FY2016 Ed Budget: States Take the Lead in Funding Growth
23 April 2015
→ Anne Wujcik, Education Research Analyst, MDR; Managing Editor, EdNET News Alert
What’s the budget outlook for the next school year? It’s too early for a definitive answer, but the tea leaves aren’t that hard to read. Both Congress and the various state legislatures are working on their FY2016 budgets. The states are furthest along, since they need to have budgets in place by the end of June, with the majority of states’ fiscal years starting on July 1. Congress has until September 30 and has a recent history of missing that deadline, sometimes by as much as six months.
First, the federal budget. With Republicans in charge of both chambers of Congress, the budget process may be more orderly this year, though that’s not a given. Unlike defense or health care expenditures, the education budget is too small to garner much real heat during the budget resolution floor debates, but the writing is on the wall. Both the House and Senate are marching toward a balanced budget and increases in defense-related spending. To get there, they both propose making cuts to non-defense discretionary spending, with the Senate plan cutting $237 billion and the House $759 billion over the next ten years. The education budget sits in the non-defense discretionary bucket, of course. Both the House and Senate propose sticking with the sequester cap for non-defense discretionary spending in FY2016, which means there will be no “extra” money for anything. The good news under this scenario would be flat education funding for FY2016.
The other good news is found at the state level. Remember that the U.S. Department of Education supplies only 10% of overall K-12 funding. State and local revenues supply the other 90%, in roughly equal proportions. Though it’s been a slow uphill climb, the states are largely back on solid financial footings. By FY2015, according to the National Association of State Budget Officers, most states had surpassed pre-recession revenue and spending levels—a key milestone in recovery. The bulk of spending increases has been directed to K-12 education and Medicaid. Thirty-nine states enacted general fund spending increases for K-12 education in FY2015, for a net increase of $11.1 billion or 2.5%. The five-year outlook is for a compound annual growth rate of between 2% to 2.5% for both revenues and expenditures.
Detailed below are FY2016 budget proposals for several states. Not every item in a governor’s budget proposal meets with approval, though education funding is broadly supported in most state legislatures. The proposals illustrate the commitments on the part of states to supporting and improving their K-12 education systems and provide some insight into what tops state educational priority lists.
California is the poster child for recovery. California was among the states hardest hit by the recession, and education funding took its fair share of hits. During the recession, the state deferred almost 20% of its annual payments to the schools, with deferrals reaching a high of $9.5 billion in the 2011‑2012 fiscal year. The proposed FY2015-2016 budget makes the last payment on those deferrals and also includes a healthy increase in baseline K-12 spending. Overall, Governor Brown has proposed a $7.8 billion increase in K-12 spending for the 2015-2016 fiscal year, including:
- $1.1 billion in discretionary one-time funding for school districts, charter schools, and county offices of education to further support implementation of Common Core, the newly adopted English Language Development standards, and California’s Next Generation Science standards
- $100 million in one-time funding to support additional investments in Internet connectivity and infrastructure
- $250 million in one-time funding in each of the next three years to support a transitional Career Technical Education Incentive Grant Program
- $59.5 million in increased funding to support projected charter school enrollment growth
- $33.6 million to support 4,000 State Preschool slots with full-day wraparound care
Michigan has increased its investment in K-12 education by $1.2 billion since fiscal year 2011, despite continued enrollment declines. For FY2016, Governor Snyder recommends $11.9 billion in state funds. While this is a very small increase (1%), it includes $108 million intended to provide a $75 per-pupil increase in the foundation allowance for schools across the state. Increases in basic education funding formulas are always good news. It’s too easy for legislatures to cut specialized one-off programs or even categorical funding like textbook aid when times get tough. In addition to the per-pupil increase, the Governor’s budget includes:
- $100 million for at-risk funding for school students across the state in need of additional assistance
- $25 million for third-grade reading proficiency
- $25 million in technology infrastructure improvement grants to help schools meet online learning needs
- $17.8 million in funding to better prepare students for college and careers through the expansion of career and technical education early/middle college programs
Utah’s FY2016 budget is final, with Utah schools receiving the largest funding increase they’ve seen in 25 years. Governor Herbert proposed $503 million in new funds for public schools ($343 million) and higher education ($160 million), and the budget grants $515 million. The state’s basic funding formula for K-12 education, the Weighted Pupil Unit (WPU), was increased by 4%. The Governor had originally proposed a WPU increase of 6.25%, which would have brought per-pupil funding up to pre-recession levels. Other budget highlights include:
- $63 million to cover an expected growth in enrollment of 8,000 new students
- $8 million for a school turnaround program
- $5 million for an inventory of Utah’s current technology needs and what forms of curriculum would be acceptable for the classroom (much less than the several technology infrastructure programs the Governor proposed)
- $6 million, which is a $1 million increase, for teacher supply money
These few examples illustrate some common themes as well as budget drivers unique to each state. Most states are making at least some minimal increases to their basic K-12 funding formulas. That not only builds the base upon which future increases will be calculated, but it also provides districts with a lot of flexibility, allowing them to direct these funds to their most pressing needs. Many states are planning to fund technology infrastructure, STEM and/or CTE, and early childhood education. You can track proposed state budgets and their enactment at this resource maintained by the National Association of State Budget Officers.
Anne Wujcik has more than 30 years of education and publishing experience. She is an Education Research Analyst in MDR’s Market Research department and Managing Editor of the EdNET News Alert. Anne is also part of the EdNET Insight team, MDR’s research and information service that delivers decision support services to industry leaders.
Anne ran her own consulting firm, helping companies in the education market develop and implement strategic marketing plans. Anne spent a year as Market Research Director for the Software Publishers Association, now SIIA, and was Director of Research for TALMIS, the leading market research company focused on educational technology use. Anne began her career as an elementary school teacher. She has a master’s degree in early childhood education and supervised early education programs for the state of Georgia.