Instructional Expenses: Prek-12 Education Spending

Where and how well our school districts spend our education dollars can have a profound impact on student academic achievement and success. Historically, education makes up about one-fourth of Florida’s total budget. For fiscal year 2022-23, PreK-12 public education will make up 26.4 percent ($29.066 billion) of the state’s $110.2 billion budget, trailing only Health & Human Services as the largest appropriation by program area. More General Revenue funds are appropriated for Education ($18.647 billion) than for any other program area. [1]

A 2017 study by the U.S. Census Bureau[2] examined public education spending by state for the year 2015 and reported that, nationwide, public school systems spent 53.8 percent of total expenditures ($344.3 billion) on instructional activities. Instructional activities are defined as “activities dealing with the interaction between teachers and students in the classroom or other learning situations.” This includes employee salaries and benefits, instructional supplies, purchased services, and other miscellaneous instructional expenditures. This does not include activities designed to assess and improve the well-being of students or to supplement the teaching process (e.g., guidance counselors, health and psychological services, etc.).

In the early 2000s, the idea of requiring a minimum of 65 percent of a school district’s total operating funds be spent in the classroom began to gain traction among state legislatures. Known as the “65 percent solution,” the idea was that more money could be spent in the classrooms without having to raise taxes, and that student outcomes would be improved as a result. In 2006, Georgia enacted legislation implementing the 65 percent solution. In 2011, absent any evidence of a direct correlation between the higher classroom expenditures and student learning gains, the state’s Education Finance Study Commission recommended repeal of the 65 percent requirement.

In 2008, the Florida Taxation and Budget Reform Commission recommended a constitutional amendment that would have required at least 65 percent of school funding to be used for classroom instruction, rather than school administration. The Florida Supreme Court struck the proposed amendment from the ballot on the grounds that, as written, it was misleading to voters.

SCHOOL DISTRICT BUDGETS

The Florida Department of Education (FLDOE) provides school districts and charter schools with a comprehensive and uniform structure of accounts for financial, cost, and budgetary reporting, consistent with generally accepted standards for governmental accounting and cost reporting. Known as the “Red Book,”[3] this structure allows school districts to organize their budgets and estimate their annual expenditures based upon the fund type, function, and object.

Fund Types

A fund is a fiscal or accounting entity with its own self-balancing set of accounts. The basic fund structure for Florida school districts follows generally accepted accounting principles for governments.

General Fund – Also referred to as the Operating Fund, the General Fund is used for the day-to-day operations of the school district. The General Fund accounts for the vast majority of operational expenditures that support our education system. Revenues and expenses for Voluntary Pre-Kindergarten and Workforce programs are also recorded in this fund. Proper comparisons of Florida school districts, including per student budgets or expenditures, are usually made using the General Fund amounts.

Special Revenue Funds – Used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted or committed to expenditures for specific purposes. primarily from federal sources for the purpose of providing specific educational programs to be administered by the District. The four major programs are the Elementary and Secondary Education Act (ESEA), Title I Program; Individuals with Disabilities Education Act (IDEA); Teacher and Principal Training and Recruiting, Title II, Part A; and Early Head Start and Head Start.

Debt Service Fund – Used to account for the accumulation of resources and the payment of general long-term debt principal, interest, and fees. Funds for the retirement of debt are comprised of Capital Fund transfers, where funding is derived from District Capital Improvement Tax and interest on investments. Debt instruments are issued to finance new school construction and renovate existing facilities, as well as to facilitate major purchases such as computers and buses.

Capital Projects Funds – Used to account for revenue to acquire, construct or maintain facilities and capital equipment. By law, the use of these funds is restricted and they may not be used for operating salaries.   

Internal Services Funds – Account for the District’s individual self-insurance programs and the Employee Benefits Plan. An independent actuary reviews these self-insured plans on an annual basis. These benefit plans allow employees to use pre-tax dollars for medical and dependent care, thus reducing their taxable income and taxes.

Permanent Funds – Account for resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the school district’s programs.

Enterprise Funds – Account for any activity for which a fee is charged to external users for goods or services.

