Special Report

States Spending the Most (and Least) on Education

For the third consecutive year, total spending on public elementary and secondary education fell nationwide, according to a recent release from the U.S. Census Bureau. Spending per student totaled $10,608, roughly the same as the year before.

Due to a number of factors, however, spending per student ranged widely among the 50 states. New York was the nation’s top spender, at $19,552 per pupil. Utah, on the other hand, spent just $6,206 for every student. Based on the U.S. Census Bureau’s latest release on education spending, 24/7 Wall St. reviewed the states that spent the most and least on education per student.

Click here to see the states spending the most on education

Click here to see the states spending the least on education

The nation’s highest spenders on education were disproportionately in the Northeast, while the states spending the least tended to be in the Southern or Western U.S. Michael Leachman, director of state fiscal research at the Center on Budget and Policy Priorities, explained that spending can be driven by a range of factors, including state size, labor costs, and geography, noting that rural schools can often incur higher transportation costs.

Household earnings appear to play a major role in determining statewide school spending. The states that spent the most per student also had some of the wealthiest households. Median household income in all of the 10 top spending states was higher than the U.S. median. Among the states spending the least, only Utah households earned more than the national median of $51,371 in 2012.

Schools are funded primarily by property tax revenue. As a result, “high-income districts get a lot more money because of the difference in property tax wealth,” Leachman said. To compensate for inequality, states’ school funding formulas tend to distribute more money to low-income districts where property values are likely to be much lower. However, as Leachman explained, this is not always the case, and some formulas can actually award less to poorer areas.

Nationally, 10% of school revenue came from the federal government, and roughly the same came from state sources and local sources. In the nation’s highest spending states, local sources were more likely to account for high portions of expenditures, with little coming from the federal government. For instance, in Connecticut, one of the top spenders, 57% of funds came from local sources and just 5% from federal sources.

The opposite was also typically the case with the nation’s lowest spenders, all of which received at least 10% of their funds from the federal government and in some cases much more. Nearly 18% of school funding in Mississippi, one of the lowest-spending states, came from federal coffers.

High education spending often pays off, at least as measured by standardized tests. Based on a recent Education Week report, four of the top spending states were among the top five states in K-12 achievement. Among the states spending the least per pupil, only Florida earned a higher grade than the U.S. overall on the National Assessment for Educational Progress (NAEP).

However, pouring money into school systems by no means guarantees success. Students in Delaware and Alaska, two of the top spenders, had below-average NAEP scores.

Educational attainment rates among adults were also higher in the states that spent more per student. Students in these states were much more likely to complete high school and go on to complete college. More than 30% of adults in the majority of the top spending states had at least a bachelor’s degree, compared to the U.S rate of 29.1%.

Based on the latest data from the U.S. Census Bureau, 24/7 Wall St. reviewed the 10 states that spent the most and the least per student in fiscal year 2012. We reviewed a variety of Census data related to education spending and revenue, including the proportion of state education revenue from federal, state and local sources, as well as the proportion of state spending that went to teaching costs or support services, all for fiscal year 2012. We also reviewed additional data on income, poverty and educational attainment from the Census’ 2012 American Community Survey. We considered state proficiency scores in the 2013 National Assessment of Educational Progress, provided by Education Week. These scores cover proficiency in math and reading for students in the fourth and eighth grades.

These are the states spending the most (and least) on education.

States Spending the Most on Education

10. Maryland
> Spending per pupil: $13,608
> Total education spending: $13.7 billion (13th highest)
> Pct. with high school diploma: 89.1% (23rd highest)
> Median household income: $71,122 (the highest)

Maryland spent $13,608 per pupil in fiscal year 2012, 10th highest nationwide. School administration costs accounted for nearly $1,000 per pupil, more than in all but two other states. The state benefits from having a wealthy tax base. Maryland’s median household income of $71,122 in 2012 was the highest of any state and nearly $20,000 more than the national median income of $51,371 that year. While large school budgets do not guarantee that students will have high scores on national tests, Maryland children excelled in most subjects. For example, Maryland primary school students led the nation in reading proficiency in 2013.

9. Delaware
> Spending per pupil: $13,864
> Total education spending: $1.8 billion (6th lowest)
> Pct. with high school diploma: 88.5% (25th lowest)
> Median household income: $58,415 (10th highest)

Unlike most other states with high education spending, the majority of Delaware’s elementary and secondary school spending came from state sources. By contrast, less than half of primary and secondary school spending across the nation came from state sources. With the state helping to foot much of the education bill, schools spent an average of $8,832 directly on teaching, more than in all but six other states. Delaware households were also more likely than most to have high incomes, which can increase education spending through greater tax collections. A typical household earned $58,415 in 2012, more than all but a handful of states.

