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Projections of Education Statistics to 2011
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Chapter 6
Expenditures of Public Elementary and Secondary Schools


Current expenditures and average annual teacher salaries in public elementary and secondary schools are both projected to increase in constant dollars between school years 1998-99 and 2010-11 in the middle set of projections presented in this chapter with current expenditures projected to increase more rapidly. (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.

Recent NCES projections of current expenditures generally have been less accurate than the recent NCES projections of public elementary and secondary enrollment but more accurate than projections for teacher salaries. Projections of teacher salaries that have been produced are generally less accurate than teachers salaries; and of similar accuracy to recent NCES projections of associate's degrees. (See table A2 for the mean absolute percentages of the recent forecasts of selected education statistics.) Long-term projections which are economically based, such as those for current expenditures and teacher salaries, will generally be less accurate than long-term demographic projections, such as those for elementary and secondary enrollments.

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Current Expenditures

Past Trends

Current expenditures increased from $213.4 billion in 1985-86 to $311.6 billion in 1998-99 using constant 1999-2000 dollars and the Consumer Price Index (table 33 and figure 53). (The 1998-99 school year is the last year for which current expenditures are available.) This was an increase of 46 percent. Current expenditures are estimated to increase to $336.3 billion by 2001-02, an increase of 58 percent since 1985-86. From 1985-86 to 1998-99, current expenditures per pupil in fall enrollment rose 24 percent to $6,696 (table 33 and figures 54 and 55). Current expenditures per pupil in fall enrollment will increase an estimated 32 percent between 1985-86 and 2001-02. Current expenditures per pupil in average daily attendance in constant dollars (table 34) increased 23 percent from 1985-86 to 1998-99.

Historically, education expenditures have followed a path similar to general economic trends. For much of the period since 1985-86, 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 appendix 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 (appendix table B6). There was a rapid rise in state education aid to local governments during the period from 1985-86 to 1998-99. (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 1985-86. The percent increase has not been constant over that time, however. Most of the largest of the percent increases occurred between 1985-86 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 1985-86 (4.6 percent) to 1998-99 (4.7 percent) (table 33 and appendix tables B5 and B6). Fall enrollment increased annually every year during that time period.

Current expenditures per pupil in fall enrollment as a percentage of disposable income per capita fell from 27.5 percent in 1985-86 to 27.4 percent in 1998-99 (tables 33 and appendix table B6).

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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 1999-2000 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 projections of current expenditures produced using similar methodologies have appeared in the past 12 editions of the Projections of Education Statistics, there is information on the historical accuracy of similar current expenditures projections. Historically, the average difference between the actual values and the projections of both current expenditures and current expenditures per pupil has been about 2 percent for projections that are two or three years out from the year of the last actual data. Projections for years that are further out from the last year of actual data tend to be less accurate. The average difference between the actual values and projections seven or more years out from the last year with actual data generally has been over 4.5 percent for current expenditures and current expenditures per pupil. (See table A2 for the mean absolute percentages of the recent forecasts of current expenditures and appendix A5 for a further discussion of the accuracy of these forecasts.)

In the middle alternative projections, current expenditures in constant 1999-2000 dollars are projected to increase steadily throughout the forecast period, reaching $418 billion in 2010-11. This is an increase of 34 percent over the 1998-99 level, and 24 percent over the estimated level for 2001-02. 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 fall enrollment in constant dollars are projected to increase by 33 percent from $6,696 in 1998-99 to $8,875 in 2010-11 (table 33 and figure 54).

In the middle economic growth projection, total current expenditures as a percentage of total disposable income are projected to decrease to 4.2 percent in 2010-11 (table 33 and appendix tables B5 and B6). Current expenditures per pupil in fall enrollment as a percentage of disposable income per capita are projected to decrease slightly, from 27.4 percent to 26.7 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 1998-99 to 2010-11, reaching $402.4 billion at the end of the forecast period.

In the high economic growth projections, current expenditures are projected to increase by approximately 40 percent over the 1998-99 level to $435.9 billion in 2010-11.

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Teacher Salaries

Past Trends

The period from 1985-86 to 2000-01 has been dominated by two different patterns for teacher salaries in constant dollars (table 35 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 1985-86 to 1989-90, teacher salaries increased 7 percent, from $39,204 to $41,824 in constant 1999-2000 dollars. 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 2000-01, teacher salaries decreased less than one percent. During much of that period, the economy, current expenditures, and revenues of state and local governments had not been increasing as rapidly as they did at the end of the end of the 1990s.

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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.

As projections of teacher salaries produced using similar methodologies have appeared in the past 12 editions of the Projections of Education Statistics, there is information on the historical accuracy of similar teacher salary projections. Historically, the average difference between the actual values and the projections of teacher salaries has been about 2 percent for projections that are two or three years out from the year of the last actual data. Projections for years that are further out from the last year of actual data tend to be less accurate. The average difference between the actual value and the projection ten years out from the last year with actual data is almost 16 percent. (See table A2 for the mean absolute percentages of the recent forecasts of teacher salaries and appendix A5 for a further discussion of the accuracy of these forecasts.)

In the middle economic growth projections, the average teacher salary in constant 1999-2000 dollars is projected to reach $43,216 in 2010-11 (table 35 and figure 57). This is a 4 percent increase from the level estimated for 2000-01. This percent increase is less than the average percentage difference between recent long-term projections of teacher salaries and their actual values.

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National Center for Education Statistics - http://nces.ed.gov
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