Pension (and Other Employee Benefit) Trust Funds – Used to report fiduciary activities for pension plans that are administered through trusts that meet certain criteria, and other employee benefit plans.

Investment Trust Funds – Used to report fiduciary activities for the external portion of investment pools and individual investment accounts that are held in a trust that meets certain criteria.

Private-Purpose Trust Funds – Used to report all fiduciary activities that are not required to be reported in pension (and other employee benefit) trusts or investment trusts and are held in a trust that meets certain criteria.

Custodial Funds – Used to report fiduciary activities that are not required to be reported in one of the trust funds identified above.

Functions

Function refers to activities performed to accomplish established objectives and are classified into the following major categories:

Instruction (Function 5000) –   Activities dealing directly with the teaching of students or the interaction between teachers and students.

Student and Instructional Support Services – Administrative, technical, and logistical support services to facilitate and enhance instruction. Instructional support services are made up of the following five functions:

• Student Support Services (Function 6100) – Activities designed to assess and improve the well-being of students and to supplement the teaching process, such as attendance, social work, guidance, health and psychological services.
• Instructional Media Services (Function 6200) – Activities concerned with directing, managing and supervising educational media services. 
• Instruction and Curriculum Development Services (Function 6300) – Activities designed to aid teachers in developing the curriculum, preparing and using special curriculum materials, and understanding and appreciating the various techniques that stimulate and motivate students. 
• Instructional Staff Training Services (Function 6400) – Activities designed to contribute to the professional or occupational growth and competence of the instructional staff during the time of their service to the school board or school, such as workshops, demonstrations, school visits, courses for college credits, sabbatical leave and travel leave. 
• Instruction-Related Technology (Function 6500) – Technology activities and services associated with the operation and support of computer learning labs, media center computer labs, instructional technology centers, instructional networks and similar operations for the purpose of supporting instruction. 

General Support Services – Activities associated with establishing policy, operating schools and the school system, and providing the necessary facilities and services for the staff and students. General support services of the school district are described in the following 11 functions: 

• School Board (Function 7100) – Activities of the elected or appointed body that has been created according to state law and vested with responsibilities for educational activities in a given administrative unit. 
• General Administration (Function 7200) – Activities performed by the superintendent and assistant superintendents in the general direction and management of all affairs of the school system.
• School Administration (Function 7300) – Activities concerned with directing and managing the operation of a particular school.      
• Facilities Acquisition and Construction (Function 7400) – Activities concerned with the acquisition of land and buildings, remodeling buildings, construction of buildings and additions, initial installation or extension of service systems and other built-in equipment, and improvements to sites.
• Fiscal Services (Function 7500) – Activities concerned with the fiscal operation of the school system. 
• Food Services (Function 7600) – Activities concerned with obtaining and providing food to students and staff in the school system. 
• Central Services (Function 7700) – Activities, other than general administration, that support the other instructional and supporting services programs (e.g., planning, research, development, evaluation, information, staff, statistical, data processing and other internal services). 
• Student Transportation Services (Function 7800) – Activities associated with the transportation of students to and from school activities, either between home and school, from school to school, or on trips for curricular or co-curricular activities. 
• Operation of Plant (Function 7900) – Activities concerned with keeping the physical plant open and ready for use. 
• Maintenance of Plant (Function 8100) – Activities that are concerned with maintaining the grounds, buildings and equipment at an acceptable level of efficiency through repairs or preventive maintenance. 
• Administrative Technology Services (Function 8200) – Activities concerned with supporting the school district’s information technology systems, including supporting administrative networks, maintaining administrative information systems, and processing data for administrative and managerial purposes. 

Community Services (Function 9100) – Activities that are not related to providing education for students in a school system, including services provided by the school system for the community as a whole or some segment of the community, such as community recreation programs, civic activities, public libraries, programs of custody and care of children, financial aid and community welfare activities.

Debt Service (Function 9200) – Payments of principal and interest to service debt and expenditures related to the issuance and retirement of debt.

