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The Bottom Line

    Where Does Education Funding Come From and How Is It  Spent?

    We're breaking down where education  funding comes from and how it's spent.

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    We're taking at look at our  first episode of the TikTok series, EdFinToks, where you can learn about education finance all under 60 seconds. We're breaking down where education  funding comes from and how it's spent.


    We'll start with the basics of K-12 education spending in the United States. How much does the U.S. spend annually on K-12 public education? The total spending for fiscal year 18 was $721B (numbers rounded to the nearest billion). Where does that money come from?We’re taking a look at the F33 Census data summary tables and came across the following


    K-12 education has 3 major sources of revenue (revenue = money in)


    K-12 education revenue sources


    $329B (45.6%) came from “Local” funding—this is primarily money that local governments collect through property taxes. 

    $337B (46.7%) came from “State” funding—this comes from money that state governments collect through sales taxes, state income taxes, tolls, and other taxes or fees. 

    $55B (7.7%) came from “Federal” funding—this comes from the federal government budget that is generated from federal income taxes, payroll taxes, corporate taxes, and estate taxes.


    You can probably see that the keyword here is TAXES. Local, state, and federal governments collect money through a variety of taxes in order to fund public services like education, mass transit, roads and highways, parks and recreation, health services, and public safety.


    $720B is a big number. Where does it all go?


    Infographic of spending in K-12 education


    Right off the bat, $90B goes towards pre-committed expenses: capital projects and interest on debt. This includes construction of school buildings, athletic fields, and sometimes even major purchases like buses or projects like a new roof or heating/cooling system.


    That leaves $630B for operating expenses. About 80% of spending goes to salaries and benefits, which is pretty typical for any large organization. $382B goes towards Instruction, most of which is teacher salaries and benefits but also includes some supplies, curricular materials, and student technology. $248B goes towards Support Services and Other Expenses, which includes:

    • operating school buildings with principals
    • facilities and grounds maintenance
    • HVAC systems
    • utilities
    • insurance
    • printing and copying
    • school security
    • supporting students with counselors
    • instructional support
    • transportation
    • health services
    • assistive devices
    • speech and language services
    • cafeteria and food services
    • special education placement
    • libraries
    • supporting teachers with curriculum development
    • professional development
    • managing central services like the superintendent, record-keeping, assessment and evaluation
    • HR and finance systems
    • student data systems, and much more


    Many of these support services are required by state or federal law.


    The U.S. has nearly 51 million public school students. The average spending per student, known as “per-pupil spending” is $12,612 but this number can vary from state to state, district to district, and even school-to-school. The state with the lowest average per-pupil spending is Utah ($7.6K) and the state with the highest average per-pupil spending is New York ($24K).


    Now you know ...


    • How much the US spends on public education
    • Where the money comes from
    • What money is spent on


    Interested in learning more about funding? Look up the F33 Census data and check out the revenue and spending data for your home state. 


    The most recent data available is from “Fiscal Year 18” which refers to the school year that started in the Fall of 2017 and ended in the summer of 2018. If you’re interested in looking up specific data for your state, go to this link and download the tables.



    Catch  up on our previous EdFinToks  

    Jess Gartner

    Jess Gartner is the founder and CEO of Allovue, where edtech meets fintech - #edfintech! Allovue was founded by educators, for educators. We combine powerful financial technology with education data, giving administrators the power to connect spending to student achievement. Jess has been featured as one of Forbes Magazine’s 30 Under 30 in Education (2015, 2016 All-Star), The Baltimore Sun’s Women to Watch (2013), and Baltimore Magazine’s 40 Under 40 (2013). In 2014, she was recognized as the Maryland Smart CEO Innovator of the Year in the Emerging Business category. Before founding Allovue, Jess studied education policy at the University of Pennsylvania and taught in schools around the world, including Thailand, South Africa, Philadelphia, and Baltimore. She taught middle school humanities in Baltimore City and received her M.A. in teaching from Johns Hopkins University.