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Chapter 6
Expenditures of Public Elementary and Secondary Schools
Current expenditures are projected to increase by 38 percent in constant dollars between school years 1997-98 and 2009-10 in the middle set of projections presented in this chapter. Average annual teacher salaries in public elementary and secondary schools in constant dollars are projected to increase 8 percent during that period. (Note that all percent changes presented in this chapter were calculated using unrounded numbers.) These projections are based on assumptions concerning economic growth and assistance by state governments to local governments which are discussed in appendix A5. Other sets of projections, based on alternative economic scenarios, are also discussed. No projections for private schools are presented as there are no regular data collections for total private school expenditures.
There are many factors that may affect future school expenditures and teacher salaries that were not considered in the production of the projections presented in this chapter. These include recent policy initiatives to decrease classroom size and potential changes in the distribution of elementary and secondary teachers as older teachers retire and are replaced by younger teachers. Projections of current expenditures that have been produced over the last 12 years are generally less accurate than the recent NCES projections of public elementary and secondary enrollment, public high school graduates, and classroom teachers; more accurate than the recent NCES projections of higher education enrollment, earned degrees, and teacher salaries; and of similar accuracy to recent NCES projections of expenditures of institutions of higher education. Projections of teacher salaries that have been produced over the last 12 years are generally less accurate than the recent NCES projections of public elementary and secondary enrollment, public high school graduates, classroom teachers, current expenditures in elementary and secondary schools, and expenditures of institutions of higher education, and of similar accuracy to recent NCES projections of higher education enrollment and earned degrees.
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Current Expenditures
Past Trends
Current expenditures increased from $196.6 billion in 1984-85 to $290.4 billion in 1997-98 using constant 1998-99 dollars and the Consumer Price Index (table 43 and figure 53). (The 1997-98 school year is the last year for which current expenditures are available.) This was an increase of 48 percent. Current expenditures are estimated to increase to $336 billion by 2000-01, an increase of 71 percent since 1984-85. From 1984-85 to 1997-98, current expenditures per pupil in average daily attendance rose 25 percent to $6,777 (table 43 and figures 54 and 55). Current expenditures per pupil in average daily attendance will increase an estimated 43 percent between 1984-85 and 2000-01. Current expenditures per pupil in fall enrollment (table 44) increased 26 percent from 1984-85 to 1997-98.
Historically, education expenditures have followed a path similar to general economic trends. For much of the period since 1984-85, the economy has been rising. Current expenditures have also been rising during that period. (See figure 56 for a comparison of the growth rates of current expenditures per pupil and one major indicator of the state of the economy, disposable income per capita, and table B6 for the values of disposable income per capita.)
The amount that local governments spend on education is also historically associated with the amount of state education aid to local governments (table B6). There was a rapid rise in state education aid to local governments during the period from 1984-85 to 1997-98. (See figure 56 for a comparison of the growth rates of current expenditures per pupil and revenue receipts from state sources per capita.)
Current expenditures, which had already been increasing, have increased each year since 1984-85. The percent increase has not been constant over that time, however. Most of the largest of the percent increases occurred between 1984-85 and 1989-90. That was the period when disposable income per capita and state education aid per capita were also increasing most rapidly. Also during that period, enrollments, which had been falling since the early 1970s, entered a period of steady increases. Since 1989-90, current expenditures have not been increasing as rapidly. Disposable income per capita and state education aid per capita have been increasing at lower rates than in the mid-1980s as well.
The percentage of total disposable income spent on public elementary and secondary school current expenditures increased slightly from 1984-85 (4.8 percent) to 1997-98 (5.1 percent) (tables 43 and B6). Average daily attendance increased annually every year during that time period.
Current expenditures per pupil in average daily attendance as a percentage of disposable income per capita rose from 31.4 percent in 1984-85 to 32.0 percent in 1997-98.
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Alternative Projections
Three sets of projections are presented for current expenditures in this chapter. Each set of projections is based on alternative assumptions concerning the economy. These assumptions together with the methodology used to produce the current expenditure projections are discussed in appendix A5.
The projections in this chapter are presented in both constant 1998-99 dollars and in current dollars. The projections were developed in constant dollars and then placed in current dollars using projections for the Consumer Price Index (CPI) (table B6). Three alternative sets of projections for the CPI were used, one for use with the middle alternative projections, one for use with the low alternative projections, and one for use with the high alternative projections. As the set of projections for the CPI developed for use with the high economic growth projections is rising at the slowest rate, it is sometimes the case that the expenditure projections in current dollars from the high economic growth set of projections are lower than those from the other two alternative sets of projections.
In the middle alternative projections, current expenditures in constant 1998-99 dollars are projected to increase steadily throughout the forecast period, reaching $402 billion in 2009-10. This is an increase of 38 percent over the 1997-98 level, and 19 percent over the estimated level for 2000-01. Current expenditures are projected to increase most rapidly during the first half of the period. This is also the period during which enrollments are expected to increase most rapidly.
Current expenditures per pupil in average daily attendance are projected to increase by 36 percent from $6,777 in 1997-98 to $9,204 in 2009-10 (table 43 and figure 54).
In the middle economic growth projection, total current expenditures as a percentage of total disposable income are projected to decrease to 4.8 percent from 1997-98 to 2009-10. Current expenditures per pupil in average daily attendance as a percentage of disposable income per capita are projected to increase slightly, from 32.0 percent to 32.6 percent during the same period.
In the low economic growth projections, both current expenditures and current expenditures per pupil are projected to increase more slowly than in the middle set of projections. Current expenditures are projected to increase by 29 percent from 1997-98 to 2009-10, reaching $374.0 billion at the end of the forecast period. Current expenditures per pupil in average daily attendance are projected to reach $8,568 by 2009-10, an increase of 26 percent since 1997-98.
In the high economic growth projections, current expenditures are projected to increase by approximately 50 percent over the 1997-98 level to $435.1 billion in 2009-10. Current expenditures per pupil in average daily attendance are projected to increase by 47 percent to $9,965 since 1997-98.
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Teacher Salaries
Past Trends
The period from 1984-85 to 1998-99 has been dominated by two different patterns for teacher salaries in constant dollars (table 45 and figures 57 and 58).
Teacher salaries had reached the bottom of a period of steady declines in 1980-81, and then entered a period of steady and relatively rapid growth. From 1984-85 to 1989-90, teacher salaries increased 10.7 percent, from $36,733 to $40,661. During this period, current expenditures and the revenues of state governments were increasing rapidly. (See figure 59 for a comparison of the growth rates for teacher salaries and current expenditures per pupil.)
From 1989-90 to 1998-99, teacher salaries decreased 0.2 percent. During much of that period, the economy, current expenditures, and revenues of state and local governments had not been increasing as rapidly as earlier.
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Alternative Projections
As with current expenditures, three sets of projections are presented for teacher salaries. The methodology and the assumptions used to produce these projections are discussed in appendix A5.
In the middle economic growth projections, the average teacher salary in constant 1998-99 dollars is projected to reach $43,401 in 2009-10 (table 45 and figure 57). This is a 6.9-percent increase from the level estimated for 1998-99.
In the low alternative projections, teacher salaries are projected to increase slightly throughout the projection period. The average salary is projected to increase to $42,070 in 2009-10, an increase of about 3.7 percent from 1998-99. (See figure 58 for a comparison of the growth rates for the alternative sets of projections.)
In the high alternative projections, the average teacher salary is projected to reach $44,925 in 2009-10, an increase of about 10.7 percent from 1998-99.
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