The Real Reason Disparities Exist in Education Funding

Almost every state has been sued for not investing enough in education, especially in poorer districts. But localities may be more to blame.
by | May 6, 2015

What's the right amount to spend on schools to get the best outcomes?

The average spending per student in school districts around the country decreased in 2011 -- the latest year that data is available -- and began years of declining expenditures, according to an April report on K-12 funding by State Policy Reports.

The roughly 2.5 percent decrease in 2011 followed years of growth that plateaued from 2008 until 2010 at about $10,800 per pupil. During the Great Recession, the American Recovery and Reinvestment Act (commonly referred to as the stimulus) allowed states to keep up their education funding. But they've had more freedom to decrease spending since that act expired.

As states reduced funding, some local districts haven't been able to make up for that loss, which has led to greater disparities between rich and poor school districts. Richer school districts receive more local funding than poorer districts in 23 states, according to the report.

In recent years, several states -- including Kansas, New Jersey, New York and Texas -- have faced lawsuits about whether or not they've invested enough in education. In all but five states there have been lawsuits at some point. The Kansas Supreme Court ruled last year that the state was not providing an equitable public education across all districts in the state. Last week, the state's highest court decided not to take up a case regarding a new funding method for public education. A lower court will rule on the plan this week, which could force legislators to give additional funding to Kansas public schools.

On average, states provide 45.1 percent of total education funding, while local districts contribute 44.8 percent. In some states, the difference between state and local contributions is much larger. In Vermont, for example, the state covers 87.3 percent of education funding, while local districts shell out only 4.8 percent. On the other hand, districts in Illinois give the second highest contributions in the nation, behind Washington, D.C., supplying 59.1 percent of the funding, while the state covers just 32.5 percent.

"State funding is meant to have an equalizing influence, insuring that all the districts within the state are working with roughly similar resources," the report said. States typically try to spend more to help students in the poorest districts get similar education opportunities as students in richer districts.

In fiscal year 2012, Virginia's Fairfax County Public Schools received $2,764 per pupil from the state and provided $9,905 per pupil, while neighboring (and poorer) Prince William County provided $4,812 per pupil in local funding and got $4,813 per pupil from the state.

Local districts fund education through property taxes, so districts with higher property values can better support their schools. State funding is supposed to balance those disparities, but in 24 states, total per-pupil funding from state and local sources was still lower in the poorest districts.

"Some of it is based on funding trends, some is based on different structures and systems," Marcia Howard, the executive director and executive editor at the Federal Funds Information for States, said. "To the extent that states step in to assume more of the burden, then you'll see the state share go up and the local share go down."

When observers factor in federal aid, however, only six states ended up spending more on their wealthiest districts than their poorest. Federal aid is well-targeted to make up for disparities in funding between high- and low-poverty districts. Analysts recommend that spending in high-poverty areas should be at least as high as spending in areas of low poverty.

Michael Leachman, the director of state fiscal research at the Center on Budget and Policy Priorities who has researched how states fund education, said poor districts will continue to be disproportionately funded unless more states change their funding models. When states cut funding for education, the services that are often the first to go also tend to help poor students the most, he said.

"The basics of what's important for outcomes is having high-quality teachers spend as much time as possible with kids. You do that with more hours of learning, longer school years, more hours per day and smaller class sizes, especially in the lower grades," he said. "It's going to have an especially important affect in low-income schools, because those are the kids who benefit the most from those kinds of reforms."

While proponents of budget cuts have said that funding does not affect education outcomes, a 2012 report by the Albert Shankar Institute found that money does matter, but what matters more is how that money is spent. Higher "per-pupil spending are positively associated with ... higher student outcomes,” in general, but more importantly a bigger budget can translate into smaller class sizes and access to better resources, which correlates to increased student performance.

Some states have also shifted their funding models away from local funding, which makes individual districts' wealth matter less.

Despite being in one of the nation's wealthiest areas, Fairfax County, Va.'s school district says it can't afford a preschool program. (Wikimedia Commons/Jarekt)

Fairfax County, Va., contributes more funding to Virginia's State Department of Education than the 15.7 percent of its total education funding it gets back. Officials said that the wealthiest parts of the county skew the amount of wealth in the area and mask the number of students living in poverty.

"We're getting back 20 cents on every dollar in income tax that they pay. We are an enormous loser," Jeff McKay, the Lee District supervisor and member of the Fairfax County Board of Supervisors, said. "We are funding operations state-wide, but struggling to be able to reasonably fund out schools, and that's enormously frustrating."

For the 2012-2013 school year, Fairfax County was the country’s eleventh largest school district. The county, made up of nine districts, funds eight clusters of schools and day-to-day operations of all county schools, transportation, facilities management and general support costs. McKay said the county is at a disadvantage because it has been unable to launch a comprehensive pre-kindergarten program. McKay said he’s losing teachers to neighboring districts in Virginia, Maryland and D.C., where wages are higher.

Virginia ranked No. 31 in the country for its per-pupil expenditures in academic year 2011-2012, according to the State Policy Research report. Pressed to cut from other public areas to make up for education funding, Fairfax County has slowly started to lobby the General Assembly in Richmond to change the state's funding model, to factor cost of living into the formula and to look at different high-need populations, such as English language learners, special education students and students who qualify for free or reduced lunch programs.

"We're left being blamed for not really funding education. There's a tremendous amount of anger on this issue, and it's from all different parts of the state," McKay said. "You're going to see it boil over … and they're going to have to do something about it."

Mary Ellen McIntire | Mary Ellen McIntire