Budget & Finance

Is Your School District Underfunded?

By Eesha Pendharkar — October 18, 2021 4 min read
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The Oak Grove school district in Illinois spends more than $2,500 more per student than neighboring North Chicago school district. In Massachusetts, Swampscott schools spends almost $5,000 more per student than neighboring Lynn school district. And in New Jersey, Brigantine City School District spends more than $14,000 more per student than its neighbor, Atlantic City Schools.

These sorts of stark disparities in spending can be traced back to the amount of affordable rental housing in each school district, according to a new report by Bellwether Education.

School districts in communities with a lack of affordable housing generate $4,664 more in per-pupil funding compared with the average district in the nation’s biggest metropolitan areas, according to the report.

This is not an immutable characteristic of public school systems, the report says. It is the direct result of housing and K-12 policy choices determined by local and state officials.

Residents of wealthy towns are typically politically hostile toward building low-income housing in their communities. And state-sanctioned K-12 district boundaries, which have been mostly stagnant for the past half century, separate wealthy areas from low-income areas, ultimately creating a vast disparity in the amount in local property taxes that fund these two school districts.

“These districts create inequities by dividing up resources differently between different communities,” said Jennifer Schiess, a partner at Bellwether and the co-author of the report. “And it’s because of both the shape of the districts and the structure of our school funding systems and that reliance on local funds.”

Bellwether calls this practice of politicians and realtors lumping all the affordable housing into one district “educational gerrymandering.”

The study analyzed the affordable housing and K-12 spending patterns in the country’s 200 largest metropolitan areas which serve more than 39 million students.

State and federal funding for schools is designed to allocate more money for low-income districts, but those governments have historically not spent enough to make up for the property tax discrepancy, the report found.

To calculate what constitutes affordable housing, Bellwether developed an “Affordability Index” that compares the percentage of affordable rental units available in a district to the percentage of families in poverty in a school district’s broader community. Affordable housing is defined as $1,000 a month or below, since that’s roughly 50 percent of a low-income family’s monthly income (A family of four bringing in $25,000 or lower annual income is considered by the federal government to be low-income.)

An affordability index of 1 means the number of low-income families matches the number of affordable rentals available. School districts with affordability indexes that are higher than one -- like North Chicago with 2.55, Lynn with 2.29 or Atlantic City with 3.06 -- typically have an unusually high amount of affordable housing available. Typically, districts that have more affordable housing available (with high affordability indexes) can’t spend as much per student as districts with inaccessible housing.

Bellwether found that districts in northern states have vast income and affordable housing disparities, leading to vastly different school spending amounts for students in those states. The authors call these neighboring school districts with stark spending disparities in the same state “barrier borders.”

Across the country, Bellweather found a total of 497 barrier borders across the country, where a school district with an Affordability Index of 0.5 or less shares a border with a district with an Affordability Index of 1.5 or more.

And the problem is more acute in northern states, where there are many tiny districts that align with town or city borders, than southern states, where school districts generally align with county lines.

The more districts a state has, the authors note, the more opportunities there are for ‘educational gerrymandering’ leading to K-12 segregation by income level.

According to the report, there are a few ways to fix the interrelated problem of affordable housing and school funding. Districts can address inequities by allowing students from districts with fewer resources to enroll in districts with more resources. Local and state governments can redraw district lines to evenly distribute affordable housing across districts and to create fewer overall districts. And policymakers can fix funding formulas so state spending can more sufficiently make up for spending gaps between poor and wealthy areas.

“Fix the funding system and also fix the boundaries to make them larger,” Schiess said. “If you have larger school district boundaries, you capture more neighborhoods within that, and that helps to address the finance issue as well as the accessibility issue.”

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