Spending on US schools is more popular than ever

In the 1980s, Americans drew the public purse strings tight and many schools saw little new money.

Referendums for school-construction bonds failed or barely got through. Educators got the cold shoulder when they asked voters to raise property taxes.

But that was then.

Today, Democrats and Republicans alike are eager to spend more federal money to repair crumbling school buildings. Governors flush with cash are pumping state money into education. Even localities are finding it easier to persuade voters to fork over more cash.

The 1990s are turning out to be the best era for school funding since at least the 1950s. This week, St. Louis became the most recent city to get voter approval for new taxes to fund education.

But education experts caution that the new money is pushing school boards into a gilded cage. Federal and state governments are earmarking funds for specific purposes, giving local boards less autonomy. And because states' income is based on income taxes - which swing up and down with the economy - their largess is more vulnerable to a recession than was '50s-era funding.

With poor schools getting most of the state money, they have the most to lose. "When there's an upturn, there's a lot more money," says Bruce Cooper, a professor of urban education at Fordham University in New York. "When there's a downturn, there's a lot less money. We're vulnerable."

Such economic gloom seems out of place in the current environment. While the federal government celebrates the start of budget surpluses, state governments are doing even better. And when governors aren't socking money away in rainy-day funds, they're earmarking it for education. In state of the state addresses, many governors are calling for more school funding.

"There's been a growing recognition by the public that education is of critical importance and it costs money to do it right," says Harold Seamon, deputy executive director of the National School Boards Association in Virginia.

Even the federal government is getting involved. The Clinton administration proposes to raise $25 billion through tax credits to repair schools. Republicans generally agree with the idea, although they want more money spent on suburban and rural areas than inner cities.

"I don't think I've ever seen an environment where education spending was so popular," says Bob Durante, a director in Standard & Poor's public finance department in New York.

According to a poll last year, two-thirds of Americans are willing to pay more taxes to improve inner-city schools. And here in St. Louis, nearly two-thirds of voters this week agreed to raise the city's sales tax by two-thirds of a penny. The money would help make up for a shortfall in state funds when the court gives up its jurisdiction over busing.

Around the country, education experts point out, the challenge of the new school funding lies in the details. In the past, localities provided most of their own school funding through property taxes. But taxpayer revolts two decades ago made it difficult for many communities to keep raising taxes, so states began to step in with their own funds. Today, states spend just as much money on education, on average, as local governments do (although there's wide variation among the states).

And states are under pressure to put in even more funds, thanks to lawsuits related to the yawning spending gap between rich and poor school districts. Typically, states are remedying the imbalance by targeting money to poor districts.

But concerns about the instability of states' income-tax revenues have some worried about what will happen to these poorer schools in a recession. During the last downturn in the early 1990s, local school boards raised revenues on their own when state funding shriveled, says Ed Hurley, school finance specialist with the National Education Association in Washington. Now "it's much more difficult because of these property-tax limitations."