Is school funding fair? States may be failing needy students

New report says school funding fairness suffers amid national recession and post-federal stimulus

funding-fair-states The stimulus package that provided funding for states as part of the American Recovery and Reinvestment Act (ARRA) may have done more harm than good, suggests a new report. Instead of continuing to invest in crucial parts of education post-stimulus, many states have sacrificed fair school funding.

During the beginning of the U.S. economy’s recession in 2008, the federal government created a stimulus package to support public schools and prevent major layoffs and cuts in essential programs and services through the ARRA.

However, when the federal ARRA funding was depleted, many states were left with budget shortfalls.

“When the stimulus ended, states faced a crucial test: either restore revenue or allow cuts to education funding and programs,” according to the report. “This [data] shows many of the states failed this test, sacrificing fair school funding after the foreseeable loss of federal stimulus.”

(Next page: Fairness principles)

The report, “Is School Funding Fair? A National Report Card [NRC],” is produced by the Education Law Center (ELC), which advocates for at-risk students, and is coauthored by Bruce Baker of the Rutgers Graduate School of Education, along with others. The authors say the report makes many “assumptions” about how school funding systems should be designed.

The report grades all 50 states and the District of Columbia on funding fairness based on four basic principles:

1. A fair funding system should provide levels of funding based on student need;

2. Student poverty is the most critical variable affecting funding levels and can serve as a proxy for other measures of disadvantage, such as racial segregation, limited English proficiency and student mobility;

3. Fair funding systems are designed “progressively” so that funding increases relative to student poverty;

4. A sufficient overall level of funding is a crucial starting point for any funding formula to be successful.

Using these principles as a foundation of their assessments of “fairness,” the ELC evaluated states on four fairness measures, including:

1. Funding level: States are ranked from the highest to lowest in per pupil funding.

2. Funding distribution: States are measured as “regressive,” “progressive,” or “flat” based on whether they provide more or less funding to schools based on their poverty concentration in comparison to other states.

3. Effort: The differences in state spending relative to the state’s fiscal capacity.

4. Coverage: The proportion of school-aged children attending the state’s public schools and the income disparity between families using public and nonpublic schools.

For more information on the specifics of these measures, read the report.

“As this National Report Card shows, most states did not step up when the federal stimulus dried up,” said David Sciarra, ELC executive director and NRC coauthor. “These latest results show school finance in most states is decidedly unfair, a condition which deprives equal educational opportunity to millions of public school children across the nation.”

(Next page: The shocking results)

Shocking results

The NRC provides 5 years of school funding data, from 2007 through 2011.

Perhaps the most devastating finding is that in 2011, about half of the states cut funding from 2010 levels, and in 14 states per-pupil spending in 2011 was below 2007 levels, even without adjusting for inflation.

Reversing a “positive trend,” notes the report, the number of “progressive states,”—those that provided more funds as district poverty increased—dropped between 2010 and 2011. For example, New Jersey lowered the funding boost for poor districts from 42 percent in 2009 to only 7 percent in 2011. In Utah, the funding boost was cut in half from 59 percent in 2009 to 24 percent in 2011.

“Even among ‘progressive’ states, only 8 provide more than a 10 percent boost to high-poverty districts,” say the report’s authors. “In the 5 most ‘regressive’ states (North Dakota, Vermont, New Hampshire, North Carolina and Nevada), the poorest districts receive at least 20 percent less funding than higher-wealth districts.”

Perhaps unsurprisingly, many states reduced their investment in K-12 public education in 2011. All but 3 states lowered their “fiscal effort on education between 2010 and 2011 when they faced the fiscal cliff created by the loss of federal stimulus funds,” said the report.

States making the strongest effort to fund public education devote more than 4.5 percent of their economic productivity to schools (Vermont, New Jersey and New York), while the lowest effort states (Oregon, South Dakota and Delaware) allocate 2.5 percent or less.

“This year’s [NRC] confirms that states across the country are failing to adequately and equitably invest in children,” said Wade Henderson, president and CEO of The Leadership Conference on Human and Civil Rights in Washington, D.C. “A tough economy is no excuse to deny adequate education to students, regardless of their race, disability status, income, or zip code. This report also offers proof that states can do better when they prioritize students over politics.”

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