Current expenditures are projected to increase by 36 percent in constant dollars between school years 1994-95 and 2007-08 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 3 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 private school expenditures.
Current expenditures increased from $170.5 billion in 1982-83 to $250.5 billion in 1994-95 using constant 1995-96 dollars and the Consumer Price Index (table 34 and figure 51). (The 1994-95 school year is the last year for which current expenditures are available.) This was an increase of 47 percent. Current expenditures are estimated to increase to $269.7 billion by 1996-97, an increase of 58 percent since 1982-83. From 1982-83 to 1994-95, current expenditures per pupil in average daily attendance rose 32 percent to $6,151 (table 34 and figures 52 and 53). Current expenditures per pupil in average daily attendance increased an estimated 37 percent from 1982-83 to 1996-97. Current expenditures per pupil in fall enrollment (table 35) also increased 32 percent from 1982-83 to 1994-95.
Historically, education expenditures have followed a path similar to general economic trends. For much of the period since 1982-83, the economy has been rising. Current expenditures have also been rising during that period. (See figure 54 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 B7). There was a rapid rise in state education aid to local governments during the period from 1982-83 to 1994-95. (See figure 55 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 1982-83. The percent increase has not been constant over that time, however. Most of the largest of the percent increases occurred from 1984-85 to 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 has increased slightly from 1982-83 (4.5 percent) to 1994-95 (4.7 percent) (tables 34, B5 and B6). This percentage was not stable during this period, however. It fell to 4.3 percent in 1983-84 before beginning to rise again. The year 1983-84 is notable because enrollment as measured by average daily attendance reached its lowest level since 1962-63 and has been increasing annually since then.
Current expenditures per pupil in average daily attendance as a percentage of disposable income per capita rose from 28.2 percent in 1982-83 to 30.3 percent in 1994-95.
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 1995-96 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 B8). 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 low alternative projections is rising at the most rapid rate and that developed for use with the high alternative projections is rising at the slowest rate, it is frequently the case that the current dollar projections from the low alternative set of projections are higher than those from the other two alternative sets of projections.
In the middle alternative projections, current expenditures in constant 1995-96 dollars are projected to increase steadily throughout the forecast period, reaching $341.5 billion in 2007-08. This is an increase of 36 percent over the 1994-95 level, and 27 percent over the estimated level for 1996-97. Current expenditures are projected to increase most rapidly during the period from 1996-97 to 1999-2000. 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 24 percent to $7,622 from 1994-95 to 2007-08 (table 34 and figure 52).
In the middle alternative projection, total current expenditures as a percentage of total disposable income are projected to remain at 4.7 percent from 1994-95 to 2007-08. Current expenditures per pupil in average daily attendance as a percentage of disposable income per capita are projected to increase slightly, from 30.3 percent to 30.5 percent during the same period.
In the low alternative 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 31 percent from 1994-95 to 2007-08, reaching $328.0 billion at the end of the forecast period. Current expenditures per pupil in average daily attendance are projected to reach $7,321 by 2007-08, an increase of 19 percent since 1994-95.
In the high alternative projections, current expenditures are projected to increase by approximately 41 percent over the 1994-95 level to $353.5 billion in 2007-08. Current expenditures per pupil in average daily attendance are projected to increase by 28 percent to $7,888 since 1994-95.
The period from 1982-83 to 1996-97 has been dominated by two different patterns for teacher salaries in constant dollars (table 36 and figures 56 and 57).
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 1982-83 to 1989-90, teacher salaries increased 17.1 percent, from $32,587 to $38,172. 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.) It was during that period when enrollment, which had also been in a period of steady decline, began increasing again.
From 1989-90 to 1996-97, teacher salaries declined 2 percent. (Unlike current expenditures, there are values for teacher salaries for 1995-96 and 1996-97.) During much of that period, the economy, current expenditures, and revenues of state and local governments had not been increasing as rapidly as earlier.
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 alternative projections, the average teacher salary in constant 1995-96 dollars is projected to reach $38,522 in 2007-08 (table 36 and figure 56). This is a 3-percent increase from the level estimated for 1996-97.
In the low alternative projections, teacher salaries are also projected to rise only slightly throughout the projection period. The average salary is projected to rise to $37,823 in 2007-08, an increase of about 1 percent from 1996-97. (See figure 57 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 $39,127 in 2007-08, an increase of about 5 percent.