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8. Rhode Island
> Spending per pupil: $14,005
> Total education spending: $2.2 billion (8th lowest)
> Pct. with high school diploma: 86.1% (17th lowest)
> Median household income: $54,554 (18th highest)

Services such as administration, maintenance, and counseling, accounted for a substantial share of overall education spending in Rhode Island. In particular, the state spent $1,525 per pupil on student support, such as social work and placement services, in fiscal year 2012, much more than double the national average of just over $600. Like several other top-spending education systems, a relatively small proportion of Rhode Island school funding came from federal and state sources in fiscal 2012. Instead, more than 55% of primary and secondary education spending came from local sources, among the highest percentages nationwide.

7. Massachusetts
> Spending per pupil: $14,142
> Total education spending: $15.6 billion (11th highest)
> Pct. with high school diploma: 89.7% (21st highest)
> Median household income: $65,339 (6th highest)

With the highest rate of higher educational attainment in the country, it might not be surprising that Massachusetts spends among the most per student on elementary and secondary education. More than 39% of state residents had at least a bachelor’s degree in 2012, and the state spent more than $14,000 per pupil. Massachusetts employs more teachers than most other states. More than 11% of the state’s employees worked in education as of 2012, a higher percentage than all but a few states. In all, Massachusetts spent $5,916 per student on teacher salaries and another $853 per student on support staff, both among the highest in the country.

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6. Wyoming
> Spending per pupil: $15,897
> Total education spending: $1.7 billion (5th lowest)
> Pct. with high school diploma: 91.7% (tied-5th highest)
> Median household income: $54,901 (17th highest)

Wyoming spent nearly $9,500 per student in employee salaries and wages, more than all but two other states, and $3,912 per student on employee benefits, the fifth-most nationwide. Additionally, the state was one of the top spenders on student instruction on a per-student basis and the third-highest spender on support services, at more than $6,000 per pupil. Wyoming managed to spend the sixth most on education per pupil despite having the nation’s lowest state and local income tax burden as of 2011. Of course, it helps that the state derives a large portion of its tax revenue from oil and gas severance taxes.

5. Vermont
> Spending per pupil: $16,039
> Total education spending: $1.6 billion (3rd lowest)
> Pct. with high school diploma: 91.7% (tied-5th highest)
> Median household income: $52,977 (20th highest)

Vermont schools spent $1,136 per pupil on school administration expenses in fiscal year 2012, more than any other state. The educational services industry was particularly large in the state. More than 13% of all Vermont employees worked in educational services in 2012, the most of any state in the nation. While funding in most states with large school budgets came primarily from local sources, 87.3% of funding for Vermont schools came from the state, the highest proportion nationwide. Like the majority of states spending the most on education, Vermont state tax collections were relatively high. The state collected more than $4,400 in taxes per resident in fiscal year 2012, fourth-highest in the nation.

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4. Connecticut
> Spending per pupil: $16,273
> Total education spending: $9.9 billion (20th highest)
> Pct. with high school diploma: 89.9% (18th highest)
> Median household income: $67,276 (4th highest)

Like several other states that spend the most on education, Connecticut’s adults were typically well-educated. More than 37% of residents aged 25 and older had at least a bachelor’s degree as of 2012, among the highest rates nationwide. By one measure, teachers in Connecticut were exceptionally well-compensated, earning an average of $6,573 per pupil last year, behind only New York and New Jersey. Connecticut students were among the nation’s highest scorers on standardized tests. More than 45% of eighth graders, for example, were proficient in reading exams in 2013, more than all but two other states.

3. New Jersey
> Spending per pupil: $17,266
> Total education spending: $26.6 billion (5th highest)
> Pct. with high school diploma: 88.3% (24th lowest)
> Median household income: $69,667 (2nd highest)

New Jersey spent more than any other state on pupil support — which includes social services and counselling — allocating $1,781 per pupil in fiscal year 2012. Like most states with large education spending, New Jersey residents are quite wealthy. A typical household earned nearly $70,000 in 2012, second only to Maryland. New Jersey also had exceptionally strong educational attainment rates. More than 36% of residents 25 years and older had at least a bachelor’s degree as of 2012, more than all but a handful states. Although New Jersey cut per pupil spending by more than 5% between 2010 and 2011 — the most of any state — it remained among the highest education spenders. All other states with high education spending increased education expenditure by relatively large amounts over that period. The state made up for education cuts the following year, when per pupil spending rose 8.1%, among the most of any state.

