Teacher Pensions Blog

The Census Bureau’s Annual Survey of School System Finances compiles total education spending and revenue across the entire country. The latest data, released earlier this week, shows teacher benefits continue to eat away at school budgets. 

In total, public school expenditures have nearly tripled since 1992 (including inflation). The table below shows how those dollars are being spent across broad categories. Figures for all years reflect current expenditures and do not include capital costs or debt. 

As the table suggests, school districts are spending more and more of their budgets on employee benefits, at the expense of base salaries and wages. Over the long term, the percentage of education budgets going toward salaries fell from 65.0 to 56.2 percent, while the percentage spent on employee benefits increased from 15.0 to 23.7 percent.

Public School Expenditures, 1992-2017

As a share of total expenditures, benefits now eat up almost eight percentage points more than they did in 1992. 

These are steady, long-term trends, but they're no less troubling. Increased spending on benefits is one reason teacher salaries have been flat, in real terms, over the last few decades. Benefits are also a less efficient use of money than salaries, since teachers value $1 in take-home pay more than they do $1 in benefit spending. Worse, much of these rising benefit costs reflect the growing burden of debt costs, not actual benefit enhancements for teachers and retirees. 

Updated on May 23, 2019