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E.D. Tab: Revenues and Expenditures for Public Elementary and Secondary Education: School Year 2001-2002, June 2004
 Tables: 

Summary

Introduction

Nearly $420 billion of revenues were raised to fund public education for grades prekindergarten through 12 in school year 2001-02, fiscal year 2002. Current expenditures (those excluding construction, equipment, and debt financing) exceeded $368 billion, a 5.8 percent increase from fiscal year 2001. About three out of every five current expenditure dollars were spent on teachers, textbooks, and other instructional services and supplies.

An average of $7,734 was spent on each student—an increase of 4.9 percent from $7,376 in school year 2000-01 (in unadjusted dollars).1

Total expenditures for public education, including school construction, debt financing, community services, and adult education programs, came to $435 billion.

These and other financial data on public elementary and secondary education are collected and reported each year by the National Center for Education Statistics (NCES), U.S. Department of Education. The data are part of the "National Public Education Financial Survey" (NPEFS), one of the components of the Common Core of Data (CCD) collection of surveys. These data were collected from March to September 2003. Editing and imputations were completed in February 2004. (Definitions of terms used throughout this report, including state and local revenues, are provided at the end of the text.)


Revenues for Public Elementary and Secondary Education

  • Nearly $420 billion were collected for public elementary and secondary education for school year 2001-02 in the 50 states and the District of Columbia (table 1). Total revenues ranged from a high of around $52 billion in California, which serves about 1 out of every 8 students in the nation, to a low of about $794 million in North Dakota, which serves roughly 1 out of every 449 students in the nation.

  • Nationally, revenues increased an average of 4.7 percent over the previous year's revenues of $401 billion (in unadjusted dollars).

  • The greatest part of education revenues came from state and local governments, which together provided nearly $387 billion, or 92.1 percent of all revenues. (table 2)

  • The federal government contribution to education revenues made up $33 billion. The relative contributions from these levels of government can be expressed as portions of the typical education dollar (figure 1). Local sources for school year 2001-02 made up 43 cents of every dollar in revenue; state revenues comprised 49 cents; and the remaining 8 cents came from federal sources.

  • Among states with more than one school district, revenues from local sources ranged from 13.8 percent in New Mexico to 62.4 percent in Nevada (table 2).2 Revenues from state sources also showed a wide distribution in their share of total revenues. The state revenue share of total revenues was 31.5 percent in Nevada and 72.0 percent in New Mexico. Federal revenues ranged from 4.2 percent in New Jersey to 16.8 percent in Alaska. Federal sources contributed 10 percent or more of the revenues in Alabama, Alaska, Arizona, Arkansas, District of Columbia , Florida, Kentucky, Louisiana, Mississippi, Montana, New Mexico, North Dakota, Oklahoma, South Dakota, and West Virginia.

Figure 1. The public education dollar: Revenues by source: School year 2001-02
(Total revenues: 420 billion)
Figure 1.  The public education dollar: Revenues by source: School year 2001-02 (Total revenues: 420 billion)
SOURCE: Data reported by states to the U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), "National Public Education Financial Survey," 2001?02.

Current Expenditures for Public Elementary and Secondary Education

  • Current expenditures for public education in 2001-02 totaled approximately $368 billion (table 3). This represents a $20 billion (5.8 percent) increase over expenditures in the previous school year ($348 billion in unadjusted dollars). Nearly $227 billion in current expenditures went for instruction. Another $127 billion were expended for a cluster of services that support instruction. Another $15 billion were spent on noninstructional services.

  • Expressed in terms of the typical education dollar, instructional expenditures accounted for approximately 61 cents of the education dollar for current expenditures (figure 2). Instructional expenditures include teacher salaries and benefits, supplies (e.g., textbooks), and purchased services. About 34 cents of the education dollar went for support services, which include operation and maintenance of buildings, school administration, transportation, and other student and school support activities (e.g., student counseling, libraries, and health services). Just over 4 cents of every education dollar went to noninstructional activities, which include school meals and enterprise activities, such as bookstores.

  • Most states were closely clustered around the national average (61.5 percent) in terms of the share of current expenditures that were spent on instruction; all but five states and the District of Columbia spent more than 58 percent of their current expenditures on instruction (table 4). The five states that spent less than 58% of current expenditures on instruction were Arizona, Colorado, Michigan, New Mexico, and Oklahoma. Two states spent about two-thirds of their current expenditures on instruction. These states were Maine (66.6 percent) and New York (68.3 percent).

Figure 2. The public education dollar: Current expenditures by function: School year 2001-02
(Current expenditures: 368 billion)
Figure 2.  The public education dollar: Current expenditures by function: School year 2001-02 (Current expenditures: 368 billion)
SOURCE: Data reported by states to the U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), "National Public Education Financial Survey," 2001?02.

