local government education employment
TRANSCRIPT
Federal, State & Local Education
Finances
Nomura Global Media
New York Field Trip 2012
New York City, New York
Thomas Gais & Lucy Dadayan
May 22, 2012
State revenue crisis is easing, but state-local fiscal crisis continues
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Worst state government tax declines in 5+ decades - worse than 2001 recession
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-18%
-15%
-12%
-9%
-6%
-3%
0%
3%
6%
9%
12%
15%
18%
Percentage Change in Real State Government Taxes & Real GDP vs. Year Ago
Real GDP
Real state tax revenue
Sources: U. S. Census Bureau (Quarterly tax collections); Bureau of Economic Analysis (real GDP).
Notes: (1) % changes averaged over 2 quarters; (2) No legislative adjustments; (3) Recession periods are shaded.
State Taxes are Improving While Local Taxes Continue to Decline
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-13%
-11%
-9%
-7%
-5%
-3%
-1%
1%
3%
5%
7%
9%Year-Over-Year Change in Real State Taxes and Local Taxes
State Local
Sources: U.S. Census Bureau (tax revenue) and Bureau of Economic Analysis (GDP price index).
Notes: (1) 4-quarter average of percent change in real tax revenue; (2) No adjustments for legislative changes.
State income and sales taxes are recovering Local property taxes are weakening
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(30)
(25)
(20)
(15)
(10)
(5)
0
5
10Real Tax revenue changes since start of recession
Sales tax (state)
Income tax (state)
Corporate income tax (state)
Property tax (local)
Notes: Income, sales, & corporate taxes for state governments, property taxes for local governments. Rolling annual totals.
Source: Rockefeller Institute analysis of data from Census Bureau and Bureau of Economic Analysis.
Property Taxes Trending Downward and Are Likely to Fall Further
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(6)
(3)
0
3
6
9
12
15
18
21
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Real Percent Change in State-Local Property Taxes Since the Start of Recession
1973-Nov 1980-Jan 1990-July 2001-March 2007-Dec
Notes: Four quarter moving averages.
Source: Rockefeller Institute analysis of U. S. Census Bureau quarterly tax survey.
K-12 Education Enrollment and Financing
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K-12 Enrollment as Share of Total Population: Great Variation Across States
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K-12 Enrollment: Percent Change, 2005-2010
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NCES Projects Large Pupil Enrollment Growth in West; Declines in Northeast
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Real Per Pupil Expenditures
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0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Total exp. Instructional exp.
Sources: Rockefeller Institute Analysis of NCES and BEA data.
Great Variation in Average Per-Pupil Total Spending, 2009
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0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000
WYNYNJAKCTVTMAMDDERIPAHI
MENHMN
ILNEVAWI
OHLA
NMWAORSCGAKSTXIA
MIWVMTMOCACOFL
NDNVSDINALARKYNCAZUTID
MSOKTN
Median State Spending
by Region
Northeast $15,591
Midwest $12,017
South $10,168
West $11,033
Notes: Spending adjusted to inflation.
Sources: Rockefeller Institute analysis of NCES and BEA data.
Sources of K-12 Education Revenues, 2009 US Total = $591.4 billion
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State 46.9%
Federal 9.6%
Local 43.6%
Source: NCES.
State Revenue as Share of Total K-12 Revenues in 2009: Wide Variations
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
VTHI
NMID
MNAKNCDEWAWVKSALCAKYWYMIARMSOKUTORMTSC
OHAZUSLAIA
TNNYWICOMEMDGATXVANJ
MAINCTPA
NDNH
RINEFL
MOSDNVIL
Source: Rockefeller Institute analysis of NCES data.
Median State Share of
Total Revenues, by
Region
Northeast 40%
Midwest 42%
South 50%
West 56%
Per-Pupil Federal, State, and Local Real Revenues, 1989-2009
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0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Federal Revenue State Revenue Local Revenue
Sources: Rockefeller Institute Analysis of NCES and BEA data.
Real Per Pupil Local Revenues: Growing Divergence b/n Northeast & West States
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0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Northeast Midwest South West
Notes: States classified based on average real per pupil total expenditures from 1989 to 2009.
Sources: Rockefeller Institute Analysis of BEA and NCES data.
Real Per Pupil State Revenues, by Region
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0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Northeast Midwest South West
Notes: States classified based on average real per pupil total expenditures from 1989 to 2009.
Sources: Rockefeller Institute Analysis of BEA and NCES data.
Real Per Pupil Federal Revenues, by Region
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0
300
600
900
1,200
1,500
1,800
2,100
2,400
2,700
3,000
3,300
Northeast Midwest South West
Notes: States classified based on average real per pupil total expenditures from 1989 to 2009.
Sources: Rockefeller Institute Analysis of BEA and NCES data.
