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New York Per Pupil Education

Spending is Nation’s Highest—Where
Does the Money Come From?
September 7, 2017

Based on the most recent national data, New York spends more per pupil than any other state:
$21,206 per pupil compared to the national average of $11,392 as of the 2014-2015 school
year.1 Spending in all New York school districts exceeds the national average, but the source of
revenues varies considerably in each district.2 Revenues generally approximate spending, with
slight year-to-year variations caused by use of, or deposit into, reserves. This blog uses the most
recent state data for school year 2015-2016 to identify interesting trends in revenue variability.

Variety in Revenue Sources

In school year 2015-2016, school district revenues averaged $24,845 per pupil. 3 The largest
source of these revenues, $13,168 per pupil, or 53 percent, is from local governments and is
mostly derived from the property tax. However, local shares for individual districts varied greatly,
from 6.7 percent in Indian River (Jefferson County) to 95.4 percent in Amagansett (Suffolk
County) of total district revenues.

As shown in Table 1, state aid averaged $10,990 per pupil, or 44.2 percent of total district
revenues, but ranged from 4.4 percent in Amagansett (Suffolk County) to 83.4 percent in
Bolivar-Richburg (Allegany County). Federal aid provided a much smaller share of district
revenues, 2.8 percent on average, and there was also considerably less variability, from 0.1
percent in Fisher’s Island (Suffolk County) to almost 31 percent in Kiryas Joel (Orange County).4

The variability in revenue sources follows a set pattern with wealthier districts having greater
total revenues that are mainly derived from local resources.5 In order to analyze the impact of
relative wealth on district revenues, all 674 school districts in the state are grouped into wealth
deciles, as measured by pupil poverty and area poverty. 6 As shown in Figure 1, the difference in
total revenues per pupil is relatively flat between the 1st and 6th deciles, increasing gradually in
the 7th to 9th deciles, and rising drastically in the 10th decile. As deciles increase from the lowest
to highest wealth, local revenues grow gradually, and increase significantly in the 10th decile.

Overall state aid is progressive and concentrated in the lowest wealth deciles, as a share of total
revenues and in aggregate amounts. Approximately 72 percent of revenues in the 1st decile are
from state aid ($16,167), while state aid comprises 54 percent of revenues for the 5th decile
($12,232), and 13 percent of 10th decile revenues ($4,457). School districts in the 10th decile
average almost $4,500 per student in state aid, despite collecting more in local resources
($30,486 per pupil) than any district in the other deciles receives from local, state, and federal
sources combined.

Differing Tax Efforts

Variability in local resources occurs as wealthier districts are able to collect higher per pupil
revenues with lower revenue effort—essentially property tax rates—due to higher taxable
property values. 7 (See Figure 2.) In contrast, school districts with lower taxable property values
have to levy higher rates to yield the same amount of tax revenues. Wealthy districts’ ability to
raise more revenue at comparable or even lower tax rates has two impacts – wealthy districts
are able to outspend poorer districts with comparable or lower tax rates, and homes of similar
values are taxed at a higher rate in poorer school districts.

Regional Differences and Tax Effort

On a regional basis, the highest spenders per pupil are Long Island and the Lower Hudson Valley,
and both regions derive a larger share of revenues from local sources compared to other regions
of the state. These two regions are considerably wealthier than the rest of the state; combining
to account for almost 80 percent of the districts in the top two wealth deciles, while only
representing 13 percent of the districts in the other 8 deciles. The most economically
disadvantaged regions of the state receive proportionally more state aid, led by the Southern
Tier at $14,639 per pupil and Western New York at $13,195 per pupil.
Figure 4 below shows that revenue efforts and regional local revenues per pupil are largely
disconnected. Long Island, which collects $22,140 per pupil, or 68.1 percent above the state
average for local revenues, has a tax effort that is relatively close to the state average of $18.34.
The Mid-Hudson Valley has the highest revenue effort in the State, collecting $16,311 per pupil,
while the Finger Lakes region has the second highest, but only collects $8,589 per pupil, $4,579
less than the state regional average.
Regions That Raise the Most and Least

Not all regions show similar revenue-raising patterns as wealth increases, and Long Island and
Western New York provide interesting examples. Revenues in Long Island’s 121 school districts
increase considerably as wealth increases, with totals averaging more than $40,000 per pupil in
the wealthiest decile compared to an average of $28,880 for the region. Long Island districts
raise more local revenues as wealth increases; in the 9th and 10th deciles, this is done with a
lower tax effort as shown in Figure 5.
In contrast, revenues per pupil in Western New York’s 80 districts actually decline as wealth
increases and tax effort does not vary as much between deciles. While local revenues increase
with wealth, the increases in the higher deciles are not as dramatic. Western New York’s revenue
pattern appropriately mirrors a widely accepted tenet of educational funding - the cost of a
sound, basic education decreases as student needs decrease, with wealth serving as a major
factor in determining need.8 Long Island’s revenue pattern directly contradicts this principle, with
drastically more spending as wealth increases.

New York State spends more per pupil than any other state in the nation, and there is great
variety in how school districts raise revenue to support spending. The poorest districts in the
State have a comparatively high tax burden but raise relatively little local revenue, while the
wealthiest districts raise vastly more revenue with lower revenue efforts. Given the ability and
willingness of many wealthy districts to raise more local revenues, it is time for the State to
properly account for district wealth and reallocate state resources from high-wealth to low-
wealth districts.

By David Friedfel

U.S. Census Bureau, Educational Finance Branch, Public Education Finances: 2015, G15-ASPEF (June 2017),
Empire Center for Public Policy, NY’s Stratospheric School Spending (July 26, 2017),
New York State Education Department, Fiscal Analysis & Research Unit, “Masterfile for 2015-16” (accessed
August 3, 2017),
There are only seven districts with more than 10 percent of revenues coming from the federal government and
are mostly atypical districts. For example, Kiryas Joel only educates the severely disabled, and Highland Mills serves
the children of service members located at West Point.
The overwhelming majority of local revenues are property taxes, but also include payments in lieu of taxes
(PILOTs), interest earnings, local taxes on residential energy, and other miscellaneous revenues.
Wealth deciles are based on the average of a district’s free and reduced price lunch share and census small area
income and poverty estimates (SAIPE), divided by the district’s combined wealth ratio as determined by the New
York State Education Department. The resulting figure is then indexed to the state average to determine a needs
index. CBC staff analysis of data from New York State Education Department, Fiscal Analysis & Research Unit,
“2017-18 Executive Budget School Aid Runs” (January 19, 2017).
Local revenue effort “is calculated by dividing local revenue [including non-property tax revenues] by the actual
property value of the district in the prior year, with the result multiplied by 1,000 and rounded to two decimal
places.” See: New York State Education Department, Fiscal Analysis & Research Unit, The Fiscal Profile Reporting
System Appendix (July 2017),
David Friedfel, A Better Foundation Aid Formula: Funding Sound Basic Education with Only Modest Added Cost,
(Citizens Budget Commission, December 2016),