Current Expenditures per Student

  • In 2001-02, the 50 states and the District of Columbia spent an average of $7,734 in current expenditures for every pupil in membership (table 5). This represents a 4.9 percent increase in current expenditures per student from the previous school year ($7,376 in unadjusted dollars).
  • The median of the state per pupil expenditures was $7,380, indicating that one-half of all states educated students at a cost of less than $7,380 per student. Four states—New Jersey ($11,793), New York ($11,218), Connecticut ($10,577), and Massachusetts ($10,232)—expended more than $10,000 per pupil. The District of Columbia , which comprises a single urban district, spent $12,102 per pupil. Only one state, Utah, had expenditures of less than $5,000 for each pupil in membership ($4,900).
  • On average, for every student in 2001-02, about $4,755 was spent for instructional services. Expenditures per pupil for instruction ranged from $3,197 in Utah to $7,660 in New York. Support Services expenditures per pupil were highest in the District of Columbia ($5,726) and New Jersey ($4,454) and lowest in Tennessee ($1,789), Mississippi ($1,781) and Utah ($1,435). Expenditures per pupil for noninstructional services such as food services were $322 for the nation.
Expenditures for Instruction
  • Expenditures for instruction totaled more than $226 billion for school year 2001-02 (table 6). Over $162 billion went for salaries for teachers and instructional aides. Benefits for instructional staff made up almost $42 billion, bringing the total for salaries and benefits for teachers and teacher aides to $204 billion.
  • Instructional supplies, including textbooks, made up over $11 billion. (Expenditures for computers and desks are not considered current expenditures, but are otherwise part of replacement equipment in table 7). Expenditures for purchased services were nearly $7 billion. These expenditures include the costs for contract teachers (who are not on the school district's payroll), educational television, computer-assisted instruction, and rental equipment for instruction.
  • Tuition expenditures for sending students to out-of-state schools and nonpublic schools within the state totaled over $3 billion.
Total Expenditures
  • Total expenditures made by school districts came to approximately $435 billion in the 2001-02 school year (table 7). About $368 billion of total expenditures were current expenditures for public elementary and secondary education. An additional $43 billion went for facilities acquisition and construction, $7 billion for replacement equipment, and another $10 billion for interest payments on debt. The remaining amount ($7 billion) was spent on other programs, such as community services and adult education, which are not part of public elementary and secondary education.

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Technical Notes

The National Public Education Financial Survey (NPEFS) is an annual state-level collection of revenue and expenditure data for public education in grades prekindergarten through 12. It is part of the Common Core of Data (CCD) collection of surveys of administrative records data relating to public elementary and secondary education. These data are for fiscal year 2002, which in most states began on July 1, 2001 and ended on June 30, 2002. The fiscal year in Alabama started on October 1, and in Nebraska and Texas the fiscal year started on September 1. Revenues and expenditures are audited after the close of the fiscal year and are then submitted to NCES by each state education agency. Additionally, explanations for all missing and zero values are collected from states. The data are processed and edited by NCES and verified by staff at each state education agency (SEA). State totals from the school district level finance data from the Bureau of the Census, "Survey of Local Governments: School Systems" will not agree with the data in this report due to the exclusion of some state education programs from the Census Bureau collection and minor differences in data definitions.

Total expenditures include all types of expenditures by school districts and other public elementary/secondary education agencies. Researchers generally use current expenditures instead of total expenditures when comparing education spending between states or across time because current expenditures exclude expenditures for capital outlay, which tend to have dramatic increases and decreases from year to year. Also, the current expenditures commonly reported are for public elementary and secondary education only. Many school districts also support community services, adult education, private education, and other programs, which are included in total expenditures. These programs and the extent to which they are funded by school districts vary greatly both across states and within states.

NCES has made adjustments for missing data. Values that were missing and not reported elsewhere on a state's survey form were imputed. The method used for all imputations was to (a) create a subset of states reporting the item in question; (b) subtract the value for that item from each state's total expenditures; (c) for each state, compute the ratio of that item to the reduced total from step b; (d) compute the average of these ratios; (e) multiply the total expenditures of the state with the missing item by the average ratio; and (f) substitute the imputed estimate for the missing item and then recompute the subtotals and totals. Imputed data represent less than 2 percent of the expenditures in any state for which data were imputed.

Other adjustments were made when a single value was reported for two or more items. NCES distributed portions of the single state reported value to the missing item(s). In most cases, these distribution types of adjustments did not affect total revenues or total expenditures. For more information on these adjustments, the reader should refer to the documentation for the National Public Education Financial Survey: School Year 2001-02 data file.

