State governments as a whole spend more than $500 billion a year on K-12 schools in the United States, according to a recent report from the National Working Group on Funding Student Learning, making education the largest expenditure in most state budgets.

Yet, the report notes, it's difficult to figure out where all this money goes and how the amount spent contributes to student achievement. The report recommends overhauling school finance systems so that the resources can be better spent supporting the ambitious learning goals that the general public demands.

With the current downturn in the economy, school districts across the country are getting hit hard. Most school districts depend on state and local tax revenue, so when state and local budgets take a hit, so do schools. In addition, some school districts have been affected by problems in the financial sector. From Wisconsin to California, school districts have lost money because of the bankruptcy of Lehman Brothers and investment deals gone sour. These financial losses will mean larger class sizes, and cutbacks in programs, supplies and school maintenance projects.