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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