Real Per Pupil Total Revenues, by Region
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0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Northeast Midwest South West
Notes: States classified based on average real per pupil total expenditures from 1989 to 2009.
Sources: Rockefeller Institute Analysis of BEA and NCES data.
Higher Education Enrollment and Financing
Instability and Long-Run Shifts in Sources of Funding
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Higher Education FTE Enrollment as Share of Total Population: 2011
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Higher Education FTE Enrollment: Percent Change, 2006-2011
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Sources of Higher Education Revenues, 2011 US = $143.8 billion
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Net Tuition, 39.2%
Local Taxes, 6.4%
All State Support, 52.5%
ARRA Funds, 1.9%
Source: State Higher Education Executive Officers.
Total Educational Revenue Per FTE, FY 2011
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0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000
WYAKDECTRI
MEMDNJMIVTPAALKYTX
NDNCMNNYOKIL
MSVAARTNUSIA
MAMONVWVSC
NEWI
NHSDHI
NMINLAORAZGA
OHIDKSCAUTCOMTFL
WA
Source: Rockefeller Institute analysis of State Higher Education Executive Officers data.
Median Higher Education
Revenue per FTE
Northeast $13,120
Midwest $10,545
South $11,664
West $ 9,869
Higher education as “balance wheel” in state budgets: Volatility in state/local appropriations and growth of net tuition
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$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
1986 1991 1996 2001 2006 2011
State/local appropriations perFTE
Net tuition revenue per FTE
Public universities in South and West still rely heavily on S/L govts—despite trends toward convergence
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-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Net tuition
State/localgovernments
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Net tuition
State/localgovernments
South West
Public higher education in Northeast & Midwest now splits costs between tuition & SLG appropriations
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-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Net tuition
State/localgovernments
Northeast
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Net tuition
State/localgovernments
Midwest
Significant cuts in local government education employment
Continued growth in state government education employment (largely higher
education institutions)
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State & Local Government vs. Private Sector Employment During The Great Recession
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-8%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
Cu
mu
lati
ve p
erc
en
t c
han
ge s
ince s
tart
of
recess
ion
Private State gov. Local gov.
Source: U.S. Bureau of Labor Statistics (CES, seasonally adjusted).
Local Government Employment Has Declined Sharply Since the Great Recession
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-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
Cu
mu
lati
ve p
erc
en
t ch
an
ge s
ince s
tart
of
recess
ion
Local education Local non-education
Source: U.S. Bureau of Labor Statistics (CES, seasonally adjusted).
Local Government Education Employment Hit Much Harder Than Past Recessions
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-4%
-2%
0%
2%
4%
6%
8%
10%
12%
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60
Cu
mu
lati
ve p
erc
en
t ch
an
ge s
ince s
tart
of
recess
ion
Months since start of recession
1973 1980 1990 2001 2007
Source: U.S. Bureau of Labor Statistics (CES, seasonally adjusted).
State Government Education Jobs Continued to Increase in The Great Recession
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-8%
-6%
-4%
-2%
0%
2%
4%
6%
Cu
mu
lati
ve p
erc
en
t ch
an
ge s
ince s
tart
of
recess
ion
State education State non-education
Source: U.S. Bureau of Labor Statistics (CES, seasonally adjusted).
State Government Education Employment Grew 4%, Weaker Than Past Recessions
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-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60
Cu
mu
lati
ve p
erc
en
t ch
an
ge s
ince s
tart
of
recess
ion
Months since start of recession
1973 1980 1990 2001 2007
Source: U.S. Bureau of Labor Statistics (CES, seasonally adjusted).
Looking forward
K-12 education financing is strained in several ways:
weakness of local revenues—property tax no longer a cushion for schools
seeing drops in state assistance
volatility in state revenues—less predictability, with implications for workforce
population of school age children increasing in states with lower fiscal capacity,
smaller state budgets, economies harder hit by recession
Higher ed spending is growing but not through govt appropriations;
funded increasingly through tuition and thus affected by many factors,
e.g., changes in federal loans/grants, interest rates, jobs, personal income
Federal funds/policies may become more important as state differences
grow in K-12 financing and as higher education revenues are privatized
Yet federal support for all levels of education is, at best, vulnerable—to
sequestration process, political immobilism, focus of budget balancing
efforts on discretionary programs (fed education programs except some
student loans are non-defense discretionary and thus subject to caps)
Biggest problem, however, is state fiscal systems: shrinking and volatile
revenue base, competition for resources from health care programs, etc.;
and persistent regional patterns, which raise hard issues for federalism
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Rockefeller Institute
The Public Policy Institute of the State University of New York
411 State Street Albany, NY 12203-1003 www.rockinst.org
Thomas L. Gais
Director
(518) 443-5831
Lucy Dadayan
Senior Policy Analyst
(518) 443-5828