Education Funding

State K-12 Spending Is Inequitable and Inadequate. See Where Yours Ranks

By Mark Lieberman — October 28, 2021 4 min read
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In close to two dozen states, high-poverty schools get less money per student or just the same amount as low-poverty schools, a new report shows, despite abundant evidence that high-poverty schools benefit from more robust investment.

A new analysis of U.S. Census Bureau data also shows wide disparities in how evenly school funding is distributed. On average, schools in the U.S. spend roughly $15,000 per student. But within states, average funding ranges from roughly $9,700 per student in Arizona to roughly $26,700 in New York. That’s a difference of roughly $17,000 per student.

These figures are among the findings in the annual “Making the Grade” report published Thursday by the Education Law Center.

They highlight the longstanding reality of U.S. public school funding: Per-student spending ranges widely from state to state and varies considerably from year to year, depending on property values, tax revenues, budgetary constraints, and political conditions. A highly complex and chaotic school finance system leaves thousands of schools with inadequate resources and millions of students with insufficient opportunities to learn.

Schools in more than half of U.S. states get fewer dollars per student than the national average. In 12 of those states, average school funding is more than $3,000 below the national average.

All of these 2019 figures are adjusted for regional differences and omit federal funds, which make up just 8 percent of the nation’s K-12 education investment.

The report’s authors, Danielle Farrie and David Sciarra of the Education Law Center, argue that these massive disparities reinforce the need for more federal support for the nation’s public school system. Ideally, they write, expanded federal funding would spur states to ramp up their own investment, rather than giving them cover to make cuts.

They’re pushing for Congress to pass President Joe Biden’s fiscal year 2022 federal budget proposal that includes $20 billion in “equity grants” for states that take steps to make their school funding formulas more equitable.

“Current dollars from Title I and other recurring federal sources are simply too small to improve the overall funding of public education in the states,” they write.

Several states, including Tennessee and Vermont, are currently in the process of revamping their funding formulas. In several others, like Arizona and Pennsylvania, legal challenges to school funding formulas aim to improve public school offerings and address historical inequities. In North Carolina, a federal judge is urging lawmakers to quickly add billions of dollars to the state’s education budget or face reprisal.

Some states invest more, and a higher percentage of their overall budgets

The report assigns states a grade of A through F in three areas:

Funding Level: How much money schools get;

Funding Distribution: Whether high-poverty schools get more money per student than low-poverty schools;

Funding effort: How much schools get relative to a state’s overall gross domestic product.

Wyoming is the only state to receive an A grade in all three metrics. Only one other state, Alaska, received only A and B grades. (Vermont received an A for funding level and funding effort, but didn’t receive a score for funding distribution because of data reporting inconsistencies, the report says.)

States that scored the highest on the report’s funding distribution category allocate more funding to schools with at least 30 percent of students from families in poverty than to schools with fewer than 5 percent of students in poverty.

High-poverty schools in Utah, for instance, get 57 percent more funding than the state’s low-poverty schools. But in most states, students in high-poverty schools get the same amount of funding, or up to 1 percent less, than students in low-poverty schools. In Illinois, for instance, low-poverty schools get roughly $19,000 per student, while high-poverty schools get $15,500 per student on average. Those numbers followed the state’s 2017 school funding formula revamp, which was designed to resolve longstanding inequities..

Current dollars from Title I and other recurring federal sources are simply too small to improve the overall funding of public education in the states.

Two states, Florida and Nevada, got an F on all three measures. Five more states—Alabama, Arizona, North Carolina, Tennessee and Utah—got two F grades out of three. Another 15 states got one F grade.

States invest annually anywhere from 2.3 percent (Arizona) to 5.9 percent (Vermont) of their overall GDP in public K-12 schools. Twenty-seven states invest below the national average of 3.37 percent.

How the status quo can change

Farrie and Sciarra advocate for expanding federal aid to high-need students and for offering incentives to states that take tangible steps to close equity gaps.

Longer-term, though, they argue that broad political consensus will be the best mechanism for achieving a school funding system that works for all students.

“Only sustained political campaigns focused on strengthening public education can change the trajectory in states that, for decades, shortchanged students of an adequate education,” they write.

Recent efforts to push states to opt into a federal expansion of the Medicaid health insurance program offer a roadmap for the advocacy that may be necessary to prod schools to spend more on education, the report says.

Many states have been reluctant to join the program despite widespread public support and a broad consensus that it’s a fiscally responsible path to take.

States that take a similar approach in response to federal incentives for equity-minded K-12 finance reforms would lose “the long-term benefits that would come from greater investment, such as improved educational outcomes, reduced racial disparities, and economic growth,” Farrie and Sciarra write.


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