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Window on State Government - Susan Combs Texas Comptroller of Public Accounts

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Background: Public Education Spending in Texas

Public and higher education together constitute the largest category of state spending by far.

Public and higher education together constitute the largest category of state spending by far, accounting for 41.4 percent of all appropriations and 60.7 percent of general revenue spending in the 2010-11 biennium.

  • K-12 schools alone receive about 43.7 percent of Texas’ general revenue, twice the share of Medicaid, which accounts for 21.6 percent of all general revenue appropriations.2
  • Public education also drives much local government spending – as Texas homeowners recognize when they pay their property taxes.
  • Texas public education spending is growing rapidly, rising by 95 percent during the last decade (Exhibit 2).

Exhibit 2.

Total School District Spending in Texas

see alternate

Source: Texas Education Agency.

See district spending details.

Enrollment in Texas public schools rose by about 20 percent in the last decade.

Texas is a rapidly growing state, of course, and higher enrollment is responsible for some of the increase in spending. Enrollment in Texas public schools rose by about 19.7 percent in the last decade (Exhibit 3).

In the last decade, total spending rose nearly five times as fast as enrollment (95.3 percent versus 19.7 percent) (Exhibit 4).

Exhibit 3.

Statewide Public School Enrollment

see alternate

Source: Texas Education Agency.

See enrollment details.

Exhibit 4.

Change in total expenditures vs. enrollment

see alternate

Sources: Texas Comptroller of Public Accounts and Texas Education Agency.

See spending vs. enrollment details.

Thus higher enrollment explains only part of the increase in spending. Texas public education spending per student is rising rapidly (Exhibit 5).

  • Texas’ public school districts’ spending per student rose by 63 percent over the last decade.
  • Texas’ public school districts spent $11,567 per student in 2008-09.
  • State spending not included in reported school district expenditures, such as state contributions to the Teachers Retirement System (TRS), textbook purchases and other direct state expenditures lifted total spending per student to $11,978.

Exhibit 5.

Total Public School Spending Per Pupil

see alternate

Sources: Texas Comptroller of Public Accounts, Texas Education Agency and Teachers Retirement System.

See spending per pupil details.

These increases cannot be explained solely by inflation, as the growth in per-pupil spending has greatly exceeded the general inflation rate (Exhibit 6).

The growth in per-pupil spending has greatly exceeded the general inflation rate.

Exhibit 6.

Change in Expenditures per Pupil vs. Inflation
(Consumer Price Index)

see alternate

Sources: Texas Comptroller of Public Accounts and Texas Education Agency.

See spending per pupil vs inflation details.

To understand what state and local spending on public education buys, one can examine individual categories of school expenditures.

Texas school districts report expenditures by “objects,” broad categories of expenditures. Exhibit 7 examines statewide school district expenditures reported to the Texas Education Agency (TEA):

  • Payroll – salaries, wages and benefits for school district employees, account for 59.4 percent of all state and local spending on public education;
  • Other Operating – operating expenses such as food services, vehicle fuel, supplies, materials and services;
  • Capital Outlay – spending on fixed assets such as buildings; and
  • Debt Service – principal and interest payments on bonds and other debt.

Salaries, wages and benefits accounted for 59.4 percent of all spending on public education.

Exhibit 7.

Statewide School District Costs by Object

see alternate

Source: Texas Education Agency

See spending by object details.

 

Exhibit 8 shows the growth trends in major expenditure spending categories. It also shows the growth of school district fund balances, an available source of funds.

Exhibit 8.

Growth in Major Categories of School District Spending And School District Fund Balances

see alternate

Source: Texas Education Agency.

See spending per pupil vs inflation details.

A High School Diploma – the Best Investment

In fall 2005, 353,465 Texas students entered the ninth grade. Nearly 29,000 of them dropped out by spring 2009, never receiving a diploma – or the life advantages it brings.3

One of the most compelling personal motives for completing high school is money, plain and simple. Those who graduate from high school earn much more over their lifetimes.

According to the U.S. Census Bureau, high school dropouts aged 25 or older earned an average of $32,598 in 2008. High school graduates, by contrast, earned an average of $51,383 – nearly 58 percent more.

Over their entire careers, Texas workers with at least a high school diploma earn 38 percent more than workers who dropped out of school, and those with a bachelor’s degree earn 79 percent more than those with a high school diploma only.4

The benefits extend well beyond personal earnings, however.

According to data from the Texas Higher Education Coordinating Board, only 18.3 percent of seventh graders from 1995 had earned a post-secondary certification or diploma by 2006. For 1998’s seventh graders, the numbers were even worse, with just 17.9 percent having earned a post-secondary award by 2009.

Our students are the state’s future work force, and as such are critical to our continued economic growth. A recent study from the Texas A&M Bush School of Government and Public Service estimated that students in the class of 2012 who drop out of school would cost Texas and its economy $6 billion to $10.7 billion over their lifetimes.5

More information on dropouts can be found in the FAST Appendix. (PDF,4.7M)

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