Last year, state and local governments spent $12.6 billion on elementary school construction, down 31 percent from 2008. Rather than raise taxes, states are instead reducing spending, particularly for facility upgrades.
Bloomberg reports that the lack of spending will play a role in potential buyers’ decisions as to whether to buy a home. The quality of local schools is a major selling point for house hunters.
“If there’s a period of under-investment, particularly in places that haven’t recovered yet, that has implications for subsequent generations,” said Ralph McLaughlin, chief economist at Trulia. “That potentially is widening income equality for the next generation.”