Education funding gaps: Which states are hitting, missing the mark?

While the debate rages over the federal budget and how much will go to K-12 schools, states and localities supply the biggest share of education dollars – about 87 percent on average. But is that money distributed fairly to the students who need it most?

School districts that serve the most students in poverty receive an average of $1,200, or 10 percent, less per student in state and local funding than districts with few students in poverty, according to a report released Thursday by The Education Trust released Thursday by The Education Trust (Ed Trust), a group in Washington that advocates for closing economic and racial inequities in schools. The resource gap grows to $2,200 when adjusting to account for an estimated 40 percent higher cost to educate high-poverty students, the report notes.

“We know that money is not the only thing that matters for student success, but at the same time, inequities in funding underlie a whole lot of other inequities in our school systems,” says Natasha Ushomirsky, the report’s co-author.

Funding gaps between high-poverty and low-poverty districts vary widely from state to state, and in some cases disappear altogether, showing the progress that’s been made on this front over the past several decades.

Twenty-four states provide roughly equal amounts to both types of districts, and in 17 states, high-poverty districts actually receive more. The most progressive are Ohio, Minnesota, and South Dakota, which give more than 20 percent more funding for disadvantaged districts, Ed Trust reports.

In Illinois, by contrast, high-poverty districts get nearly 20 percent less in state and local revenue than low-poverty districts (the largest gap in the Ed Trust analysis).

The report also looks at state revenues alone, finding that nine states supply at least 100 percent more to low-poverty districts than to high-poverty ones. New Jersey tops this chart at 431 percent, followed by Connecticut, Rhode Island, Pennsylvania, Massachusetts, Ohio, Virginia, Maryland, and California.

Advocates have been pushing for decades for more equitable funding formulas, and many states do incorporate various characteristics of students and districts into their formulas in an attempt to be fair.

In addition to the base funding, for instance, 30 states gave additional funds for low-income students as of 2012, according to a report by the Education Law Center in Philadelphia. And 29 states used tax revenues in the district as a factor to adjust their funding. Oregon took into account eight student factors, including whether students were learning English, had disabilities, were in foster care, or were pregnant/parenting.

In some cases, shifts toward equity have come partly in response to lawsuits challenging state funding levels and formulas for not doing enough to provide an adequate education to disadvantaged students. Plaintiffs have won 22 such cases since 1989, including one in Ohio.

“Research shows that after there is a point of victory in these cases, districts with the highest proportion of high-needs students ... do receive a greater share of funding ... but then after a while, the disparities slowly creep back into being,” says Dan Thatcher, a senior policy specialist with the National Conference of State Legislatures in Denver.

One factor that helps explain Ohio’s good showing in the Ed Trust report is that there’s been a “sustained focus” on closing funding equity gaps there for more than 20 years, says Paolo DeMaria, an Ohio-based principal consultant for Education First, a policy consulting firm in Seattle.

“Ohio has tried to provide some supplemental resources to those areas that don’t have the property wealth,” Mr. DeMaria says. That, in combination with providing additional funds for economically disadvantaged students, even before the lawsuit, has “done a good bit to close the gaps in Ohio.” But he cautions: “In school finance, there’s never the magic bullet to solve all the challenges of the day.”

Minnesota’s good showing may relate to the fact that “its formula works very well and is very comprehensive,” Mr. Thatcher says.

Ed Trust’s snapshot offers one way to compare fairness across state borders, but it’s not easy for state policymakers to use the same criteria to satisfy such advocacy groups, Thatcher says. For instance, Ed Trust uses the poverty line to measure which districts fall into the highest- and lowest-poverty quartiles. But when schools are reporting characteristics of their students to the state, they usually have to rely on free- and reduced-price lunch participation as a proxy for poverty, which doesn’t capture all poor families.

Racial and ethnic inequities are also examined in the Ed Trust report. Nationally, districts serving the most African-American, Latino, and Native American students received about $2,000, or 15 percent, less state and local funding than districts with the least students of color.

The overall funding gap for low-income students and students of color, the Ed Trust report concludes, “contradicts a national commitment to equality of opportunity, and it deprives students of learning experiences, enrichment, and support they need to succeed.”