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2. Alaska
> Spending per pupil: $17,390
> Total education spending: $2.4 billion (9th lowest)
> Pct. with high school diploma: 92.0% (3rd highest)
> Median household income: $67,712 (3rd highest)

Alaska likely finds it easier to afford large school budgets because of high tax revenues. The state collected nearly $10,000 per capita in taxes in fiscal 2012, the most nationwide and considerably higher than the $2,557 national rate. However, much of this comes from taxes on oil and gas extraction, which accounted for more than two-thirds of all state tax collections last year. Additionally helping residents, the state’s median household income was the third highest in the country, at $67,712, in 2012. While NAEP test scores were relatively poor in the state, ninety-two percent of residents had at least a high school diploma in 2012, more than all but two other states. Although Alaska’s per pupil instructional spending ranked fifth in the country, no state spent as much per student on support services, at more than $7,000 per year.

1. New York
> Spending per pupil: $19,522
> Total education spending: $58.8 billion (2nd highest)
> Pct. with high school diploma: 85.3% (15th highest)
> Median household income: $56,448 (15th highest)

Teachers in New York were among the best-paid in the nation. The state spent $8,312 per pupil on teacher salaries and wages, and $4,233 on teachers’ benefits, both the most nationwide. In total, New York spent $13,582 per student on instruction, more than double the national average, and more than any other state. Taxes also tend to be quite high in New York. The state and local tax burden was nearly 13% of per capita income in 2011, the most in the nation according to the Tax Foundation. Despite having wealthy residents and the nation’s highest per student spending, just over 85% of adult residents had at least a high school diploma, less than the national rate of 86.4%.

Click here to see the states spending the least on education

States Spending the Least on Education

10. Florida
> Spending per pupil: $8,371
> Total education spending: $24.1 billion (7th highest)
> Pct. with high school diploma: 86.5% (18th lowest)
> Median household income: $45,040 (11th lowest)

Florida spent $8,371per primary and secondary school student in fiscal year 2012, considerably less than the national average spending of $10,607. The per student expenditure in Florida was also 5.8% lower than the year before, a larger cut than in all but one other state. As is common in many states spending less on education, tax revenues in Florida were also quite low. The state collected $1,719 per capita in fiscal year 2012, only more than three other states. This was partly because Florida has no income tax. Unlike most states spending the least on education, however, Florida scored better than all but a handful of states on the 2013 NAEP.

9. Tennessee
> Spending per pupil: $8,294
> Total education spending: $9.0 billion (21st highest)
> Pct. with high school diploma: 85.1% (13th lowest)
> Median household income: $42,764 (7th lowest)

Tennessee allocated just $2,697 per pupil to to administrative, technical and logistical support, less than all but three other states. Low tax collections may limit how much Tennessee can spend on education. The state collected just $1,864 in taxes per resident in fiscal year 2012, among the lowest nationwide. One reason for this may be the state’s tax structure — Tennessee does not collect income taxes on earnings. Lower incomes in the state may also partly explain the low taxes. A typical household earned $42,764 in 2012, lower than all but a handful of states.

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8. Texas
> Spending per pupil: $8,260
> Total education spending: $49.8 billion (3rd highest)
> Pct. with high school diploma: 81.4% (the lowest)
> Median household income: $50,740 (24th highest)

Texas school systems allocated less than $1,000 per pupil to employee benefits, less than any other state. By contrast, spending on employee benefits across the nation averaged $2,363 per pupil. Despite the low education spending, Texas students fared relatively well on standardized tests last year, with K-12 achievement scores inline with the national average. Educational attainment rates, on the other hand, were exceptionally poor. Just over 81% of state-residents had attained at least a high school diploma in 2012, the lowest rate nationwide.

7. Nevada
> Spending per pupil: $8,222
> Total education spending: $4.1 billion (16th lowest)
> Pct. with high school diploma: 84.9% (10th lowest)
> Median household income: $49,760 (24th lowest)

Nevada spent $8,222 per student, with much of this going to support services, including logistical and administrative expenses. The state spent just $4,782 on instructional spending per pupil in fiscal year 2012, lower than all but a handful of states. Nevada’s elementary and secondary school systems received less than $10,000 per pupil in total federal, state, and local revenue in fiscal year 2012, much less than $12,331 nationwide average. Just 34% of fourth graders were proficient in math last year, much less than the 41% of U.S. fourth graders. While nearly 30% of U.S. residents had attained at least a bachelor’s degree as of 2012, just 22.4% of Nevada residents had, less than all but six other states.

