The United States spends about $11,000 each year, on average, to educate each public K-12 school student, according to the most recently available government information. That’s a 27% increase in inflation adjusted dollars from two decades before.

While the United States as a whole spends an average of $11,000 per student each year, the actual number of dollars allocated to educate each student varies dramatically — state to state and city to city.

In Utah, per pupil spending averages about $6,500 each year, compared to more than $20,000 in New York, according to a recent Census Bureau report on public education finances.

However, spending within states is not uniform and varies dramatically by school district. For example, in New York, where the typical school district’s per pupil allotments are at least 25% higher than the national average, there are some school districts whose revenues and expenses are below average. For example, the Indian River Central School District’s cost-adjusted per pupil allotment is 8% below the national mean, according to a detailed analysis by EdBuild.

Sometimes school funding formulas leave some students with more resources and some students with less — even within a single city or neighborhood

According to the Edunomics Lab at Georgetown University, traditional funding formulas lead to uneven funding distribution within districts. These historic differences in funding stemming from traditional school funding formulas matter because they exacerbate inequalities. A recent report by the Brookings Institution, Racial Disparities in Education Finance: Going Beyond Equal Revenues, said these intradistrict disparities “can undermine existing systems trying to close achievement gaps if it means the most at-risk students are not receiving their fair share of highly qualified teachers.”

A mix of federal, state, and local dollars supports U.S. public schools. Overall, according to the National Center for Education Statistics, the federal government contributes about 9% of K-12 education dollars, states contribute 45%, and local governments contribute 46%.

But these rates vary: Excluding Hawaii (which is a single-district state), the highest proportion of state support is found in places like Vermont (where the state government pays for 89% of the state’s education expenses), Arkansas (77%) and New Mexico (70%); the lowest proportion is in states such as Illinois (37%), New Hampshire (34%), and South Dakota (31%).

What results from this hodgepodge of federal, state, and local funding decisions? Often, unintended consequences and inequities that have a direct impact on students.

One recent report by The Education Trust found that the highest poverty school districts receive about 10% less funding per student in state and local funding than the lowest poverty districts and that school districts serving the highest percentage of minority students received roughly 15% less per student than those serving the lowest percentage.

Another recent report by Marguerite Roza, the director of the Edunomics Lab at Georgetown and a senior scholar at the Center on Reinventing Public Education, found that some school districts spend more per pupil on foreign languages and electives than they spend per pupil on math and reading, more on Advanced Placement courses than on remedial courses.

A recent report by Sean F. Reardon of Stanford University found that there was more and more “residential segregation by income” between 1970 and 2009. He found that this and other factors contributed to a broadening achievement gap between children from low-income and high-income families: “The achievement gap between children from high and low-income families is roughly 40% larger among children born in 2001 than among those born 25 years earlier.”

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.SOURCESNCES, Public School Expenditures, May 2016

School budgeting is often very complex, and the rules and regulations often leave limited flexibility for principals and teachers to make decisions about how to allocate resources to benefit the students in their schools and classrooms. According to the Edunomics Lab at Georgetown, typical principals have authority over only 5% of their budgets. This lack of autonomy is at least partially due to negotiated contract agreements and other regulations that dictate school-level decisions.

“Nimbleness is rare in schools in part because existing district structures typically impede it,” wrote Naomi Calvo and Karen Hawley Miles of Education Resource Strategies. “Resource patterns generally are a given in most schools, rather than something under principal control.”

In recent years, some states and school districts — including California, Denver, and Boston — have transitioned to “student-based allocation,” also known as “weighted student funding,” which allocates funds based on the number of students in a school and their characteristics (such as the number of students in poverty, the number who are homeless and the number who are disabled). The Every Student Succeeds Act (ESSA) included a Flexibility for Equitable Per-Pupil Funding pilot program, which gave 50 school districts in the United States the opportunity to combine federal, state and local funding and allocate them through a single student-based formula based on student needs.

Scholars and policy makers say student-based allocation leads to greater equity, transparency, accountability, and autonomy for school-based decision-makers.

The United States has invested progressively more in education. According to the National Center for Education Statistics, in the 1961-62 school year, per-pupil spending was about $3,000 in constant 2014-15 dollars. In the 2012-13 school year, per-pupil spending was about $11,000 in 2014-15 dollars, more than three times as high.

Contributing to that trend is an increase over time in the ratio of teachers to students. The number of teachers in public schools has increased, from about 1.4 million in 1960 to more than 3 million today, and the number of students enrolled in public schools has increased from about 36 million to 50 million. This means that the average student-teacher ratio, reported by the National Center for Education Statistics, has dropped from about 26 students to every teacher, on average, in 1960 to about 16 students per teacher today.

While the average ratio has fallen, the change has not been uniform: according to a CPRE report on The Transformation of the Teaching Force, there has been a spike in pre-kindergarten teachers, for example, and a big increase in elementary enrichment and special education teachers.

Average teacher annual salaries have not changed substantially over time. According to the National Center for Education Statistics, the average U.S. teacher earned $52,830 in 1969-70 (in constant 2012-13 dollars), compared with $56,383 in 2012-13.

Results, as measured by student achievement, have not risen as rapidly as spending.

Performance on the National Assessment of Educational Progress (NAEP) has improved modestly for elementary-aged children (9-year-olds) but has not improved for high schoolers (17-year-olds).

Today, the graduation rate is higher than it has been, but the relationship between graduation rate and K-12 spending remains unclear.

