ERIC - EJ1345128 - The Costs of Cutting School Spending: Lessons from the Great Recession, Education Next, 2020 (2024)

State budgets are in trouble due to the COVID-19 pandemic, with tax revenues in freefall and steep increases in spending on unemployment insurance, social-welfare programs, and emergency services. That spells budget trouble for schools, since states contribute about half of all public-school funding nationwide. How might cuts to state education spending affect student achievement? Lessons can be learned about what's ahead by looking at education spending and student outcomes after the Great Recession, which began in late 2007 and ended in June 2009. The years immediately following that period represented the largest and most sustained decline in national per-pupil spending in more than a century. The sheer magnitude of this historical episode allows the examination of whether large-scale and persistent education budget cuts harm students in general and poor children in particular. In this article, the authors examine each state's test scores and number of college freshmen from 2002 to 2017 to compare those outcomes before and after the funding cuts induced by the recession. The results of this study show that declining state support and subsequent cuts in local school budgets can slow student progress with potentially lasting consequences. First, the spending declines that followed the Great Recession halted a five-decade-long increase in student test scores in reading and math. Second, those cuts also were associated with slower rates of college-going among students on track to become first-time college freshmen. Though the impact of tough economic times on public schools may be felt for years to come, the severity of the consequences for students can be minimized by maintaining support for instruction as much as possible.

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