Public School Funding Unequal: State and Local School Finance Systems Perpetuate Per-Student Spending Disparities

Finance Systems Perpetuate Inequitable Funding Of U.S. Schools

According to a report out of the Center for American Progress, inequitable per-pupil spending perpetuated by regressive state and local school-finance systems remains cause for concern in U.S. public schools, despite state aid formulas designed to work to the contrary.

“Inequitable funding of U.S. public schools contributes significantly to the under achievement of our low-income and minority students. It’s something we have to fix if we are to progress as a society,” Cynthia G. Brown, vice president of education policy at the Center for American Progress, said in a statement.

The study’s authors, Rutgers professor Bruce Baker and NYU associate professor Sean Corcoran, identify six states — Illinois, Texas, New York, Pennsylvania, Missouri and North Carolina — where combined state and local revenues and school resources are considerably lower in higher-poverty districts than they are in lower-poverty districts.

While states’ school finance formulas strive to account for differences in the costs of attaining equal educational opportunity across schools and districts — and also account for differences in the ability of local public school districts to cover those costs — not all are successful in carrying out those intentions.

For instance, according to the report, non-property sources of revenues, like income taxes and fees, are generally higher in low-poverty districts than high-poverty ones, and are seldom equalized through the state aid formula.

The authors point out the largest share of federal revenues to local public school districts are Title I revenues, which are directed at high-poverty schools. However, the influence of these revenues on school finance systems is very small overall, raising revenue estimates for the highest-poverty districts by only 5 percentage points.

Baker writes states then end up channeling billions of taxpayer dollars back to lower-poverty districts that have less of a need for funding support. He says that allocation of these resources based on student need could enable better educational opportunities in high-poverty settings.

The report concludes that states must scrutinize their funding systems and revise their formulas so as to “use financial resources in ways that will most effectively level the educational playing fields between their districts.”

“Nationwide, school finance disparities continue to seriously undermine the mission of this country’s public schools,” the report reads. “Eliminating these disparities must be a priority if our goal is to successfully educate this generation of children to compete and win in the global marketplace.”

Last month, another Center for American progress report determined schools that enroll 90 percent or more non-white students spend $733 less per pupil per year than schools that enroll 90 percent or more white students. These “racially isolated” schools make up one-third of the country’s schools. Nationwide, schools spend $334 more on every white student than on every non-white student.

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