highest and lowest revenue states were 10.0 to 1 for state revenues, 6.1 to 1 for local revenues, and 3.6 to 1 for federal revenues (table B). (All ratios exclude the District of Columbia, and local revenues exclude Hawaii, a state with nearly full state funding of education.)

State wealth—measured as gross state product (GSP) per capita, median household income, and median housing value—showed a positive relationship with unadjusted local revenues per pupil and total revenues per pupil, but no relationship with either state or federal revenues per pupil. States with higher fiscal capacity tended to raise larger amounts of money from local sources. Since state and federal revenues did not eliminate these differences, wealthier states tended to have higher total revenues per pupil for public education. However, cost adjustments to revenues reduced or eliminated these relationships.

Total expenditures for elementary and secondary education, which include both current and capital expenditures, were $334 billion in 1997–98, with current expenditures totaling over $285 billion—or about 85 percent of total expenditures. Total expenditures were $7,247 per pupil, current expenditures were $6,189 per pupil, and capital expenditures were $953 per pupil.²

Current expenditures per pupil showed a substantial range across the 50 states and the District of Columbia—from a high of $9,643 in New Jersey to a low of $3,969 in Utah, with a ratio of expenditure between the highest and lowest spending states of 2.4 to 1 (table C). Cost adjustments reduced the range between the highest and lowest spending states, but the ratio between New Jersey ($8,371) and Utah ($4,156) was still 2.0 to 1 (table D).

Within current expenditures, the range in expenditures per pupil was highest for student and instructional staff support services and lowest for instruction. Excluding the District of Columbia, unadjusted expenditures per pupil for student and instructional staff support services ranged from a high of $1,042 in New Jersey to a low of $285 in North Dakota—a ratio of nearly 3.7 to 1 between the highest and lowest expenditure states. Expenditures per pupil for instruction, in contrast, ranged from a high of $6,017 in New York to a low of $2,620 in Utah—a ratio of just 2.3 to 1 (table C).

All three measures of state wealth—GSP per capita, median household income, and median housing value—were consistently related to all measures of expenditure per pupil except capital expenditures. Or, stated differently, wealthier states tended to spend more money per pupil on almost all education functions than poorer states. Cost adjustments tended to reduce the relationship between state wealth and most measures of expenditure per pupil. But even with cost adjustments, wealthier states still tended to have higher expenditures for education.

Chambers, J.G. (1998). Geographic Variations in Public Schools' Costs (NCES 98–04). U.S. Department of Education. Washington, DC: National Center for Education Statistics Working Paper.