Overall, the United States spends $620 billion a year on education, which is about 3.6% of the U.S. GDP. This number (which includes federal, state, and local dollars) is slightly more than the United States spends in a typical year on the military (roughly $600 billion a year), according to the Office of Management and Budget.
These funds aren’t distributed evenly for a number of reasons, including:
Property tax disparities: Nearly half of school funding is local, and many cities fund schools using property taxes. Wealthier communities might have more to contribute to K-12 education than poorer communities.
Arbitrary funding formulas: School funding formulas have been cobbled together over many years. Sometimes there are unintended consequences. One report finds that “many years of political decisions regarding distribution of state aid,” with lawmakers looking out for their own districts, can lead to inequities. Complicating matters, there are often multiple state funding formulas that operate at once — without taking each other or other local variables into account.Salary disparities: Educator salaries and benefits constitute about 80% of public school expenditures. Teachers with more years of experience tend to choose to teach in schools with fewer high-needs, low-income kids. One recent study in California found that students with low socio-economic status had both lower teacher-student ratios and smaller average teacher salaries.
NCES, Public School Expenditures, May 2016
EducationNEXT, Breaking Down School Budgets by Marguerite Roza, Summer 2009
NCES, Education Expenditures by Country (Updated May 2016)
Office of Management and Budget, Historical Tables, Table 3.1, Outlays by Function and Superfunction, https://www.whitehouse.gov/omb/budget/Historicals, https://www.whitehouse.gov/sites/default/files/omb/budget/fy2017/assets/hist03z1.xls
NPR, Why America’s Schools have a Money Problem: http://www.npr.org/2016/04/18/474256366/why-americas-schools-have-a-money-problem (2016)
Heather Rose Jon Sonstelie Ray Reinhard, School Resources and Academic Standards in California: Lessons from the Schoolhouse
Table 5.5 (2006), http://www.ppic.org/content/pubs/report/R_106HRR.pdf