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6. North Carolina
> Spending per pupil: $8,200
> Total education spending: $12.8 billion (14th highest)
> Pct. with high school diploma: 85.2% (14th lowest)
> Median household income: $45,150 (13th lowest)

Of the $8,200 North Carolina spent per pupil in fiscal year 2012, $2,610 went to support services such as administration and maintenance, less than in all but two other states. Low funding from state and local sources meant North Carolina relied more heavily on federal resources — 14.3% of elementary and secondary school funds came from the federal government, more than all but a handful of states. More than 45% of fourth graders were proficient in math last year, versus 41.3% of nationwide fourth graders. However, while fourth graders across the country improved their math scores on standardized tests by 7.2 points between 2003 and 2013, North Carolina fourth graders improved their math scores by less than 3 points, one of the smallest improvements.

5. Mississippi
> Spending per pupil: $8,164
> Total education spending: $4.5 billion (18th lowest)
> Pct. with high school diploma: 82.3% (3rd lowest)
> Median household income: $37,095 (the lowest)

Nearly 18% of Mississippi elementary and secondary school funding came from the federal government, more than every state except for Louisiana. High reliance on federal funds may indicate a lack of resources within the state. A typical Mississippi household made just $37,095 in 2012, the least nationwide. With nearly one quarter of state residents living in poverty, more than anywhere else in the U.S., residents were also more likely to be dependent on government aid programs such as SNAP benefits. More than 19% of households in the state used food stamps in the 12 months prior to 2012, second-most in the nation. Education Week gave Mississippi an “F” in K-12 student achievement last year, making it the only state to receive a failing grade. Just 26.1% of fourth graders, and 21.3% of eighth graders, in the state were proficient in math, both among the worst nationwide.

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4. Arizona
> Spending per pupil: $7,558
> Total education spending: $7.9 billion (25th highest)
> Pct. with high school diploma: 85.7% (16th lowest)
> Median household income: $47,826 (21st lowest)

Only three states spent less on teacher salaries and benefits than Arizona. Benefits made up a particularly small portion of the budget. The state allocated less than $700 per student in teacher benefits in fiscal year 2012, less than all but one other state and half the national average expenditure of $1,573. While Arizona fourth graders had among the nation’s largest improvements in the math sections of the NAEP between 2003 and 2013, less than 40% were considered proficient last year, still shy of the national rate.

3. Oklahoma
> Spending per pupil: $7,466
> Total education spending: $5.8 billion (21st lowest)
> Pct. with high school diploma: 86.7% (19th lowest)
> Median household income: $44,312 (10th lowest)

Like most states spending the least on education, Oklahoma’s localities did not provide very much funding for schools — just $1,843 per pupil in 2012, less than all but four other states. Instead, 13.3% of school funding came from the federal government, among the higher percentages in the nation. Oklahoma cut education spending per student in both 2011 and 2012. This included a nearly cut 4% between 2010 and 2011, one of the largest drops in the U.S. during that time. Oklahoma students fared among the worst on standardized tests. Just 3.7% of eighth grade students were considered advanced in math last year, less than half the national rate. And only one-quarter were considered proficient, compared to more than one third of students nationwide.

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2. Idaho
> Spending per pupil: $6,658
> Total education spending: $2.0 billion (7th lowest)
> Pct. with high school diploma: 89.8% (20th highest)
> Median household income: $45,489 (15th lowest)

Idaho received less than $7,500 in education revenues per student in 2012. No state received less money from federal, state and local sources combined. Local funding was especially miniscule. While elementary and secondary schools across the nation received $5,487 per student on average, local sources in Idaho provided just $301 per student — far and away the lowest in the nation. As a result, Idaho was able to spend just $6,658 per pupil in fiscal 2012, well below the U.S. average of $10,608 per student. Just over $4,000 was spent directly on teaching, less than every state except for Utah.

1. Utah
> Spending per pupil: $6,206
> Total education spending: $4.2 billion (17th lowest)
> Pct. with high school diploma: 91.0% (10th highest)
> Median household income: $57,049 (13th highest)

Utah spent just $6,206 per pupil in fiscal 2012, less than any other state. Teacher compensation was also the lowest in the nation, by one measure, at just $2,397 per student. By contrast, expenditure on teachers’ salaries across the nation averaged well over $4,000 per pupil. Educational attainment rates, however, were exceptionally good. More than 90% of residents aged 25 and older had at least a high school diploma as of 2012, and 30.7% had completed at least a bachelor’s degree, both among the best rates nationwide. For current students, on the other hand, the results were not especially impressive. Utah earned a “D+” for K-12 achievement, worse than the “C-” grade awarded to the U.S. overall.

Click here to see the states spending the most on education

 

 

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