Government Funding of Public Schools
Funding and operating a system of public schools is one of the largest and most important government functions, especially at the state and local levels. Local control of public schools is a longstanding tradition in the U.S., but the schools rely on multiple levels of government -- local, state and federal -- for general operating funds, as well as revenues for specific interventions and programs.
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Local Government
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Public schools in most U.S. states receive funding from three major government sources: local taxes, state revenues and federal funds. The chief funding source at the local level is the property tax, levied on all residential and business property within the taxing jurisdiction of a local public school district. A board of trustees sets policy for a local school district, including adoption of the school system's budget and local tax rate. Local property taxes generate revenues, which school districts use for employee payroll, school building maintenance, instructional materials and supplies. According to a 2008 report by the Education Commission of the States (ECS), local sources accounted for nearly 44 percent of revenue for public schools.
State Funding
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State legislatures appropriate funds for public education. In Virginia, for example, the general assembly finances public schools with revenue from the state's general fund. Retail sales taxes, state lottery proceeds and other revenue sources generate money for the state's general fund. From this, legislators appropriate funding for public schools, state prisons and other government functions. In most states, public education accounts for a growing proportion of state spending. The ECS report found that state sources accounted for 48 percent of public school system revenues in 2008.
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Federal Programs
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Compared to state and local sources, the federal government plays less of a role in funding the nation's public schools. The ECS reported that federal funds represented about 8 percent of school funding in 2008. The Williamsburg-Yorktown Daily newspaper in Virginia reported that the federal government funds public schools in the form of grants for specific purposes and programs. This includes school lunches for children from low-income families, educational technology, special education and bilingual education. One of the most significant federal education programs is Title I of the federal Elementary and Secondary Education Act. Originally passed in the 1960s, Title I provides money for schools to meet the educational needs of the poor. Originally intended as a targeted intervention and a supplemental funding source, a study for the Brookings Institution in Washington, D.C., found that Title I has evolved into a broad funding stream for general school needs.
Size
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Many reports measure public school funding in terms of per-pupil expenditures. The ECS displayed per pupil expenditures by states as of the 2007-2008 school year and reported that New York had the highest expenditures at more than $17,000 annually per child. Utah had the lowest per-pupil spending, at $5,765 per student.
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