Executive Summary

Since the 1990s, the United States has experienced periods of volatility in energy costs (Joskow 2002). Public schools have not been immune to the increased energy costs associated with these periods. In light of these experiences, the National Center for Education Statistics (NCES) of the U.S. Department of Education undertook the "Effects of Energy Needs and Expenditures on U.S. Public Schools" survey. The survey examined the effects of energy needs on public school districts and was designed to contribute to a better understanding of how increases in energy expenditures influence school district budgeting and actions. It was not designed to assess the role that weather may have played in effecting energy expenditures, to evaluate the utility of various cost-saving measures that districts might employ to reduce energy expenditures, or to examine several other factors that might directly affect energy budgets.

Although the survey of 851 public school districts focused primarily on fiscal year ¹ 2001 (FY 01), the questionnaire also gathered data on FY 00 energy expenditures and budgeted FY 02 energy expenditures to examine the financial resources available to districts. Data collection began in November 2001, approximately 4 months after the start of FY 02, thereby allowing districts to report total expenditures from FY 01 and budgets allocated for FY 02.

This report examines the effects of increased energy costs on the country's public school systems. Specifically, the following five topics are addressed:

• energy expenditures in FY 00 and FY 01, and budgeted expenditures for FY 01 and FY 02;

• efforts to reduce energy consumption;

• characteristics of districts with sufficient and insufficient energy budgets for FY 01;

• experiences of districts with energy budget shortfalls; and

• perceptions of school district staff regarding their districts' ability to respond to immediate and future energy needs.

Survey findings indicate that, on average, school districts spent $137 per pupil on energy expenditures in FY 00. For FY 01, they budgeted an 11 percent increase, raising their budgets to $152 per pupil. However, actual FY 01 per pupil energy expenditures, at $166 per pupil, were 22 percent higher than in FY 00. The average district experienced a 9 percent shortfall between what it had budgeted for FY 01 and its actual expenditures. The average school district budgeted $176 per pupil for FY 02 energy needs, or a 6 percent increase over what it actually spent in FY 01. This $24 per pupil increase over FY 01 budgeted costs translated into an increase of about $1 billion in expected costs.

Key findings from the survey are as follows:

Energy expenditures in FY 01

• In FY 01, energy expenditures were nearly $8 billion (Table 1).

• From FY 00 to FY 01, when inflation was 3.4 percent² (Snyder and Hoffman 2002), per pupil expenditures for energy rose from $137 to $166 (22 percent) (Table 2). If energy costs had risen at the rate of inflation, an additional $22 per pupil, or $1 billion, would have been available for school districts.

• Sixty-one percent of public school districts reported a shortfall in energy funding in FY 01 (Table 4).

• Eighty-three percent of school districts that had experienced an energy budget shortfall attributed the shortfall to increases in the cost per unit of energy (Table 6).

• Small school districts spent the most per pupil in energy expenditures in FY 01, $204 per pupil (Table 2). However, both large and midsized school districts were more likely to encounter shortfalls in funding their energy expenditures in FY 01 (Table 4).

• Rural districts also spent more per pupil for energy in FY 01 ($190) than urban or suburban districts ($154 and $164, respectively) (Table 2).

• School districts in the West spent $149 per pupil on energy, compared with $189 in the Central region (Table 2).

Efforts to reduce energy consumption

• During FY 01, school districts took various actions to improve energy efficiency. Fortyseven percent of public school districts renovated or retrofitted existing facilities, 39 percent locked in rates with one or more energy vendors, 29 percent participated in consortia that negotiated prices with thirdparty energy vendors, 12 percent instituted or increased fees to use facilities, and 7 percent closed schools or sent students home early for at least 1 day.

• During FY 02, 47 percent of the nation's districts renovated or retrofitted existing facilities, 44 percent locked in rates, 33 percent participated in consortia, 15 percent instituted or increased fees to use facilities, and 6 percent closed schools or sent students home early for at least 1 day.

Characteristics of districts with sufficient and insufficient energy budgets for FY 01

• The likelihood of experiencing an insufficient energy budget was lower in small districts than in either midsized or large districts (56 percent compared to 72 and 80 percent, respectively) (Table 4).

• Urban school districts were more likely to have insufficient funds than suburban or rural districts (82 percent compared to 60 and 59 percent, respectively) (Table 4).

• The likelihood of a shortfall was greatest in districts in the Southeast, where 81 percent of school districts encountered an insufficient energy budget (Table 4).

• Districts whose total FY 01 budget averaged $9,000 or more per student were less likely to have insufficient funds allocated for energy needs than districts that budgeted between $6,500 and $8,999 per student (Table 4).

Experiences of districts with energy budget shortfalls

• When they encountered budget shortfalls, school districts took a variety of actions (either individually or in combination): 75 percent reallocated funds from other programs, 53 percent used an unappropriated surplus, and 46 percent used a large proportion of the nonpersonnel budget (Figure 3).

• Twenty percent of districts experiencing an insufficient energy budget responded by instituting severe austerity measures (Figure 3).

• Nineteen percent of districts responding to an energy budget shortfall found that supervisory approval of increased energy funding was not immediately forthcoming (Figure 3).

• In response to a shortfall in the energy budget, 8 percent of districts raised school taxes and 8 percent rolled over the underbudgeted amount to the next fiscal year (Figure 3).

• Seven percent of districts experiencing an insufficient energy budget used short-term loans to finance the additional funds needed (Figure 3).

Perceptions of school district staff regarding their districts' ability to respond to immediate and future energy needs

• Forty-two percent of respondents nationwide agreed or strongly agreed that their school district had successfully reduced energy usage in FY 01 (Table 7).

• Thirty-seven percent of all school districts believed they have a long-term energy problem (Table 10), and nearly three-quarters believed that "future increases in energy costs pose a major threat to the allocation of district funds to essential areas such as student instruction" (Table 11).

It is important to note that many of the district characteristics used for independent analyses are related to each other. For example, in 1999–2000, district enrollment and metropolitan status were related, with urban districts typically being larger than rural districts. Relationships also exist between other analysis variables, such as enrollment size and region, metropolitan status and poverty concentration, and per pupil expenditure and percent of budget allocated for energy. Because of the relatively small sample size used in this study, no attempt has been made to parse out the independent associations of these variables. Their existence, however, should be considered in the interpretation of the data presented in this report.

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¹ Throughout this report, the term "fiscal year" is used to specify the calendar period associated with school district finances. School districts often define the fiscal year from July 1 through June 30, with the year referring to the calendar year in which the fiscal year ends. For example, for many districts, fiscal year 2001 began on July 1, 2000, and ended on June 30, 2001. In using this designation of fiscal years, the 2000–2001 school year would cover similar calendar dates as fiscal year 2001.

² As measured by the Consumer Price Index adjusted to a school-year basis (July through June).

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