Other Capital Outlay (Function 9300) – Expenditures that meet criteria for capitalization as determined by the district school board for the acquisition of capital assets or additions to capital assets, including land and land improvements, buildings, fixed equipment, remodeling, furniture, fixtures, equipment and motor vehicles.

Objects

An object refers to goods or services obtained as a result of a specific expenditure. FLDOE identifies seven major object categories:

• Salaries – Amounts paid to employees of the school system who are in positions of a permanent nature, including personnel under written contract substituting for individuals in permanent positions.
• Employee Benefits – Amounts paid by the school system on behalf of employees. These amounts are not included in gross salary. Such payments are fringe benefits and, while not paid directly to employees, are part of the cost of employing staff.
• Purchased Services – Amounts paid for personal services rendered by personnel who are not on the payroll of the district school board, and other services that the board may purchase.
• Energy Services – Expenditures for the various types of energy used by the school district (e.g., electricity, natural gas, etc.).
• Materials and Supplies – Amounts paid for items of an expendable nature that are consumed, worn out or deteriorated in use, or items that lose their identity through fabrication or incorporation into different or more complex units or substances (e.g., textbooks, periodicals, office supplies, etc.).
• Capital Outlay – Expenditures for the acquisition of capital assets or additions to capital assets (e.g., land, buildings, new and replacement equipment etc.).
• Other – Amounts paid for goods and services not previously classified (e.g., retirement of debt, payment of interest on debt, judgments against the school system, etc.)

Budget data are displayed by fund type, including general fund, special revenue funds, debt service funds, capital projects funds, permanent fund, enterprise funds, and internal service funds.[4]

Methodology

The major source of the data used in this analysis is the “School District Summary Budget” page on the FLDOE website (https://www.fldoe.org/finance/fl-edu-finance-program-fefp/school-dis-summary-budget.stml). The amount appropriated by each school district for Instructional purposes (function 5000) was divided by the total appropriation in the General Fund to calculate the percentage of district operating funds allocated for Instructional purposes (see Table 1).

The Instructional function was selected because it includes expenditures for activities that deal directly with the teaching of students or the interaction between teachers and students. The General Fund was selected because it reflects expenditures for the day-to-day operations of the school district and permits better comparisons of one district to another.

Findings

As shown in Table 1, the percentage of school district General Fund moneys appropriated for Instructional purposes during the 2021-22 fiscal year ranges from 39.3 percent (Calhoun County) to 91.1 percent (Jefferson County). Florida TaxWatch considers Jefferson County to be an anomaly since, after years of failing grades, the operation of Jefferson County‘s public schools was turned over to a private charter school company in 2016, making Jefferson County Florida’s first (and only) charter school system. A more realistic range (excluding Jefferson County) is from 39.3 percent (Calhoun County) to 75.4 percent (Hendry County). The median value is 62 percent, which means that one-half of the school districts appropriated more than 62 percent of its General Fund for Instructional uses and one-half of the school districts appropriated less than 62 percent.

Florida TaxWatch believes that shifting education spending away from administrative and other expenses and toward classroom/instructional expenses is beneficial. This is particularly true in school districts that are struggling to make up for diminished student achievement reported during the COVID-19 pandemic. A recent study found that the shifts to remote or hybrid instruction during 2020-21 had profound (negative) consequences for student achievement. In districts that went to remote instruction, achievement growth was lower for all population groups, but especially for students attending schools in low-income, economically disadvantaged areas.[5]

Florida TaxWatch is not suggesting that simply putting more money into the classroom, whether it is for increased teacher salaries or improved technology, will automatically produce better academic achievement. But shifting a greater percentage of a school district’s operating budget into the classroom can be effective and beneficial if:

• The money is targeted to provide additional resources to the students who need additional resources the most (e.g., English Language Learners, economically disadvantaged students, etc.); and
• The money stays in the classroom, for teacher salaries and professional development, improved textbooks and curriculum, instructional technology, etc.

In summary, directing more funds into direct instructional activities and to the base units of producing academic excellence should provide a greater likelihood of increasing student academic achievement. It is the combination of not only where the moneys are spent (e.g., instruction) but also how well they are managed.

Table 1.

Source: FLDOE’s “School District Summary Budget”