Nearly 2/3 of Virginia schools had not returned to pre-recession levels of per-pupil funding by 2018-2019

As another national economic downturn lurks, a large majority of Virginia public school districts have still not financially recovered from the stock market crash that occurred nearly 15 years ago.

The Great Recession, which began in December 2007 and ended in June 2009, bottlenecked the level of funding that public schools relied on from state and local tax revenues.

“The years immediately following that period [the Great Recession] represented the largest and most sustained decline in national per-pupil spending in more than a century,” according to a 2020 paper from Education Next, an education policy journal.

Approximately two-thirds of Virginia school districts were still not spending at pre-recession levels during the 2018-19 school year, when adjusting for inflation, according to data from the state education department. Nearly all of the state’s most populous divisions are in that group, including the Richmond area’s “big four” of the city of Richmond and Chesterfield, Hanover and Henrico counties, as well as major districts in Northern Virginia and the Hampton Roads area.

On average nationwide, per-pupil spending fell by roughly 7%, the Education Next paper states. Per-pupil spending, which is calculated by a school division’s annual budget divided by the number of students, is annually funded by a mix of local, state and federal tax dollars.

Virginia did not escape the slash in school funding stemming from the Great Recession. Statewide, school spending bottomed out in the 2012-13 academic year, after federal relief funds aimed at combating the financial crisis were phased out between 2010 and 2011.

As the federal money moved away, there was less revenue from states and localities to replace the lost funds during the financial crisis recovery, said Jim Wyckoff, a professor of education and public policy at the University of Virginia, in an interview. Effectively, he said, the federal relief funding pushed the effects of the recession on education a few years down the road.

According to the nonprofit Economic Policy Institute, the recovery funds being “prematurely” phased out coupled with continued gaps in state and local revenues, “left a total shortfall of nearly $1,000 per student in 2012-2013, a point when the economic recovery was purportedly in full swing.”

The Richmond Times-Dispatch analyzed state education department data on school spending, with a focus on comparing the 2007-08 and 2018-19 academic years to examine school systems’ spending patterns in the years before they received major federal relief funding.

Some of the biggest drops in inflation-adjusted spending are in Northern Virginia localities like Alexandria, Arlington and the smaller city of Falls Church. Spending in Richmond and Chesterfield was down approximately 7% in 2018-19, while the state data shows that Hanover and Henrico saw more modest decreases of 3% to 4%.

Of the 85 divisions spending less in 2018-19 than in 2007-08, the small Northern Virginia city of Manassas Park had the largest inflation-adjusted drop in the state, going from spending $16,962 per child in 2007-08 to spending $13,122 per student in 2018-19, representing a 22.6% drop.

Hopewell’s spending changed only by 0.1% in the time frame. The city spent $14,174 per child in 2007-08 and $14,157 in 2018-19, in today’s dollars. Petersburg was one of the districts that had recovered to pre-recession levels by 2018, spending roughly 1% more in 2018-19 than in 2007-08.

While most Virginia schools struggled to reach pre-recession spending levels 11 years after the financial crisis, on a national level, per-pupil spending returned to pre-recession spending in the 2015-16 academic year, according to the Economic Policy Institute.

Wyckoff does not expect the 2020 pandemic recession to have the same lasting impact to education funding as the Great Recession.

“I think that the other part of the story here in Virginia and largely Southern but not only Southern states, is a question about the willingness of the governor and the legislature to support increases in per-pupil spending for education,” Wyckoff said.

The Virginia Board of Education’s 2018 annual report on the condition and needs of public schools in the state said “Virginia schools are underfunded ... [and that] despite recent progress by the legislature, state [school] support is still down 9.1 percent per student for the 2018-2019 school year in real dollars compared to 2008-2009.”

In the 2020 annual report, the board wrote that Virginia schools were still underfunded and “even when adjusting for inflation, state per-pupil support for K-12 education has not been restored to pre-recessionary levels more than 10 years after the end of the Great Recession.”

The Times-Dispatch analysis found that per-pupil state funding had fallen by more than 6% from 2008-09 to 2019-20, when adjusting for inflation.