$1 trillion in, but where are the results?

Despite nearly $1 trillion in annual funding, many public schools in America’s K-12 education system are getting further from their goal of delivering quality education. Rising pension debts, disproportionate growth in non-teaching staff, and sagging student achievement all point to deep structural problems, not lack of resources.

According to a new analysis by the Reason Foundation, total spending on public K-12 schools — from local, state, and federal sources — reached $946.5 billion in 2023. When adjusted for inflation, that amounts to $20,322 per student, up from $14,969 per student in 2002 or a 35.8 percent increase over two decades, a substantial boost in resources for public education.

Where is the money going? Much of the increase in funding, according to the Reason Foundation, has been absorbed by benefit costs — particularly pension debt — and growth among non-teaching staff, even as student bodies shrink.

On a national scale, average reading results on the National Assessment of Educational Progress (NAEP) are lower than they were when the tests were first administered in 1992, and math scores have not yet rebounded to pre-COVID levels. Even pre-COVID student outcomes showed bouts of regression and were trending downward. Internationally, a number of countries have higher post-pandemic achievement results compared to their pre-COVID results, but this has not been the case for the United States.

These patterns, the Reason Foundation warns, raise serious questions about resource allocation, sustainability, and structural inefficiencies in public education, and “money alone won’t solve them.”

North Dakota spending

North Dakota sits near the middle-to-upper tier nationally in spending, coming in at $19,728 in inflation-adjusted per-student funding, according to the Reason Foundation. This is a 54.1 percent increase from 2002 levels.

Inflation-adjusted K-12 benefit spending and growth (teacher pensions, health insurance, and other expenses) is at $3,561 per student, up over 87 percent since 2002. A primary driver of rising benefit spending is teacher pension debt.

For years, states have failed to set aside enough money to cover the pension benefits promised to teachers, resulting in hundreds of billions of dollars in unfunded liabilities (i.e., the difference between the total pension benefits owed to teachers and the dollars available in pension funds). Today, this means that more K-12 education funding must be used to cover pension costs, even while many states have reduced benefits for teachers, rather than in classrooms.

North Dakota’s teacher pension fund debt is approximately $1.31 billion, with a funded ratio of roughly 73.4 percent. This debt represents the gap between promised pension benefits and assets on hand. Put another way, only 73 cents on the dollar is available to pay teacher benefits.

Hiring patterns

Over the last 20 years, growth in North Dakota’s K-12 public school non-teaching staff has been significant, increasing from 6,860 positions in 2002 to 10,391 in 2023 — a nearly 52 percent surge. While public school enrollment has increased just under 12 percent during that same time period, it is a significantly lower growth percentage relative to the non-teaching staff growth. (Check out the new workforce tool from Georgetown University that compares staffing levels with enrollment trends by district and state for the last seven years.)

North Dakota learning outcomes

Despite rising funding, the majority of North Dakota students are not meeting grade-level standards in reading or math, as measured by state assessments, and scores in both subject areas have not returned to pre-pandemic levels. (Note that test results for the 2024-25 school year also show student proficiency below 50 percent but because a new assessment was launched in spring 2025, the results are not included in the analysis.)

On national assessments, scores also remain pre-COVID levels.

Perhaps more concerning is the percentage of students scoring below basic in reading is at record highs. Thirty-eight percent of North Dakota fourth graders scored below the basic achievement level in reading, the highest percentage recorded since testing began in 1992. Eighth-grade reading shows a similar pattern, with 32 percent of students scoring below basic in reading — also the highest on record for this grade level.

And these trends were moving in the wrong direction even before COVID.

Reform, not bigger bureaucracy

North Dakota has an opportunity to confront these realities honestly. That means reforming pension systems before liabilities crowd out promised benefits and rewarding teacher excellence rather than longevity alone. It also means scrutinizing hiring decisions to ensure growth serves students. Without structural reform, higher spending risks sustaining the status quo and students paying the price.