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School Funding Facts, Pt. 2: Ed spending helps students, boosts economy

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By Amanda Litvinov

The vast majority of students in the United States–roughly 90 percent–attend public schools. But too many policymakers use faulty “facts” to justify underfunding the very schools that most families are counting on. Part one of this series examined just how low per-pupil funding has fallen in most states, and how vouchers leech resources from public schools.

Today we’ll look at two reasons why investing in education is one of the very best decisions a state can make. First, smart education spending helps low-income students overcome barriers to their future success. Second, it boosts state and local economic growth.

FACT: Education spending makes a difference—especially for low-income students. 

Do not allow anyone to tell you that the U.S. spends too much on education.

Yes, overall U.S. education spending is on the high side among developed nations. But our rate of child poverty far exceeds almost all other countries included in such comparisons. Our schools must spend to counter the effects of poverty while many European countries and Canada, for example, alleviate those conditions through other government spending.

The good news is that the services public schools provide are working. For poor children, a 20 percent increase in per-pupil spending each year of their K-12 education is associated with nearly a full additional year of completed education, 25 percent higher earnings, and a 20 percent reduction in the annual incidence of poverty in adulthood (Source: National Bureau of Economic Research, 2014 and 2016).

Also: More than 30 years of research shows that smaller class sizes are better. Class size reduction is one of only four evidence-based reforms that have been proven to increase student achievement. All students benefit from individual, active attention from their teachers, which is compromised when class sizes balloon.

Bottom line: Money matters a lot in education, and it matters how it is spent.


Investing in education is one of the best ways to strengthen the economy. 

Corporate tax breaks and tax cuts are a race to the bottom— a short-sighted approach to economic development, say Noah Berger and Peter Fisher of the Economic Policy Institute. Their research shows that providing expanded access to high quality education is likely the very best thing that a state government can do to bolster its long-term prosperity.

Good public schools attract businesses and produce well-prepared workers who eventually contribute to state revenues through taxes, allowing the state to keep investing in education—a cycle of success.

That’s why educators and parents support a bold proposal in the Oregon legislature that would, among other things, implement a corporate activity tax that would lower income taxes for middle and low-income individuals while raising $1.4 billion for education.

The Oregon Education Investment Initiative would reverse severe underfunding that has resulted in some of the highest class sizes in the nation. It would also add teacher mentoring and early childhood education programs.

Research by NEA shows that the initiative would bolster multiple sectors of the state’s economy, adding 23.6 thousand more jobs than forecasted for 2018, with more than two-thirds of the new jobs for non-teacher school support staff.

More state lawmakers should pursue sustainable investments in education, says Prof. Bruce D. Baker, who heads up the Education Law Center at Rutgers University.

“Equitable and adequate funding is a prerequisite for everything else,” Baker says. “No other strategies or programs or formulas are going to improve schools without sustained and stable funding.”

Bottom line: It’s time to stop giving handouts to corporations that don’t need them and invest taxpayer dollars in our students instead.

Now check out the final post in this series: The do’s and don’ts for talking about school funding to make the case for more resources for students.

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