On Monday, February 2, 2009, RIPEC released its 2009 edition of “How Rhode Island Schools Compare”.  The report, which uses data from the National Education Association, compares education finances in the Ocean State to the other 49 states.Based on the most recent data from the United States Census Bureau, education spending represents the largest expenditure category for state and local budgets, accounting for almost 24 percent of state and local spending nationwide in fiscal year 2006.  As state and local governments face shrinking revenues and increased need as a result of the current fiscal crisis, questions such as the role of state government in funding schools and how to determine an adequate level of education spending, take on renewed importance.

Rhode Island has continued to make significant investments in education.  When expenditures are examined as a percent of personal income based on NEA data, Rhode Island’s education expenditures increased almost three times faster than the national average.   However, on a per pupil basis, the pace of investment in Rhode Island’s schools slowed over the ten-year period.  While per pupil expenditures in Rhode Island have increased 54.4 percent since the 1997-98 school year, this increase was lower than the increase nationally and in all New England states except for Connecticut.

At the same time, a greater proportion of that growth has been borne by Rhode Island municipalities in comparison to the rest of the country.  Between 1998 and 2008 the share of education funded primarily by property taxes increased from 58.5 percent to 60.9 percent in Rhode Island.  During this time, Rhode Island rose in the national rankings for reliance on local revenues from 7th highest to 2nd highest.  In contrast, the national average decreased from 44.0 percent in 1998 to 43.3 percent in 2008. 

The report also finds that Rhode Island continues to rank in the top ten states for teacher salaries and instructional staff salaries.  The State’s average teacher salary of $57,168 ranked 8th highest in the country in 2007-08, which was the same rank held by the Ocean State in the 1997-98 school year, and were 9.3 percent higher than the national average.  Similarly, instructional staff salaries of $60,995 in 2007-08 were 9th highest in the country, the same rank as in 1997-98.  Instructional staff salaries were 12.6 percent higher than the national average in 2007-08. In response to the current fiscal crisis, Congress is currently preparing to pass a fiscal stimulus package that, in addition to other measures, would significantly increase education aid to the states for fiscal years 2009 and 2010.  While the majority of the federal stimulus money is restricted, RIPEC cautions that any use of stimulus funding should be carefully considered and reviewed in the context of the long-term fiscal impact on the structural and on-going cost of education.  Based on preliminary estimates from the Congressional Research Service, Rhode Island is set to receive approximately $96 million in FY 2009 through a temporary increase in Title 1 and Individuals with Disabilities Education Act (IDEA) funding, as well as a one-time grant though the “School Modernization and Repair Program”.  In addition, the bill provides funding for states for “high priority” areas that may be used for education services. While the federal aid will help relieve some of the immediate pressure on education funding, RIPEC believes that education finance must be viewed with an eye toward future sustainability.  As such, RIPEC recommends:

  • Ensuring the discretionary federal fiscal stimulus funds are spent effectively, and to improve the quality of education, and are not used in ways that will reinforce structural imbalances in education finance;
  • Continuing to consider fundamental decisions regarding the current cost structure of education and avoiding creating additional liabilities or commitments beyond the two-year funding period of the federal stimulus package;
  • Working to create long-term solutions by finding areas to increase efficiency in the delivery of education services, for example, examining areas for potential cost-savings through collaboration or regionalization; and
  • Implementing a predictable funding formula that aligns the state and local share of education costs with other states.
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