U.S. School Facilities Face $85 Billion Funding Gap Annually

New report reveals massive underinvestment in education facilities, identifies solutions to achieve healthier, more sustainable elementary and secondary schools.

The U.S. faces a projected shortfall of a staggering $85 billion in school facility funding every year, according to a new report from the 21st Century School Fund, the International WELL Building Institute (IWBI), and the National Council on School Facilities.

school facilitiesThe 2021 State of Our Schools Report: America’s PK-12 Public School Facilities reveals that districts are spending about $110 billion every year on maintenance, operations, and capital construction – but the educational facilities standards for good stewardship necessitates nearly $195 billion. The rise in the nation’s PK-12 gap has been brought on by increased school construction costs, building inventory increases, and a sharp decline in facility expenditures after the great recession.

All this exists despite extraordinary efforts on the part of local communities and states to deliver public school buildings that help protect the health and safety of the students, teachers and staff who walk through their doors every day.

“In our last report in 2016, we saw an annual gap of $46 billion in school facilities funding—$60 billion in today’s construction dollars,” said Mary Filardo, executive director, 21st Century School Fund and lead author of the report. “Unfortunately, while local districts are struggling with making facilities safe in a pandemic, they are faced with longstanding deficiencies in their aging infrastructure, which makes this very difficult.”

In the U.S., PK-12 school facilities are the second largest sector of public infrastructure spending behind only highways. However, unlike transportation infrastructure, which has most of its capital costs paid from federal and state sources, local school districts individually bear the heaviest responsibilities for school construction capital funding in most states. Nationally, local districts cover 77 percent of school facility costs, with only 22 percent coming from states. Schools received just over 1 percent from federal funds ($7.1 billion) for school construction between 2009 and 2019. One third of these federal funds came from FEMA to aid schools after natural disasters.

“While states and the federal government contribute roughly 45 percent and 10 percent respectively to school districts’ annual operating costs, the capital investment required to build and modernize buildings falls most heavily on local districts and taxpayers,” said Rachel Hodgdon, president and CEO of IWBI. “If the financial resources in the community aren’t there, new construction rarely gets funded. Where our children learn matters, and access to safe, healthy and equitable learning environments should be a right, not a privilege.”

Local districts held nearly half a trillion dollars in long-term debt at the end of fiscal year 2019, representing a national average of slightly more than $11,000 per student. The poorest districts, particularly small and rural ones, cannot even afford to borrow capital to address their aging facilities.

The $85 Billion Gap

Across the nation, local school districts work hard to deliver healthy and safe public school facilities that offer suitable learning environments. They support ongoing operations and maintenance in annual operating budgets and invest in buildings and grounds construction and improvements in capital budgets. But every year the shortfall increases in both budgets, leaving school districts unprepared to provide adequate and equitable school facilities.

The $85 billion gap between what is needed for good stewardship and what districts and states have done occurs both in capital outlays and operations and maintenance.

  • Annually, U.S. public school districts spent an average of $54.1 billion on capital improvements from fiscal years 2009 to 2019 (in 2020 dollars), leaving a capital investment gap of $57.4 billion.
  • Annually, the U.S. spent an average of $56 billion on facilities operations and maintenance, leaving a maintenance and operations gap of $27.6 billion.

“Closing these annual funding gaps must be a top priority. We have Title 1 for the classroom. We need a Title 1 for school facilities as well. This will ensure that all public schools meet modern standards for health, safety, learning, and environmental sustainability and resiliency,” said Juan Mireles, president, National Council on School Facilities and director of facilities and transportation services, California Department of Education. “Too many of our schools are just old and worn out, with inadequate ventilation for clean air, which is a must during this pandemic. The recent 2020 GAO study on the condition of our nation’s public schools found that thousands of school districts have at least half of their schools in need of updates or replacements of key building systems or features.”

Economic, Racial, And Ethnic Inequity

When comparing the funding for school districts across socioeconomic, race, ethnicity and location, the disparities were profound. On average, school districts with high levels of economically disadvantaged students spent less per school than well-off suburban communities. These structural inequities are also found in and often compounded by racial and ethnic composition and the locations of the districts. Rural districts serving high poverty public school communities have funded capital improvements at almost half the level of the national average—$2.3 million on average per school compared to $4.3 million per school.

“This is another area where those who have the least suffer the most,” said Hodgdon. “Schools that are in a state of disrepair—suffering from poor indoor air quality due to lack of ventilation and proper filtration and compromised water quality—are often in the most disadvantaged communities. These schools weren’t sufficient before the pandemic; today, in many cases, they are just plain dangerous.”

Health, Performance, And Economic Impact

With more than one-sixth of the entire U.S. population inside PK–12 public school buildings each weekday, modernizing and replacing old public schools can have a major impact on the health and performance of both students and staff. These efforts can also enable communities to conserve land, energy and water, reduce carbon emissions, and in the face of climate change, protect lives and reduce the level of relief funding needed following disasters.

“At Carrier, we’re committed to creating enhanced learning environments that have been shown to improve the health, well-being and cognitive function of students and staff,” said Greg Alcorn, vice president, Healthy Buildings, Carrier, a platinum sponsor of the report. “This report shines a light on long-standing deficiencies and needs for air quality and safety upgrades in many of our schools, and also the opportunity that with the right strategies in place, a healthier and safer indoor environment can be achieved.”

Looking to the Future

The report found that if school districts across the nation dedicated 15 percent of their recent Elementary and Secondary School Emergency Relief (ESSER) funds to addressing the crisis of school facilities conditions in low wealth and high need communities, they would have about $30 billion over the next three years to reduce deferred maintenance and make their schools healthier and safer.

Congress is currently considering additional funding to address long standing facilities deficiencies. If there was $130 billion of federal funding dedicated to rebuilding America’s schools, it could close the capital investment gap by about 22 percent over 10 years. Federal funding is the only way many low-wealth and high-need districts will be able to bring their PK-12 schools into the 21st century.

“The status quo is unsustainable. This report provides Congress and state leaders with a roadmap to address these daunting challenges to rebuild our nation’s schools for communities and families today and for generations to come,” said Filardo.

“Five years after the last State of Our Schools Report, the deficits have grown and the same hard truth remains. If the condition of a community’s school facility is dependent on the local tax base, as almost all are, the conditions across our nation’s schools will remain inequitable,” said Anisa Heming, director of the Center for Green Schools at the U.S. Green Building Council. “It doesn’t have to be this way. With federal and state contributions, every child’s school could be an inspiring, safe and resilient learning environment that protects the health of its occupants, its community and the planet.”

In support of the launch of the 2021 State of our Schools Report, more than 30 non-profit organizations, education associations, and businesses have helped make the data widely available. Download the report to dive deeper into the data and to find more detail about the conditions of schools in each state.

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