Researchers who have looked at individual communities have found that schools that receive more funding do not necessarily produce stronger results. That is, spending and outcomes may not be clearly correlated.

“In more than half of the states included in our study, there was no clear relationship between spending and achievement after adjusting for other variables, such as cost of living and students in poverty,” wrote Ulrich Boser in a recent report by the Center for American Progress.

However, research is not totally consistent on the return on investment in education. A recent study by Jesse Rothstein and Julien Lafortune of Berkeley and Diane Whitmore Schanzenbach of Northwestern, found that rapid increases in funding tied to events, such as court orders or legislative actions, “cause gradual increases in the relative achievement of students in low-income school districts, consistent with the goal of improving educational opportunity for these students.” In other words, increasing spending can, in some cases, help to boost the achievement of high-needs students.

In recent years, there have been efforts at the federal, state, and local levels to bring more equity and transparency to school funding. And policymakers are increasingly asking: How can school funding policies and practices help improve outcomes for students?

A lot of work remains — both by policymakers and by researchers — to ensure that school funding is fair and equitable, and the Walton Family Foundation is committed to supporting policy efforts and research that bring greater equity, transparency and effectiveness to school finances.

1. How Much is Spent Per Public School Student?

Public Education Finances 2014 (US Census Bureau): p. 11, Table 11: States Ranked According to Per Pupil Public Elementary-Secondary School System Finance Amounts: FY 2014 (Released June 2016)

NCES: Table 236.15. Current expenditures and current expenditures per pupil in public elementary and secondary schools 1989 – 1990 through 2025-26

2. U.S. School Spending Isn't Uniform

Public Education Finances 2014 (US Census Bureau): Figure 4, Table 8, Table 5

NCES, Table 236.15: Current expenditures and current expenditures per pupil in public elementary and secondary schools: 1989-90 through 2025-26

EdBuild

Chart from: NPR: Why America’s Schools Have a Money problem, April 18, 2016

3. There are Funding Disparities Between Schools

Do Districts Fund Schools Fairly?, Education Next, By Kacey Guin, Betheny Gross, Scott Deburgomaster and Marguerite Roza (Fall 2007)

Sheila Murray, Kim S. Rueben, Racial Disparities in Education Finance: Going Beyond Equal Revenues (2008)

Dylan Peers McCoy, Chalkbeat, Which Schools get the most money? Indianapolis Public Schools analysis reveals how schools compare (May 18, 2016)

Edunomics Lab, Georgetown: Student Based Allocation 101

Every Student Succeeds Act

4. A Mix of Funds

US Census Bureau, Public Education Finances 2014: Table 5, Percentage Distribution of Public Elementary-Secondary School System Revenue by Source and State: Fiscal Year 2014: https://www.census.gov/content/dam/Census/library/publications/2016/econ/g14-aspef.pdf

National Center for Education Statistics, Public elementary and secondary revenues and expenditures, by locale, source of revenue, and purpose of expenditure: 2012-13, Table 235.40

5. A Common Result: Inequity

The Education Trust, Funding Gaps 2015: Too Many States Still Spend Less on Educating Students Who Need the Most, March 2015

EducationNEXT, Breaking Down School Budgets by Marguerite Roza, Summer 2009

6. Sources of Inequity

NCES, Public School Expenditures, May 2016

NCES, Financing education: National, state, and local funding and spending for public schools in 2013 (January 2016)

EducationNEXT, Breaking Down School Budgets by Marguerite Roza, Summer 2009

NCES, Number of public school districts and public and private elementary and secondary schools: Selected years, 1869-70 through 2010-11

EdBuild, School Districts, Difference from National Average

Roza, Many a slip ‘tween cup and lip: District fiscal practices and their effect on school spending (2005)

Roza, Educational Economics: Where Do School Funds Go

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

7. How Does Money Flow to Schools and Students?

Annenberg Institute for School Reform, Voices in Urban Education, Student-Based Budgeting (Fall 2010)

Current expenditures and current expenditures per pupil in public elementary and secondary schools: 1989-90 through 2025-26: https://nces.ed.gov/programs/digest/d15/tables/dt15_236.15.asp?current=yes

Public elementary and secondary revenues and expenditures, by locale, source of revenue, and purpose of expenditure: 2012-13: https://nces.ed.gov/programs/digest/d15/tables/dt15_235.40.asp?current=yes

Edunomics Lab, Student Based Allocation 101

Every Student Succeeds Act

8. How the U.S. Spends Its Education Dollars

NCES, Table 236.55, Total and current expenditures per pupil in public elementary and secondary schools: Selected years, 1919-20 through 2012-13

NCES, Table 208.20, Public and Private Elementary and Secondary Teachers, Enrollment, Pupil/Teacher Ratios, and New Teacher Hires: Selected Years, Fall 1955 – Fall 2025

NCES, Number and percentage distribution of teachers in public and private elementary schools, by selected teacher characteristics: selected years 1987-88 through 2011-12

NCES, 120 Years of American Education: A Statistical Portrait, Table 8.—Historical summary of public elementary and secondary school statistics: 1869–70 to 1989–90

9. What Are We Getting for Our Money?

NAEP, Long Term Trends

Center For American Progress, Return on Educational Investment, 2011.

NCES, p. 3, Trends in Academic Progress

NCES, Figure 1. Average Freshman Graduation Rate (AFGR) for public high school students: school years 1990-91 through 2012-13

Julien Lafortune, Jesse Rothstein, Diane Whitmore Schanzenbach, “School Finance Reform and the Distribution of Student Achievement,” Feb. 2016