The number of prekindergarten students was imputed in Alabama, California, Michigan, and Tennessee. As a result, total student counts for these states are flagged as imputed, and all expenditure per pupil figures are flagged as imputed even if the expenditures are exactly as reported by the state.

NCES accepts revisions to these data from state education agencies for 1 year, and releases the revised data at the end of this period.

For More Information

This report used information from the Common Core of Data, "National Public Education Financial Survey: School Year 2001-02." For more information about this E.D. Tabs or the data set, contact

Frank Johnson
National Center for Education Statistics,
1990 K Street NW, Washington, DC 20006-5651;

or call 202-502-7362; fax 202-502-7475;
or e-mail frank.johnson@ed.gov.

Visit the Common Core of Data, National Public Education Financial Survey website for downloading data files and documentation at http://nces.ed.gov/ccd/stfis.asp.

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Definitions

Current expenditures are those for the day-to-day operation of schools. They include all expenditures except those associated with repaying debts, capital outlays (e.g., purchases of land, school construction and repair, and equipment), and programs outside the scope of preschool to grade 12, such as adult education, community colleges, and community services. Expenditures for items lasting more than 1 year (e.g., school buses and computers) are not included in current expenditures.

Employee benefits for instruction are expenditures that are made in addition to the gross salary, but are not paid directly to employees. These include health insurance (for current and retired instructional staff), retirement contributions, social security contributions, worker's compensation, unemployment compensation, and other benefits such as unused sick leave.

Facilities acquisition and construction expenditures include expenditures for new school construction, including renovation and expansion. They include expenditures on land, buildings, and equipment for new and remodeled facilities.

Federal revenues include direct grants-in-aid to schools or agencies, funds distributed through a state or intermediate agency, and revenues in lieu of taxes to compensate a school district for nontaxable federal institutions within a district's boundary.

Instructional expenditures are current expenditures for activities directly associated with the interaction between teachers and students. These include teacher salaries and benefits, supplies (e.g., textbooks), and purchased instructional services.

Interest on debt expenditures are expenditures for interest on long-term debt (i.e., obligations of more than 1 year).

Intermediate revenues come from sources that are not local or state education agencies, but operate at an intermediate level between local and state education agencies and possess independent fund-raising capability, for example, county or municipal agencies. Intermediate revenues are included in local revenue totals.

Local revenues include revenues from such sources as local property and nonproperty taxes, investments, and revenues from student activities, textbook sales, transportation and tuition fees, and food services. Intermediate revenues are included in local revenue totals.

Noninstructional expenditures go mostly toward food service, with some expenditures going toward enterprise operations, such as bookstores and interscholastic athletics.

NPEFS stands for the National Public Education Financial Survey, the state-level finance survey, and source of the data in this report.

Other instructional expenditures include instructional expenditures that were not coded to a specific item, such as salaries or supplies.

Other program expenditures include expenditures for community services, adult education, community colleges, private schools, and other programs that are not part of public elementary and secondary education.

Purchased services for instruction include expenditures for services provided by private businesses and nonprofit institutions. These include computer-assisted instruction, educational television, and the professional services of teachers who are not on the school district's payroll. Rental equipment and service contracts for instructional equipment are also included under purchased services.

Replacement equipment expenditures include expenditures for equipment for schools that are not new or recently renovated. Equipment is generally defined as items that last more than 1 year, are repaired rather than replaced, and have a cost over a level set by the state or local education agencies.

Salaries for instruction include the gross salaries of permanent and temporary instructional staff (teachers, teacher aides, and substitute teachers) on the payroll of school districts.

State revenues include both direct funds from state governments and revenues in lieu of taxation. Revenues in lieu of taxes are paid to compensate a school district for nontaxable state institutions or facilities within the district's boundary.

Student membership is the count of students enrolled on or about October 1.

Supplies for instruction include class textbooks and other instructional supplies.

Support services expenditures are current expenditures for activities that support instruction. These services include operation and maintenance of buildings, school administration, student support services (e.g., nurses, therapists, and guidance counselors), student transportation, instructional staff support (e.g., librarians, instructional specialists), school district administration, business services, research, and data processing.

Total expenditures for public elementary and secondary education and other programs include current expenditures for public elementary and secondary education, and expenditures for facilities acquisition and construction, replacement equipment, other programs, and interest on debt.

Tuition paid out-of-state includes tuition paid to school districts outside the state, and to private schools both inside the state and outside the state, for educating elementary and secondary school students (grades prekindergarten through grade 12). Special needs children who cannot receive the education and services they require within their school district are sometimes sent to private schools.

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Footnotes

1Comparisons are based on the previous edition of this report, Revenues and Expenditures for Public Elementary and Secondary Education: School Year 2000–01 (NCES 2003–362).

2Hawaii and the District of Columbia have only one school district each and thus are not comparable to other states.

 


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