20080419

Proven Policies to Close Funding Gaps

States should decrease reliance on local property taxes to fund education and increase support from state sources.

The state share of state and local education funding varies widely from state to state, from a high of 83.9% in New Mexico to a low of 38.2% in Nebraska.. Unsurprisingly, states like Illinois, Pennsylvania, Texas, and Virginia, which rank near the bottom in percentage of state funding, also have some of the largest funding gaps in the nation.

While federal funding for NCLB has increased by roughly $6 billion from 2001 to 2004, this still represents a small piece of the overall school funding pie. The federal government has never provided more than 10% of K-12 funding, and states will continue to be the primary funders of public education. That said, the federal government can and should do more to provide resources for low-income and minority students. Per-capita income in the richest state is almost double that in the least wealthy, while the poverty rate varies among the states by more than three to one. These underlying structural differences have direct impact on the size of the national education funding gap, and can only be offset through federal action.

States should do more to specifically target extra funding to high-poverty school districts. The number of states adopting poverty-based funding strategies has increased in recent years, as state policymakers have worked to align their funding and accountability systems toward the goal of closing the achievement gap.

We need to apply fair funding principles to individual schools as well as districts. School finance analyses traditionally have relied on district-level financial data, because that's the level at which state dollars are allocated. Districts are also distinct financial entities, so it's relatively easy to determine how much revenue one gets compared to another. Researchers have found that within some large diverse districts, high-poverty schools receive hundreds of thousands of dollars less than lower-poverty schools of similar in size.

Some states simply should spend more money on public education. The state funding gaps show one important dimension of state education policy-how the resources provided to low-income and minority students compare to the resources provided to their wealthier, whiter peers. There's no doubt that we need to analyze these gaps, understand their origins, and make them disappear.

Knowledge of the funding gap and its fundamental unfairness are not new, and the policies needed to close the gaps are relatively straightforward and well known. Recent events, however, suggest that a new opportunity is developing to make progress on this important issue.

This was a summary of the Education Trust's report: The Funding Gap 2004 by Kevin Carey

Please be sure to read the entire report for yourself HERE